Softpanorama

May the source be with you, but remember the KISS principle ;-)
Home Switchboard Unix Administration Red Hat TCP/IP Networks Neoliberalism Toxic Managers
(slightly skeptical) Educational society promoting "Back to basics" movement against IT overcomplexity and  bastardization of classic Unix

Peak Cheap Energy

Fighting MSM disinformation and oversimplifications about cost of shale oil and other energy related topics:
as Arthur Berman noted "Shale oil is not a revolution, it is a retirement party"

News Casino Capitalism Recommended Links Secular Stagnation Gas wars Oil glut fallacy Subprime oil: Deflation of the USA shale oil bubble
Paper oil, Minsky financial instability hypothesis and casino capitalism Slightly skeptical view of oil price forecasts Paper oil and record oil futures trading volumes MSM propagated myth about Saudis defending this market share Russia oil production Iran return to western oil markets fear mongering Oil Burden: amount on money spend on energy vs. global GDP
Energy returned on energy invested (ERoEI) Energy Geopolitics Great condensate con A note of ERoEI decline Cushing is filling up hysteria Plato Oil as Hubert Peak in condition of rising oil prices Media disinformation about Plato oil and Hubert peak
Energy disinformation agency and friends Big Fukushima Debate Oil consumption growth The fiasco of suburbia US military energy consumption Media-Military-Industrial Complex Neoconservatism
Neocolonialism as Financial Imperialism  All wars are bankers wars Predator state Bakken Reality Check Junk bond bubble Debt enslavement Neoliberalism as a New Form of Corporatism
IMF as the key institution for neoliberal debt enslavement Media disinformation about Plato oil and Hubert peak Fiat money, gold and petrodollar Energy Bookshelf Financial Quotes Financial Humor Etc
80 years ago the Nobel Prize winning chemist explained where oil DOES come into the picture:

Though it was not understood a century ago, and though as yet the applications of the knowledge to the economics of life are not generally realized, life in its physical aspect is fundamentally a struggle for energy, …

Soddy, Frederick M.A., F.R.S.. Wealth, Virtual Wealth and Debt (Kindle Locations 1089-1091). Distributed Proofreaders Canada.

The ‘backing’ for the petrodollar now includes the monetized value of Chinese and third world labor and natural resources as well as OPEC oil. But controlling the outcome of life’s “struggle for energy” is still the crumbling cornerstone of both US foreign and domestic economic policies:

  • control the world’s access to energy and it has no choice but submitting to the hegemon’s will
  • the U.S. political system is now owned lock, stock and barrel by a financial / military industrial / fossil fuels complex (am I forgetting anybody?). The powers that be are trying to preserve the existing status quo by insuring that life remains a “struggle for energy”.

The denizens of Wall Street and Washington can perhaps be forgiven for believing they were the “masters of the universe” at the conclusion of WWII. What they can NOT be forgiven is their belief – then or now – is that “the end of history” had arrived (unless they cause it).

Steven comment on Michael Klare Delusional Thinking in Washington, The Desperate Plight of a Declining Superpower


Introduction

Nemesis eventually catches hubris.

"Shale oil is not a revolution, it is a retirement party"
Arthur Berman

When oil is traded too cheaply, the victim of such trades is always the future generations. The drop in oil prices in 2014-2017 might have been a curse, not the blessing as it slowed down or stopped the adaptation processes to the "end of cheap oil". The process that was already in place with $4 per gallon ($1 per liter) gas in the USA, when sales of large SUV dropped considerably and used large SUV could be  bought for a half of its usual price.  The reality is a harsh mistress: the situation in 2018 with depletion of existing oil deposits and new discoveries is now worse than in, say, 2000.  Technology an and will prolong the agony so so far there is no viable solution to "hydrocarbon age".

As of 2018 in the USA consumer still continue to do the same things as before 2008. Such as buying large SUVs. Which fits Albert Einstein definition of insanity ("doing the same thing over and over again and expecting different results"). As one NYT commenter noted (Moscow on the Brazos):

I don't get it. We're supposed to be running out of oil, right? Or has that changed? $2 gas and we've gone past the Bell Curve of supply and use? And now we're all drunk on cheap gas. I'm happy to see new innovative efficient technology, new electric and hybrid cars but now they're selling boatloads of SUVs and pickup trucks. They are back in big style. They are better now, instead of 11 mpg they're 15 mpg.

As IEA )which is a noted chaierleader of position "do not worry, be happy" as for the end of chep oil) noted in iea.org

In a Low Oil Price Scenario, longer payback periods mean that the world misses out on almost 15% of the energy savings seen in our central scenario, foregoing around $800 billion-worth of efficiency improvements in cars, trucks, aircraft and other end-use equipment, holding back the much-needed energy transition.

At the same time, the current slump in oil prices proved to be pretty long (started in Sept 2018)  and defy all expectations. That means that any person who tried to predict commodities price in the current environment is suspect ;-).  In a "very long run" the supply/demand dynamic is at work, but market for the period less then a year prices can be pretty arbitrary and completely disconnected with the cost of producing oil and supply and remand ration. This is a side effect of financialization when the volume of "paper oil" traded is the order of magnitude larger then the volume of actual oil expected for any given period.  That is another proof that neoliberalism is an unstable system with a built-in positive feedback loop. As such neoliberalism is quite capable of dragging us through shortages, depressions, environmental disasters, and even wars on the way from one equilibrium to another. So all those general considerations that are provided below are nothing but an educated guess. As John Kenneth Galbraith aptly said: "The only function of economic forecasting is to make astrology look respectable." Readers beware...

This is a skeptical page that was created due to strong doubts about MSM coverage of the current oil prices slump. Especially the idea of oil glut (which in the USA for some strange reason coincide with rising imports of oil.

in this sense MSM cries about getting close to self-sufficency look strange. Yes some tipes of oil-like products produced by shale wells are not very desirable (condensate) and they are stored distorting the whole picture but with rising imports thee can be not "oil glut". But not for the US MSMs. This looks like a phenomenon which came directly from  Geroge Orwell's novel 1984  where it was called "doublespeak". 

The first thing to understand is that at a given stage of developing of drilling and other related technologies there is a minimal price of oil below which production can be continued only at a loss. This price point is different for different types of oil, and slightly varies between different regions but it does exist. For example, a shale/tight oil well often costs around $6-8 million, which needs to be amortized over the life of a well which in the case of shale/tight oil is approximately five-six years. To make things worse unlike conventional wells that can produce approximately at the same rate for a decade, those wells experience a steep decline after two first years. With more half of oil extracted in the first two years. The cost is much higher for non-conventional oil producers than for conventional producers and that means that at prices below, say, $70-$80 per barrel production of shale oil leaves the trail of junk bonds production as well. One is impossible without the other. 

Canadian tar sand production is even more expensive. Deep water drilling is somewhere in between conventional and non-conventional oil, pricewise.

There are different estimates, but most analysts agree that the US shale/tight oil producers need around $70-$80 per barrel to be able to pay their debts and around $60-$70 to break even. Those numbers are slightly less for deep water oil ($40-$50) and slightly higher for Canadian tar sands. The picture below illustrated difference prices to produce different types of oil ( see below) is reproduced from What Me Worry About Peak Oil  by Art Berman (December 27, 2015 ):

This means that production of light oil from tight zones need the price of $70-80 per barrel to pay the debt.  The same applies to extra heavy, deep water, and EOR projects. Offshore arctic and ultra deep water are extremely expensive and with their own special environmental risks as BP recently discovered. The implication seems to be that "non-conventional" oil projects do require prices in $80-$100 range to continue pump oil at the same rate (Red Queen's race - Wikipedia) and this implies continued drilling of new wells.

In this sense 2010-2013 were gold age for oil production worldwide, as prices were close or above $100 and billions were invested in high cost oil resources

All-in-all it looks that "Shale oil is not a revolution, it is a retirement party" as aptly observed Arthur Berman).

Now prices dropped below $33 (as of Jan 6, 2015) and at this level of prices all tight oil producers  are losing money  on each barrel of oil they produce. Debt fueled boom in the shale space will most likely never return. Most shale players managed to survive 2015 (some due to hedges; some due to junk bond dent they accumulate and still did not put into capex). But to survive in 2016 will be more difficult and they are in danger of defaulting on their bonds. Mass extinction might well be in the cards, if low prices persist for the whole year.

 when the almighty money almagamations like the Carlyle Group swoop in and buy up all the distressed assets, we just might see oil prices rebound. The vultures won’t have the motive to short the heck out of oil, like they are now.

Junk bonds has duration around five-seven years, so bonds taken in 2010 will be due soon and refinancing them now is very difficult. That means weaker non-conventional oil producers will probably be bankrupt if not in 2016, then in 2017, if prices stay low. This process already stated with something like a dozen bankruptcies in 2015. According to OilPrice.com more expected in 2016:

At the same time world demand for oil will continues to grow and will grow in 2016 probably by 1.3 Mb/d or more.  In 2015 it rose from 92.45 to 93.82 Mb/d. The only country that has additional capacities now is Iran but how quickly it can expand production in low price regime and whether it will be willing to sell additional oil at such low prices to get currency is difficult to predict. Some think that Iran will be able to add another 0.5 Mb/d in 2016 which can only compensate for the drop of US production and nothing else. Production in all other countries will be iether stable or slightly declining due to natural decline of wells with age and lack of capital investments in new drilling. Typical estimate is 1% decline or around 1MB/d of lost supply. Natural rate of decline of most conventional wells is around 6% and non-conventional around 20 (not evenly distributed; the first year production can even rise).  It it doubtful that remaining capital investments will be able to offset everything but 1% of decline. Real decline from non-OPEC members in 2016 can be more.

Actually even Saudis managed only marginally increase their exports in 2015; they just exported slightly more oil  (around  +0.3Mb/d more) at very low prices which supports the current low oil price regime, but not their economy which ended 2015 with a record deficit around $100 billions by Saudis estimates ($150 by IMF estimates). What is Saudis motivation of doing this (and depleting both their coffers and oil reserves) is a difficult question to answer but probably this is an economic war with Iran. The second important source of support of low prices is Wall Street games with futures.

The key problem here is that shale and tight oil producers were not that profitable at above $100 per barrel oil price range that existed in 2010-2013 and accumulated large amount of debt (several hundreds of billions, mostly in junk bonds) during those "good times" . The debt that now needs to be serviced so they have an albatross around their necks.

The destruction of oil supply while very gradual already started albeit slowly, as decline of wells is still compensated by hedging, new drilling and projects that have been started in the "good old days" are still coming online. This decline might well accelerate toward the middle of 2016, if prices do not recover. In any case hedges will expire somewhere in 2016 and after that it will be clear who is swimming naked.

In other words the current oil prices are IMHO not sustainable (too low) even in one-two year timeframe. When most hedges expire and the number of bankruptcies start to increase, Wall Street might be unable to press oil futures down anymore so push back in prices can be pretty violent. .

BTW Saudis lost around $100 billions this year and their foreign reserves shrunk to around $600 billions. Projected loss for 2016 is around $85 billions. So they need around one decade to deplete their foreign currency reserves.

Some suspicious consistency in the US MSM stories about oil price slump

“Where ideas are concerned, America can be counted on to do one of two things: take a good idea and run it completely into the ground, or take a bad idea and run it completely into the ground.”

—George Carlin

Oh what a tangled web we weave, When first we practice to deceive!"

Walter Scott, Marmion, Canto vi, Stanza 17

 

To make the story short current MSM behaviour is highly irresponsible and suggests that all of them are in the pockets of Wall Street or worse. After all oil is a irreplaceable commodity that will eventually run out. Low oil prices from this point of view are the last thing we need. It's like drinking party on the deck of Titanic. What should be done is creating the infrastructure for living with much less oil available. Which is possible only with high prices for this commodity. also the destruction of oil patch that now is happening should be get so much cheerleading. It is a tragedy for many people. The ability to fill gas tank for less then 2 dollars is not everything in this life. 

Economist Herbert Stein (1916-1999) wrote in 1986: "if it can’t go on forever it will stop." Despite this self-evident truth there is interesting, highly correlated bias, in coverage of oil prices slump for most of the US MSM: all predict essentially that current low oil prices will stay if nor forever, then for a very long time. And that what happened in 2015 is not anomaly, despite clear indicators that at this price most US producers sell their barrels at loss.  They salivate that this situation will continue in the first half of 2016 and well into 2017. They also completely discard negative externalities of this event.  As oil has crashed to $33 levels there is  a lot of MSM talk that the current price is really the long term historical average price, that 2005-2014 was an anomaly (bubble) and that we will stay in this range (say, $20-$40) for years to come.  Actually you can bet that at any price point MSM will claim that the cost of extraction is 20% lower, no matter what the price level is.

You can bet that at any price point MSM will claim that the cost of extraction is 20% lower, no matter what the price level is.

Yes, there are few places in the Middle East and Russia from which oil can be profitably extracted at this price range. But those countries depend on oil for revenue to balance the budget so even in those places this situation is unsustainable.  More then 80% sources of oil are unprofitable at those prices. That includes all shale/tight oil and all deep offshore anywhere in the world.

Still for some unknown to me reason in MSM low oil prices (below the cost of production) and depletion of valuable natural resource are now considered to be a universal good. While at best this is nothing more then initiated by Saudis "Hail Mary pass" to save Western civilization from secular stagnation. Externalities be damned, full speed ahead. Shale oil industry and destruction of its workforce, junk bond market troubles are just collateral damage. Does not matter one bit. Give us cheap oil brother and all will be fine.
 

For some unknown to me reason in MSM low oil prices (below the cost of production) and depletion of valuable natural resource are now considered to be a universal good. While at best this is nothing more then initiated by Saudis "Hail Mary pass" to save Western civilization from secular stagnation. Externalities be damned, full speed ahead. Shale oil industry and destruction of its workforce, junk bond market troubles are just collateral damage. Does not matter one bit. Give us cheap oil brother and all will be fine.

But at the same time never try to catch falling oil barrel ;-). Market can stay irrational longer than you can stay solvent.

Also strange and suspicious is that most MSM peruse suspiciously similar and questionable, or outright false, if we look at the facts, stories:

  1. Quicker depletion of a valuable and irreplaceable national resource due to low prices does not matter.  Existing wells deplete 5-8% per year (tight oil more that that) so you need to discover, drill and put on line at least the same amount in order to maintains the same volume of oil production. That costs money, and if money are not here nobody will drill. So natural tendency of production at low oil price (which now man below $70-$80 per barrel) is down, not up. 
     
  2. Saudis are fighting for their market share and flooding the world with oil.  This hypothesis is advanced despite the fact that their exports are stagnant and had grown in 2015 only by around 0.2-0.3 Mb/d (see Saudi Arabia oil production and forecast for 2016). Which is a miserable amount. What fight for market share: they can sell all theoil they produce.  In 2014 they exported around 7.1 Mb/d and in 2015 around 7.3 Mb/d. Plus/minus 0.1 Mb/d. So nothing essentially changed as for the level of their exports taking into account that the growth of world consumption for 2015 is over 1 Mb/d.   Their real strategy is dumping their exports at low price undercutting other producers to bring the price down.  In other words they are using what is called "predatory pricing" and to achieve that they tapped into their currency reserves to the tune of $100 billion a year. They are burning their currency reserves at the speed at which they can exhaust them from six years to decade, losing the investment grade in three.  Also most of their fields are old and semi-exhausted, so maintaining high production might even damage them, cutting short their useful life and the total amount of oil Saudis can recover from them. 

    Saudi shipments rose to 7.364 million barrels a day in October, 2015, according to the latest figures from the Joint Organizations Data Initiative (JODI).  Shipments averaged 7.11 million barrels a day in 2014, down from an 11-year high of 7.54 million barrels a day in 2013 and the lowest in three previous years. So Saudis failed even match their 2013 exports in 2015.

  3. Iran is able and willing to throw on the market another 0.5-0.7 Mb/d in 2016 further depressing prices. This hypothesis is advanced despite explicit statements from the Iran leadership that they will not give any future customer additional discounts above those that exist today.  while Iran leadership is definitely irrational, blocking the temporary freeze agreement, and willing to hurt the county future by increasing oil production as much as they can in low oil price environment (hurting their ally Russia in the process), they are not completely stupid and they do not have much money to drill anyway.  As they now have access to their previously frozen foreign reserves they definitely can wait a year or two before coming to the market with the new supply.  also increase of supply is not instant, it requires time and money, even taking into account that Iran has some underdeveloped fields that can be profitably put into production even at low prices that exist to today. This is a better strategy then coming with new supply at the point of ridiculously low prices. Although everything can happen. Middle Eastern nations are unpredictable.
     
  4. A very conservative estimate of the decline of non-OPEC production for the next year. Most assume that it will be limited to roughly 0.5 Mb/d. But the rate of natural decline of existing conventional oil wells is 3-6% and reduced capital expenses mean less new production is coming online in 2016 and 2017. Assuming 1% depletion that's around 1MB/d that should disappear in 2016. Add to this hard crash that is possible for the US shale producers and the estimate 1.5 Mb/d drop does not look outrageously high. But those consideration somehow disappeared from all considerations from MSM and they operate under assumption that supply from existing wells is indefinite and decline is a rounding error.  Only increase in supply is material and eminent (again Iran supply story get the most prominence). 
     
  5. The US MSM propagate the following bogus narrative: "there is an oil glut in the USA market in particular despite the fact that the USA increasing their import of oil. To cry about glut on oil in the country which imports each month in 2015 more and more oil is something new to me.  This is something from Orwell novel Nineteen Eighty-Four and is called doublespeak. If you are an oil producer, you don’t pump oil unless you have orders for it.  If you pump oil without orders, then you need your own storage to store it. In no way you ship it to Cushing, Oklahoma with their 80 Mb storage capacity as your customers can be in completely different part of the USA and it's you who need to pay for storage. That's the privilege used by refineries to regulate their input in case of maintenance, seasonal peaks, etc.  You don’t ship any oil without getting paid for it. So oil glut theory claim that they are producers which have oil shipped to customers and customers did not use it. Putting it in storage instead. And this bogus "theory" is propagated by MSM for more then 18 month now. It' time for MSM to stop to propagate this nonsense. 
     
  6. Cheap oil is here to stay and current situation will last to 2017 in worst case or to 2020-2040 in the best. IEA forecasts are viewed as facts, despite clear interest in lower oil prices.  In reality just cutting capital investment along with depletion of  existing fields (almost 6% for conventional wells, around 20% per year but very unevenly spread for shale/tight oil wells) guarantee diminishing supply. To compensate for 5% depletion the world now needs to find and put into production approximately 5 Mb/d of oil. In other words the world is losing approximately 1 Mb/s of supply per quarter. This loss a very difficult to stop, although it was possible for the last several years because huge capital investments in oil industry caused by high oil prices. 2010-2014 has shown that with high oil prices the decline can be stopped and reversed.  The problem is that adequate capital investments are thing in the past and now most oil companies need to adapt to starvation mode as for capital investment in the oil industry. That spells huge trouble for Norway, Russia, GB,  and other nations with mostly conventional wells.  It will be a miracle if they can maintain they level of production at prices below $40 for more then one-two years (there is some inertia here and new projects are continuing to come online for around 18 months since the start of the price drop; that means till mid, or last quarter of 2016, depending were you put the start of oil price drop). 
     
  7. MSM instantly forgot about previous concerns and the reversal of efficiency of the US car fleet. In 2015 SUVs again became the most popular category of personal car with sales of large SUVs booming. This deterioration of the US fleet efficiency happens along with slow down of sales of hybrids and, especially, electrical cars.
     
  8. Growth of demand during the current period of below $2 per gallon gas for some, unexplained reason will be slower then the explosive growth of demand in 2015. for some reason is is expected to be  limited to around 1% or 1.3-1.4 Mb/d worldwide.
     
  9. China slowed down and her oil consumption will be stagnant or down despite boom in car sales, as if the number of cars of the road is disconnected with oil use. In reality transportation is around 60% of country oil use. Right, but China oil consumption is still growing and will continue to grow in 2016. Those trends can co-exist for a while. So electrical consumption decline does not mean that the oil consumption decline is eminent.

    The same situation can exist in other countries such as the USA - slowing of the economy along with growth of oil consumption. All those new SUVs on the road need fuel to run.
     
  10. The assumption that the destruction of shale/tight oil companies with excessive debt loads in the USA  will be gradual and slow. Despite the fact that they currently produce at a loss  each barrel of oil they sell.  Also it will be orderly without major disruption of production -- just a gradual decline despite dramatically lower capital expenses. The assumption of most US MSM is that US production will stay close to current levels due to Gulf production or due to by waiving some magic wand by Obama administration.
     
  11. Junk bond problem does not exist or is of minor importance despite the fact that there are over 100 billions of shale oil book related junk bonds on the market. Similarly losses of financial sector from hedges in 2015 are non-existent as well (only Mexicans got several billions or additional revenue due to hedges).

The question is from where all those MSM deceptive and false  "talking points" originate.

The end of cheap oil hypothesis

The "end of cheap oil" hypothesis can be simplified to several postulates:

  1. Mankind demand for oil will continues to grow, although the pace of growth slows down with the increase of the price of oil as well as due to stagnation of world economy caused by high oil prices. That does not exclude temporary (often multiyear) oil price slumps or highs: instability is the nature of financial system under neoliberalism. 
  2. The supply of oil profitably extractable at any given price point below $100 (such $40, $50, $60 per barrel) will continue to shrink. Total extractable supply of oil can grow only by adding more and more expensive source of oil, sources with lower EROEI. New technology of extraction (especially horizontal drilling) can somewhat offset decline of EROEI but can't reverse it.  Simple calculation by dividing "proven world reserves" by annual consumption suggest that at prices below $100 in 2014 dollars they will be exhausted in approximately half a century (assuming $50 a barrel price point) peakoilbarrel.com, comment 12/11/2015 at 7:34 am)
    Proved oil reserves at 1700.1 billion barrels, 52.5 years of supply.

    Reference:

    http://www.bp.com/en/global/corporate/energy-economics/statistical-review-of-world-energy/oil-review-by-energy-type/oil-reserves.html

    At 50 USD per barrel, the value is 50×1,700,100,000,000=85,005,000,000,000 usd

    Not enough, 100 USD per barrel will be better. 85 trillion dollars to spend so 1700.1 billion barrels of oil can be extracted and burned in 52.5 years. An absolute bargain. Current consumption at 32.85 billion per year, 365×90,000,000, 1700.1/32.85=51.75 years.

  3. The search for new sources of hydrocarbons by G7 countries will intensify over time and will likely generate resources wars. At least two resource wars already happened: Iraq and Libya. Wars are fought over access to and control of oil resources with high EROEI as well as other vital natural resources. With rising human population, competition for these resources might increase triggering conflicts, large and small. Industrialized nations already started to invade weaker countries to secure access to oil which is essential to the survival of modern industrial civilization (Iraq and Libya, and if we think about pipelines to Europe, Syria). 
  4. Very high price of oil (let's say above $100 per barrel)  leads to stagnation in all major industrialized countries and first of all the USA as well as eventual debt collapse of neoliberal economies and slow down or reverse of neoliberal globalization.
  5. The current "Race to burn what's left" is irrational.  Low oil prices destroy and delay investment in new supplies, slow down efficiency gains, encourage consumption and sow the seeds of the next big boom in prices.  If we assume that at each price point only a finite amount of oil can be profitably extracted from Earth (which is a planet, that is now well researched for oil), the current year and a half slump in oil prices looks extremely suspicious. It means robbing future generations, as conservation efforts are now derailed. Sales of SUVs and small trucks in the USA are up.  Trillions in equity and bond losses, hundred thousands of ruined retirement accounts and there is a severe recession knocking on the door for the US economy. The US are selling their last drops of oil at prices below production cost. In my opinion it would be wiser to save the oil that is currently  produce in strategic reserves and sell it when prices are much higher.

Please note that the US government patiently observes the current situation and does not try to influence the price by buying oil for their strategic oil reserve, although in the past it used to do such things. MSM coverage of oil also suggests strong establishment bias toward lower prices. As if this is the last "Heil Mary" pass in geostrategic game for the USA dominance.  So there are higher priorities in play here then the destiny of the US shale industry and more rapid exhaustion of national oil reserves. At the same time oil price slum is equivalent to a huge stimulus  to the USA economy, but it does have some significant side affects. If we assume $93.17-49.08=44.09 price drop for 2015 and the daily consumption of around  19.58 Mb/s that comes to 222 billions a year.

The current drop of oil prices also represent huge stimulus to EU,  China, Japan and other all other industrialized countries without or with little own oil reserves. If this were organized as a part of Russian sanctions package, this was a brilliant strategy. All industrialized countries in which own consumption far exceeds own production, are essentially isolated from negative affect of countersanctions   by the low price of oil.  In other worlds this is a huge global economic stimulus to the "masters of the universe" and at the same time stern warning to one of the last "resource nationalists" which try to pursue independence from Washington foreign policy.

The key question here: was it engineered by neoliberal strategists in Washington, DC and their masters in major Wall Street banks (in this case this was a really brilliant move)? Or is this ugly side effect of unhinged capitalism known as neoliberalism where oil companies overinvested in new projects due to greed and many new projects are coming simultaneously  online, while demand for oil grows more slowly then they expected. In any case at one point Saudi Arabia decided to dump its oil on the market and fun started. Was it the order from Washington or thier own initiave is unclear.

In recent years oil consumption was growing at slower pace dur to high oil prices. Per Michael Klare 2005 projection of oil consumption in 2015 was 105 Mb/d (millions of barrels per day); actual in 2015 was around 93 Mb/d as high price of oil stimulated investment in energy saving technologies. That includes not only small and hybrid cars (which actually did not improve much from, say, 1990 level, as the size of small car in the USA had grown considerably, but also cars and trucks working on natural gas, blending gas with alcohol (up to 10%), tax breaks for electrical cars ($7500 currently on many "pure electrical" models of small passenger cars, half of that on hybrids). Now this positive trend is partially reversed.  

But there were other signs of introduction of energy saving technologies which indirectly cut oil consumption, especially in chemical industry which will stay:     

For example the energy cost to major chemicals of running their plants is significant in the united states this about 6% of the national energy consumption. Since 1994, Dow has reduced its energy intensity by 22 percent through a structured program targeting process improvements. This has saved 1.6 quadrillion BTUs, equivalent to the energy required to generate all of the residential electricity used in California for one year. The savings have totaled $8.6 billion on an investment of $1 billion.

Note on the term "conspiracy theories"

Conspiracy theory was the term invented by CIA to whitewash their participation in JFK assassination, which got a wider use and became a common term in English language.  Here is how the term is defined in Wikipedia:

A conspiracy theory is an explanatory hypothesis that suggests that two or more persons, a group, or an organization of having caused or covered up, through secret planning and deliberate action, an event or situation which is typically taken to be illegal or harmful. Although the existence of a proven conspiracy involving United States President Richard Nixon and his aides in the Watergate scandal of the 1970s has been claimed as validation of conspiracy theories in general,[1] the term "conspiracy theory" has acquired a derogatory meaning and is often used to dismiss or ridicule beliefs in conspiracies.[2]

Such things as the current oil slump probably could never happen purely due to market forces (and notion of "free market" is another neoliberal lie; neoliberal markets are neither free nor fair). Oil is not a regular commodity. Oil is a strategic resource. So I think it is naïve to analyze it strictly in supply-demand terms.  Geopolitics plays very important role in oil prices and always was. Remember how the USSR was brought to its knees by dropping the oil prices in late 80th.

Remember Iraq war with one million of Iraqis dead. Was not this a blatant attempt to secure oil resources for the USA majors? Remember Libyan color revolution and Hillary reaction to the horrible death of poor colonel. Is not this about collision of French desire to secure oil supplies and Washington desire to get rid on a dictator who was an obstacle to neoliberal agenda?

And Syria war unleashed to achieve what ? It all about remapping Middle East by toppling "not friendly enough" to Washington regimes. It took longer then "seven countries in five years"  as Rumsfeld promised (https://www.youtube.com/watch?v=9RC1Mepk_Sw) but it looks like the plan itself is still current: 

“We’re going to take out seven countries in 5 years, starting with Iraq, and then Syria, Lebanon, Libya, Somalia, Sudan and, finishing off, Iran”

General Wesley Clark. Retired 4-star U.S. Army general,
Supreme Allied Commander of NATO during the 1999 War on Yugoslavia .

It is clear that recent "petro wars" in the Middle East were about execution of a  US strategy which was not only about globalism and the USA world dominance, but also about oil.

The oil market has always been driven by geopolitics, and it was a factor that contributed to unleashing both WWI and WWII. Or, if you want, geopolitics has been very strongly influenced by the supply and distribution of crude oil for at least a century. To talk in pure supply/demand terms about such a strategic, vital for human civilization commodity is absurd.
and the whole idea the Kingdom of  Saudi Arabia, a vassal state completely dependent in its survival on the USA unleashes a price war against the USA shale production looks very suspect. nevertheless it is propagated by major MSM like 100% true.

In other words oil was and is a major weapon of economic war. And dumping oil prices is especially potent weapon against countries with significant oil exports such as Russia, Venezuela, Iran, Iraq, etc.  You can kill several birds with one stone.

The key question here is classic cue bono ? Which country is the major beneficiary of the current oil prices crash. The answer is -- the USA (despite some troubles of shale producers which started in late 2015 when most hedges expired). So  it is plausible to suggest that the USA elite including Wall Street banks played an important role in slamming oil prices to reach some important geopolitical goal, significance of which supersede the value of destruction of the USA shale industry.  After all the US financial industry can for a short time distort price of any commodity to any desired level.  HFT is a perfect tool for that and that was explicitly mentioned on Aleynikov trial  by Goldman officials.

It might well be that the current low price is playing double role: to stimulate Western economies and simultaneously serve as the most important part of package of sanctions against Russia. Obama actually hinted that this is true. And Saudi Arabia did play similar role in the past -- crash of oil prices did  facilitated the dissolution of the USSR, which lost the major part of its export revenue).

I would like to stress it again that the idea that Saudi Arabia is engaged in price war against the USA to defend its market share is extremely questionable. By all measures KSA is a satellite state, vassal of the USA if you like. How vassal state can act in such a way without the USA blessing ?  Economic conditions are now not equal to 2008 so the current drop of oil prices can't be explained by panic.  And without using the power of US-controlled financial markets it id doubful that it is possible to accomplish such a quick and sustained drop. 

The USA has long history of using oil as a geopolitical tool. Not only to crash the USSR but also to lure Japan into WWII. Oil embargo against imperial Japan served essentially as a declaration of war and it was read by Imperial Japan leadership exactly this way  (the leadership, which actually has little or no illusions that Japan will lose, but decided not to surrender without armed struggle). There is some evidence that Perl Harbor was not defended specifically to make entrance into the war with Japan more dramatic and more acceptable to the population of the USA, as a reaction on the clear act of aggression by Japan (although air carriers were sent to sea to save them).

And population of Earth still grow, as well as the number of cars and, especially tracks on the road. Similarly the number of airplanes and ships.  Until that trend stops the "long term"  trend for oil price should be up as chances of finding large deposit of "cheap oil" are not close to zero.  Of course "In a long run we all are dead" maxim applies.

But as of 2015 the planet is pretty well explored for this vital commodity. That means that the cost of oil extraction rises with time because the cheapest to extract oil is removed first. Actually this is now true for most commodities, including metals.

To get oil now deeper wells are needed, or fracking equipment and fracking sand and liquids, or you get oil that is too heavy or oil which contains too much sulfur. That means that  special refineries need to be build. In any case more resources are need to produce the same amount of petrol and diesel for transportation and other purposes. It is natural to think that price will gradually rise due to diminishing returns on capital used for extraction.  According to Barclays Capital (cited by  Steven Kopits),  the costs of extracting oil began increasing by 10.9% per year, since 1999 from $5 to almost $25 per barrel.  Add to this transportation cost to refineries, interest on debt, etc and we are probably talking about "magic" figure of $60 per barrel.  So in 2015 any price below it is strongly suspect and probably is temporary. Although the4 rule is "never to say never" and for investors in oil ETNs (such USO, OIL, etc) Keyes saying that market can be irrational longer the you can stay solvent fully applies.  The same saying is now looming over the heads of shale companies executives. As of December 2015 bloodbath has began.

So the question is really about how long the current low oil prices (oil slump) will last. One year is definitely enough to eliminate hedges. And in December of 2015 they are mostly gone (two year hedges do exist but are a rarety)  Capital expenses are now slashed to the bones, but project that take several years to complete will still come into production and that will support the level of oil production at least for one year till Jan 2017. We also can probably see some consolidation of the oil industry. Weak players start being eliminated.

Three years are enough to eliminate most new capital investment and to finish projects which started before slump. Capital investment goes to a screeching halt. After that much depends on the speed of decline of existing wells and pace on increasing of global consumption. that actually includes growth of internal consumption in three major oil producing nations such as USA, Russia and Saudi Arabia. Of those three Saudi Arabia experiences especially quick rise in internal oil demand.

In any case since mid 2015 the price of oil on spot market dropped almost to one third of max price previously achieved. As of Aug 8, 2015 the spot price for October, 2015 delivery was around $44 per barrel. This is a dramatic drop from over $100 per barrel price peak achieved earlier. 

"Cheap oil" is the cornerstone of the current neoliberal world order; it's end means end of US dominated world

We need to understand that "cheap oil" is the cornerstone of the current neoliberal social system including the level of neoliberal globalization that is underway since late 80th. So for the USA elite a lot is in stake if price of oil consistently stays, say, over $100. The USA world domination which is so cherished by neocons and for which they are ready to fight endless wars is in stake.  Also countries that "do not deserve it in view of neoliberal elite (and are only partially controlled by the USA), such as Iran and Russia, can became fabulously rich. And they understand that "the end of cheap oil" might bring great socio-economic changes within the USA itself as neolibel fairy tale about "tricke down" prosperity will be exposed as a fraud. and American people can became rightfully angry, despite all efforts to brainwash them and to fond external target for their anger. In this sense we can view the current oil slump as a brave attempt, "The Last Hurrah" attack of the old neoliberal guard  which came to power in 1980th to postpone inevitable social changes (and first of all demise of neoliberalism and by extension the USA role as a global hegemon). the important of oil for the US as the center or global neoliberal empire was well described in 2002 article by Bill Christison (Oil and the Middle East)

April 5, 2002

Back in March CounterPunch published Christison's devastating critique of the strategies and conduct of the US war of terrorism. (See our archive by scrolling down to "Search CounterPunch.)) These new remarks, which he has made available to CounterPunch were delivered to various peace groups in Santa Fe, New Mexico on early April.Bill Christison joined the CIA in 1950, and served on the analysis side of the Agency for 28 years. From the early 1970s he served as National Intelligence Officer (principal adviser to the Director of Central Intelligence on certain areas) for, at various times, Southeast Asia, South Asia and Africa. Before he retired in 1979 he was Director of the CIA's Office of Regional and Political Analysis, a 250-person unit His wife Kathy also worked in the CIA, retiring in 1979.Since then she has been mainly preoccupied by the issue of Palestine.

I've been asked to talk today about the topic, "U.S. Oil Policy as a Juggernaut in U.S. Foreign Policy." That's a great title. When you hear the word "juggernaut," what you think of--at least what I think of--is a monster machine of some sort, maybe the heaviest heavy tank you can imagine, rumbling down a city street, unstoppable, crushing everything in its way, and even destroying the paving of the street as it goes. Well, that comes pretty close to describing what I believe about the long-term effects of our oil, and other, foreign policies in the Middle East. But if we look ahead, rather than at the past or the present, my hope is that, by changing some of our own foreign policies, U.S. oil policy will in the future no longer be a destructive juggernaut.

It's worth spending a minute to talk about why oil is so important to the United States. The world's total use of energy from all sources--from petroleum, natural gas, coal, wood, hydropower, nuclear, geothermal, solar, and wind power--has increased in recent years roughly as the global population has also increased. Petroleum contributes the greatest single amount -- about two-fifths of the world's total energy output, and natural gas (which is in some ways related to oil) more than another one-fifth. The United States alone uses about one-quarter of the world's total energy output, but has less than five percent of the world's population. The U.S. itself does not produce anywhere near the amount of energy that it consumes. According to statistics of the U.S. Department of Energy, the United States used in the year 2000 almost 100 quadrillion Btu's--or British Thermal Units--of energy. But of those 100 quadrillion Btu's, the U.S. had to import close to 30 percent. The United States is, hands down, the most profligate user of energy, by far, on this whole globe.

With respect to oil alone, the U.S. imported in the year 2000 almost two-thirds of the oil that it used. The importance of Saudi Arabia as a supplier of the U.S., needs to be emphasized, but not just because the Saudis hold the largest known but still untapped oil reserves in the world. What is even more important to the U.S. at the moment is that Saudi Arabia has the largest installed but unused rapid production capacity--that is, oil wells, pumping equipment and so forth already there but not used to meet current, or "normal," production needs. In any emergency that cut off oil supplies from anywhere else in the world, Saudi Arabia would one of very few, and maybe the only, nation that could easily and quickly increase its oil production without a waiting period measured in months rather than a few days. This obviously adds to what any general or admiral would call the strategic value of Saudi Arabia to the United States.

There is another characteristic of the global oil industry that we should all understand. It is an industry dominated by a half-dozen extremely large, global corporations--including ExxonMobil (these two firms merged in 1999), British Petroleum, Shell, Texaco, Gulf and Socal. Fifty to 75 years ago these companies might have been swashbuckling, unregulated corporations seeking to maximize profits and avoid the controls of any governments by all means fair or foul. Today, however, these companies by no means have the same personalities that they had years ago. In the Middle East, at least, the governments of the area have nationalized practically all oil production, and the companies or their subsidiaries have gradually worked out mutually supportive relationships with the local governments, under which the companies continue to manage most of the oil production and global oil trade, while the governments, and OPEC, make the basic decisions on how much oil to produce. The companies continue to make large profits, which keep them happy enough.

In their relations with the U.S. and other advanced nations, the companies no longer shun government regulation, because most of the regulations imposed on them are supportive of, and increase the profits of, the companies themselves. The regulations fall more into the area of corporate welfare than into the area of inducing the corporations to become better citizens. In the U.S., the ties of the oil companies with both of the major political parties are close and mutually profitable. Up to a few months ago, these same comments would have applied to Enron, which was clearly one of the world's largest energy companies, even though it was not one of the largest global oil companies.

I started out by comparing the long-term effects of U.S. oil policies to a juggernaut. To show you why, I want to go back almost 60 years, to February 1945. In that month, President Franklin D. Roosevelt, while returning from the Yalta Conference, met with King Ibn Saud of Saudi Arabia on a U.S. warship in the middle of the Suez Canal. Two months later, Roosevelt was dead, but this meeting was probably one of his most important acts as a world leader The actual records of the conversations between these two men have never been released by either of their governments, but it is quite clear that an agreement was reached under which the United States guaranteed for the indefinite future the security and stability of the Saudi monarchy. In return, the Saudi King guaranteed U.S. access to, and joint development of, the massive Saudi oil reserves, also for the indefinite future. These mutual guarantees were later, implicitly at least, extended to apply to the other, and smaller, Gulf state monarchies, from the Arab Emirates to Bahrain and Kuwait. All of these guarantees were reinforced by the U.S. war against Iraq in 1990-1991, and these guarantees still today form the basis of U.S. oil policies in the Middle East.

So for close to 60 years now, the U.S. has continued to prop up and support these authoritarian governments. I'd like to give you an example of how this has worked in the case of Saudi Arabia. This is from an article that appeared in The Nation magazine last November, written by a British expert on world security affairs. Here are a few lines from this article. "To protect the Saudi regime against its external enemies, the United States has steadily expanded its military presence in the region. [T]o protect the royal family against its internal enemies, US personnel have become deeply involved in the regime's internal security apparatus. At the same time, the vast and highly conspicuous accumulation of wealth by the royal family has alienated it from the larger Saudi population and led to charges of systemic corruption. In response, the regime has outlawed all forms of political debate in the kingdom (there is no parliament, no free speech, no political party, no right of assembly) and used its US-trained security forces to quash overt expressions of dissent. All these effects have generated covert opposition to the regime and occasional acts of violence"

The United States pursued policies like these not only in Saudi Arabia and the smaller Gulf States, but elsewhere in the Middle East as well. When the U.S. overthrew Mossadegh in Iran in 1953, and reinstalled the Shah in power, Washington began carrying out precisely the same policies in Iran as it employed in Saudi Arabia. The Shah's secret police, known as SAVAK, and the Iranian military forces both grew markedly stronger. For 26 years the Shah's repressive regime succeeded in smothering internal dissent. In 1979, however, major internal dissent did erupt, supported by radical Islamic clerics who wanted all U.S. influence out of their land. The Shah was quickly overthrown. U.S. experiences in Iran since that date should have suggested to people in Washington that just perhaps the strong U.S. support for repressive regimes in the Middle East was not the ideal long-term policy for us to pursue. No reexamination of U.S. foreign policy ever got started, however, because the United States was immediately consumed by the horrible insult Iranians imposed on us when they held over 50 Americans from the U.S. Embassy hostage for more than a year.

Then, in the 1980s, the U.S. spent the decade quietly cozying up to Saddam Hussein, the dictatorial ruler of Iraq, which was and is another big oil producer of the Middle East. Since Iran was now a U.S. enemy, the U.S. supported Iraq in its war against Iran. The U.S. did not criticize Saddam Hussein even when he employed chemical warfare to gas sizable numbers of Kurdish people in his own country. The United States only abandoned him in 1990, when he crossed the U.S. over Kuwait. Even here, the diplomatic signals Saddam received from the U.S. until shortly before he invaded Kuwait were very unclear. Once again, when the break finally came, the U.S. administration gave no thought to reappraising its own policies throughout the region. A decision was made in favor of going to war to end this threat to U.S. hegemony and U.S. access to oil, and that was that.

Now, in the year 2002, this almost-60-year-old Middle East oil policy of the United States is showing signs of even more fraying at the edges. Beyond any question in my opinion, one of the root causes behind the terrorism of September 11 was this very U.S. policy of supporting for the past half-century and more these authoritarian and often corrupt Arab and Muslim governments. There exists a high degree of anger among many Muslims with their own governments, which have for so long been supported by the U.S.

Osama bin Laden is a good example of this particular root cause behind the September 11 terrorism. His wrath was directed as much against the Saudi government, for example, as it was against the United States. His opposition to what used to be his own government was probably the main reason why he had the support of a majority of the young men under 25 in Saudi Arabia. He received similar support from many young men in other Arab and Muslim states as well. Right now these groups of angry young men obviously no longer have a viable leader in Osama bin Laden, but other extremist leaders are almost sure to arise. In addition, the next generation of leaders in at least some of these states may well emerge from among these young men. If any of them do come into power, their future governments will likely be more anti-American than the present governments, which Washington likes to call "moderate," but which are really nothing of the sort. If we have not reduced our energy dependence on oil in the meantime, we may face serious trouble.

The U.S. should therefore adopt quite draconian measures immediately to reduce its overall energy usage, including its dependence on Mideast oil. It is unlikely, for the near future at least, that the U.S. will solve a future energy crunch through alternative power sources or by "clean" coal, nuclear power, or Alaskan oil usage. The U.S. also should not count on oil supplies from Central Asia as a way to ignore the need for conservation.

The U.S. should also, over time and gradually, reduce its ties with the present governments in many Muslim states, and try to develop improved relations with opposition elements there, actively seeking out democratically inclined groups. Such steps will be necessary if there is to be any hope of reducing support for future Osama bin Ladens that arises from the anger of Arabs and Muslims with their own governments.

I want to turn now to another foreign policy problem that the U.S. faces in the Middle East, one that has become more tightly intertwined with U.S. oil policies since September 11. Ever since shortly after World War II, the U.S. has had not one but two fundamental foreign policies in the Middle East. The first policy, which I've already talked about, has been to support authoritarian and undemocratic governments in the oil nations in an effort to guarantee the long-term easy access to Middle East oil at "reasonable" prices. The other policy, equally important, has been to provide strong support to Israel and to guarantee the security of Israel as a Jewish state, also for the long term.

Over the last fifty-plus years, there has been a fair amount of tension and conflict between these two policies. The United States under President Harry Truman was, as I'm sure you all know, instrumental in helping to establish the state of Israel in 1948. But even then, one of the reasons for the opposition to Truman's desires by many other U.S. officials, including the Secretary of State, General George Marshall, was that it might endanger the west's access to oil from the Arab nations.

As it has turned out, for most of the period since World War II, the U.S. has managed to keep its two basic policies in the Middle East pretty much apart from each other--in separate boxes so to speak--and to keep the tensions between them in check. The very existence of the Cold War, which provided the bogey-man of a common enemy, helped in this regard. The one obvious time when the U.S. proved unable to keep the tensions between its two policies under control was the OPEC oil embargo against the west in late 1973 and early 1974. The Arab-Israeli war of 1973, and specifically the U.S. response of resupplying Israel with large amounts of new military equipment, precipitated the embargo, and many of us here can remember the gas lines that resulted in this country. But the gas lines only lasted a few months, and then we all went back to normal. But we should remember those months as a perfect example of the fact that there are indeed real conflicting interests involved in the two basic U.S. foreign policies in the Middle East.

Overall, though, because the United States has been able to hold these conflicting interests in check for most of the past half century, I think that Washington has allowed the tensions to grow, more or less ignored by U.S. policymakers, to a point where they are going to be exceedingly difficult to deal with in the future. Since September 11, a number of things have happened that make it more impossible than ever to separate the effects of the Israel-Palestine problem from the effects of the continuing U.S. support for most authoritarian governments of the oil nations in the area.

In Saudi Arabia and most of the small Gulf States, the position of the monarchies has become more precarious, as these monarchies have been subjected to more criticism since September 11 from public opinion in the United States than has been the case for years. In normal circumstances, when these monarchies are confident that the U.S. guarantee of their security is strong and unbreakable, most of them will not worry too much about other issues that might further weaken their domestic position. The George W. Bush administration is undoubtedly reassuring them that the U.S. security guarantee is still in effect, but they cannot help but be worried about its permanence when they see public opinion in this country changing. This puts pressure on the monarchies to pay more attention to the opinion of their own Arab "street." And the opinion of this Arab "street" is today more intensely critical than ever of Israel's policies on Palestine and the continued occupation of the West Bank and Gaza.

The U.S. government, from September 11 right up to the present, has made it clearer than ever to the world at large that it will unilaterally decide what actions around the world constitute "terrorism," and what actions do not. Specifically, in the minds of Arabs and Muslims everywhere, the U.S. seems to have accepted all actions by Palestinians against Israelis, including acts against Israeli soldiers as well as those against innocent civilians, as being terrorism. At the same time, however, the U.S. appears to believe that no acts by Israelis against Palestinians constitute terrorism. Arabs see this as a double standard. When, also at the same time, Arabs see their own rulers expressing support for the "war on terrorism" as it is defined by the U.S., their antagonism toward their own rulers intensifies. And the rulers themselves, recognizing this antagonism, feel greater concern for their own positions.

I'd like to express a note of caution here. I certainly do not know for sure whether any, or some, or all of the governments in Arab oil nations--the dictatorial governments whose stability and security the U.S. has guaranteed for almost 60 years--will collapse in the near future. Of course change can happen rapidly and without warning. The best minds in the U.S. government had no inkling that the Shah of Iran was going to be ousted a week before it happened in 1979. But even governments that seem to be falling apart can sometimes last for years, until some totally unforeseen shove comes along that pushes them over the edge.

What I am more sure of is that these Arab oil governments are now under greater pressure to change than they have been for years, because of developments since September 11. Therefore the U.S. should be actively encouraging--though never using military force to do so--a gradual movement toward greater political democracy in these nations. And in order to reduce the importance of one major factor leading to greater instability in the region, the U.S. should immediately begin to play a far more active role than it has recently in pressing for a solution to the Israel-Palestine problem based on two truly sovereign nations, with strong treaty guarantees from the United States of the future security of both of these nations.

Simultaneously,  wars for access to cheap oil (Iraq, Libya) can  be viewed as desperate attempts to find a way out of "secular stagnation", in which advanced economies found themselves after 2008 (or, more correctly, after 2000). And history proves that war is not always necessary. Sometimes other mechanisms work as well. So lowering of oil price for a considerable perios can also be viewed as a  clever "Hail Mary" pass to save Western economies which suffer from stagnation (aka "new normal") characterized by low economic growth, high level of debt,  and high unemployment rate --  along with deflationary tendencies at the end of debt expansion super cycle. 

And this precious product then is by-and-large wasted. In most Western countries population uses a lot more energy than they absolutely have to use, burning lion share of it in personal transportation.  Industries produce a lot of unnecessary or outright harmful crap, which sell only by the power of marketing.  Some industries produce crap exclusively and can be eliminated ;-). Most people in the USA could probably cut their private gas consumption by 50% or more with little or no harful effects (less car trips, sharing of cars, use of hybrid and electrical cars for commute, telecommuting, etc).

But this is not true of major industries, air and sea transport.  Those are areas where the limits set by "end of cheap oil" strike hard. At $4 per gallon and higher some (heavy/bulky) goods produced in China are already uneconomic to ship to the USA. That already started to affect  furniture industry. And we need get serious about planning, and the subsequent modifications in our energy usage pattern. Transition to the world with less "cheap oil" takes a lot of time and money to implement.

It might well be possible to replace around 20% of today’s oil consumption with renewable. Hybrid and electrical cars don't save much energy (lithium battery production consumes a lot of energy and rare metals which are very expensive to mine and refine) but they allow to substitute burning of oil to burning coal to produce electricity. 

Just the fact that oil industry now resorted to two  ecologically dangerous methods of extraction of shale oil and tar sands oil indirectly proves "top cheap oil" hypothesis. Why bother if cheap oil is plentiful? It's simply stupid to invest money in such extraction schemes unless you really believe in the "end of cheap oil".  If you object to this that means that you can't think clearly an dispassionately.

In both cases the size of ecological damage will be certain only decades later. it might be something like destroying America to save it. IMHO in no way the US shale production could be the decisive factor in spot prices drop of this magnitude (to closer $30 in 2015 dollars which so 30/2.4 in 1983 dollars ). And in 2014-2015 economic contraction did not reached 2008 levels to justify it from this point of view. EROEI of shale oil is way too low for shale oil to be competitive at current prices:  it is a complex and not very efficient process of conversion of energy and junk bonds into oil. It is far from just drilling a hole  and collecting oil which  flows under internal pressure  like in old good times.  Horizontal drilling greatly helps (and is the essence of most new methods of oil extraction with one (upper) well used to inject stream or chemicals and the other below it to collect oil) , but does not change the whole picture or lower EROEI of those methods. According to Wikipedia:

A 1984 study estimated the EROEI of the various known oil-shale deposits as varying between 0.7–13.3[75] although known oil-shale extraction development projects assert an EROEI between 3 to 10. According to the World Energy Outlook 2010, the EROEI of ex-situ processing is typically 4 to 5 while of in-situ processing it may be even as low as 2. However, according to the EIA most of used energy can be provided by burning the spent shale or oil-shale gas.[76]

Same problem of low EROEI is true about tar sands. Simplifying you can think about extraction of oil from tar sands as the industrial process of converting energy of  natural gas and junk bonds into oil. Approximately  280–350 kWh of energy is needed to extract a barrel of bitumen and upgrade it to synthetic crude. Most of this energy is produced by burning natural gas. Assuming $.1 per kilowatt we will get energy cost alone around 28-$35 a barrel. You probably should double this number to account for capital expenses and other costs.  

Is oil commodity or under neoliberalism this is another currency subject to standard currency attacks

A commodity currency is a name given to currencies of countries which depend heavily on the export of certain raw materials for income. These countries are typically developing countries, e.g. countries like Burundi, Tanzania, Papua New Guinea; but also include developed countries like Canada and Australia.

Befor assendance of neoliberalism in 1980th world oil prices were determined largely by real daily supply and demand. It was the province of oil buyers and oil sellers. Then Goldman Sachs decided to buy the small Wall Street commodity brokerage, J. Aron in the 1980th They had their eye set on transforming how oil is traded in world markets.

It was the advent of “paper oil,” oil traded in futures, contracts independent of delivery of physical crude, easier for the large banks to manipulate based on rumors and derivative market skullduggery, as a handful of Wall Street banks dominated oil futures trades and knew just who held what positions, a convenient insider role that is rarely mentioned inn polite company. It was the beginning of transforming oil trading into a casino where Goldman Sachs, Morgan Stanley, JP MorganChase and a few other giant Wall Street banks ran the crap tables. Essentially they invented another commodity currency. In the foreign exchange market, commodity currencies generally refer to the Australian dollar, Canadian dollar, New Zealand dollar, Norwegian krone, South African rand, Brazilian real, Russian ruble and the Chilean peso.

It looks like oil also became not pure commodity, but a new commodity currency. New York really trades overwhelmingly on a non-physical oil basis these days. Nobody checks if sellers of the futures have actual oil to settle. All settmenta are in dollar. In other words oil was virtualized.

In addtionan there are multiple oil ETFs (which are prefect way to rob lemmings -- naive investors who decided that oil is more reliable store of value then stocks)

Symbol  Name  Assets*  Avg Vol  YTD  1 Year  3 Year  5 Year  Inception  ER  ETF Home Page  Liquidity  Expenses 
USO United States Oil Fund $2,578,400.00 25,967,785 -28.05% -57.77% -59.14% -56.62% 2006-04-10 0.45% View A+ A+
OIL S&P GSCI Crude Oil Tot Ret Idx ETN $866,760.90 4,389,938 -33.41% -63.17% -64.50% -62.10% 2006-08-15 0.75% View A B
DBO DB Oil Fund $513,040.00 331,095 -27.39% -58.67% -58.24% -53.53% 2007-01-05 0.78% View A B-
BNO United States Brent Oil Fund $91,324.50 128,165 -26.08% -57.43% -59.34% -35.66% 2010-06-02 0.90% View A- C+
USL United States 12 Month Oil $70,752.00 84,619 -22.71%

As with futures, several questions arise about OIL ETFs. In any case as dollar finance is unlimited (via printing press) that creates completely new environment for commodities, when the price can be completely detached from reality.  In a way, oil ETFs are not that different then gold EFT which became pure "virtual currency" called "gold"  -- yet another financial speculation vehicle (Something Just Snapped At The Comex Zero Hedge):

As of Friday the comex gold "coverage" or amount of paper claims on every ounce of physical, was literally off the chart, soaring to a mindblowing 207 ounces of paper gold claims for every ounce of deliverable gold. This also means that the dilution ratio between physical gold and paper gold has hit a new all-time low of just 0.48%!

Similarly to games with gold we see "naked" shorting of oil:

United States Oil Fund LP (ETF) Short Interest Down 6.7% in July (USO) by Max Byerly

Aug 18th, 2015 | Ticker Report

Shares of United States Oil Fund LP (ETF) (NYSE:USO) were the target of a significant decline in short interest in the month of July. As of July 31st, there was short interest totalling 45,855,306 shares, a decline of 6.7% from the July 15th total of 49,139,106 shares, AnalystRatings.NET reports. Based on an average trading volume of 23,230,679 shares, the short-interest ratio is currently 2.0 days.

United States Oil Fund LP (NYSE:USO) opened at 13.89 on Tuesday. United States Oil Fund LP has a 52 week low of $13.86 and a 52 week high of $35.83. The company’s 50-day moving average is $16.41 and its 200 day moving average is $18.44.

United States Oil Fund, LP (NYSE:USO) is a commodity pool that issues limited partnership interests (shares) traded on the NYSE Arca, Inc. The investment objective of USO is for changes in percentage terms of its shares’ per share net asset value (NAV) to reflect the changes in percentage terms of the spot price of light, sweet crude oil delivered to Cushing, Oklahoma, as measured by the changes in the price of the futures contract for light, sweet crude oil traded on the New York Mercantile Exchange (the NYMEX). The Company’s general partner is United States Commodity Funds LLC. The net assets of USO consist primarily of investments in futures contracts for light, sweet crude oil, other types of crude oil, diesel-heating oil, gasoline, natural gas and other petroleum-based fuels that are traded on the NYMEX, ICE Futures or other the United States and foreign exchanges.

Here is an interesting graph of money manager positions on NYMEX WTI (only NYMEX and only WTI):

The key question here is: "To what extent oil is still a commodity, and to what extent it is now yet another "virtual currency" subject to standard currency attacks ?" Naked selling of oil futures via shorting of OIL ETFs is not only possible, but highly profitable path for such attacks (4 Ways to Short Oil with ETFs - May 16, 2013 - Zacks.com).  All those tricks are possible due to free convertibility to US dollars, which unlike oil do not have any Earth-based limitations as for quantity and, what is more important, quality (gas liquids and shale oil are not equivalent to "classic' oil and refining of them produce mainly gasoline, instead of full spectrum of products; they should be considered "oil substitutes" and counted separately). And small amount injected in ETF can move spot oil market vary efficiently. So tail can wag the dog.

Who finance such attacks as losses can be substantial is an interesting question the answer on which I do not know, but recent behaviour of oil prices is typical for a currency attack as data about real oil extraction does not produce any optimism as for elimination of "peal cheap oil" phenomenon. But for speculators and gulling retail investors this does not matter. Casino is a casino. What is interesting the US MSM produce highly deceptive and well coordinated picture suggesting that there is government involvement in the whole scheme ( see below Russia sanctions section).

All those talks about crisis of overproduction are suspect. To a certain extent this might be a factor  due to slowing down of China economy and perma recession in the USA along with better small cars efficiency. But it is impossible to hide the fact that it was Saudi Arabia that decided to lower the oil prices and started to move in this direction ( An Oil Price 'Cold War' With Saudi Arabia Experts Disagree - US News) much like that did to economically crash the USSR in late 80th, early 90th.  I think that talk about attack on the USA shale industry does not make much sense, as Saudi Arabia is a vassal state and such move is punishable for a vassal:

Some experts declared it the start of a “cold war” with Saudi Arabia, as described by two University of Texas professors in an op-ed in the Dallas Morning News. Other analysts, however, contend that the Saudis are merely trying to defend against other exporters to the U.S.

“There’s another conflict brewing in the Middle East — the intensifying oil battle between Saudi Arabia and Texas,” Isaac Barchas and Michael Webber, who teach at the University of Texas at Austin, wrote in the op-ed.

As Webber, deputy director of the university's Energy Institute, describes to U.S. News, "Ford versus GM, Dell versus Apple: these are big companies duking it out for market share. Why would it be any different for oil. Is it a military war? No. But it's a market share war."

There are three main parts to his and Barchas' argument:

  1. Hydraulic fracturing, or fracking, has unleashed an energy boom here in the U.S., reducing net crude oil and petroleum product imports to their lowest levels since 1987.
  2. With more oil now available on the market, combined with a sluggish global economy that’s reduced demand in Europe and China, benchmark Brent crude oil prices have fallen by roughly 27 percent since June – their lowest point in four years.
  3. Saudi Arabia, the U.S's.second-largest source of imported oil behind Canada, is trying to retain its market share by undercutting American producers. The goal: drive down prices far enough to scare away Wall Street investors or simply make fracking unprofitable, forcing U.S. companies to take their drill rigs offline to reduce supply and clearing the way for more Saudi oil imports.

As Chip Register, managing director of consulting firm Sapient Global Markets asserted in a blog post on Forbes, “The Saudis have put a bull’s-eye on the U.S. shale industry.”

Other experts, however, expressed strong skepticism with this view.

“It’s not a personalized attack,” Steven Kopits, managing director of the consulting firm Princeton Energy Advisors, says of the Saudi discount. “Saudi Arabia is looking out for its own interests, not trying to undermine other people’s interests.” 

Jan Kalicki, public policy scholar and energy lead at The Wilson Center, a nonpartisan think tank, agrees.

“Any real impact on shale in the U.S. is going to require more than a price adjustment of this kind," he says.

U.S. shale fields can start and stop production relatively quickly. Technological advances, meanwhile, have sharply lowered the break-even point – no longer does fracking rank as one of the most expensive forms of oil production. It can still turn a profit at current prices of $80 a barrel, but depending on the type of well, fracking operations might even be able make money at prices as low as $55 a barrel.

Hence, “trying to apply predatory pricing in the oil business will only work in the very short run, if at all,” says Paul Sullivan, economics professor at National Defense University.

I think here the target is probably Russia. Telegraph reported  that Saudis offer Russia secret oil deal if it drops Syria - Telegraph

The revelations come amid high tension in the Middle East, with US, British, and French warship poised for missile strikes in Syria. Iran has threatened to retaliate.

The strategic jitters pushed Brent crude prices to a five-month high of $112 a barrel. “We are only one incident away from a serious oil spike. The market is a lot tighter than people think,” said Chris Skrebowski, editor of Petroleum Review.

Leaked transcripts of a closed-door meeting between Russia’s Vladimir Putin and Saudi Prince Bandar bin Sultan shed an extraordinary light on the hard-nosed Realpolitik of the two sides.

Prince Bandar, head of Saudi intelligence, allegedly confronted the Kremlin with a mix of inducements and threats in a bid to break the deadlock over Syria. “Let us examine how to put together a unified Russian-Saudi strategy on the subject of oil. The aim is to agree on the price of oil and production quantities that keep the price stable in global oil markets,” he said at the four-hour meeting with Mr Putin. They met at Mr Putin’s dacha outside Moscow three weeks ago.

“We understand Russia’s great interest in the oil and gas in the Mediterranean from Israel to Cyprus. And we understand the importance of the Russian gas pipeline to Europe. We are not interested in competing with that. We can cooperate in this area,” he said, purporting to speak with the full backing of the US.

Oil futures

Oil ETNs such USO or OIL does not have any intrinsic value. They are based on oil futures. Like is that case with currency future contracts, empirical studies suggest, not only is the oil futures price a biased estimate of the future spot price, but more often  it even gets the direction wrong. If the futures price suggests the oil will depreciate, it can well appreciate instead. In addition you can buy or sell options on oil making this commodity a real paradise for speculators.

Speculators definitely have expectations about the future oil spot price.  But often they demonstrate herd behavior driving the price to extremes as trading futures is trading "virtual oil" (futures are settled in dollars, never in actual commodity). This is especially true about short selling which can drive oil to really unprofitable for all major producers price. Recently they manage to drive it to less then $40 a barrel, the price at which only selected low cost producers can get the oil form the ground (to say nothing to invest in additional exploration or pay the cost of infrastructure and such). You ability to see oil short via specialized ETF or other means is limited only by your dollar reserves and the availability of counter party (and you can play certain games with this counterparty issue). 

Here is example of prices on Aug 31, 2015 (which also is a nice demonstration of dramatic dynamics that is possible in a single day) :

Chart Current Session Prior Day Opt's
Open Time Set Chg Vol Set Op Int
Oct'15 45.00 19:28
Aug 31
49.20
3.98 719704 45.22 440212 Call Put
Nov'15 45.69 19:28
Aug 31
49.93
3.95 137067 45.98 215025 Call Put
Dec'15 46.57 19:29
Aug 31
50.77
3.91 162736 46.86 243840 Call Put
Jan'16 47.50 19:28
Aug 31
51.63
3.91 57430 47.72 102471 Call Put
Feb'16 47.50 19:28
Aug 31
52.38
3.93 38475 48.45 50167 Call Put
Mar'16 48.25 19:29
Aug 31
52.98
3.92 38170 49.06 73615 Call Put
Apr'16 48.75 19:29
Aug 31
53.47
3.86 14106 49.61 25925 Call Put
May'16 48.99 19:28
Aug 31
53.85
3.76 7934 50.09 23357 Call Put
Jun'16 49.86 19:28
Aug 31
54.16
3.64 44230 50.52 103798 Call Put
Jul'16 50.29 19:28
Aug 31
54.38
3.53 3938 50.85 21832 Call Put
Aug'16 50.03 19:28
Aug 31
54.61
3.42 2511 51.19 16337 Call Put
Sep'16 50.72 19:28
Aug 31
54.87
3.31 8091 51.56 42572 Call Put
Oct'16
-
19:28
Aug 31
55.16
3.20 1164 51.96 17226 Call Put
Nov'16
-
19:28
Aug 31
55.48
3.11 1038 52.37 17809 Call Put
Dec'16 52.59 19:28
Aug 31
55.81
3.02 56618 52.79 133005 Call Put
Jan'17
-
19:28
Aug 31
56.05
2.94 598 53.11 14894 Call Put
Feb'17
-
19:29
Aug 31
56.31
2.87 277 53.44 8034 Call Put
Mar'17 55.45 19:29
Aug 31
56.59
2.81 988 53.78 9195 Call Put
Apr'17
-
19:28
Aug 31
56.85
2.75 465 54.10 3543 Call Put
May'17
-
19:29
Aug 31
57.08
2.69 435 54.39 2930 Call Put
Jun'17 53.69 19:29
Aug 31
57.34
2.64 5669 54.70 21475 Call Put
Jul'17 56.32 19:28
Aug 31
57.55
2.60 143 54.95 3120 Call Put
Aug'17
-
19:29
Aug 31
57.81
2.57 48 55.24 1760 Call Put
Sep'17
-
19:28
Aug 31
58.11
2.56 71 55.55 3982 Call Put
Oct'17
-
19:28
Aug 31
58.41
2.54 15 55.87 1184 Call Put
Nov'17
-
19:28
Aug 31
58.73
2.53 15 56.20 1270 Call Put
Dec'17 55.75 19:28
Aug 31
59.05
2.51 9588 56.54 44135 Call Put
Jan'18
-
19:28
Aug 31
59.21
2.49
-
56.72 1532 Call Put
Feb'18
-
19:28
Aug 31
59.38
2.46
-
56.92 312 Call Put
Mar'18
-
19:28
Aug 31
59.57
2.43
-
57.14 2688 Call Put
Apr'18
-
19:29
Aug 31
59.77
2.40
-
57.37 63 Call Put
May'18
-
19:28
Aug 31
59.98
2.37
-
57.61 516 Call Put
Jun'18
-
19:29
Aug 31
60.21
2.34 226 57.87 3700 Call Put
Jul'18
-
19:28
Aug 31
60.35
2.30
-
58.05 296 Call Put
Aug'18
-
19:28
Aug 31
60.52
2.27
-
58.25 61 Call Put
Sep'18
-
19:28
Aug 31
60.69
2.23
-
58.46 461 Call Put
Oct'18
-
19:28
Aug 31
60.87
2.20
-
58.67 61 Call Put
Nov'18
-
19:28
Aug 31
61.05
2.16
-
58.89 311 Call Put
Dec'18 58.54 19:28
Aug 31
61.24
2.12 2002 59.12 19416 Call Put
Jan'19
-
19:28
Aug 31
61.35
2.10
-
59.25 204 Call Put
Feb'19
-
19:28
Aug 31
61.48
2.08
-
59.40 4 Call Put
Mar'19
-
19:28
Aug 31
61.62
2.06
-
59.56 454 Call Put
Apr'19
-
19:28
Aug 31
61.78
2.04
-
59.74 4 Call Put
May'19
-
19:28
Aug 31
61.96
2.02
-
59.94 4 Call Put
Jun'19
-
19:28
Aug 31
62.15
2.00
-
60.15 1185 Call Put
Jul'19
-
19:28
Aug 31
62.20
1.98
-
60.22 5 Call Put
Aug'19
-
19:28
Aug 31
62.29
1.96
-
60.33 4 Call Put
Sep'19
-
19:28
Aug 31
62.41
1.94
-
60.47 4 Call Put
Oct'19
-
19:28
Aug 31
62.55
1.92
-
60.63 4 Call Put
Nov'19
-
19:28
Aug 31
62.72
1.90
-
60.82 104 Call Put
Dec'19
-
19:28
Aug 31
62.93
1.88 158 61.05 6628 Call Put
Jan'20
-
19:29
Aug 31
63.00
1.86
-
61.14
-
Call Put
Feb'20
-
19:29
Aug 31
63.08
1.84
-
61.24
-
Call Put
Mar'20
-
19:28
Aug 31
63.17
1.82
-
61.35
-
Call Put
Apr'20
-
19:28
Aug 31
63.28
1.80
-
61.48
-
Call Put
May'20
-
19:28
Aug 31
63.41
1.78
-
61.63
-
Call Put
Jun'20
-
19:28
Aug 31
63.56
1.76
-
61.80
-
Call Put
Jul'20
-
19:28
Aug 31
63.57
1.74
-
61.83
-
Call Put
Aug'20
-
19:28
Aug 31
63.62
1.72
-
61.90
-
Call Put
Sep'20
-
19:29
Aug 31
63.70
1.70
-
62.00
-
Call Put
Oct'20
-
19:29
Aug 31
63.83
1.68
-
62.15
-
Call Put
Nov'20
-
19:28
Aug 31
63.97
1.66
-
62.31
-
Call Put
Dec'20 64.00 19:28
Aug 31
64.14
1.64 14 62.50 1935 Call Put
Jun'21
-
19:28
Aug 31
64.59
1.57
-
63.02
-
Call Put
Dec'21
-
19:28
Aug 31
65.04
1.50 1 63.54 440 Call Put
Jun'22
-
19:28
Aug 31
65.34
1.50
-
63.84
-
Call Put
Dec'22
-
19:28
Aug 31
65.64
1.50
-
64.14 180 Call Put
Jun'23
-
19:29
Aug 31
65.64
1.50
-
64.14
-
Call Put

Is this  the mixture of overproduction crisis and intelligence operation with unforeseen side effects (blowback)

If we assume that the current event are a complex mixture of overproduction crisis, secular stagnation and intelligence operation with the goal to squeeze Russia (and as a side effect hurt Iran revenues)  that we should expect it lasting for several years, enough to destroy the opponents economically. So changes of recovering of oil prices in 2016 from this point of view are slip. For Russia this is a double blow as oil prices also affect natural gas prices. And it is true that Russian leadership were completely unprepared to this course of events, so the damage is great and real. As noted "Obama’s foreign policy goals get a boost from plunging oil prices" (Washingtonpost, Dec 23, 2015):

Plunging crude oil prices are diverting hundreds of billions of dollars away from the treasure chests of oil-exporting nations, putting some of the United States’ adversaries under greater stress.

After two years of falling prices, the effects have reverberated across the globe, fueling economic discontent in Venezuela, changing Russia’s economic and political calculations, and dampening Iranian leaders’ hopes of a financial windfall when sanctions linked to its nuclear program will be lifted next year.

At a time of tension for U.S. international relations, cheap oil has dovetailed with some of the Obama administration’s foreign policy goals: pressuring Russian President Vladi­mir Putin, undermining the popularity of Venezuelan President Nicolás Maduro and tempering the prospects for Iranian oil revenue. At the same time, it is pouring cash into the hands of consumers, boosting tepid economic recoveries in Europe, Japan and the United States.

https://www.washingtonpost.com/business/economy/as-crude-oil-prices-plunge-so-do-oil-exporters-revenue-hopes/2015/12/23/ed552372-a900-11e5-8058-480b572b4aae_story.html?hpid=hp_hp-top-table-main_oil-910pm%3Ahomepage%2Fstory

But there are some visible side effect, with some probably not well anticipated:

All that means that dramatic drop in oil prices is a mixed blessing. Mike Whitney lists several other factors( Oil Price Blowback , Jan 6, 2015, Counterpunch)

Up to now, of course, Russia, Iran and Venezuela have taken the biggest hit, but that will probably change as time goes on. What the Obama administration should be worried about is the second-order effects that will eventually show up in terms of higher unemployment, market volatility, and wobbly bank balance sheets. That’s where the real damage is going to crop up because that’s where red ink and bad loans can metastasize into a full-blown financial crisis. Check out this blurb from Nick Cunningham at Oilprice.com and you’ll see what I mean:

“According to an assessment from the Federal Reserve Bank of Dallas, an estimated 250,000 jobs across eight U.S. states could be lost in 2015 if oil prices don’t rise. More than 50 percent of those job losses would occur in Texas, which leads the nation in oil production.

There are some early signs that a slowdown in drilling could spread to the manufacturing sector in Texas… One executive at a metal manufacturing company said in the survey, “the drop in crude oil prices is going to make things ugly… quickly.” Another company that manufactures machinery told the Dallas Fed, “Low oil prices will drive reductions in U.S. drilling rigs, which will in turn reduce the market for our products.”

The sentiment was similar for a chemical manufacturer, who said “lower oil prices will adversely impact margins. Energy volatility will cause our customers to keep inventories tight.”

States like Texas, North Dakota, Oklahoma, and Louisiana have seen their economies boom over the last few years as oil production surged. But the sector is now deflating, leaving gashes in employment rolls and state budgets.” (Low Prices Lead To Layoffs In The Oil Patch, Nick Cunningham, Oilprice.com)

Of course industries lay-off workers all the time and it doesn’t always lead to a financial crisis. But unemployment is just one part of the picture, lower personal consumption is another. Take a look:

“Falling oil prices are a bigger drag on economic growth than the incremental “savings” received by the consumer…..Another way to show this graphically is to look at the annual changes in Personal Consumption Expenditures (PCE) in aggregate as compared to the subsection of PCE spent on energy and related products. This is shown in the chart below.

Lower Energy Prices To Lower PCE (Personal Consumption Expenditures):

unnamed

(The Gasoline Price Myth, Lance Roberts, oilprice.com)

See? So despite what you might have read in the MSM, lower gas prices do not translate into greater personal consumption or more robust growth. Quiet the contrary, they tend to intensify deflationary pressures and reduce activity which is a damper on growth.

Then there’s the knock-on effects that crashing prices and layoffs have on other industries like mining, manufacturing and chemical production. Here’s more from Oil Price:

“Oil and gas production makeup a hefty chunk of the “mining and manufacturing” component of the employment rolls. Since 2000, when the oil price boom gained traction, Texas has comprised more than 40% of all jobs in the country according to first quarter data from the Dallas Federal Reserve…

The majority of the jobs “created” since the financial crisis have been lower wage paying jobs in retail, healthcare and other service sectors of the economy. Conversely, the jobs created within the energy space are some of the highest wage paying opportunities available in engineering, technology, accounting, legal, etc. In fact, each job created in energy related areas has had a “ripple effect” of creating 2.8 jobs elsewhere in the economy from piping to coatings, trucking and transportation, restaurants and retail….

The obvious ramification of the plunge in oil prices is that eventually the loss of revenue will lead to cuts in production, declines in capital expenditure plans (which comprise almost 1/4th of all capex expenditures in the S&P 500), freezes and/or reductions in employment, and declines in revenue and profitability…

Simply put, lower oil and gasoline prices may have a bigger detraction on the economy than the “savings” provided to consumers.” (The Gasoline Price Myth, Lance Roberts, oilprice.com)

None of this sounds very reassuring, does it? And yet, all we hear from the media is how the economy is going to reach “escape velocity” on the back of cheap oil. Nonsense. This is just more “green shoots” baloney wrapped in public relations hype. The fact is, the economy needs the good-paying jobs more than it needs low-priced energy. But now that prices are tumbling, those jobs are going to disappear which is going to be a drag on growth.

Now check out these headlines I picked up on Google News that help to show what’s going on off the radar:

Measuring oil production and consumption: BBL,  MMbbl and Mb/d

In a way the USA (along with Canada) is an exceptional (read backward) country which still was unable (or more correctly unwilling) to switch to metric system.  In the USA oil production and  consumption by volume is usually measured in  barrels (BBL). One BBL equals 42 US gallons  or approximately 159 liters; 6.29 barrels equal one cubic meter and (on average) 7.33 barrels weigh one metric ton (1000 kilograms). Energy-wise one barrel of crude approximately equals 5604 cubic-feet of natural gas, 1.45 barrels of liquefied natural gas (LNG), or about one barrel of gas condensate.

When converting volume measures into weight measures a coefficient based on so called API gravity  is used. The latter is a measure of how heavy or light a petroleum liquid is compared to water: if its API gravity is greater than 10, it is lighter and floats on water; if less than 10, it is heavier and sinks. In other words this is a measure that is inverse of density. Although mathematically, API gravity is a dimensionless value,  for historical reasons it is measures in 'degrees' like angles. In this case this is degrees on a hydrometer instrument. API gravity values of most petroleum liquids fall between 10 and 70 degrees. From Wikipedia:

Crude oil is classified as light, medium, or heavy according to its measured API gravity.

Crude oil with API gravity less than 10° is referred to as extra heavy oil or bitumen. Bitumen derived from oil sands deposits in Alberta, Canada, has an API gravity of around 8°. It can be diluted with lighter hydrocarbons to produce diluted bitumen, which has an API gravity of less than 22.3°, or further "upgraded" to an API gravity of 31 to 33° as synthetic crude.[7]

Oil companies that are listed on American stock exchanges typically report their production in thousand or million barrels. Abbreviations like Mbbl (one thousand barrels), or MMbbl (one million barrels) are used. Often Mb/d is used instead of MMbbl per day.  This actually preferable notation that is used in this page.

As density of the oil varies it is not that easy to convert one metric into another for example volume into weight  as the following quote illustrates (Open Thread, Oil and Gas - Peak Oil Barrel ):

One problem is the estimate of Russian average barrels per metric ton, often it is assumed that this is 7.3 or 7.33 barrels per metric ton. If 7.33 barrels per ton is correct the average API gravity would be 33.4 degrees.

The Urals blend is about 31.7 degrees API or 7.25 barrels per metric ton.

On political motives for reporting less Russian output, possibly the US government wants the sanctions to affect Russian oil output and has some influence on what is reported by the EIA. Likewise the Russian government wants to show that sanctions are not affecting them and might influence the Russian oil ministry to report higher output.

Possibly this could happen or the average API gravity of Russian output may be different than we think, if API gravity is 31.7 degrees (Urals blend) then output in April would have been 10.55 Mb/d, JODI had about 10.1 Mb/d in April.

AlexS showed that the NGL numbers reported by the EIA and Jodi may be about 350 kb/d too high (perhaps some condensate is being included in NGL that should be part of C+C output). If we added 350 kb/d to JODI’s April 2015 estimate of C+C output we get about 10.45 Mb/d for Russia, now the difference is only 100 kb/d, take the average and call it 10.5 Mb/d+/- 50 kb/d. That is a better explanation than “politics” in my opinion.

Great Condensate Con: What liquids are counted as oil in statistical reports such as EIA

There are several different liquids that are usually counted as oil.  Three major are crude, condensate and Natural Gas Liquids. The total all three is often counted as would oil production which now is over 90 Mb/d. But by how much nobody knows. The EIA reports crude plus condensate  as "oil".  EIA has total world production of Crude Oil, NGPL, and Other Liquids at 93,770,000 barrels per day in June 2015.  This type of reporting provides oil traders with wrong data and was called "Great condensate con" :

Lease condensate consists of very light hydrocarbons which condense from gaseous into liquid form when they leave the high pressure of oil reservoirs and exit through the top of an oil well. This condensate is less dense than oil and can interfere with optimal refining if too much is mixed with actual crude oil. The oil industry's own engineers classify oil as hydrocarbons having an API gravity of less than 45--the higher the number, the lower the density and the "lighter" the substance. Lease condensate is defined as hydrocarbons having an API gravity between 45 and 70. (For a good discussion about condensates and their place in the marketplace, read "Neither Fish nor Fowl – Condensates Muscle in on NGL and Crude Markets.")

Refiners are already complaining that so-called "blended crudes" contain too much lease condensate, and they are seeking out better crudes straight from the wellhead. Brown has dubbed all of this the great condensate con.

Brown points out that U.S. net crude oil imports for December 2015 grew from the previous December, according to the U.S. Energy Information Administration (EIA), the statistical arm of the U.S. Department of Energy. U.S. statistics for crude oil imports include condensate, but don't break out condensate separately. Brown believes that with America already awash in condensate, almost all of those imports must have been crude oil proper.

Brown asks, "Why would refiners continue to import large--and increasing--volumes of actual crude oil, if they didn’t have to--even as we saw a huge build in [U.S.] C+C [crude oil plus condensate] inventories?"

Part of the answer is that U.S. production of crude oil has been declining since mid-2015. But another part of the answer is that what the EIA calls crude oil is actually crude plus lease condensate. With huge new amounts of lease condensate coming from America's condensate-rich tight oil fields -- the ones tapped by hydraulic fracturing or fracking -- the United States isn't producing quite as much actual crude oil as the raw numbers would lead us to believe. This EIA chart breaking down the API gravity of U.S. crude production supports this view.

Exactly how much of America's and the world's presumed crude oil production is actually condensate remains a mystery. The data just aren't sufficient to separate condensate production from crude oil in most instances.

Brown explains: "My premise is that U.S. (and probably global) refiners hit in late 2014 the upper limit of the volume of condensate that they could process" and still maintain the product mix they want to produce. That would imply that condensate inventories have been building faster than crude inventories and that the condensate is looking for an outlet.

That outlet has been in blended crudes, that is heavier crude oil that is blended with condensates to make it lighter and therefore something that fits the definition of light crude. Light crude is generally easier to refine and thus more valuable.

The trouble is, the blends lack the characteristics of nonblended crudes of comparable density (that is, the same API gravity), and refiners are discovering to their chagrin that the mix of products they can get out of blended crudes isn't what they expect.

So, now we can try to answer our questions. Brown believes that worldwide production of condensate "accounts for virtually all of the post-2005 increase in C+C [crude plus condensate] production." What this implies is that almost all of the 4 million-barrel-per-day increase in world "oil" production from 2005 through 2014 may actually be lease condensate. And that would mean crude oil production proper has been nearly flat during this period -- a conjecture supported by record and near record average daily prices for crude oil from 2011 through 2014. Only when demand softened in late 2014 did prices begin to drop.

Here it is worth mentioning that when oil companies talk about the price of oil, they are referring to the price quoted on popular futures exchanges -- prices which reflect only the price of crude oil itself. The exchanges do not allow other products such as condensates to be mixed with the oil that is delivered to holders of exchange contracts.

But when oil companies (and governments) talk about oil supply, they include all sorts of things that cannot be sold as oil on the world market including biofuels, refinery gains and natural gas plant liquids as well as lease condensate. Which leads to a simple rule coined by Brown: If what you're selling cannot be sold on the world market as crude oil, then it's not crude oil.

The glut that developed in 2015 may ultimately be tied to some increases in actual, honest-to-god crude oil production. The accepted story from 2005 through 2014 has been that crude oil production has been growing, albeit at a significantly slower rate than the previous nine-year period--15.7 percent from 1996 through 2005 versus 5.4 percent from 2005 through 2014 according to the EIA. If Brown is right, we have all been victims of the great condensate con which has lulled the world into a sense of complacency with regard to actual oil supplies--supplies he believes have been barely growing or stagnant since 2005.

"Oil traders are acting on fundamentally flawed data," Brown told me by phone. Often a contrarian, Brown added: "The time to invest is when there's blood in the streets. And, there's blood in the streets."

He explained: "Who of us in January of 2014 believed that prices would be below $30 in January of 2016? If the conventional wisdom was wrong in 2014, maybe it's similarly wrong in 2016" that prices will remain low for a long time.

Brown points out that it took trillions of dollars of investment from 2005 through today just to maintain what he believes is almost flat production in oil. With oil companies slashing exploration budgets in the face of low oil prices and production declining at an estimated 4.5 and 6.7 percent per year for existing wells worldwide, a recovery in oil demand might push oil prices much higher very quickly.

That possibility is being obscured by the supposed rise in crude oil production in recent years that may just turn out to be an artifact of the great condensate con.

 

But counting such a diverse group of liquids is impossible without substantial errors in each category. That mean that the error margin of and global production figure has margin or error around  +- 0.5% or even 1% or one Mb/d.  for example amount of oil produced and pumped to the surface at wellhead is different and greater that amount of oil that got to refineries (which along with chemical plants are major consumers) because of losses during transportation and evaporation or light fractions in case weather is hot during the period before oil is processed at refinery or chemical plant.  Also there are differences in reporting and errors in measuring oil density by various countries, difficulties of converting weight into volume and vice versa, etc.  There are also large differences in reporting between agencies ( aspofrance.viabloga.com)

Reporting of small producers (and small producer countries) is often very fuzzy and here various games can be and often are played with those report with compete impunity, if you have some agenda.  So any analyst who take published by agencies figures  as precise amount produced accuracy equal to five meaningful digits is iether idiot or crook. Only first three digits  probably can be countered as meaningful. In no way the forth digit is.  If the analyst is talking about "oil glut" based on those figures he/she is definitely a crook ;-). 

Now you understand that all talk about 1Mb/d glut is very suspect.

Que Bono and Wall Street HFT games with oil futures

Low oil prices are essentially a crime against humanity as oil is exhaustible resources and burning it now in oversized SUVs means depriving of fuel and extremely important important for chemical industry commodity future generations. So the question is "que bono"

From this point if view (which is a standard starting point of any crime investigation) the origin of low oil prices lies probably in Wall Street  which capitalized on the US government desire to hurt Russian economy, Saudi machinations (with Saudis as a partner in this crime ;-) related to thier declining market share in oil market.

It is not that difficult on the level of Wall street cguant to play the short game for a long time,  skillfully dropped the market prices by exploiting rumores, and with the help of MSM distorting statistics (just read a typical CNBC article to feel the level of crap they are trying to infuse in readers), exploiting Saudi desire to preserve market share combined with temporary oil overproduction. Temporary overproduction due to the period of oil prices over $100, when everybody and his brother in the USA were trying to discover and drill new shale well and convert junk bonds into flow of oil trying to get rich in such supposlydly lucrative market. 

World production at the same time stagnated. Russia exports are actually in decline for many years. After all Libya production now is off the market, due to destruction of their country and subsequent civil war caused by French intervention in alliance with the USA, Qatar and several other mid-eastern countries. If you analyze the US press the bias toward lower oil prices is  evident. 

 

Production by country and total world production

Estimated average world daily production of 95.71  Mb/d for 2015 ( (Jan 12, 2016 forecast) exceeds EIA’s Annual Energy Outlook 2015 forecast (April 2015) by 2.6 Mb/d! so much for EIA forecasting abilities.

For 2016 IEA predicts 95.93 (Jan 12, 2016 forecast) and for 2017 96.69 (also  Jan 12, 2016 forecast)

OPEC predictions were 94.5 Mb/d for 2015 (December 2015  forecast) with growth in 2020 to 97.6 (it presupposes investment of  around $250 billion each year in non OPEC countries and $40 billions annually by OPEC countries; money that with current oil prices are nowhere to come by):

In the downside supply scenario, 3.3 mb/d from non-OPEC supply is assumed to be lost by 2040 with respect to the Reference Case.

Oil production is highly concentrated.  The top dozen of out of 100 oil-producing countries accounted for over 73% of the world's oil production. The top three (Russia, Saudi Arabian and the USA) account for almost 40%. 

Here is a chart from  Bloomberg Business

Iraq and Iran are also large and important players but currently  they are definitely the second tier players.  That might change in the future.

Now what will (most probably) happen in 2016 with the major players

Now let's discuss Iran and Iraq

All three major oil producers (troika) are severely affected by the oil price slump, but for the USA as one of the largest world oil importers it is a mixed blessing (destruction of shale  industry and connected with it jobs is just a collateral damage for approximately $200 billion stimulus due to lower prices.

For the Russia and Saudis this is a huge negative development which  leads to unbalanced budgets (especially for Saudies who need $100 oil to balance the budget and  lost $100 billions of their foreign reserves in 2015) and depletion  of currency reserves (more for Saudis then Russia, but Saudis had bigger currency reserves and can benefit from being a vassal of the USA by commanding a higher prices for state assets in fire sale). 

All-in-all around 100 countries produce oil with top three producing around 40%,  and the top ten over 63% of the world's oil production.

According to International Energy Agency (EIA), in 2011 the top ten oil-producing countries accounted for over 63% of the world's oil production.[2] As of November 2012, Russia produced 10.9 million barrels of crude per day, while Saudi Arabia produced 9.9 million barrels.[3]

Top oil producers: According to EIA top 10 oil producer countries produced over 64 % of the world oil production in 2012. The top oil producers in 2012 were: Russia 544 Mt (13 %), Saudi Arabia 520 Mt (13 %), United States 387 Mt (9 %), China 206 Mt (5%), Iran 186 Mt (4 %), Canada 182 Mt (4 %), United Arab Emirates 163 Mt (4 %), Venezuela 162 Mt (4 %), Kuwait 152 Mt (4 %) and Iraq 148 Mt (4 %). In 2012 total oil production was 4,142 Mt. [4] In 2011 the world oil production was 4,011 Mt demonstrating an annually rising trend in oil production.[5]

  Country Production (bbl/day) Production (MT) Share of
World %
Date of
Information
 World 84,951,200 10,194 100% 2014 est. Peak Production
1 Russia 10,107,000 1212 14.05% 3/2015.[6] 10,107,000 (3/2015)
2 Saudi Arabia 9,735,200 1168 13.09% 12/2014.[6] 9,900,000 (1/1980)
3 United States 9,373,000 1124 12.23% 4/2015.[6] 9,610,000 (6/2015)
4 China 4,189,000 502 5.15% 5/2015.[6] 4,189,000 (5/2015)
5 Canada 3,603,000   4.54% 12/2014.[6] 3,603,000 (1/2015)
6 Iraq 3,368,000   4.45% 5/2015.[6] 3,368,000 (5/2015)
7 Iran 3,113,000   4.14% 12/2014.[6] 6,060,000 (1/1974)
8 United Arab Emirates 2,820,000   3.32% 12/2014.[6] 2,820,000 (1/2013)
9 Kuwait 2,619,000   2.96% 12/2014.[6] 2,650,000 (1/2013)
10 Mexico 2,562,000   3.56% 12/2014.[6] 3,476,000 (1/2004)
11 Venezuela 2,501,000   3.56% 12/2014.[6] 3,280,000 (1/1997)
12 Nigeria 2,423,000   2.62% 12/2014.[6] 2,627,000 (1/2005)
13 Brazil 2,255,000   3.05% 12/2014.[6] 2,255,000 (1/2015)
14 Angola 1,831,000   2.31% 12/2014.[6] 1,946,000 (1/2008)
15 Kazakhstan 1,573,000   1.83% 12/2014.[6]
16 Qatar 1,553,000   1.44% 12/2014.[6]
17 Norway 1,539,000   2.79% 12/2014.[6]
18 Algeria 1,462,000   2.52% 12/2014.[6]
19 Colombia 1,003,000   1.19% 12/2014.[6]
20 Oman 940,000   0.95% 12/2014.[6]
21 Azerbaijan 871,000   1.20% 12/2014.[6]
22 Indonesia 828,000   1.66% 12/2014.[6]
23 United Kingdom 801,000   1.78% 12/2014.[6]
24 India 772,000   1.04% 12/2014.[6]
25 Malaysia 570,000   0.82% 12/2014.[6]
26 Argentina 540,000   0.93% 12/2014.[6]
27 Ecuador 526,000   0.58% 12/2014.[6]
28 Egypt 514,000   0.80% 12/2014.[6]
29 Libya 470,000   0.85% 5/2015.[6]
30 Australia 338,000   0.70% 12/2014.[6]
31 Vietnam 337,000   0.36% 12/2014.[6]
32 Equatorial Guinea 270,000   0.41% 12/2014.[6]
33 Congo, Republic of the 265,000   0.33% 12/2014.[6]
34 Sudan 259,000   0.13% 12/2014.[6]
35 Thailand 241,000   0.45% 12/2014.[6]
36 Gabon 239,000   0.29% 12/2014.[6]
37 Turkmenistan 229,000   0.22% 12/2014.[6]
38 Denmark 175,000   0.31% 12/2014.[6]
39 Yemen 131,000   0.34% 12/2014.[6]
40 Brunei 112,000   0.17% 12/2014.[6]
41 Italy 106,000   0.17% 12/2014.[6]
42 Ghana 105,000   0.01% 12/2014.[6]
43 Chad 98,000   0.13% 12/2014.[6]
44 Romania 85,000   0.14% 12/2014.[6]
45 Trinidad and Tobago 81,000   0.18% 12/2014.[6]
46 Pakistan 81,000   0.16% 12/2014.[6]
47 Cameroon 81,000   0.09% 12/2014.[6]
48 Timor-Leste 79,000   0.11% 12/2014.[6]
49 Peru 69,000   0.17% 12/2014.[6]
50 Uzbekistan 65,000   0.08% 12/2014.[6]
51 Tunisia 55,000   0.11% 12/2014.[6]
52 Germany 52,000   0.19% 12/2014.[6]
53 Bolivia 51,000   0.06% 12/2014.[6]
54 Bahrain 50,000   0.06% 12/2014.[6]
55 Cuba 50,000   0.06% 12/2014.[6]
56 Turkey 48,000   0.06% 12/2014.[6]
57 Ukraine 41,000   0.12% 12/2014.[6]
58 New Zealand 40,000   0.07% 12/2014.[6]
59 Ivory Coast 36,000   0.07% 12/2014.[6]
60 Papua New Guinea 34,000   0.04% 12/2014.[6]
61 Belarus 30,000   0.04% 12/2014.[6]
62 Netherlands 28,000   0.07% 12/2014.[6]
63 Syria 23,000   0.48% 12/2014.[6]
64 Philippines 21,000   0.02% 12/2014.[6]
65 Albania 21,000   0.01% 12/2014.[6]
66 Mongolia 21,000   0.01% 12/2014.[6]
67 Burma 20,000   0.02% 12/2014.[6]
68 Congo, Democratic Republic of the 20,000   0.02% 12/2014.[6]
69 Poland 19,000   0.04% 12/2014.[6]
70 Austria 17,000   0.03% 12/2014.[6]
71 France 15,000   0.08% 12/2014.[6]
72 Suriname 15,000   0.07% 12/2014.[6]
73 Serbia 12,000   0.01% 12/2014.[6]
74 Hungary 11,000   0.03% 12/2014.[6]
75 Guatemala 10,000   0.02% 12/2014.[6]
76 Croatia 10,000   0.03% 12/2014.[6]
77 Chile 7,000   0.01% 12/2014.[6]
78 Mauritania 7,000   0.02% 12/2014.[6]
79 Spain 6,000   0.03% 12/2014.[6]
80 Japan 5,000   0.16% 12/2014.[6]
81 South Africa 4,000   0.22% 12/2014.[6]
82 Bangladesh 4,000   0.01% 12/2014.[6]
83 Czech Republic 3,000   0.01% 12/2014.[6]
84 Lithuania 2,000   0.01% 12/2014.[6]
85 Belize 2,000   0.00% 12/2014.[6]
86 Bulgaria 1,000   0.00% 12/2014.[6]
87 Georgia 1,000   0.00% 12/2014.[6]
88 Kyrgyzstan 1,000   0.00% 12/2014.[6]
89 Barbados 1,000   0.00% 12/2014.[6]
90 Greece 1,000   0.00% 12/2014.[6]

Global oil production has been split into three geo-political categories: 1) USA and Canada, 2) OPEC and 3) the Rest of the World (RoW). RoW production bears the hallmarks of having peaked in the period 2005 to 2010 and this has consequences for oil prices, demand and prosperity in parts of the world, especially the OECD. Most of the growth in oil supply has been in the USA and Canada where the market has been flooded with expensive oil.

Here are the data for crude oil + condensate + natural gas liquids (C+C+NGL) and exclude biofuels and refinery gains that are included by the EIA in their total liquids number.

The 1.1 million bpd gain in US oil production was the largest year over year gain for any country in 2013, and the largest gain in US history. Mostly due to shale oil. The US remained the world’s third-largest oil producer at 10 million bpd in 2013, trailing Saudi Arabia’s 11.5 million bpd and Russia’s 10.8 million bpd. Rounding out the top five were China (4.2 million bpd) and Canada (3.9 million bpd).

Just to put the current US oil boom into further perspective, over the past five years global oil production has increased by 3.85 million bpd. During that same time span, US production increased by 3.22 million bpd — 83.6 percent of the total global increase.

If the current “low oil price crisis”  does indeed destroy high cost production capacity then this will raise the question if the high cost sources can  be brought back? And at what cost?  Especially interesting is the question: "Can the shale industry can come back from the near death experience?"

What MSM do not discuss: depletion rates

Low oil prices are suicidal for mankind in a long run. Oil is too valuable and irreplaceable resource  for chemical industry to be burned in excessive qualities in transport due to low prices, especially when hybrid and all electrical cars is a reality and price differential with ordinary cars for small card is not that great (less then twice). Electricity unlike oil can be produced from renewable resources such as nuclear (breeder reactors are a reality), wind and solar (solar panels improved dramatically in the last ten years).  At the same time in the USA (and probably elsewhere) sales of SUVs and light trucks are again booming.  That say something about level of intelligence of the USA government. 

With producers in the US and across the world pumping as much as they can, they are doing it at a cost of running into diminishing production rates (depletion) on those existing wells sooner. The 2008 IEA survey of ~800 major fields (including all giants and supergiants) which produced over 60% of that year crude showed an average annual decline rate of 5.1%.

Most countries in the world now face depletion of their reserves. Some face acute depletion (Indonesia, Mexico, etc), some still manage to maintain plato (Russia, Saudi Arabia) or even increase production (the USA, Canada, Iraq, Iran, in the future probably Libya and Syria),  But generally around 4% of total world capacity is depleted per year and without adequate investment can't be replaced. in 2008 IHS estimated global oil field decline rates to be around 4.5%. EIA did a study estimated the worldwide decline rates to be around 6.7%.

When peak oil has been discussed decades ago it was considered a 3% decline rate in production was manageable -- 5% would considered extremely difficult to deal with  (The Guardian)

Now depletion rates are higher (source: IHS, Deloitte & Touche and USGS databases; other industry sources; EIA estimates and analysis)

Outside a couple of countries such as Iran, Iraq and Venezuela offshore production grows faster the onshore production. Shale production growth in the past was the fastest, especially in the USA.  That means a switch to more expensive sources of oil.

Given the increasing decline rates, the oil industry needs considerable capex investments. In the absence of them it slide into irreversible decline.  New technologies greatly help but there are natural limits of what you can achieve with them. they are not substitute to finding new fields which is a very expensive activity.

US oil production and forecast for 2016

Among three major oil producing nations (USA, Russia and Saudi Arabia) the USA is the most dynamic nation, and the most difficult to predict due to large share of shale oil in the USA output. Gradual destruction of the US shale industry ability to pump oil  due to low prices is now established fact. That only discussable item is how quick it will proceed. The first 12 months were cushioned by hedges, but at the and of 2015 most companies are now  "swimming naked". 

Still there are signs that the US oil production peaked in 2015. Decimation of shale can't be compensated by offshore drilling. The sinking shale that could easily lose 1 Mb/d in 2016

At the same time in 2015 total US oil production remained remarkably stable, bank loans were extended or refinanced and bankruptcies were few and does not look like an epidemic. So forecaster of "doom and gloom" were wrong by at least one year. There are no signs of panic in view of drop of oil prices below the level of sustainable production. After all oil is the strategic industry and to leave to market forces is extremely unwise. Wall Street probably has other opinion. As John Kenneth Galbraith said “The sense of responsibility in the financial community for the community as a whole is not small. It is nearly nil.” (The Great Crash of 1929). They live by the next quarter results.

Dec 8, 2015 EIA data  can be found http://www.eia.gov/forecasts/steo/tables/?tableNumber=29#

EIA estimates that total U.S. crude oil production declined by about 60,000 b/d in November 2015 compared with October. That decline will accelerate in December. Crude oil production will probably gradually decrease through the third quarter of 2016 before growth resumes late in 2016, it higher oil prices (at least above $50) materialize. 

Projections of the U.S. crude oil production

Saudi Arabia oil production and forecast for 2016

Oil production

There are signs that Saudi Arabia oil production peaked or close to a peak. A terror attack in 2016 Saudi Arabia is not very likely. Shiite organizations have not resorted to terrorism in many years and they seem now focused on fighting ISIS. which although sponsored by Saudis is a distinct organization.

Saudi Arabia produced 10.28 million barrels a day in October, 2015,  up from 9.69Mb/done year ago.   Chances that production will reach 11 Mb/d are slim. There are strong signs that they have huge difficulties in increasing oil extraction volume.  All their efforts to increase production led to increase of less then 1Mb/d  increase in 2015 (7% increase in production). Which is partially offset by  increase in internal consumption (In 2015 Saudi Arabia oil demand rose by a notable 0.21 mb/d, which equates to a nearly 8% rise y-o-y, )  Here is relevant quote (OilPrice.com, Dec 21, 2015)

Crude exports from Saudi Arabia rose from an average of 7.111 million barrels per day in September to 7.364 million per day in October, according to the latest data from the Joint Organizations Data Initiative (JODI), which monitors the oil industry. The report said this quantity was the most oil exported from Saudi Arabia since June and 7 percent higher than in October 2014.

And those doubts about Saudis ability to increase production exist for some time. When U.S. president George W. Bush asked the Saudis to raise production on a visit to Saudi Arabia in January 2008 they declined. After that Bush questioned whether they had the ability to raise production any more.

But they did managed to achieve temporary production peak: in April 2015, the Saudi oil minister Ali Al-Naimi said that Saudi Arabia produced 10.3 million barrels per day in March that year, which was the highest figure based on records since the early 1980s.  The previous peak in production was in August 2013 at 10.2 million barrels per day.

Theoretically as its own population and internal consumption is growing and depletion of its wells reached critical level, they should concentrate of providing the standard of living for future generations, not dump the oil at the lowest price.  In three decades if the current annual increase in internal consumption continues at, say, 5% and production stays flat Saudi Arabia paradoxically may became oil importing county.

Still Saudi are known to use the most advanced (and most expensive) technologies of boosting the extraction rate to counter the natural decline curve.   They now are exploring shale technology and reportedly are trying to hire workers from the USA who became unemployed during the downturn of shale industry started in mid 2014.

Exports

Contrary to MSM coverage about Saudis flooding world with their oil, year over year increase in exports is slim. Basically they are flat (due to rapidly increasing population and domestic consumption): 

Net exports were around 7.111 Mb/d (September, 2015). But with current low prices this is an economic suicide, even if this is an economic war against Iran -- attempt to hurt its major competitor when  sanctions are lifted.

The net revenue dropped more then a half and the country is burining its currency reserves (which are substantial and at current burn rate will last for more then three years)  So there is something fishy in this propagated by Western MSM idea of Saudis defending their market share. The cost of defending their market share proved to be in hundred billions of lost revenue, which far exceeds their losses from rise of the US shale oil production (if the prices remained above $100 per barrel).  Also the question arise, why now. Shale was a long story in the USA and reached present size around decade ago (2005).

This is definitely a declation of war. But if the target is not the USA (and it can't be the target as Saudis are the USA vassal state), then war of whom ?  The USA is actually a beneficially of this  war (like most wars in this region) and  got a half trillion subsidy due to lower price of oil.  And  "corrupt and atheistic" Western Europe also got similar subsidy.

Business Insider

A report by Citigroup has warned that Saudi Arabia could run out of oil to export by 2030, raising fears that oil prices may rise significantly in coming years.

... ... ...

Its export capacity could steadily reduce and, “if nothing changes, Saudi may have no available oil for export by 2030”, Citi analyst Heidy Rehman wrote.

Saudi Arabia consumes 25pc of its oil output and oil accounts for about 50pc of its electricity production. With peak power demand rising by about 8pc per year, the nation is aiming to more than double its power capacity by 2032 through new nuclear and solar instalations.

Internal consumption

Saudi Arabia produced 10.28 million barrels a day in October 2015 and exported  7.364 million barrels a day. the difference  is less then 3 Mb/d

In September figure were 10.28 and 7.111. The difference is above 3 Mb/d.

So we can assume that 2015 internal consumption is approximately 3 million barrel a day.  In 2015 Saudi Arabia oil demand rose by a notable 0.21 mb/d, which equates to a nearly 8% rise y-o-y, driven by transportation fuels such as jet/kerosene, gasoline and diesel oil, which grew at high rates. The higher consumption of jet fuel reflects the increase in travel activity towards the end of the summer vacation, which coincided with the Hajj season.

Internal consumptions rapidly growing year over year with some years (2009) close to 10% growth (Saudi Arabia Crude Oil Consumption by Year (Thousand Barrels per Day)):

2005 1,963.64 4.20 %
2006 2,020.02 2.87 %
2007 2,094.33 3.68 %
2008 2,236.99 6.81 %
2009 2,436.12 8.90 %
2010 2,579.73 5.90 %
2011 2,760.91 7.02 %
2012 2,861.00 3.63 %
2013 2,925.00 2.24 %

Russia oil production and forecast for 2016

Russian oil production considered to be at "over peak" stage with increases mainly due to offshore drilling. In 2014 total petroleum and other liquids production in 2014 were 10.8 Mb/d  (EIA). Russia crude oil production in late 2015 was around 10.20M, up from  10.08Mb/done year ago. That's was an unanticipated, even by Russian Ministry of Energy result of activities of small companies. which managed to increase of  production by  1.12% from one year ago, when most analysts expected a slight decline (Russia Crude Oil Production (Monthly, Barrels per Day).

Despite severe depreciation of ruble and sanctions, in 2015 Russia managed to reach the level of production that exceed the level of former USSR period. At the same time most of Russia's fields are mature fields and the production from them is declining for long time,  offset only by new more expensive projects with less total volume. Unless Arctic oil and other expensive oil are economical to produce (which requires over $100 bbl price) the national path for Russian production is iether long plato or down. 

Russian oil extraction (red) and oil exports (green) in metric tons

 

In 2015 Russia managed to increase exports the first time in six years, but that does not change general situation: internal consumption is growing pretty robustly with growth of car fleet and decline of production due to national depletion of oil conventional wells became more and more difficult to compensate with new discoveries. And new fields, even if such exist, can't be now tapped because capital expenditures by most Russian oil companies now are slashed to the bone (russia is more like the USA in this respect with over dozen of major oil companies producing   oil).

At current oil prices Arctic oil now is out of reach and only existing platforms will remain in production. All of them are losing money. conventional wells are still profitable with same remaining profitable up to $20 per barrel. Still for the next several years Russia probably will be able to keep the current level of production due to huge previous investments dome in 2010-2014 in a few new fields (Bloomberg Business, December 20, 2015):

The other big boosts to Russian production this year have come from a few mid-sized new fields like those of Severenergia in the Arctic Yamal region. Co-owners Novatek OJSC and Gazpromneft PJSC invested in the $9.2 billion project back when oil prices were high. With most of the capital already committed, operating costs now are relatively low and output of gas condensate, a light and especially valuable form of crude, is up five-fold this year.

One side effect of falling oil prices -- the 52 percent plunge in the ruble over the last two years -- has helped Russian oil producers, chopping their costs in dollar terms since between 80 and 90 percent of their spending comes in rubles.

... ... ...

To be sure, few in the industry expect Russia to be able to sustain the current performance for more than a few years. Tax hikes and lack of financing have cut deeply into exploration drilling, which is down 21 percent this year, and handicap the larger new projects that are needed to replace the country’s older fields as they run dry.

... ... ...

In some parts of the Russian oil patch, low prices are already causing pain. At $40 a barrel, “half of our fields could be stopped. Heavy oil, low horizons, mature horizons are all unprofitable at a price of $40-45. We are waiting for better times,” Russneft OJSC Board Chairman Mikhail Gutseriev said in an interview on state television early this month.

Unfortunately just before the oil prices crush Russia was engaged in several high cost drilling projects in Arctic and was caught naked when oil price dropped. ( see Petroleum industry in Russia - Wikipedia).  Timing can't be more bad as this is a really expensive oil, probably around $60 per barrel or higher at wellhead.  Which are now sold at a huge discount.  Igor Sechin proved to be a weak leader of the Russia major state owned oil company Rosneft.  Government refused to bail out the company which faces large external debt and it was saved by some "white knife" billionaire.

Moscow Exile, December 19, 2015 at 11:19 am

Undeterred by OPEC’s decision to keep pumping and drive out U.S. shale rivals, Russian oil output continued to grow, in October setting a new monthly record for the post-Soviet era. Explorers have remained profitable under a friendly tax system and low production costs.

Mystery Benefactor

Rosneft assuaged concerns over the sustainability of Russia’s biggest corporate debt load after the company received a $15 billion advance payment for oil supplies from a source the company didn’t identify, according to quarterly reports published Nov. 13. The inflow of cash will help Rosneft meet $2.5 billion in debt due in the fourth quarter, $13.7 billion in 2016 and $11.3 billion in 2017, according to a presentation on its website.

See: One Year Into New OPEC Era, You Made 12% Buying These Oil Bonds

It looks like the board is in denial of the blunder with overinvest they made:

18 December 2015
Rosneft Holds Board of Directors Meeting

On December 18, Rosneft Board of Directors considered in Vladivostok interim results of its 2015 operations, the business-plan for 2016-2017, the Long-term development program and the energy efficiency program of the Company.

The following decisions were taken:

1. The Board of Directors considered and acknowledged 2015 Rosneft interim results and the intermediate results of the implementation of the long-term development program of the Company. The Board of Directors welcomed the results of the implementation of programs aimed at raising efficiency in challenging economic environment: the Company maintained low levels of OPEX and eased its debt burden.

2. The Board of Directors considered and acknowledged the business-plan for 2016-2017, structured in accordance with a conservative macroeconomic scenario and focused on the implementation of the Long-term development program of the Company, approved by the Government of the Russian Federation.

Within the ambit of delivering strategic goals of boosting production, securing deliveries of oil and oil products, maintaining a market share (both in Russia and abroad), the Company plans to increase capital expenditures by a third (compared to 2015 levels). The investment development program envisages the achievement of strategic goals of hydrocarbon production growth by means of accelerated commencement of oil and gas greenfields whilst exercising a balanced external financing program. After the completion of transition to Euro-5 motor fuels production in December 2015, refineries’ modernization program will be focused on increasing processing depth. Also, the program of cutting operating costs and enhancing operating and financial efficiency will be continued. Hence the leadership in the industry by the operating costs and capital costs will be guaranteed.

... .... ...

Commenting on the results of the Board meeting, Rosneft Chairman of the Management Board Igor Sechin said: “Measures taken by the Company for strengthening its oilfield services business dimension in 2015 enabled Rosneft to increase production in order to guarantee supplies to its traditional markets while keeping operating and capital expenditures at the record-low levels. The Company consistently generates free cash flow, providing funding sources for its investment decisions in accordance with 2015-2016 business plan approved by the Board of Directors and the Long-term Development Program”.

In August 2014, it was announced that preparations by the Russian government to sell a 19.5 percent stake in the company were underway and would most likely be sold in two tranches. So far this chunk of the company was not sold, probably because of low oil prices. 

Russia oil internal consumption is generally more or less stable and growling at a very slow page outside several 'abnormal" years. In 2016 it will not probably grow much as the economy remain is conditions close to recession. Lukoil chairman has said that he  expects Russia to produce less oil  in 2016 than in 2015

Russia internal oil consumption is currently around 3.3 Mb/d, up from 3.2 Mb/d one year ago. This is a change of 3.15% from one year ago.

2005 2,785.14 1.25 %
2006 2,803.47 0.66 %
2007 2,885.10 2.91 %
2008 2,981.92 3.36 %
2009 2,888.53 -3.13 %
2010 3,081.82 6.69 %
2011 3,352.11 8.77 %
2012 3,395.11 1.28 %
2013 3,320.00 -2.21 %

It is expected that it will continue to grow by around 0.1 Mb/d per year as car fleet is rapidly growing.. Also Russia will process more raw oil in 2016 then in 2015 which also negatively influence export of raw oil

Oil producing countries with civil wars/sanctions/military conflicts  

This is a very complex topic that is beyond the scope of this analyses. But paradoxically such countries are the "last hurrah" for increasing the oil production, as they do have reserve that can't be tapped at reasonable costs now but at the same time represent the last spot of "cheap oil" deposits. Some facts:

Oil consumption

Mankind dependency on oil is hardwired into fabric of our civilization.  It is an irreplaceable product. But as much as  2/3 of this extremely valuable chemical industry resource is burned in transportation. That actually means that sales of cars and trucks are instrumental to predicting future demand at least one year ahead.  And they are growing especially fast in China and India. They also accelerated in the USA.

World oil consumption is often given in millions barrels per day (mbpd or Mb/d). BP stated that in 2014 global oil demand increased by 1.4 Mb/d over 2012 to 91.3 Mb/d.  Assuming on average $60 per barrel this is 5.5 trillion dollars a year of additional expenses on energy.   Here are actual figures of world consumption for the last decade ( World Crude Oil Consumption by Year (Thousand Barrels per Day))

2005 84,668.04 1.79 %
2006 85,586.39 1.08 %
2007 86,700.09 1.30 %
2008 86,027.86 -0.78 %
2009 84,953.36 -1.25 %
2010 87,839.10 3.40 %
2011 88,657.70 0.93 %
2012 89,668.91 1.14 %
2013 90,354.27 0.76 %

As BP noted in February 2015 "Global demand for energy is expected to rise by 37% from 2013 to 2035, or by an average of 1.4% a year".  So it is reasonable to assume that oil demand will rise approximately the same rate, which taking into account the current rate of consumption is above 1Mb/d.

The oil consumption proved to be extremely resilient  to economic conditions (that only drop in the last decade happened in 2009) and is growing globally each year by rate about 1 Mb/d due to increase of population and cars and trucks on the road. ( Peak oil - Wikipedia )

The table above does not contain data for 2014 and 205. Here they are:

As for the forecast of 2015, the growth of consumption is predicted in the range of 1.2-1.4 MB/d:

According to IEA "an annual $630 billion in worldwide upstream oil and gas investment – the total amount the industry spent on average each year for the past five years – is required just to compensate for declining production at existing fields and to keep future output flat at today’s levels" (iea.org). It is easy to see that such amount is difficult to come by when prices of oil are in $30-$40 range,  do the decline of world oil output might happen faster then growth of consumption.

OPEC forecast is usually more reliable then EIA but generally very similar, despite having different set of biases (G7 bias in case of IEA and Saudi Arabia bias for OPEC forecast) They predict higher growth of demand in 2015 and lower growth in 2016:

World oil demand is expected to grow by 1.50 mb/d in 2015 to average 92.86 mb/d, ...  In 2016, world oil demand growth is seen reaching 1.25 mb/d ...  to average 94.14 mb/d.

India is set to become the world’s third largest oil importer after the US and China before 2025, according to the International Energy Agency (IEA). India’s energy needs would overtake Japan as the third largest net importer of oil before 2025. EIA predict stable consumption level until 2040 only 1.1% growth on average (EIA)

The bulk of that demand growth is expected to come from developing countries in Asia. With U.S. supply falling, where are the new oil supplies coming from ? There simply isn’t enough to go around.

Double-digit percentage increases in oil consumption were recorded by Pakistan, Venezuela, and Azerbaijan from 2012 to 2013, and over the past five years double-digit percentage consumption increases were recorded by Central and South America (15.2 percent), the Middle East (18.3 percent), Africa (12 percent), Asia Pacific (17.4 percent), and the former Soviet Union (12.8 percent). World Sets New Oil Production and Consumption Records

Per country picture: not all countries are created equal

The most significant factor affecting petroleum demand has been human population growth. Large countries that previously were dirt poor and consumed minuscule amount of oil now now rapidly growing (India and China) are primary drivers of consumption. Arab countries also experience rapid population growth (Saudi Arabia is one example). The United States Census Bureau predicts that world population in 2030 will be almost double that of 1980. Oil production per capita peaked in 1979 at 5.5 Giga barrels/year but then declined to fluctuate around 4.5 Giga barrels/year since. In this regard, the decreasing population growth rate since the 1970s has somewhat ameliorated the per capita decline.

Not all consumers of oil are created equal.

Source: CIA World Factbook - Unless otherwise noted, information in this page is accurate as of January 1, 2014

See also: Oil consumption per capita bar chart

Country Name Oil consumption per capita
 (bbl/day per 1000 people)
Year of Estimate
Singapore 202 2012
Nauru 139 2012
Kuwait 134 2012
Luxembourg 119 2012
Bahamas, The 111 2012
United Arab Emirates 103 2012
Saudi Arabia 100 2012
Falkland Islands (Islas Malvinas) 96 2008
Seychelles 89 2012
Qatar 85 2012
Greenland 69 2012
Canada 64 2012
United States 61 2012
Netherlands 60 2012
Belgium 60 2012
Cayman Islands 57 2012
Antigua and Barbuda 56 2012
Iceland 56 2012
New Caledonia 54 2012
Libya 51 2012
Norway 47 2012
Malta 46 2012
Oman 46 2012
Korea, South 45 2012
Australia 44 2012
Taiwan 43 2012
Hong Kong 42 2012
Brunei 42 2012
Finland 41 2012
Puerto Rico 41 2012
Saint Kitts and Nevis 39 2012
Sweden 39 2012
Bahrain 38 2012
Japan 35 2012
New Zealand 35 2012
Greece 34 2012
Austria 34 2012
Trinidad and Tobago 33 2012
Slovenia 32 2012
Israel 31 2010
Barbados 31 2012
Germany 31 2012
Spain 31 2012
Switzerland 31 2012
Ireland 30 2012
Macau 29 2012
France 28 2012
Panama 28 2012
Grenada 28 2012
Suriname 27 2012
Venezuela 27 2012
Portugal 26 2012
United Kingdom 26 2012
Lebanon 26 2012
Denmark 25 2012
Italy 25 2012
Turkmenistan 25 2012
Estonia 24 2012
Iran 23 2012
Iraq 22 2012
Jamaica 22 2012
Belize 21 2012
Saint Vincent and the Grenadines 19 2012
Czech Republic 19 2012
Malaysia 19 2012
Lithuania 19 2012
Saint Lucia 18 2012
Mexico 18 2012
Chile 18 2012
Mauritius 18 2012
Armenia 18 2012
Belarus 17 2012
Fiji 17 2012
Cuba 16 2012
Djibouti 15 2012
Russia 15 2012
Brazil 10 2012
Turkey 8 2012
China 7 2012
India 3 2012
Pakistan 2 2012
Bangladesh 1 2012

Consumption in net oil exporting countries is limited to the volume of production and price while consumption in net oil importing countries by the price of oil and the oil that is left for export after internal consumer got their share (which depends on price of oil).  In other words, to paraphrase “Animal Farm,”  all pigs are equal but some pigs are more equal then others.

Of course pigs with strong military (read G7) are also more equal then others and can change this equation in their favor by force and already started doing this (USA in Iraq, France in Libya).

While demand for oil continues to increase globally, oil producing countries also increase their internal consumption rapidly. For example increase in internal consumption of Saudi Arabia led to a situation when since 2005 their exports are essentially flat despite increase of production.

Having noted Steven Kopits’ continuing track record of being remarkably prescient regarding global oil supply and demand analysis, I do have one issue with global supply & demand analysis -– consumption in net oil exporting countries versus consumption in net oil importing countries, to -- wit, to paraphrase “Animal Farm,” in my opinion some consumers are more equal than others.

Let’s assume a scenario where all oil production and refining operations are in oil exporting countries and let’s ignore things like refinery gains. Total petroleum liquids production is 80 mbpd and consumption in the oil exporting countries is 40 mbpd, and they therefore net export 40 mbpd to oil importing countries.

Production rises by 2.5 mbpd in the oil exporting countries, so total supply increases from 80 mbpd to 82.5 mbpd. However, consumption in the oil exporting countries rose by 5 mbpd. So, Net Exports = Production – Consumption = 82.5 mbpd – 45 mbpd = 37.5 mbpd.

My point is that a global supply and demand analysis would not accurately represent the situation in the net oil importing countries, i.e., a 6.25% decline in the supply available to net importers (40 mbpd to 37.5 mbpd), although global supply is up by 3.125%, 80 mbpd to 82.5 mbpd.

Of course, the crux of what I call “Export Land Model” or ELM, is that for a number of reasons (subsidies, proximity to production, legal restrictions, etc.), consumption in oil exporting countries tends to be satisfied before oil is exported.

Interesting enough, the case histories tend to show that regardless of how oil exporters treat internal consumption, given an ongoing production decline, the net export decline rate tends to exceed the production decline rate and the net export decline rate tends to accelerate with time.

For example, Indonesia subsidizes petroleum consumption and the UK heavily taxes petroleum consumption, but both former net oil exporters showed accelerating rates of decline in their net exports (in excess of their respective production decline rates).

Here are the ELM Mathematical Facts of Life:

Given an ongoing production decline in a net oil exporting country, unless they cut their domestic oil consumption at the same rate as the rate of decline in production or at a faster rate, the resulting net export decline rate will exceed the production decline rate and the net export decline rate will accelerate with time. Furthermore, a net oil exporter can become a net oil importer, even with rising production, if the rate of increase in consumption exceeds the rate of increase in production, e.g., the US and China.

The (2005) Top 33 net exporters showed a slight increase in production from 2005 to 2013, from about 62 mbpd to 63 mbpd (total petroleum liquids + other liquids, EIA), but their rate of increase in consumption exceed their rate of increase in production and their combined net exports (what I call Global Net Exports, or GNE) fell from 46 mbpd in 2005 to 43 mbpd in 2013.

Furthermore, China and India (“Chindia”) consumed an increasing share of a post-2005 declining volume of GNE. What I call Available Net Exports (ANE, or GNE less Chinidia’s Net Imports, CNI) fell from 41 mbpd in 2005 to 34 mbpd in 2013.

Here’s the Available Net Exports problem:

Given an ongoing decline in GNE–and it’s when, not if–then unless the Chindia region cuts their oil consumption at the same rate as the rate of decline in GNE, or at a faster rate, the resulting rate of decline in ANE will exceed the GNE decline rate and the ANE decline rate will accelerate with time.

From 2005 to 2013, GNE fell at 0.8%year. From 2005 to 2013, ANE -- the supply of Global Net Exports of oil available to importers other than China & India -- fell at 2.3%/year.

The USA consumption

The United States remains the world's largest consumer of petroleum. The United States uses most of oil per capita in the world.  Between 1995 and 2005, US consumption grew from 17.7 Mb/d (2,810,000 m3/d) to 20.7 Mb/d (3,290,000 m3/d), a 3,000,000 barrels per day (480,000 m3/d) increase. According to EIA Jan 12, 2016 report (eia.gov):

In other words the USA consumption is approximately equal to total Saudi export capacity. 

The U.S. Energy Information Administration (EIA) includes volumes of biofuels in data on total petroleum consumption. Per capita consumption of oil in the USA is one of the highest in the worlds and exceeds, for example, Russian per capita consumption four times.

Looking forward, both the EIA and the EIA project that U.S. oil demand will oscillate around 20 Mb/d mark. That might change if oil price stays low for several years.

The USA consumption is highly concentrated on transportation sector and in private cars sector is quite wasteful. The same population in Germany, Great Britain, France, Poland, the low countries and Scandinavia use 10 Mb/d.

Peter, 12/21/2015 at 4:33 pm
Watcher

1)US consumption is besides a couple of small countries the highest in the world.

http://www.indexmundi.com/map/?v=91000

compared to other western industrial countries it’s consumption is totally unjustifiable.

2) Driving a Ford F150 or an ampera to work has nothing to do with GDP and everything to do with needless oil consumption. So stop saying things which even an 8 year old would find obvious

US consumers will not cut consumption out of the goodness of their hearts, they will be forced to do so when prices make cuts necessary.

China consumption

China, by comparison, increased consumption from 3,400,000 barrels per day (540,000 m3/d) to 7,000,000 barrels per day (1,100,000 m3/d), an increase of 3,600,000 barrels per day (570,000 m3/d), in the same time frame.

China surpassed the United States as the world’s largest crude oil importer in 2015. As China’s economic growth is predicted to decrease from the high rates of the early part of the 21st Century that level might grow more slowly, but still China is so far behind the USA in consumption of gasoline per capita the trend toward more equal consumption clearly will increase china figures dramatically. Much depends how quickly china will grow middle class, which owns individual cars.

India consumption

India is burning over 4 mbpd now. India's oil imports are expected to more than triple from 2005 levels by 2020, rising to 5 million barrels per day.  Look at Energy Export Databrowser to see the consumption line for each country. 45 degree slope for India, just a few degrees less than China’s slope. KSA’s slope looks early exponential. No reason why it shouldn’t be. It’s their oil.

Russian consumption

Russian internal consumption grows rapidly and that means that in the future Russia will export less oils. Russian leadership have found itself unprepared to the dramatic drop of oil prices and now will take moves to refine more oil at home, and selling less raw oil. The fact that Russia sells mostly unprocessed oil was a blunder that costs Russia billions and Putin had shown ability to learn from mistakes. 

Russia's Key Energy Statistics world rank
Total Primary Energy Production
2012
55.296
Quadrillion Btu
3
Total Primary Energy Consumption
2012
31.522
Quadrillion Btu
3
Dry Natural Gas Production
2011
22,213
Billion Cubic Feet
2
Total Petroleum and Other Liquids Production
2014
10,853
Thousand Barrels Per Day
3
Total Primary Coal Production
2013
388,013
Thousand Short Tons
6

Compare that with the USA

United States' Key Energy Statistics world rank
Total Primary Energy Production
2012
79.212
Quadrillion Btu
2
Total Primary Energy Consumption
2012
95.058
Quadrillion Btu
2
Dry Natural Gas Production
2011
22,902
Billion Cubic Feet
1
Total Petroleum and Other Liquids Production
2014
13,973
Thousand Barrels Per Day
1
Total Primary Coal Production
2013
984,842
Thousand Short Tons
2

India

India's existing domestic production of about 0.86 Mb/d is only about 25% of its current consumption of 3,47 Mb/d.  According to the EIA, its production peaked at 996,000 barrels per day in 2011. Energy consumption in India is likely double by 2031.   The CAGR (compound annual growth rate) for the ten years ending in March 2014 is above 3.5%.

Domestic production of  oil is relatively stable. The EIA (US Energy Information Administration) estimates that India had close to 5.7 billion barrels of proven oil reserves at the beginning of 2014. About 44% of the reserves are onshore resource.

 Imports is likely to rise  from current 75 percent to 80 percent by the end of the 12th five year plan (2016-17). According to the Directorate General of Commercial Intelligence and Statistics, crude oil and refined products made up over 28 percent and 30 percent of India's import of principal commodities in 2010-11 and first half of 2011-12 respectively.

India is a major crude oil refiner. India petroleum refining capacity has outstripped demand consistently. Since 2002, the country's export of petroleum products has risen from 10 million tones to around 60 million tones in 2011-12, an average annual growth of over 20%.

Analyzing India’s oil consumption

According to IES (International Energy Statistics) presented by the EIA (US Energy Information Administration), the CAGR for total petroleum consumption for the world was 0.8% from 2005 to 2013. This consumption has been measured in thousand barrels per day. In the same period, China saw its consumption increase by 5.1%. In CAGR terms, India’s consumption increased by 4.1%. In contrast, the US saw its consumption decrease by 1.2%.

Per sector consumption

Oil consumption is distributed amongst four broad sectors: transportation, residential, commercial, and industrial. In terms of oil consumption, transportation is the largest sector and the one that has seen the largest growth in demand in recent decades. This growth has largely come from new demand for personal cars. In the USA it accounts for approximately 68.9% of all the oil used. Globally it is close to 55%

There are also "shadow" consumers of oil. For example military is important but often underreported or unreported consumer. So in no way published figured of consumption can be taken at face value. 
 

Consumption by transportation sector

Approximately two-thirds of U.S. oil consumption is due to the transportation sector. Slightly less for the world. 

In the USA consumption is depicted on the following picture

Private transportation is gradually became more efficient in miles per gallon metric (so energy consumption is shifted to the production of battery and electrical motors).  Most of the efficiently is already obtained on cars such as Toyota Prius which averages probably 40 miles per gallon and can run on electrical engine at low speeds/city traffic which is killing regular car efficiency.  Further substantial improvement is unlikely as traffic jams are the most important feature of morning commute in the USA. Traffic congestion, especially at rush hour, is a problem in most of the USA large cities. A 2009 study found that traffic congestion costs the United States almost $87.2 billion. The economic costs of traffic congestion have increased 63% over the past decade, and despite the declining traffic volumes caused by the economic downturn, Americans still waste more than 2.8 billion US gallons (11,000,000 m3) of fuel each year as a result of traffic congestion. Motorists also waste 4.2 billion hours annually, or one full workweek per traveler.

Private transportation sector oil consultation with gradually rise with the growth of population.

It's not only car and trucks burn fuel on the roads. Maintaining road surface is pretty fuel-intensive activity as well. With the development of the  Eisenhower Interstate Highway System in the 1950s, the road system in the USA, as of 2010, has a total length of 47,182 miles (75,932 km), making it the world's second longest after China's, and the largest public works project in US history. A large number of multilane roads while improving peak hours traffic is considerably more expensive to maintain. A Federal Highway Administration report saying the number of roads in good condition each year is going up.  As the same time roads and surface transportation will only get about half their projected $1.7 trillion need for capital projects.  The high cost of America's bad roads and bridges - Feb. 12, 2013

Industrial transportation use efficient diesel engines and improving efficiently on such engines is a very difficult task. So it will approximately consume the same amount of fuel per ton per mile of transported goods as now. Some improvement are possible by increasing of usage of railways. for maritime transportation saving are possible by lowing the speed of vessels, which was already done when price of oil was high.

In air transportation larger planes, more efficient engines can improve fuel efficiency. Between 1960 and 2000 there was a 55% overall fuel efficiency gain. Optimal amount of passengers/cargo  and fuel are also important factors. As over 80% of the fully laden take-off weight of a modern aircraft such as the Airbus A380 is craft and fuel (Fuel economy in aircraft - Wikipedia )

Pilots of turbine airplanes actually have less control over the fuel efficiency of their flights because there are so many variables, first among them being air traffic control. Turbine engines are at their least efficient down low where the air is dense. As the airplane climbs up and the air thins, the turbine produces less power and thus consumes less fuel, but the drag of the thinning air on the airplane decreases faster than the power from the engine drops, so the airplane speeds up and the fuel flow goes down. Takeoff delays really cut into fuel efficiency in a jet compared to a piston engine.

Military aviation also consumes large amount of fuel and is known for very low fuel efficiency.

Chemical industry consumption

Chemical industry consumes approximately 30% of oil.

Residual Fuel Oil Consumption By Chemical Industry - By Country - Data from Quandl

Military consumption

Also we should not forget that one of the largest consumer of oil is military which will get oil at any price. And we have the recent trend in re-armament. So the consumption of oil by military grows again. Here are some 2007 data (US military energy consumption- facts and figures)

As the saying goes, facts are many but the truth is one. The truth is that the U.S. military is the single largest consumer of energy in the world. But as a wise man once said, don't confuse facts with reality. The reality is that even U.S. Department of Defense (DoD) does not know precisely where and how much energy it consumes. This is my Fact Zero.

Below I give some facts and figures on U.S. military oil consumption based mostly on official statistics.[1] If you want to reproduce them make sure you read every footnote even if you need to put on your glasses. Also read the footnotes in this article.

According to the DoD's Federal Energy Management Report for FY2006, the DoD spent approximately $3.5 billion on facility energy and $16.5 billion on energy for tactical vehicles. To this we should add 238 million spent on non-tactical vehicles.[6] Overall, total actual cost[7] for DoD energy consumption is over $20 billion. By the way, remember that a billion has nine zeros.

According to Pentagon spokesman Chris Isleib a $10 increase per barrel of oil increases Defense Department costs by $1.3 billion per year.

Hurting Russian economy

Oil is a strategic resource using which countries pursue geostrategic interest. So manipulation on oil price is a war by other means. As Patrick J. Buchanan  noted in his article America Regains the Oil Weapon The American Conservative in American Conservative (Nov 14, 2014)  "...price, Adam Smith notwithstanding, is something we can control and manipulate"  although strangely enough he consider Saudis to be an independent player, as if they are not a vassal state dependent on Washington:

In July of 1941, after Japan occupied French Indochina, the Roosevelt administration froze Japan’s assets in the United States. Denied hard cash, Japan could not buy the U.S. oil upon which the empire depended for survival. Seeing the Dutch East Indies as her only other source, Japan prepared to invade.

But first she had to eliminate the sole strategic threat to her occupation of the East Indies—the U.S. battle fleet at Pearl Harbor. FDR’s cutoff of oil to Japan was thus a primary cause of WWII in the Pacific, which led to hundreds of thousands of U.S. war dead, the destruction of Japan, Mao’s triumph in China and a U.S. war in Korea.

A second stunning use of the oil weapon came in 1973. Arab members of OPEC imposed an embargo in retaliation for Nixon’s rescue of Israel with an airlift in the Yom Kippur war. Long gas lines helped to bring Nixon down.

Now the oil weapon appears to be back in America’s hand.

Due to the substitution of natural gas for oil in heating homes and buildings, horizontal drilling, and hydraulic fracking, which enables us to bring oil and gas out of shale rock in places like North Dakota, U.S. production has exploded. We now produce more oil than Saudi Arabia and the benefits are not only economic, but geostrategic.

... ... ...

What is Riyadh’s game?

Is the Saudi strategy to let prices fall to where it is no longer profitable for Americans to begin new fracking? Are the Saudis thinking of doing to the new oil-producing champion, USA, what we are doing to Venezuela, Russia, and Iran? Riyadh may want to let the price of oil sink below where it makes sense for energy companies to prospect for new sources of oil or invest more billions in expanding production.

Are the Saudis out to cripple us with an oil glut?

Today, not only are Iran and Iraq producing below potential, so, too, is Libya. And we have been bombing ISIS’ oil facilities in Syria.

A contrarian’s question: Would we not be better off if these countries not only restored oil production, but also expanded production and put more oil on the market than they do today? Demand creates supply, and a world oil market where there is more supply than demand would seem to be to America’s benefit. For we remain the world’s largest consumer of petroleum products. And surely it is to our benefit to enlarge both the reserves and production of oil and gas in North America.

Price pays a huge role in creating, and shrinking, supply. And price, Adam Smith notwithstanding, is something we can control and manipulate, even as China manipulates its currency.

In “America’s New Oil Weapon” in National Review, Arthur Herman of the Hudson Institute urges the United States to take bold steps to increase our supplies of oil and gas.

We should relax the rules on drilling in Alaska’s Arctic National Wildlife Refuge, which has 10 billion barrels of oil locked up. We should use as an economic weapon against OPEC the 700 million barrels in the Strategic Petroleum Reserve. We should allow the export of oil from the United States to enable us to cope with OPEC cutbacks. We should build the Keystone XL pipeline, and the other oil and gas pipelines between us and Canada now sitting in limbo.

What Herman is urging upon us is a new nationalism, a new way of thinking about international economics that puts the U.S. and its allies first, and uses our economic leverage to advance national rather than global interests.

High oil prices pressured the US economy and its perennially-undercapitalized banking system. US economy health depends on low oil prices.   But there is geopolitical dimension of the current drop of oil prices. In is not unconceivable to think that Washington reused Reagan plan of hurting Russian economy (which catalyzed dissolution of the USSR) by pushing down oil prices.

Among the many threats facing Russia’s economy, cheap oil could be the biggest of all. Low crude are depressing the ruble (at some point in early 2015 ruble  dropped to 69 per dollar from 30-35 or so; in August 24, 2015 it reached 69.96) and knocking export on which Russia depends due to its integration in the global economy: the direction Russian neoliberal pushed for since 1991. And Russian elite was taking high oil prices for granted. For example,  Russia’s draft budget for 2015 was based on $100-a-barrel oil (Oil Prices Are Hurting Russia's Economy - Businessweek, October 13, 2014)

Because of Russia’s outsize dependence on oil and gas, which account for more than two-thirds of its exports, lower energy prices can easily tip its $2 trillion economy into recession. “Growth is likely to remain positive only with oil prices above $92 to $93 a barrel,” says economist Charles Robertson of Renaissance Capital. At $90 a barrel, the economy would contract 0.4 percent next year, and at $80 a barrel it would shrink 1.7 percent, he predicts.

Do the US tried to subdue Russia the second time via decimating oil prices and thus cutting dramatically the stream of revenue from oil exports?  It is difficult to say.   But now this strategy is better understood by Russians, which created certain difficulties in its implementation despite the huge power of the US financial sector. The sector which can allow itself to play with oil futures the way it wants due to unlimited supply of the US dollars -- the world reserve currency.  The Fed remains a monetary superpower controlling the world's main reserve currency and xUSSR  and emerging countries currencies are formally or informally pegged to dollar. Therefore, its monetary policy is exported across the globe. The Fed was exporting its easy monetary policy to the rest of the world in the early-to-mid 2000s. Now  the attempt of normalization of monetary policy creating huge tightening of monetary conditions for the rest of the world.  It also dramatically devalue large export oriented Russian companies:

How Russian energy giant Gazprom lost $300bn  Justin Burke for  the New East network

Aug 07, 2015  |  The Guardian

annamarinja airman23 8 Aug 2015 09:09

Poor airman23. Have you ever heard about Dick Cheney? Have you ever looked at the Wolfowitz Doctrine? If not, then you are very much behind the nowadays understanding of fascism and fascists. On the other hand, you are such a concrete success of Mrs. Nuland-Kagan' (and likes) travails.

yemrajesh  -> psygone 8 Aug 2015 07:36

Difficult to say. If the costs are true'ly low it would have reflected at the Pump. But it hasn't. Another flaw is how can oil pumped from deeper well ( Fracked Oil) is cheaper than conventional oil. It looks more like US flexing its muscles to subdue Russia. Besides its not Just Gazprom , shell, BP, Exxon , Gulf, Mobil etc also many of US vassal states are affected. It would be interesting to see how long this artificial price drop continue with zero benefit to the customers.

Kaiama 8 Aug 2015 06:07

Since the Russians haven't rolled over the first time, the US is trying again. These days, the price of oil is determined by activity in the futures market impacting the spot price. Likewise, I expect for shares and wouldn't be surprised if someone is shorting the stock. Any oil and gas not pumped today is available to be pumped tomorrow - possibly at higher prices. Gazprom isn't going bankrupt. Neither are any of the other major oil companies.

AlbertEU  -> alpamysh 7 Aug 2015 17:09

The crisis of one industry necessarily will hurt other sectors. Hard-hit banking sector, which is credited US shale industry. The effect can be like an avalanche. Especially if it is strengthened by additional steps. I think for anybody is not a secret the existence of a huge number of empty weight of the dollar, which is produced by running the printing press. Oil trade is in the dollar, which in turn keeps the volume of the empty weight of the dollar. Now imagine a situation where part of the oil market has not traded more in dollars. It is equally affected, the USA and Russia.

But there is one important detail. Russia has never in its history, was a rich country (if you count all the inhabitants of Russia, not individuals). In the country there is no cult of consumption. The traditional religions of Russia, that is, those that have always existed in Russia (Orthodox Christianity, Islam and Buddhism) did not contribute to the emergence of such a cult.

Orthodoxy says plainly that material wealth is not important for a man. Wealth is only supplied in addition to achieve the main goal in the life of an Orthodox Christian. Therefore, to be poor in Russia is not a problem. This is a normal way of life. Hence the stoic resistance to any hardship, challenges, wars and so on. Expectations of great social upheaval in Russia, caused by the lowering of the standard of living is a little naive. Russia used to run in the marathon. Who would have more strength, intelligence and endurance is a big question. Geopolitics is a very strange science...

If this is a deliberate maneuver, an economic war on Russia, it can became very costly and might have made sense only on a short or medium-term basis (three-five years), to shock Russian elite into submission and depose Putin and his faction of "resource nationalists" which are like a bone in the throat of US multinationals.  This time Washington managed to catch  Putin's government completely  unprepared to such development of event, which increased the chances of success.

And they really took Russian elite by surprise. That's why the USA oil Blitzkrieg initially enjoyed such a huge success and immediately crashed the ruble (100% devaluation happened) as well as put Russian economy in recession. But Russians quickly realized what's going on and the game in the second part of  2015 became more complicated as those futures and shale industry junk bonds now also weight on the USA financial sector.  It this was a deliberate maneuver, it does has unanticipated side effects.

Those who sell futures for 2017 for $58 can be hit with $30 loss per barrel, if the game turn bad.  So the current low oil price movements should be viewed as  yet another neoliberal financial casino gambling session, in which stakes are really high.  It is completely counter productive from the point of view of future of mankind, but the last thing the USA elite care about is the future of mankind. They are preoccupied with the desire to preserve and enhance their global neoliberal empire and that requires crashing all potential competitors, including Russia and China. The paradox is that while they weaken Russia they really strengthen China (although they try to compensate this with playing Chinese stock market to their advantage). But Putin severely underestimated the damage West can inflict to Russian economy:

Opportunities for the West to hurt the Russian economy are limited, President Vladimir Putin said Thursday. Europe cannot stop buying Russian gas without inflicting pain on itself, and if the US tries to lower oil prices, the dollar will suffer.

If the West tries to damage Russia’s influence in the world energy market, efforts will likely backfire, the Russian President said during his twelfth annual televised question and answer session.

To really influence the world oil market a country would need to increase production and cut prices, which currently only Saudi Arabia could afford, Putin said.

The president added he didn’t expect Saudi Arabia, which has “very kind relations” with Russia, will choose to cut prices, that could also damage its own economy.

If world oil production increases, the price could go down to about $85 per barrel. “For us the price fall from $90 to $85 per barrel isn’t critical,” Putin said, adding that for Saudi Arabia it would be more sensitive.

Also the President said that being an OPEC member, Saudi Arabia would need to coordinate its action with the organization, which “is very complicated.”

Meanwhile, Russia supplies about a third of Europe's energy needs, said Putin. Finland, for example, is close to Russia economically, as it receives 70 percent of its gas from Russia.

“Can Europe stop buying Russian gas? I think it's impossible…Will they make themselves bleed? That's hard to imagine,” the Russian president said.

Since oil is sold internationally on global markets cutting the price would mean lower dollar circulation, diminishing its value in the global currency market.

"If prices decrease in the global market, the emerging shale industry will die,” Putin said.

The US shale industry has boosted domestic production, but President said that the so-called "shale revolution" was expensive and not quick to come.

Russia’s economy largely relies on energy. In 2013 more than 50 percent of the national budget was funded by gas and oil revenues. The main revenue comes from oil, as last year, oil revenues reached $191 billion, and gas $28 billion.

“Oil and gas revenues are a big contribution to the Russian budget, a big part for us when we decide on our government programs, and of course, meeting our social obligations,” the president said.

As Reuters reported:

“The Obama administration has opened a new front in the global battle for oil market share, effectively clearing the way for the shipment of as much as a million barrels per day of ultra-light U.S. crude to the rest of the world…

The Department of Commerce on Tuesday ended a year-long silence on a contentious, four-decade ban on oil exports, saying it had begun approving a backlog of requests to sell processed light oil abroad.

The action comes at a critical juncture for the global oil market. World prices have halved to less than $60 a barrel since the summer as top exporter Saudi Arabia, once a staunch defender of $100 oil, refused to cut production in the face of surging U.S. shale output and tempered global demand…

With global oil markets in flux, it is far from clear how much U.S. condensate will find a market overseas.”
(Analysis – U.S. opening of oil export tap widens battle for global market, Reuters)

Why would the oil producers, who have over the years raised the price of oil  suddenly agree to drop the price from roughly $120 a barrel to lower then $60  a barrel (Want To Hurt Russia Lower The Price Of Oil OilPrice.com?).

Let us look first at who the major oil producers are today: Saudi Arabia, Qatar, the United Arab Emirates and the United States, as well as Russia, Iran and the Islamic State.

Of those, we can make a clear distinction between the first four countries who have solid economies and ample amounts of cash reserves and who can sustain a sharp drop in revenue when oil is sold at a lower price...

The big losers in this case will clearly be the last three countries on that list: Russia, Iran and the Islamic State.

Coincidentally, these countries are currently engaged in highly controversial conflicts and are facing opposition from the United States and the West.

Russia is involved in Ukraine’s civil war, supporting the separatists in a highly criticized move condemned by the United States and its Western allies. In response, the allies began to impose sanctions as punishment and, given the ruble’s recent downturn, Russia’s credit rating being slashed and desperate gas deals in the Asian markets, it seems that the sanctions have, thus far, been highly successful.

CNN reported that Russian is Russia losing $140 billions from sanctions and low oil price according to estimates from Russia's finance minister Anton Siluanov. For every $10 drop in the per-barrel price of oil, Russia loses up to $14.6 billion a year in revenues, according to Alfa Bank. This is a real economic war (Russia has just lost the economic war with the west Business The Guardian)

The phrase “perfect storm” is over-used, but the combination of a collapsing currency, a collapsing economy and punitive interest rates make it apposite. The question now is how Putin responds. If he softens his line over Ukraine, the west’s gamble will have paid off and it will be mission accomplished. But there are hardliners in Moscow who will argue that the response to the crisis should be a siege economy and the ratcheting up of military pressure on Ukraine. If economic agony makes a wounded Russian bear more belligerent, it will prove a hollow victory.

Here’s a clip from an NPR interview with the president just last week. About halfway through the interview, NPR’s Steve Inskeep asks Obama: “Are you just lucky that the price of oil went down and therefore their currency collapsed or …is it something that you did?

“Are you just lucky that the price of oil went down and therefore their currency collapsed or …is it something that you did?

Barack Obama:

If you’ll recall, their (Russia) economy was already contracting and capital was fleeing even before oil collapsed. And part of our rationale in this process was that the only thing keeping that economy afloat was the price of oil. And if, in fact, we were steady in applying sanction pressure, which we have been, that over time it would make the economy of Russia sufficiently vulnerable that if and when there were disruptions with respect to the price of oil — which, inevitably, there are going to be sometime, if not this year then next year or the year after — that they’d have enormous difficulty managing it.” (Transcript: President Obama’s Full NPR Interview)

Obama just admit that he wanted “disruptions” in the “price of oil” because he figured Putin would have “enormous difficulty managing it”?

Isn’t that the same as saying that it was all part of Washington’s plan; that plunging prices were just the icing on the cake for their asymmetrical attack on the Russian economy? It sure sounds like it. And that would also explain why Obama decided to allow domestic producers to dump more oil on the market even though it’s going to send prices lower. Apparently, none of that matters as long as the policy hurts Russia.

So maybe the US-Saudi oil collusion theory isn’t so far fetched after all. Maybe Salon’s Patrick L. Smith was right when he said:

“Less than a week after the Minsk Protocol was signed, Kerry made a little-noted trip to Jeddah to see King Abdullah at his summer residence. When it was reported at all, this was put across as part of Kerry’s campaign to secure Arab support in the fight against the Islamic State.

Stop right there. That is not all there was to the visit, my trustworthy sources tell me. The other half of the visit had to do with Washington’s unabated desire to ruin the Russian economy. To do this, Kerry told the Saudis 1) to raise production and 2) to cut its crude price. Keep in mind these pertinent numbers: The Saudis produce a barrel of oil for less than $30 as break-even in the national budget; the Russians need $105.

Shortly after Kerry’s visit, the Saudis began increasing production, sure enough — by more than 100,000 barrels daily during the rest of September, more apparently to come…

Think about this. Winter is coming, there are serious production outages now in Iraq, Nigeria, Venezuela and Libya, other OPEC members are screaming for relief, and the Saudis make back-to-back moves certain to push falling prices still lower?

You do the math, with Kerry’s unreported itinerary in mind, and to help you along I offer this from an extremely well-positioned source in the commodities markets: “There are very big hands pushing oil into global supply now,” this source wrote in an e-mail note the other day.” (“What Really Happened in Beijing: Putin, Obama, Xi And The Back Story The Media Won’t Tell You”, Patrick L. Smith, Salon)

As New York Post tabloid, a mousepiece of Rupert Murdock,   gleefully reported

The price collapse could not have come at a worse time for Bad Vlad Putin. The Russian president needs an oil price around $100 a barrel to prop up what’s become a wartime economy. Oil and gas provide up to a third of budget revenue and compose two-thirds of exports.

Sanctions imposed over Putin’s aggression have gnawed at Russia’s economy, but this price drop bites deep: The ruble has crashed, Russian bonds are pathetic, and foreign reserves are bleeding.

While Russians will put up with harder times than Westerners will, Putin’s made extravagant commitments (bet he’d like to have back the $50 billion he squandered on corrupt Olympic construction). The world’s fave bare-chested bully had embarked on a massive arms buildup, with a hi-tech $5 billion command center just unveiled. But Putin’s visions of military resurgence are becoming unaffordable. He also made election promises to improve Russia’s wretched health-care system. Instead, he’s firing health-care workers and shuttering hospitals.

He promised higher living standards, but now the average Ivan’s feeling squeezed. And Putin faces enormous costs in Crimea and eastern Ukraine, two booby-prize welfare states, with the latter shot to ruins. Putin’s popularity remains high. For now. The gravest worry is that, with his back to the wall, he’ll play the Mother Russia card and attack again.
 

Iraq war was a war for oil

Oil, the U.S.-Middle East Free Trade Area and the Bush Agenda By Antonia Juhasz,

 Antonia Juhasz, a visiting scholar at the Institute for Policy Studies, is the author of The Bush Agenda: Invading the World, One Economy at a Time, on which part of this article is based. She is working on a new book that will make the case for the break-up of the largest American oil companies. Learn more at www.TheBushAgenda.net

Remember oil? That thing we didn’t go to war in Iraq for? Now with his war under attack, even President George W. Bush has gone public, telling reporters last August, “[a] failed Iraq … would give the terrorists and extremists an additional tool besides safe haven, and that is revenues from oil sales.” Of course, Bush not only wants to keep oil out of his enemies’ hands, he also wants to put it into the hands of his friends. 

The President’s concern over Iraq’s oil is shared by the Iraq Study Group, which on December 6 released its much-anticipated report. While the mainstream press focused on the report’s criticism of Bush’s handling of the war and the report’s call for (potential) removal of (most) U.S. troops (maybe) by 2008, ignored was the report’s focus on Iraq’s oil. Page 1, chapter 1 laid out in no uncertain terms Iraq’s importance to the Middle East, the United States and the world with this reminder: “It has the world’s second-largest known oil reserves.” The group then proceeds to give very specific and radical recommendations as to what should be done to secure those reserves. 

Guaranteeing access to Iraq’s oil, however isn’t the whole story. Despite the lives lost and the utter ruin that the war has brought, the overarching economic agenda that the administration is successfully pursuing in the Middle East might be the most enduring legacy of the war—and the most ignored.  Just two months after declaring “mission accomplished” in Iraq, Bush announced his plans for a U.S.-Middle East Free Trade Area to spread the economic invasion well-underway in Iraq to the rest of the region by 2013. Negotiations have progressed rapidly as countries seek to prove that they are with the United States, not against it.

The Bush Agenda

Within days of the 9/11 terrorist attacks, then-U.S. Trade Representative Robert Zoellick announced that the Bush administration would be “countering terror with trade.” Bush reiterated that pledge four years later when he told the United Nations, “By expanding trade, we spread hope and opportunity to the corners of the world, and we strike a blow against the terrorists. Our agenda for freer trade is part of our agenda for a freer world.” In the case of the March 2003 invasion and ongoing occupation of Iraq, these “free trade”—or corporate globalization—policies have been applied in tandem with America’s military forces.

The Bush administration used the military invasion of Iraq to oust its leader, replace its government, implement new economic and political laws, and write a new constitution. The new economic laws have transformed Iraq’s economy, applying some of the most radical—and sought-after—corporate globalization policies in the world and locking in sweeping advantages to U.S. corporations. Through the ongoing occupation, the Bush administration seeks to ensure that both Iraq’s new government and this new economic structure stay firmly in place. The ultimate goal—opening Iraq to U.S. oil companies—is reaching fruition.

In 2004, Michael Scheuer—the CIA’s senior expert on al-Qaeda until he quit in disgust with the Bush administration—wrote, “The U.S. invasion of Iraq was not preemption; it was … an avaricious, premeditated, unprovoked war against a foe who posed no immediate threat but whose defeat did offer economic advantages.”  How right he was. For it is an absolute fallacy that the Bush administration had no post-invasion plan for Iraq. The administration had a very clear economic plan that has contributed significantly to the disastrous results of the war. The plan was prepared at least two months prior to the war by the U.S. consultancy firm, Bearing Point, Inc., which then received a $250 million contract to remake Iraq’s economic infrastructure.

L. Paul Bremer III—the head of the U.S. occupation government of Iraq, the Coalition Provisional Authority (CPA)—followed Bearing Point’s plan to the letter. From May 6, 2003 until June 28, 2004, Bremer implemented his “100 Orders” with the force of law, all but a handful of which remain in place today. As the preamble to many of the orders state, they are intended to “transition [Iraq] from a … centrally planned economy to a market economy” virtually overnight and by U.S. fiat.  Bremer’s orders included firing the entire Iraqi military—some half a million men—in the first weeks of the occupation. Suddenly jobless, many of these men took their guns with them and joined the violent insurgency. Bremer also fired 120,000 of Iraq’s senior bureaucrats from every government ministry, hospital and school. {By removing the Sumi bureaucracy, they removed opposition to globalization.  The U.S. could now shop for support from what would soon be a newly elected factionalized parliament—jk.}  His laws allowed for the privatization of Iraq’s state-owned enterprises (excluding oil) and for American companies to receive preferential treatment over Iraqis in the awarding of reconstruction contracts. The laws reduced taxes on all corporations by 25 percent and opened every sector of the Iraqi economy to private foreign investment. The laws allowed foreign firms to own 100 percent of Iraqi businesses (as opposed to partnering with Iraqi firms) and to send their profits home without having to invest a cent in the struggling Iraqi economy. Iraqi laws governing banking, foreign investment, patents, copyrights, business ownership, taxes, the media, agriculture and trade were all changed to conform to U.S. goals. 

After the U.S. corporate invasion of Iraq

More than 150 U.S. companies were awarded contracts for post-war work totaling more than $50 billion.  The American companies were hired, even though Iraqi companies had successfully rebuilt the country after the previous U.S. invasion. And, because the American companies did not have to hire Iraqis, many imported foreign workers instead. The Iraqis were, of course, well aware that American firms had received billions of dollars for reconstruction, that Iraqi companies and workers had been rejected and that the country was still without basic services. The result: increasing hostility, acts of sabotage targeted directly at foreign contractors and their work, and a rising insurgency.

Halliburton received the largest contract, worth more than $12 billion, while 13 other U.S. companies received contracts worth more than $1.5 billion each. The seven largest reconstruction contracts went to the Parsons Corporation of Pasadena, Calif. ($5.3 billion); Fluor Corporation of Aliso Viejo, Calif. ($3.75 billion); Washington Group International of Boise, Idaho ($3.1 billion); Shaw Group of Baton Rouge, La. ($3 billion); Bechtel Corporation of San Francisco ($2.8 billion); Perini Corporation of Framingham, Mass. ($2.5 billion); and Contrack International, Inc. of Arlington, Va. ($2.3 billion). These companies are responsible for virtually all reconstruction in Iraq, including water, bridges, roads, hospitals, and sewers and, most significantly, electricity.

U.S. Air Force Colonel Sam Gardiner, author of a 2002 U.S. government study on the likely effect that U.S. bombardment would have on Iraq’s power system, said, “frankly, if we had just given the Iraqis some baling wire and a little bit of space to keep things running, it would have been better. But instead we’ve let big U.S. companies go in with plans for major overhauls.”

Many companies had their sights set on years-long privatization in Iraq, which helps explain their interest in “major overhauls” rather than getting the systems up and running. Cliff Mumm, head of Bechtel’s Iraq operation, put it this way: “[Iraq] has two rivers, it’s fertile, it’s sitting on an ocean of oil. Iraq ought to be a major player in the world. And we want to be working for them long term.”

And, since many U.S. contracts guaranteed that all of the companies’ costs would be covered, plus a set rate of profit (known as cost-plus contracts), they took their time, building expensive new facilities that showcased their skills and would serve their own needs should they be runing the systems one day.

Mismanagement, waste, abuse and criminality have also characterized U.S. corporations in Iraq—leading to a series of U.S. contract cancellations. For example, a $243 million contract held by the Parsons Corporation for the construction of 150 health care centers was cancelled after more than two years of work and $186 million yielded just six centers, only two of which are serving patients. Parsons was also dropped from two different contracts to build prisons, one in Mosul and the other in Nasiriyah. The Bechtel Corporation was dropped from a $50 million contract for the construction of a children’s hospital in Basra after it went $90 million over budget and a year-and-a-half behind schedule. These contracts have since been turned over to Iraqi companies.

Halliburton’s subsidiary KBR is currently being investigated by government agencies and facing dozens of charges for waste, fraud and abuse. Most significantly, in 2006, the U.S. Army cancelled Halliburton’s largest government contract, the Logistics Civil Augmentation Program (LOGCAP), which was for worldwide logistical support to U.S. troops. Halliburton will continue its current Iraq contract, but this year the LOGCAP will be broken into smaller parts and competitively bid out to other companies.

The Special Inspector General for Iraq Reconstruction (SIGIR), a congressionally-mandated independent auditing and oversight body, has opened 256 investigations into criminal fraud, four of which have resulted in convictions. SIGIR has provided critical oversight of the U.S. reconstruction, but this fall it nearly fell prey to a GOP attempt to shut down its activities well ahead of schedule. Fortunately, it survived.

SIGIR’s October 2006 report to Congress reveals the failure of U.S. corporations in Iraq. In the electricity sector, less than half of all planned projects in Iraq have been completed, while 21 percent have yet to even begin. Even the term “complete” can be misleading as, for example, SIGIR has found that contractors have failed to build transmission and distribution lines to connect new generators to homes and businesses. Thus, nationally, Iraqis have on average just 11 hours of electricity a day, and in Baghdad, the heart of instability in Iraq, there are between four and eight hours on average per day. Before the war, Baghdad averaged 24 hours per day of electricity.

While there has been greater success in finishing water and sewage projects, the fact that 80 percent of potable water projects are reported complete does little good if there is no electricity to pump the water into homes, hospitals or businesses. Meanwhile, the health care sector is truly a tragedy. Just 36 percent of planned projects are reported as complete. Of 20 planned hospitals, 12 are finished and only six of 150 planned public health centers are serving patients today.

Overall, the economy is languishing, with high inflation, low growth, and unemployment rates estimated at 30 to 50 percent {being part of a militia is providing employment} for the nation and as high as 70 percent in some areas. The International Monetary Fund has enforced a structural adjustment program on Iraq that mirrors much of Bush’s corporate globalization agenda, and the administration continues to push for Iraq’s admission into the World Trade Organization.

Iraq has not, therefore, emerged as the wealthy free market haven that Bush & Co. had hoped for. Several U.S. companies are now preparing to pack up, head home and take their billions of dollars with them, their work in Iraq left undone.  The Bush administration is likely to follow a dual strategy: continuing to pursue a corporate free-trade haven in Iraq, while helping U.S. corporations extricate themselves without consequence. The administration will also focus on the big prize: Iraq’s oil.

Winning Iraq’s oil prize: 

The Bush Agenda does have supporters, especially those corporate allies that have both shaped and benefited from the administration’s economic and military policies.  In the 2000 election cycle, the oil and gas industry donated 13 times more money to Bush’s campaign than to Al Gore’s. The Bush administration is the first in history in which the president, vice president and secretary of state are all former energy company officials. In fact, the only other U.S. president to come from the oil and gas industry was Bush’s father. Moreover, both George W. Bush and Condoleezza Rice have more experience running oil companies than they do working for the government.

Planning to secure Iraq’s oil for U.S. companies began on the tenth day of the Bush presidency, when Vice President Dick Cheney established the National Energy Policy Development Group—widely referred to as “Cheney’s Energy Task Force.” It produced two lists, titled “Foreign Suitors for Iraqi Oilfield Contracts as of 5 March 2001,” which named more than 60 companies from some 30 countries with contracts for oil and gas projects across Iraq—none of which were with American firms. However, because sanctions were imposed on Iraq at this time, none of the contracts could come into force. If the sanctions were removed—which was becoming increasingly likely as public opinion turned against the sanctions and Hussein remained in power—the contracts would go to all of those foreign oil companies and the U.S. oil industry would be shut out.

As the Bush administration stepped up its war planning, the State Department began preparations for post-invasion Iraq. Meeting four times between December 2002 and April 2003, members of the State Department’s Oil and Energy Working Group mapped out Iraq’s oil future. They agreed that Iraq “should be opened to international oil companies as quickly as possible after the war” and that the best method for doing so was through Production Sharing Agreements (PSAs).

PSAs are considered “privatization lite” in the oil business and, as such, are the favorite of international oil companies and the worst-case scenario for oil-rich states. With PSAs, oil ownership ultimately rests with the government, but the most profitable aspects of the industry—exploration and production—are contracted to the private companies under highly favorable terms. None of the top oil producers in the Middle East use PSAs, because they favor private companies at the expense of the exporting governments. In fact, PSAs are only used in respect to about 12 percent of world oil reserves {such as Nigeria}. 

 

Weakness of the propagated by MSM hypothesis about Saudi Arabia fighting for its market share

In 2013 before oil prices slump started Saudies shipped 7.54 million barrels a day on average up from 7.41 million barrels a day in 2012 (JODI website ). Saudi Arabia exported 5.49 million barrels a day in 2002, when the group began collecting oil data. Saudi monthly exports in 2013 peaked at 7.84 million barrels a day in August, the most since April and May of 2003. North Sea Brent, the benchmark for more than half of the world’s oil, averaged $110.82 a barrel during the 2010-2013.

Saudi Arabia produced 10.28 million barrels a day in October, 2015,  up from 9.69Mb/done year ago.   Chances that production will reach 11 Mb/d are slim. There are strong signs that they have huge difficulties in increasing oil extraction volume.  All their efforts to increase production led to increase of less then 1Mb/d  increase in 2015. Which is partially offset by  increase in internal consumption (In 2015 Saudi Arabia oil demand rose by a notable 0.21 mb/d, a nearly 8% annual rise)  Here is relevant quote (OilPrice.com, Dec 21, 2015). All they can achieve is 7% increase of exports.

Crude exports from Saudi Arabia rose from an average of 7.111 million barrels per day in September to 7.364 million per day in October, according to the latest data from the Joint Organizations Data Initiative (JODI), which monitors the oil industry. The report said this quantity was the most oil exported from Saudi Arabia since June and 7 percent higher than in October 2014.

The key question about propagated by MSM hypothesis about Saudi Arabia fighting for its market share is "Why piss yourself without any need?". 

That means that if Saudis withdraw one Mb/s from the market in 2015 and exported the same 7 Mb/d (instead of 7.5 Mb/d, saving around 0.5 Mb/d of their oil reserves, not counting rise in internal consumption)  their revenue would be  125 billions.  While after increasing oil production to maximum (no spare capacities) they got oil revenue $118 billions.  Less money for more effort.  Their proven oil reserves are only 268 billion barrels (EIA)  which at current rate of production (which is around 3.6 billion barrels per year) get them less then a hundred years.

Moreover they need approximately $100 oil to balance budget, so low oil prices mean depletion of their currency reserves, which if prices say on the current level will last less then 10 years.  Saudi Arabia’s record deficit of  $98 billion in 2015 At the end of October, its reserves fell to $644 billion from $732 billion at the end of last year.  The finance ministry has issued bonds worth $20 billion for the domestic market. projected means that dumping oil on the market was a self-destructive action.

The only reasonable explanation for such suicidal actions is that they launched "all-out" economic war against their arch-enemy Iran depriving it of oil revenue after lifting sanctions, hitting simultaneously Russia, Venezuela and couple of other countries they do not like.  In any case such an action should be approved by Washington as Saudis are a vassal state completely dependent on Washington for survival of their monarchic regime.

And it is easy to see huge benefits for Washington from such Saudis-Iran oil war.  Moreover may be lifting sanction itself was a gentle push for Saudis to unleash this war.

Not everybody buy MSM propagated version of Saudis behaviour. For example here is a comment from Yahoo (Saudi to diversify economy away from oil King Salman)

brian  Dec 30, 2015

This oil collapse is engineered by Saudi with the Western media. As the analysts are saying the daily over production is 1.5 million barrels. 1.5 out of 100 million daily production is ONLY 1.5% percent. Why did Saudi keep on over producing and with the media bombarding over production, the future's market is easily manipulated as oil collapsed to $36 per barrel.

This just does not make sense and not fair to the commodity producing nations. If you look at the U.S., Euro, Japan, China all they are doing is QE, printing money to supercharge their economy. On the other hand, the commodity nations are contracting.

Si

Saudi Arabia is in a conundrum, it has propped up its Clergy and kept majority of its population illiterate. This was done to keep the Kingdom under full control of its population, their women folk are even further worst off. The country is run by expatriates from around the world, mostly from Egypt, Pakistan, India, Bangladesh and Malaysia. According to Saudi rules these expatriates can not ever become citizens, even after many generations. Unlike Iran whose population is highly educated (Men and Women), Saudi administrators are afraid if Saudi gets educated there will be a revolution and that will affect how Saudi Arabia is ruled. My bet is Saudi Arabia can not progress beyond oil based economy.

 

And in another Yahoo thread Oil down 3 percent; Brent near 11-year low as oversupply worries return
Old Midwest Geezer
Saudi Arabia is fighting a financial war against Iran, its mortal enemy. Iran's main source of income is oil and SA is putting the screws to them and their Russian buddies. They picked up a perk by squeezing the US shale oil producers.

Hedging and junk debt: shale oil as subprime oil


"There are too many ugly balance sheets," warns one energy industry analyst, adding simply that "the group is not positioned for this downturn." While the mainstream media continues to chant the happy-clappy side of lower oil prices, spewing various 'statistics' about how the down-side of low oil prices is 'contained' and the huge colossal massive tax cut means 'everything is awesome' for America, the data - and now actions - do not bear this out.

Zero Hedge

Shale oil companies were not making as bandits when prices were $100. They operated in a very risky and rather unstable environment and mot of them took substantial amoount of debt.  Many used hedges regularly to make the environment more stable which is double edge sword -- it helps if price drop but deprive you of profits if price surge. Those who did were in better shape in 2015 when oil prices dropped to $35 per barrel (WTI).  Here is a good explanation of hedging from a post in peakoilbarrel.com blog:

shallow sand, 12/20/2015 at 8:56 am
Donn. Companies hedge with counter parties. Those are usually large banks. The there are 3 basic types of hedges.
  1. SWAP. The producer and counter party agree to a fixed price, say $70 per barrel. If the price goes above $70, the producer pays the counterparty the difference. If it goes below $70, the counterparty pays the producer.
  2. Cost less collars. These are like SWAPS, but in a range. Say the parties agree to a collar of $60-80. No money changes hands unless the price goes outside the range.
  3. The third is a floor, or put. The producer pays a premium to the counterparty. Say the producer buys $60 puts. If the price falls below $60, the counterparty pays the producer.

There are various hybrids and modifications of the above.

The price levels and cost of puts are based on the futures market. It is now impossible to hedge anything remotely profitable for the shale industry and a good portion of US conventional.

Furthermore, it is difficult to hedge production past 24 months. This is especially true for shale, with the high declines.

One concern with SWAPS or collars is in the event of a price spike, the producer produces less barrels than that hedged. That can wind of costing the producer a lot of $$. Also, theses types of hedges can result in very large margin requirements of the producers, but they commonly avoid those by allowing a first lien on production.

Another problem with hedges is giving up upside. If it were possible, someone who hedged in 2003 for the next ten years at $30 a barrel would be BK, as the price rocketed up, which caused OPEX to also skyrocket.

Most companies do not hedge past 24 months. Also, they do it in layers so that not as many barrels are hedged n the later years.

Many companies had significant hedge gains in 2015. There will be much less in 2016 and almost none in 2017.

Shale companies debt was typically rated as junk which means that chances for repayment of the load are low.  Just due to this fact the current talk about profitability of certain parts of shale at below then $50 prices looks a little bit suspicious even with some technology advances which were sped up by the price slum as well as lower service companies costs.   To many observers $60-$75 per barrel looks like a more reasonable minimal price for shale oil sustainable extraction, if the amount of junk bond debt is counted.

The current talk about profitability of certain parts of shale at below then $50 prices looks a little bit suspicious.   To many observers $60-$75 per barrel looks like more a reasonable minimal price for shale oil sustainable extraction, if the amount of junk bond debt is counted. 

Some technological improvements can cut costs. Neglecting ecological concerns can cut costs. The strong dollar and crash of other commodities can cut some costs (as steel and some equipment, can be bought at much lower prices). But whether all three factors mentioned can cut 50% of costs is a big multibillion question.   Gail Tverberg, a well known commentator on "end of cheap oil" problem,  thinks that the current drop of prices looks more like a harbinger of the collapse of financial system then oversupply problem on world markets (Deflationary Collapse Ahead?  Aug 28, 2015  Our Finite World )

The entire shale oil industry in America is complex mix of new technological methods and new schemes of creation of  junk bonds by Wall Street (200 billion of this debt might also be securitized like subprime mortgages). There also might be some complex derivative bets  (including but not limited to related to hedging of oil prices by shale producers, airlines, etc).

Shale oil is impossible to understand without  proper context which is the existence of  sophisticated financial system and complex financial products under neoliberalism. Wall Street can be trusted as for its ability to produce exotic financial instrument tailored for particular purpose, which can blow in your face in case of any Black Swan event.  In this case this might be securitization of debt of shale oil companies that could play a role somewhat similar to subprime mortgages but on much smaller scale as the amount of dent is miniscular in comparison with subprime mortgages.  Still, in this sense, we can call shale oil subprime oil (Broken Energy Markets and the Downside of Hubbert’s Peak Energy Matters): 

The second example of a broken energy market I want to explore is the US shale industry.  This shares certain characteristics with the wind industry in that it is a high cost but potentially very large resource. But the mechanism for integration of this resource into the market is rather different. The problem with shale gas is that over-supply has resulted in the US gas price being dumped below the level where many shale operators can make a profit. Consumers in this case benefit through getting both secure and low priced gas. But the shale operators have reportedly racked up large losses that have been covered by expanding debt. These losses may yet come home to roost with the consumer if debt defaults result in a new credit crunch where the debts are socialised via government bailouts of the banking sector.

If it were possible to produce shale gas at $1 / million btus then everyone would be happy. Consumers would be getting secure and cheap energy and producers would be making handsome profits to distribute to shareholders. That is how capitalism is supposed to work. The system as it has operated seems broken.

US Light tight oil (LTO) production appears now to have created the same problem for the liquids plays where the entrance of expensive liquids in the market have contributed to the crash in the oil price. This has created risks for the LTO operators. It remains to be seen if the LTO sector sees mass insolvencies and default on loans that may socialise these losses. The introduction of high cost LTO has also undermined the whole of the higher cost component of the conventional oil sector. If LTO could be produced in large quantities for $20 / bbl then there would be no problem since this source would  go on to substitute for the higher cost conventional sources of supply. But with costs closer to $60-$80 this is not going to happen. The conundrum for capitalism is the introduction of large quantities of higher cost energy to the system.

At this point I have to admit that nuclear power may be subject to similar limitations. It is difficult to view the Hinkley Point new nuclear build in the UK as a triumph for the consumer or the country. A better way to manage such enormous capital expenditure on vital infrastructure is via the state. The costs may eventually be socialised to the tax payer, but at least the energy is reliable and amongst the safest forms of power generation ever developed and the taxation system distributes costs in an equitable way.

A form of society could undoubtedly exist powered by nuclear, wind and shale gas. But it would be a society supported by the state with far larger numbers working in the energy industries than now, producing lower surpluses, the energy production part perhaps running at a perennial loss. Those losses have to be covered by either higher price or via the taxation system. Either way, the brave new world that awaits us will be characterized as the time of less that will be in stark contrast to the time of plenty many of us enjoyed during the 20th Century.

The so-called “shale revolution” in the U.S. was partially powered by innovation in horizontal drilling but  its cornerstone is the junk bond market. Which questions boom’s the long-term sustainability.  As The Wall Street Journal  reported total debt is   almost $200 billion. At 7% that's 14 billion of interest a year. Or at $40 per barrel 350 million barrels per year are needed just to service the debt. That's almost million barrels per day or almost total production of Bakken field (dmr.nd.gov )

And now,  the bankruptcies have begun as financing costs are not just prohibitive, there is no liquidity available at any price for many...

American oil and gas companies have gone heavily into debt during the energy boom, increasing their borrowings by 55% since 2010, to almost $200 billion.

Their need to service that debt helps explain why U.S. producers plan to continue pumping oil even as crude trades for less than $50 a barrel, down 55% since last June.

But signs of strain are building in the oil patch, where revenue growth hasn’t kept pace with borrowing. On Sunday, a private company that drills in Texas, WBH Energy LP, and its partners, filed for bankruptcy protection, saying a lender refused to advance more money and citing debt of between $10 million and $50 million. Neither the Austin-based company nor its lawyers responded to requests for comment.

Energy analysts warn defaults could be coming. “The group is not positioned for this downturn,” said Daniel Katzenberg, an analyst at Robert W. Baird & Co. “There are too many ugly balance sheets.”

...

In 2010, U.S. companies focused on producing oil and gas had $128 billion in combined total debt, according to financial data collected by S&P Capital IQ.

As of their latest quarter, such companies had $199 billion of combined total debt.

Even is "good times", before the start of current oil price slump,  the whole shale industry was financed only via junk bond market:  75 of the 97 energy E&P companies were rated by S&P below investment grade (Shale Boom Built on ‘Junk’ - GE Reports Ideas, May 19, 2014)

Although share prices for most U.S. exploration and production (E&P) companies are at all-time highs, the elephant in the room is an industry financed by the high-yield debt market, better known as “junk bonds.” The S&P says that 75 of the 97 energy E&P companies it rates are below investment grade.

The report cites a recent analysis by Energy Aspects, a commodity research consultancy, of 35 independent companies that shows a steadily worsening financial picture across the last six years. The analysis showed the companies spent as much as they brought in and “net cash flow is becoming negative while debt keeps rising.”
 

Many of the oil-drilling newcomers set up shop in order to take advantage of the low rates and easy money available in the bond market. Now that oil prices have crashed, investors are avoiding energy-related junk bonds. Moreover the whole US bond market started to turn south (in correlation with stocks) in anticipation of rate hikes. Which is making it impossible for the smaller companies to roll over their debt or attract fresh capital. The most indebted companies from Here Are America's Most Levered Energy Companies Zero Hedge are:

Source: CapIQ

When these companies need to refinance their bond they are forced to default or, if they have valuable properties, be acquired by larger companies. The whole situation with junk bonds from shale companies has some analogy with subprime loads and while lesser in scale still can serve as a catalyst for another financial meltdown (WSJ.com)

Energy companies, the fastest-growing segment of the high-yield bond market in recent years, account for nearly 18% of all outstanding high-yield bonds, up from 9% in 2009, according to J.P. Morgan.

Mr. Hamid says that the 40% possible default rate is the upper limit over the next few years, and that energy companies will take steps to avoid falling into bankruptcy, including cutting spending and selling assets.

Still even if companies make smart moves to cut costs, with oil at $65 per barrel or below for the next three years, he estimates that default rates high-yield bonds from the energy sector could still hover around 20% to 25%. “It would become a very dire scenario,” Mr. Hamid said.

After a steep plunge in oil prices last week, WTI crude, the U.S. benchmark, was recently up 3% to $68.14 a barrel in Monday morning trading.

He predicts that not that many companies will default in 2015 because many companies have hedged their exposure. But he expects that energy companies will run into trouble in 2016 as even the most conservative energy companies will see most of their hedges run off.

Energy companies are the largest sector in the high-yield universe by a wide margin. The next largest sector, J.P. Morgan estimates, is the healthcare sector, which accounts for 7.1%.
 

The total size of shale companies junk bond debt is estimated at 200 billions out of which at least 20 billions are not recoverable.

The additional huge problem is that the banks again have bundled a lot of shale companies debt into financially-engineered products like Collateralized Loan Obligations (CLOs) and Collateralized Debt Obligations (CDOs), which much like subprime CLO and CDO are overrated and might fail when borrowers are no longer able to service the loans. The rot can be concealed for a while (may be two-three years -- as long as existing well produce oil in quantity to pay the debt), but eventually, if oil prices don’t recover, a significant number of these companies are going to go under

Vultures start circling shale companies

If low prices persist for all 2016 many shale oil companies are doomed. And vultures already started circling them:

Clueless, 12/19/2015 at 10:40 pm
I would guess that by now, most can see what is happening and therefore, what is going to happen in the future since the model has been established. The banks are not going to take serious hits. Re: Magnum Hunter and New Gulf Resources.

I remember seeing some vulture investor discussions back in 2009. They were stating that they would never buy equity in failing companies: they would take control thru the debt. Much more upside possible. So, a company with $1 billion in debt has its bonds trading at say 70 cents on the $ and it is rated junk. The bond funds that hold the debt [their covenants prohibit them from holding “bankrupt” rated debt] sells to novice speculators. Then the debt plunges to 10- 30 cents on the dollar. The investment/hedge funds step in. They can buy $1 billion of debt for $300 million or less, and the are praying that the company does go belly up. If it does, they get 100% of the equity, and agree to put in another $200 million to ride out the storm. A totally non-contested, prearranged bankruptcy. If things come back [even partially], they might own a company worth $2 billion for their $500 million investment. 

shallow sand, 12/19/2015 at 11:20 pm
Clueless. You are correct. I might add that the vultures do not appear to be just purchasing the debt. They are trading unsecured debt for second lien debt. I am not sure how this works, but from what I have read, the unsecured bonds have very weak covenants. The vultures give the unsecured bond holders the option of taking pennies on the dollar or becoming subordinate the vultures on all the debt the vultures are able to trade out.

The vultures better be pretty sharp, however. 1st, they better have a good handle on the assets they are trying to acquire. Second, they better have a good team put together to operate the assets. Third, they better have a better handle on future oil and gas prices than schmucks like me.

I saw something similar to this up close in the aftermath if the 1998-99 crash. An investor group bought the bad debt from a bank for pennies on the dollar, took assignment of the liens and foreclosed.

The investor group found out in a hurry that they didn’t quite know what they had bought, and that it wasn’t easy to manage from 1000+ miles away. They had a hell of a field superintendent, but of course they thought they were smarter than him, despite him having grown up in the middle of the field.

In any event, after burning several million dollars, the sold the assets and I am sure took a big loss. They also screwed up on timing the sale. Had they held on for about 3 more years they could have at least quintupled the sale proceeds. But they knew about as much as I, or really any of us, know about where oil prices are headed.

I am sure these distressed buyers are real sharks. But sharks can die too.

What is the sustainable minimal oil price with the current oil reserves depletion

As oil is important geopolitical resource there can be no definite answer to it. Still there is a probability that the peak "cheap oil" has already occurred, but we won’t know that until several years after the fact.  There is a large discrepancy in estimates ;-).  Much depends of the type of oil in question with shale, oil sands, as deep water oil as the most expensive.

Shale oil has a break even price around $70-75 / barrel for most shale producers and at below $50, every single well is losing money. There are also pretty expensive oil extracted from  deepwater (around 7 Mb/d). Which at current oil prices will shrink approximately 10% per year.  And there are around 20 MB/d in shallow water with higher staying power but also declining 10% due to lack of investments in current price situation.  Half of oil production from future developments is uneconomic at US$60/bbl (post of AlexS 01/29/2016 at 7:06 pm )

EIA projects that in 2030 the average real price of crude oil is projected to be $72 per barrel in 2006 dollars or about $113 per barrel in nominal dollars. Projected U.S. crude oil production averages 9.3 Mb/d in 2015 and 8.8 Mb/d in 2016.  Decline is 0.5 Mb/d.  EIA is always on optimists side (they were major cheerleaders of shale bubble, which makes them more of propaganda agency then statistical outlet)  so you can probably assume that 2020 prices of oil will be above, especially if low prices will last the whole 2016.  

Pricewise EIA projections are dropping all 2015 (Short-Term Energy Outlook)

EIA short term predictions as of December 3, 2015 suggest that low oil prices might continue to dominate the first quarter of 2016:

Previously common wisdom was around that price will return to $100 per barrel on average in 2016, which the following post from Zerohedge illustrates:

6344498 Magooo

HOW HIGH OIL PRICES WILL PERMANENTLY CAP ECONOMIC GROWTH For most of the last century, cheap oil powered global economic growth. But in the last decade, the price of oil production has quadrupled, and that shift will permanently shackle the growth potential of the world’s economies.  http://www.bloomberg.com/news/articles/2012-09-23/how-high-oil-prices-will-permanently-cap-economic-growth

HIGH PRICED OIL DESTROYS GROWTH According to the OECD Economics Department and the International Monetary Fund Research Department, a sustained $10 per barrel increase in oil prices from $25 to $35 would result in the OECD as a whole losing 0.4% of GDP in the first and second years of higher prices.  http://www.EIA.org/textbase/npsum/high_oil04sum.pdf

BUT WE NEED HIGH OIL PRICES:  Marginal oil production costs are heading towards $100/barrel http://ftalphaville.ft.com/2012/05/02/983171/marginal-oil-production-costs-are-heading-towards-100barrel/

The marginal cost of the 50 largest oil and gas producers globally increased to US$92/bbl in 2011, an increase of 11% y-o-y and in-line with historical average CAGR growth.  http://ftalphaville.ft.com/2012/05/02/983171/marginal-oil-production-costs-are-heading-towards-100barrel/

Steven Kopits from Douglas-Westwood said the productivity of new capital spending has fallen by a factor of five since 2000. “The vast majority of public oil and gas companies require oil prices of over $100 to achieve positive free cash flow under current capex and dividend programmes. Nearly half of the industry needs more than $120,” he said http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/11024845/Oil-and-gas-company-debt-soars-to-danger-levels-to-cover-shortfall-in-cash.html

Sanford C. Bernstein, the Wall Street research company, calls the rapid increase in production costs “the dark side of the golden age of shale”. In a recent analysis, it estimates that non-Opec marginal cost of production rose last year to $104.5 a barrel, up more than 13 per cent from $92.3 a barrel in 2011.   http://www.ft.com/intl/cms/s/0/ec3bb622-c794-11e2-9c52-00144feab7de.html#axzz3T4sTXDB5

Now all those consideration looks far less plausible in a short term (one year) period. Here are some "post oil price slump" considerations (in 2013 dollars):

Wikipedia article gives a more wide range of prices at wellhead (without cost of servicing the debt and transportation costs) from $35 to $95 for shale oil (Oil shale economics - Wikipedia)

The United States Department of Energy estimates that the ex-situ processing would be economic at sustained average world oil prices above US $54 per barrel and in-situ processing would be economic at prices above $35 per barrel. These estimates assume a return rate of 15%.[6] The International Energy Agency estimates, based on the various pilot projects, that investment and operating costs would be similar to those of Canadian oil sands, that means would be economic at prices above $60 per barrel at current costs. This figure does not account carbon pricing, which will add additional cost.[4] According to the New Policies Scenario introduced in its World Energy Outlook 2010, a price of $50 per tonne of emitted CO2, expected by 2035, will add additional $7.50 per barrel cost of shale oil.[4]

According to a survey conducted by the RAND Corporation, the cost of producing a barrel of oil at a surface retorting complex in the United States (comprising a mine, retorting plant, upgrading plant, supporting utilities, and spent shale reclamation), would range between $70–95 ($440–600/m3, adjusted to 2005 values). This estimate considers varying levels of kerogen quality and extraction efficiency. In order for the operation to be profitable, the price of crude oil would need to remain above these levels. The analysis also discusses the expectation that processing costs would drop after the complex was established. The hypothetical unit would see a cost reduction of 35–70% after its first 500 million barrels (79×10^6 m3) were produced. Assuming an increase in output of 25 thousand barrels per day (4.0×10^3 m3/d) during each year after the start of commercial production, the costs would then be expected to decline to $35–48 per barrel ($220–300/m3) within 12 years. After achieving the milestone of 1 billion barrels (160×10^6 m3), its costs would decline further to $30–40 per barrel ($190–250/m3).[7]

 

Floor for oil prices for 2016

The only function of economic forecasting is to make astrology look respectable.
 ~John Kenneth Galbraith

The most common view is that most US shale producers are highly vulnerable if price falls below $60 and are losing money on each barrel of oil they produce  at prices below $50. With difficulties of junk bond re-financing this figure should be higher. Some Russian sources cite $75 per bbl as a breakeven price for US shale oil.  This estimate is supported by the following detailed report BAKKEN - Single Well Economics  (Jan 4, 2016).

Here is a pretty telling graph from  Scotiabank (they have way too optimistic price for Bakken I think: adding $10 to $47 we get $57 for Bakken, which is probably 10 to 20 dollars low):

 

Source Why oil prices keep falling — and throwing the world into turmoil - Vox

As you can see plausible minimum for shale oil wellhead costs is around $55( $45+$10) per barrel ( and that  does not include the cost of servicing of junk bond debt).  If prices in 2016 remain under $50/bbl (as many forecaster expect), shale oil production in the United States will likely see a substantial decline in output and many shale companies will face merger or pushed into bankruptcy. But as for total US output, this decline will be partially offset by Gulf oil coming into production so for the first six months of 2015 total decline probably will be around 0.5Mb/d or lower. 

In any case, as 2015 has shown low prices became sticky and self reinforcing via Wall Street financial mechanisms. So chances for quick reversal in 2016 are close to zero. That spells real trouble for the US shale oil industry as well as Canada oil sands production  (QE At Work Pouring Cheap Debt Into The Shale Ponzi David Stockman's Contra Corner) as well as speculators in oil futures who will be wiped out via EFN  (outside major banks and those who shorted oil):

There are two pieces of the economic puzzle when it comes to shale. First is that most shale oil deposits are not profitable to extract except at current high prices. This drilling/extraction method is not cheap. Breakeven prices vary by region but it is safe to say that no shale oil deposits are profitable below $50/barrel and most areas require much higher prices. An average might be in the range of $65 and there are plenty of areas where the price needs to be above $80 before anyone makes a nickel.

I would just note that oil traded, albeit briefly, at $34 in the last recession. Second is the production profile of shale wells; production drops off rather precipitously after the first year (in contrast with traditional wells which deplete over much longer time frames). Combine high extraction costs with rapid depletion and the economics of shale become not only dubious but frankly insane.

Usually forecasts of oil prices are not work the paper or electrons. but there are some exceptions to this rule. For example  Bill Connoly in his Oil Price Forecast 2015-2016 - Forbes was one of the few forecasters who proved to be right as for 2015; remains to be seen for 2016.

My price forecast is that today’s $60 price is likely to be the high end for the coming two years. There may be temporary market volatility higher, but don’t expect a higher price to be sustained. At the low end, $50 seems like a floor absent a global recession.

OilPrice.com analysts think that the bankruptcy of shale companies and drastic reduction of the number of new projects and capital expenditures will eventually move the oil price up to $70+ range. And that the production of shell oil in the USA will drop 1 Mb/d in 2016 or even more, while consumption rises as record number of cars was sold in 2015.  But this process in not immediate and can take more then one year as in 2015 oil production defied gloomy forecasts and remains relatively stable (Oil Price Scenarios For 2015 And 2016 OilPrice.com_

The spare capacity data suggests that demand/supply imbalance may last three years, requiring 18 months to work through to the mid-cycle point where over-supply turns to under-supply. It is by no means certain that the market will respond to the same time dynamic when we are now dependent upon natural production capacity wastage to occur as opposed to OPEC simply closing the spigot. But this is all I have to go on.

The downturn in the current price cycle began last July and we are therefore just 6 months in. Another year of pain to go for the producers, that is unless OPEC decides to intervene.

In we count start of mid cycle from December of 2014 then we can see some upward pressure in July of 2016 or so.

Low prices also might mean that only selected shale projects ("sweet spots") with continue to be explored, diminishing of flow of oil from this source to the market ( Oil under US$60 beyond 2016 suggests market rethinking shale - Channel NewsAsia). Those places will be exhausted in two-three years making extraction more expensive on average.

If U.S. shale drillers - the world's new 'swing' producers - can still turn a profit at below US$60 a barrel, then the fall in long-dated oil prices may be rational. If not, as some bullish market analysts worry, then lower prices could be choking off new supplies the world may need as soon as next year.

"If you take the curve at face value, it appears to be saying that U.S. shale can grow ... if WTI stays below US$60 for three years. That doesn’t seem very likely," Paul Horsnell, global head of commodities research at Standard Chartered, said, referring to West Texas Intermediate crude.

"One would guess that all those companies that had been holding back from cutting projects and jobs over the past few months are not going to hold on much longer, and another shakeout will start. And it probably won’t be long before U.S. rig counts start to dive again."

Link to chart: http://link.reuters.com/tef25w 

... ... ...

U.S. oil futures for December 2017 delivery have dropped by as much as US$5 a barrel, or 8 percent, in the past two days, an even deeper retreat than last November when OPEC's surprise decision to maintain oil output despite a global glut sent markets into a deepening tailspin.

CLZ17 Commodity Futures Price Chart for Crude Oil WTI December 2017

[Note that they are close to $58 as of July 24, 2015 -- NNB]

EIA forecasts change with market prices

Short-Term Energy Outlook - U.S. Energy Information Administration (EIA)

In December 2015 EIA predicted average price of oil in 2016 much lower, around $51 a barrel, so EIA forecasts change really fast with future prices and as such are just educated guesses.

  2013 2014 2015 2016
WTI Crude Oila
(dollars per barrel)
97.98 93.17 49.08 50.89
Brent Crude Oil
(dollars per barrel)
108.56 98.89 52.93 55.78

Sustained low oil price will cut capital investment in oil dramatically

An extended period of lower oil prices would benefit consumers but would trigger energy-security concerns by heightening reliance on a small number of low-cost producers, or risk a sharp rebound in price if investment falls short, says the International Energy Agency (EIA) in the 2015 edition of its  World Energy Outlook publication (WEO-2015).We need to distinguish between oil as a chemical substance, a source used by chemical companies to produce all kind of useful things and oil as a source of motor fuel.  Oil is irreplaceable resource and burning it now deprive of oil future generations. As simple as that.

The US government policy of allowing (or, most probably, facilitating/engineering) very low oil prices is extremely unwise (I would use a stronger word) because at least for one segment of transportation (which is around 70% of total oil consumption in the USA) alternative does already exist. Small hybrid and electrical cars with prices of oil over $100 (and gasoline above $4 per gallon) are absolutely viable.

Instead now we have a huge jump in SUVs sales which became No.1 personal car category. To say nothing about light trucks. Which is the last thing we need.

Switch to natural gas in large vehicles such as buses (and small delivery trucks) also experiences a dramatic slow down (transit buses in Europe already are using this fuel on mass scale).

Again I think that it is the US government which is the culprit of destruction of the US shale industry which was build with such great effort and expense and is now on the verge of extinction. By really great people working in very difficult, challenging conditions.

The US government could buy excessive oil into strategic reserve or do something similar to keep prices at least above $70 dollars level. They could also prohibit short oil ETNs and other Wall Street machinations and for good effort jail couple of too aggressive traders for violation of some New Deal era laws(after all this is gambling, plain and simple) which are still on books after all this deregulation efforts by Clinton and Bush II administrations.

My point is that wind and solar might well be not the best choices. Other alternatives of renewable fuels exists. Meanwhile we need to save oil and the best way to do it is to ramp up oil price to above $100 level, which ensure the survival of frackers, which unfortunately became a collateral damage in some larger, possibly geopolitical play.

Actually EIA recognizes the danger of oil price spikes caused by sustained low oil prices and low capex investments Sustained low oil prices could reduce exploration and production investment - Today in Energy - U.S. Energy Information Adminis

Low oil prices, if sustained, could mark the beginning of a long-term drop in upstream oil and natural gas investment. Oil prices reflect supply and demand balances, with increasing prices often suggesting a need for greater supply. Greater supply, in turn, typically requires increased investment in exploration and production (E&P) activities. Lower prices reduce investment activity.

Overlaying annual averages of the domestic first purchase price (adjusted for inflation) on oil and natural gas investment reveals that upstream investment is highly sensitive to changes in oil prices. Given the fall in oil prices that began in mid-2014 and the relationship between oil prices and upstream investment, it is possible that investment levels over the next several years will be significantly lower than the previous 10-year annual average.

Oil production is a capital-intensive industry that requires management of existing production assets and evaluation of prospective projects often requiring years of upfront investment spending on exploration, appraisal, and development before reserves are developed and produced.

Previous investment cycles provide insights into how investment responds to crude oil price changes. In 1981 and 1982, after crude oil prices significantly increased, investment topped out at more than $100 billion (in 2014 dollars) and then averaged $30 billion to $40 billion per year into the early 2000s as crude oil prices fell and remained in the $20-$30 per barrel (b) range. From 2003 to 2014, investment spending increased from $56 billion to a high of $158 billion as crude oil prices increased from $34.53/b to $87.39/b, including several months of prices reaching more than $100/b. EIA's 2015 Annual Energy Outlook Reference case projects real domestic first purchase prices to average about $70/b in 2020. This price level could result in substantially lower annual oil and natural gas investment over the 2015-20 period than the annual average of $122 billion spent during the 2005-14 investment cycle crest period

 

Additional "end of cheap energy" readings

See also my introduction to the topic of "End of cheap energy":


Top Visited
Switchboard
Latest
Past week
Past month

NEWS CONTENTS

Old News ;-)

Home 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 1999

For the list of top articles see Recommended Links section

2017 2016 2015 2014 2013 2012 2011 2010 2009
You load sixteen tons, what do you get
Another day older and deeper in debt
Saint Peter don't you call me 'cause I can't go
I owe my soul to the company store.

[Jul 24, 2021] American Empire still exists. US gov't can always sell LNG to Poland

Jul 24, 2021 | www.zerohedge.com

XJ033858JH 11 hours ago remove link

Don't worry, US gov't...you can always sell your LNG to Poland...hahahah!

LA_Goldbug 11 hours ago

I wonder what the price is for this LNG from all the way across the Atlantic.

rosalinda 10 hours ago

I read it is triple the price of the Russian gas. The Russians have all the advantages here. Putin probably would not weaponize the gas, but who is to say some Russian leader in the future might not take the opportunity? Europe is more dependant on Russian gas then Russia is dependant on European money

XJ033858JH 10 hours ago

It's more like 3.3 times...10% for the big guy

BannedCamp 8 hours ago

Likewise, Russia could nuke the whole world, but they never used a nuke on any country before, but the US has. Saying that Russia might do something that the accusing party (The U.S) is actually doing right now (to Germany) is blatant hypocrisy.

[Jul 24, 2021] Nord Stream 2 'Deal' Is Not An American Concession, It's Admission Of Defeat - ZeroHedge

Jul 24, 2021 | www.zerohedge.com

After much arm-twisting, bullying and foghorn diplomacy towards its European allies, the United States appears to have finally given up on trying to block the giant Nord Stream 2 project with Russia. What an epic saga it has been, revealing much about American relations with Europe and Washington's geopolitical objectives, as well as, ultimately, the historic decline in U.S. global power.

In the end, sanity and natural justice seem to have prevailed. The Nord Stream 2 pipeline under the Baltic Sea will double the existing flow of Russia's prodigious natural gas to Germany and the rest of Europe. The fuel is economical and environmentally clean compared with coal, oil and the shale gas that the Americans were vying with Russia to export.

Russia's vast energy resources will ensure Europe's economies and households are reliably and efficiently fueled for the future. Germany, the economic engine of the European Union, has a particular vital interest in securing the Nord Stream 2 project which augments an existing Nord Stream 1 pipeline. Both follow the same Baltic Sea route of approximately 1,222 kilometers – the longest pipeline in the world – taking Russian natural gas from its arctic region to the northern shores of Germany. For Germany's export-led economy, Russian fuel is essential for future growth, and hence benefiting the rest of Europe.

It was always a natural fit between Russia and the European Union. Geographically and economically, the two parties are compatible traders and Nord Stream 2 is merely the culmination of decades of efficient energy relations.

Enter the Americans. Washington has been seething over the strategic energy trade between Russia and Europe. The opposition escalated under the Trump administration (so much for Trump being an alleged Russian stooge!) when his ambassador to Germany, Richard Grenell, fired off threatening letters to German and other European companies arrogantly warning that they would be hit with sanctions if they dared proceed with Nord Stream 2. Pipe-laying work was indeed interrupted last year by U.S. sanctions. (So much for European sovereignty and alleged meddling in internal affairs by Russia!)

The ostensible American rationale was always absurd. Washington claimed that Russia would exploit its strategic role as gas supplier by extracting malicious concessions from Europe. It was also claimed that Russia would "weaponize" energy trade to enable alleged aggression towards Ukraine and other Eastern European states. The rationale reflects the twisted Machiavellian mentality of the Americans and their supporters in Europe – Poland and the Baltic states, as well as the Kiev regime in Ukraine. Such mentality is shot-through with irrational Russophobia.

The ridiculous paranoid claims against Russia are of course an inversion of reality. It is the Americans and their European surrogates who are weaponizing a mundane matter of commercial trade that in reality offers a win-win relationship. Part of the real objective is to distort market economics by demonizing Russia in order for the United States to export their own vastly more expensive and environmentally dirty liquefied natural gas to Europe. (So much for American free-market capitalism!)

Another vital objective for Washington is to thwart any normal relations developing between Russia and the rest of Europe. American hegemony and its hyper-militaristic economy depend on dividing and ruling other nations as so-called "allies" and "adversaries". This has been a long-time necessity ever since the Second World War and during the subsequent Cold War decades, the latter constantly revived by Washington against Russia. (So much for American claims that Russia is a "revisionist power"!)

However, there is a fundamental objective problem for the Americans. The empirical decline of U.S. global power means that Washington can no longer bully other nations in the way it has been accustomed to doing for decades. The old Cold War caricatures of demonizing others have lost their allure and potency because the objective world we live in today simply does not make them plausible or credible. The Russian gas trade with the European Union is a consummate case in point. In short, Germany and the EU are not going to shoot themselves in the foot, economically speaking, simply on the orders of Uncle Sam.

President Joe Biden had enough common sense – unlike the egotistical Trump – to realize that American opposition to Nord Stream 2 was futile. Biden is more in tune with the Washington establishment than his maverick predecessor. Hence Biden began waiving sanctions imposed under Trump. Finally this week, the White House announced that it had come to an agreement with Germany to permit Nord Stream 2 to go ahead. The Financial Times called it a "truce" while the Wall Street Journal referred to a "deal" between Washington and Berlin. (Ironically, American non-interference is presented as a "deal"!)

The implication is that the United States was magnanimously giving a "concession" to Europe. The reality is the Americans were tacitly admitting they can't stop the strategic convergence between Russia and the rest of Europe on a vital matter of energy supply.

In spinning the eventuality, Washington has continued to accuse Russia of "weaponizing" trade. It warns that if Russia is perceived to be abusing relations with Ukraine and Europe then the United States will slap more sanctions on Moscow. This amounts to the defeated bully hyperventilating.

Another geopolitical factor is China. The Biden administration has prioritized confrontation with China as the main long-term concern for repairing U.S. decline. Again, Biden is more in tune with the imperial planners in Washington than Trump was. They know that in order for the United States to have a chance of undermining China as a geopolitical rival the Europeans must be aligned with U.S. policy. Trump's boorish browbeating of Europeans and Germany in particular over NATO budgets and other petty issues resulted in an unprecedented rift in the "transatlantic alliance" – the euphemism for American dominance over Europe. By appearing to concede to Germany over Nord Stream 2, Washington is really aiming to shore up its anti-China policy. This too is an admission of defeat whereby American power is unable to confront China alone. The bully needs European lackeys to align, and so is obliged to offer a "deal" over Russia's energy trade.

All in all, Washington's virtue-signaling is one helluva gas!


21 play_arrow 2
Peter Pan 12 hours ago

What the USA accuses Russia of planning to do down the track is actually what the USA is doing now. In other words it is the USA that is weaponusing the gas issue with threats and sanctions.

_ConanTheLibertarian_ 12 hours ago remove link

The US had no business interfering. Bye.

buzzsaw99 12 hours ago

the usa should ask russia to teach them how to keep natural gas flowing when it gets cold outside. lol

RedSeaPedestrian 11 hours ago

How to keep a windmill spinning comes first.

two hoots 11 hours ago

Well we did interfere and the results exposed our decline in multifarious ways, mainly power in all things that matter in the international arena: diplomacy, defense, economic, trust. We yet have great influence with our scientific and industrial capabilities but even there others are reaching parity. Internally our unsupportable debt will hinder even that. Basically it is the US Government (domestic/foreign affairs) that has led the charge of our decline. "Government is dead" .... (we need a new and improved one to worship)

Max21c 11 hours ago

The Washingtonians & Londoners are just upset because now their buddies and puppets in the Ukraine aren't going to be able to use control over the transit of Russian gas through the Ukraine to hold Europe hostage and get their way. So everything that they're accusing the Russians of doing in the future is what Washingtonians, Londoners, and the Ukraine were doing in the past. They're just upset since their Ukrainian vassals can no longer do their bidding's against Moscow and Eastern Europe.

MR166 9 hours ago

I am a USA loving conservative but I really never understood the objections to the pipeline. Since energy = standard of living the pipeline does nothing but help mankind. The US has no problem becoming totally dependent on China for drugs, medical supplies, chips and manufacturing but is afraid of Russia shipping gas to Europe. How does that make any sense at all???!!!

ar8 9 hours ago (Edited) remove link

I will explain it for you:

US companies wanted to sell their gas to Europe.

The US companies attempted to use the US to bully European countries, companies, projects and people through sanctions and threatening fines.

It worked, a bit: numerous companies ceased working on it.

But the US, as usual, with its bullyboy tactics had been less effective and created more self-damage than it expected. It has created many enemies as a result, which will hasten the demise of the US government.

Despite its age, the following is still relevant to Nord Stream II: "War Is a Racket" is a speech and a 1935 short book, by Smedley D. Butler, a retired United States Marine Corps Major General and two-time Medal of Honor recipient.

Rudolph 2 hours ago

One more reason. We control Ukraine, Ukraine control gas to Germany. = We control Germany.

Vivekwhu 9 hours ago

What is the point of having a financial/military/market empire if you don't have a finger in every pie enriching your elite?

Chief Joesph 11 hours ago

It was simply a war of hate about anything Russian. The U.S. really had nothing to offer Germany anyway. From the German perspective, they had to protect their own interests, and since Russia was offering to sell them natural gas and the U.S. wasn't, the choice was rather simple. Perhaps it might make better relationships between eastern block countries and the west too.

The U.S. spends a great amount of time and resources "hating" other countries for no reason at all. It's bigotry by any other definition. The U.S. practices a systematic and especially politically exploited expression of hatred and hostilities. Not only do they practice this against other countries, but among their own kind too. The U.S. ranks as one of the more hateful countries in the world, only surpassed by the Middle East. Add that to the reasons why Germany doesn't want to go along with U.S. temper tantrums.

LA_Goldbug 10 hours ago

Not "hating" but "bombing" is the right description of the US foreign policy practice.

porco rosso 11 hours ago

Mr Putin is way too clever for these yankster clowns and makes them look like the fools they are time and time again. That is why they hate him so much.

Max21c 11 hours ago remove link

Putin didn't have to outsmart them. The Europeans need the gas. Water does not usually flow uphill.

porco rosso 11 hours ago

True. But in Germany there are a lot of treacherous transatlantic elements that wanted to sabotage the pipeline at any cost.

These elements are Germans but they dont give a **** about Germany. Treacherous scumbags.

wootendw PREMIUM 11 hours ago (Edited)

" The ostensible American rationale was always absurd. Washington claimed that Russia would exploit its strategic role as gas supplier by extracting malicious concessions from Europe. It was also claimed that Russia would "weaponize" energy trade to enable alleged aggression towards Ukraine and other Eastern European states. "

The absurdity lies with the existence of NATO or the US being in NATO. It no more makes sense for US to commit ourselves to Europe's defense against Russia than it does for Europe to buy American NG for three times the price it can get Russia's for.

williambanzai7 PREMIUM 10 hours ago (Edited)

Well apparently some tard thinks it makes perfect sense for other readily imagined strategic reasons none of which have anything to do with accountable governance.

Someone thinks NATO is a dog leash. An expensive dog leash.

yerfej 11 hours ago

The washington idiot cabal needs something to focus on to justify their existence so they wander the globe telling everyone how to live and who they can trade with when they're not busy starting or expanding wars. The reality is the US federal government is a completely useless parasite who's ONLY function is to domestically terrorize its own citizens and the other nations of the world.

known unknown 10 hours ago remove link

Nordstream II was built to a stop Ukraine from blocking gas to Europe which they already did once, stealing gas which they have always done. Germany asked Russia to build it. The dummy Bulgarians stopped a similar pipeline yielding to the US. Then they cried about it when they realized they lost billions. No matter what's promised Ukraine will be cut out in 5 years if they continue hostilities towards Russians.

LA_Goldbug 10 hours ago (Edited) remove link

Most people conveniently forget or don't know about Ukraine's siphoning of the gas while in transit to European countries.

Germany is as bad as the US. Thanks to Germany Yugoslavia was decapitated with help from US and UK.

Greed is King 11 hours ago

Nordstream 2 is a trade deal between the EU (primarily Germany) and Russia.

Russia sells gas to the EU; and the EU buys gas from Russia.

So, can anybody answer these questions.

1.WTF has it got to do with America ?.

2. Who the feck does America think it is that it thinks it can interfere with and make demands of free and sovereign nations ?.

When the bully is beaten, nobody ever feels sympathy for him; America would do well to think about that.

Samual Vimes 11 hours ago (Edited) remove link

Surroguts /proxies, what ever.

Unelected policy makers in all their purple clad glory.

Max21c 12 hours ago (Edited)

After much arm-twisting, bullying and foghorn diplomacy towards its European allies, the United States appears to have finally given up on trying to block the giant Nord Stream 2 project with Russia. What an epic saga it has been, revealing much about American relations with Europe and Washington's geopolitical objectives, as well as, ultimately, the historic decline in U.S. global power.

It may show a decline in US global power or it may just show a rise in Washingtonian amateurishness, arrogance, obnoxiousness, naivete and stupidity...

all it does is show out in the open that certain people are quacks, flakes, and screwballs. Why would anyone in their right mind waste time & efforts or political capital or diplomatic capital/bonnafides on trying to do something so silly as block Nord Stream 2... It just makes Washingtonians look ridiculous, silly, and absurd...

It's almost as crazy as making a horse into a Roman Senator or declaring a war on the Neptune or attacking the sea... It appears as if right after the Berlin Wall came down American elites and Washingtonians all joined the Mad King Ludwig cult and became worshipers of everything crazy...

RedSeaPedestrian 11 hours ago remove link

Or even as crazy as making a Dementia patient a Roman Emperor. (Or is that a United States President? I forget sometimes.)

hugin-o-munin 12 hours ago remove link

Whatever political games are being played there is no getting around the fact that Europe and Russia will eventually start to get along and expand trade and industrial cooperation. Most people know that both the US and UK want to prevent this because it will diminish their current top dog positions wrt global trade and financial control. Few things compare to trade and mutual beneficial cooperation when it comes to lowering the risk for conflict.

Just like Europe should promote development and trade with northern Africa so should the US with central and southern America. This would also put an end to the endless migrant caravans that are putting a huge strain on both the EU and US today. It's actually a non brainer and says more about these satanic globalists' true motive than anything else.

ReichstagFireDept. 9 hours ago remove link

Nord Stream 2 is your best indicator that Governments are realizing that Renewable Energy is NOT the replacement for Conventional Energy.

Nat. Gas IS the clean Energy source that everyone was screaming for...now it's finally worldwide and they don't want it?!

Sorry, your Green Marxist dream is ending.

geno-econ 9 hours ago remove link

U.S. should be grateful Russia is sharing its natural resources with West rather than aligning with China. There is much more than natural gas---ferro manganese, ferro chrome, uranium, enrichment, titanium, aluminum, fertilizer, wheat, timber products, etc. U.S. trade with China essentially imports only two major resources---cheap labor and synthetic opioids !

williambanzai7 PREMIUM 9 hours ago

Well, there's some plastic junk and red refugees in there as well.

geno-econ 9 hours ago

only wealthy red capitalists disguised as refugees from China

ar8 9 hours ago

You are assuming the US government thinks rationally.

It doesn't.

[Jul 24, 2021] The "deal" was merely an attempt by the US to save face

Jul 24, 2021 | www.zerohedge.com


play_arrow

Shemp 4 Victory 6 hours ago

The "deal" was merely an attempt by the US to save face.

https://theduran.com/merkel-makes-germany-look-weak-sets-up-ukraine-slush-fund-in-nord-stream-2-deal-with-u-s/

[Jul 23, 2021] Russia rejects aspects of Germany-U.S. accord on Nord Stream 2 pipeline

Jul 23, 2021 | www.msn.com

The Kremlin said on Thursday it disagreed with some statements in an agreement between the United States and Germany on the Nord Stream 2 gas pipeline, insisting that Russia had never used energy as a tool of political pressure.

The pact aims to mitigate what critics see as the strategic dangers of the $11 billion Nord Stream 2 pipeline, now 98% complete, being built under the Baltic Sea to carry gas from Russia's Arctic region to Germany.

"Russia has always been and remains a responsible guarantor of energy security on the European continent, or I would even say on a wider, global scale," Kremlin spokesman Dmitry Peskov told reporters.

[Jul 21, 2021] Germany commits to action if Russia uses energy as weapon -Nuland

Jul 21, 2021 | www.msn.com

Arby's Just Quietly Discontinued These 6 Menu Items See Dolly Parton Recreate Her Iconic "Playboy" Cover 43 Years Later

WASHINGTON, July 21 (Reuters) - Germany has committed to take action on its own and back action at the European Union level should Russia seek to use energy as a weapon or take aggressive action against Ukraine, U.S. Undersecretary of State Victoria Nuland said on Wednesday.

"Should Russia attempt to use energy as a weapon or commit further aggressive actions against Ukraine, Germany will take actions at the national level and press for effective measures at the European level, including sanctions, to limit Russian export capabilities in the energy sector," Nuland told lawmakers, adding that Germany would support an extension of the Russia-Ukraine transit agreement that expires in 2024. (Reporting By Arshad Mohammed and Jonathan Landay)

[Jul 21, 2021] Russia And Germany Win War Over Nord Stream 2

Notable quotes:
"... Two world wars were fought to keep Germany down. The stated purpose of NATO is to keep the Russians out, the Americans in and the Germans down. ..."
"... IMO US didn't cause NS2 friction because it thinks it benefits Russia, but exactly because it benefits Germany too much. ..."
"... You know, NATO, "Keep the Germans down..." and all that. US must not permit it's vassals to become too economically stronger than their master. They want to drag everyone they can down with them (and in shitter US goes) so they can still be king of the hill (or ad least shitter bottom). ..."
"... The most important point to know is that US hegemony in Europe is predicated on fear and hostility between Germany and Russia. ..."
"... There are many limitations to European strategic autonomy -- and the EU embodies those limits in many ways -- but the case of NS2 demonstrates an independent streak in German strategy. It amounts to a zero sum loss for Washington. ..."
"... Lebanon does illustrate the incredible reach of the Empire. A leverage so long that every door leads to self immolation. Your mention of the current spyware scandal is right on point. These are instruments of absolute power. ..."
"... While Trump is certainly no representative of humanity, it just as certainly doesn't look like his rise was in the playbook of the dominant faction of the oligarchy. Trump really seems to fit the mould of a Bonapartist, though recast in the context of contemporary America. This would indicate that the imperial oligarchy is in crisis, which itself could lead to fractures in the empire, and among the empire's vassals in particular. ..."
Jul 21, 2021 | www.moonofalabama.org

Russia And Germany Win War Over Nord Stream 2

The sanctions war the U.S. waged against Germany and Russia over the Nord Stream 2 pipeline has ended with a total U.S. defeat.

The U.S. attempts to block the pipeline were part of the massive anti-Russia campaign waged over the last five years. But it was always based on a misunderstanding. The pipeline is not to Russia's advantage but important for Germany. As I described Nord Stream 2 in a previous piece :

It is not Russia which needs the pipeline. It can sell its gas to China for just as much as it makes by selling gas to Europe.
...
It is Germany, the EU's economic powerhouse, that needs the pipeline and the gas flowing through it. Thanks to Chancellor Merkel's misguided energy policy - she put an end to nuclear power in German after a tsunami in Japan destroyed three badly placed reactors - Germany urgently needs the gas to keep its already high electricity prices from rising further.

That the new pipeline will bypass old ones which run through the Ukraine is likewise to the benefit of Germany, not Russia. The pipeline infrastructure in the Ukraine is old and near to disrepair. The Ukraine has no money to renew it. Politically it is under U.S. influence. It could use its control over the energy flow to the EU for blackmail. (It already tried once.) The new pipeline, laid at the bottom of the Baltic sea, requires no payment for crossing Ukrainian land and is safe from potential malign influence.

Maybe Chancellor Merkel on her recent visit to Washington DC finally managed to explain that to the Biden administration. More likely though she simply told the U.S. to f*** off. Whatever - the result is in. As the Wall Street Journal reports today:

The U.S. and Germany have reached an agreement allowing completion of the Nord Stream 2 natural gas pipeline, officials from both countries say.

Under the four-point agreement, Germany and the U.S. would invest $50 million in Ukrainian green-tech infrastructure, encompassing renewable energy and related industries. Germany also would support energy talks in the Three Seas Initiative, a Central European diplomatic forum.

Berlin and Washington as well would try to ensure that Ukraine continues to receive roughly $3 billion in annual transit fees that Russia pays under its current agreement with Kyiv, which runs through 2024. Officials didn't explain how to ensure that Russia continues to make the payments.

The U.S. also would retain the prerogative of levying future pipeline sanctions in the case of actions deemed to represent Russian energy coercion, officials in Washington said.

So Germany will spend some chump change to buy up, together with the U.S, a few Ukrainian companies that are involved in solar or wind mill stuff. It will 'support' some irrelevant talks by maybe paying for the coffee. It also promises to try something that it has no way to succeed in.

That's all just a fig leave. The U.S. really gave up without receiving anything for itself or for its client regime in the Ukraine.

The Ukraine lobby in Congress will be very unhappy with that deal. The Biden administration hopes to avoid an uproar over it. Yesterday Politico reported that the Biden administration preemptively had told the Ukraine to stop talking about the issue :

In the midst of tense negotiations with Berlin over a controversial Russia-to-Germany pipeline, the Biden administration is asking a friendly country to stay quiet about its vociferous opposition. And Ukraine is not happy.

U.S. officials have signaled that they've given up on stopping the project, known as the Nord Stream 2 pipeline, and are now scrambling to contain the damage by striking a grand bargain with Germany.

At the same time, administration officials have quietly urged their Ukrainian counterparts to withhold criticism of a forthcoming agreement with Germany involving the pipeline, according to four people with knowledge of the conversations.

The U.S. officials have indicated that going public with opposition to the forthcoming agreement could damage the Washington-Kyiv bilateral relationship , those sources said. The officials have also urged the Ukrainians not to discuss the U.S. and Germany's potential plans with Congress.

If Trump had done the above Speaker of the House Nancy Pelosi would have called for another impeachment.

The Ukrainian President Zelensky is furious over the deal and about being told to shut up. But there is little he can do but to accept the booby price the Biden administration offered him:

U.S. officials' pressure on Ukrainian officials to withhold criticism of whatever final deal the Americans and the Germans reach will face significant resistance.

A source close to Ukrainian President Volodymyr Zelensky said that Kyiv's position is that U.S. sanctions could still stop completion of the project, if only the Biden administration had the will to use them at the construction and certification stages. That person said Kyiv remains staunchly opposed to the project.

Meanwhile, the Biden administration gave Zelensky a date for a meeting at the White House with the president later this summer , according to a senior administration official.

Nord Stream 2 is to 96% ready. Its testing will start in August or September and by the years end it will hopefully deliver gas to western Europe.

Talks about building Nord Stream 3 are likely to start soon.

Posted by b on July 21, 2021 at 17:13 UTC | Permalink


corvo , Jul 21 2021 17:23 utc | 1

Did Merkel also get Biden to promise that neither he nor any of his clients (AQ, ISIS, etc. etc. etc.) would perpetrate any "unfortunate incidents" or "disruptions" on NS 2?

And would any such promises be worth the breath that uttered them?

Down South , Jul 21 2021 17:42 utc | 2
But it was always based on a misunderstanding. The pipeline is not to Russia's advantage but important for Germany

I'm afraid it is you who doesn't understand. Two world wars were fought to keep Germany down. The stated purpose of NATO is to keep the Russians out, the Americans in and the Germans down.

They weren't trying to block NS2 to keep Russia out but to keep Germany down,

Abe , Jul 21 2021 17:44 utc | 3
I beg to differ. IMO US didn't cause NS2 friction because it thinks it benefits Russia, but exactly because it benefits Germany too much.

You know, NATO, "Keep the Germans down..." and all that. US must not permit it's vassals to become too economically stronger than their master. They want to drag everyone they can down with them (and in shitter US goes) so they can still be king of the hill (or ad least shitter bottom).

That is why there is also pressure for all western countries to adopt insane immigration, LGBT, austerity policies and what not. What a better way to destroy all these countries, both economically and culturally, or adleast make them far more worse than US, it is only way US can again become "powerhouse", like after WW2.

psychohistorian , Jul 21 2021 17:46 utc | 5
Does this represent a fracturing of the EU? or maybe a change in direction?

What b is pointing out about how if it were Trump....only means that the bullying approach by empire didn't work and now we are seeing face saving bullying and backpedaling like crazy in some areas.

I roll my eyes at this ongoing belief that Trump represented humanity instead of all or some faction of the elite....as a demigod it seems.

Hoyeru , Jul 21 2021 17:54 utc | 6
the "facts" as you state them are not quite right.

1. China is ruthless. They waited until the last possible second to sign a deal with Iran, thus ensuring they are getting the best possible price for Iran's oil, basically robbing Iran blind. The poor Iran didn't have a choice but to agree. Even today, Putin will NOT say how much China is paying for gas on Siberia pipeline and a lot of people think China is robbing Russia blind on the deal. A second Siberia line without a NS2 will put Russia is very bad negotiation position and China in very good one, giving them the advantage to ask for any price of Russia and get it.

2. Merkel is leaving anyway in September and thw Green party that will be taking over HATES RUssia with passion. The NS2 is far from done deal, it needs to be insured. Plus it will fall under the EU 3rd energy package making sure Germany doesn't use it 100% . The NS2 will never be 100 usable, the Green party will see to that. AT best it will be only 50% usage.

And so on and so on. Funny how in today's world, we all have different facts. My facts are different than YOUR facts. My facts are just as relevant as your facts.

librul , Jul 21 2021 17:55 utc | 7
A most worthwhile read:
What is more, the most dangerous potential alliance, from the perspective of the United States, was considered to be an alliance between Russia and Germany. This would be an alliance of German technology and capital with Russian natural and human resources.

The article explains a lot, more than just Germany or Russia.

https://newcoldwar.org/stratfor-chiefs-most-blatant-coup-in-history-interview-from-dec-2014/

Interview was from done a few months after the US coup in Ukraine.

Arch Bungle , Jul 21 2021 17:56 utc | 8
Posted by: Down South | Jul 21 2021 17:42 utc | 2

They weren't trying to block NS2 to keep Russia out but to keep Germany down...

Germany would be 'down' no matter how much financial power it accumulates - i.e regardless of NS2. The imperial garrison at Rammstein AFB will make sure of that. What the Americans fear is the symbolic meaning of NS2 in terms of geopolitical influence for Russia. The loss of maneuverability against Russia that results from a key vassal not being able to move in complete obedience to Uncle Sam's wishes.

Max , Jul 21 2021 17:58 utc | 9
The pipeline construction battle has been won, not the energy flow war.

The Financial Empire is most likely resorting to some CHARADE to find an excuse to later stop the gas flow through Nord Stream 2. Empire's bullying was clearly exposed through sanctions and it LOST the battle of stopping the pipeline construction. So it moves to the next battle to find an excuse to stop the gas flow. Empire's evil intent is visible in these words, "the U.S. also would retain the prerogative of levying future pipeline sanctions in the case of actions deemed to represent Russian energy coercion, officials in Washington said."

The Financial Empire has worked hard over the last century to prevent Germany from allying herself with Russia. It wants to control energy flowing in Eurasia and its pricing. The war will be only won when the Financial Empire is defeated and its global pillars of power DISMANTLED.

"The 'heartland' was an area centered in Eurasia, which would be so situated and catered to by resources and manpower as to render it an unconquerable fortress and a fearsome power; and the 'crescent' was a virtual semi-arc encompassing an array of islands – America, Britain, Australia, New Zealand and Japan – which, as 'Sea Powers,' watched over the Eurasian landmass to detect and eventually thwart any tendency towards a consolidation of power on the heartland."

Has the Financial Empire stopped interfering in other regions?

karlof1 , Jul 21 2021 18:15 utc | 10
Curious. Late yesterday Sputnik published this article with a decidedly different message:

"US, Germany Threaten Retaliatory Action Against Russia in Draft Nord Stream 2 Accord - Report...."

"As the US and Germany have reportedly reached a deal on the Nord Stream 2 project, Bloomberg reported on Tuesday, citing the obtained draft text of the agreement, that it would threaten sanctions and other measures if Russia tried to use energy as a 'weapon' against Ukraine , though it did not specify what actions could provoke the countermeasures.

"According to the report, in such a case, Germany will take unspecified national action , a decision that may represent a concession from Chancellor Angela Merkel, who had previously refused to take independent action against Moscow over the gas pipeline that will run from Russia to Germany." [My Emphasis]

The article continues:

"On Tuesday, Ned Price, a spokesman for the US State Department, told reporters that he did not have final details of an agreement to announce, but that 'the Germans have put forward useful proposals, and we have been able to make progress on steps to achieve that shared goal, that shared goal being to ensure that Russia cannot weaponize energy ."

" The US was hoping for explicit language that would commit Germany to shut down gas delivery through Nord Stream 2 if Russia attempted to exert undue influence on Ukraine . Germany, on the other hand, has long rejected such a move, stating that such a threat would only serve to politicize a project that Merkel stresses is solely commercial in nature." [My Emphasis]

The overall motive appears to be this:

"The accord would also commit Germany to use its influence to prolong Ukraine's gas transit arrangement with Russia beyond 2024, possibly for up to ten years . Those talks would begin no later than September 1, according to the news outlet." [My Emphasis]

So, here we have the Outlaw US Empire meddling in the internal affairs of three nations--Germany, Russia and Ukraine. Ukraine cannot afford Russian gas as it has no rubles to pay for it. Thus if Ukraine has no money to buy, then why should Gazprom be obliged to give it away freely? What about other European customers who rely on gas piped through Ukraine; are they going to see what they pay for get stolen by Ukraine? And what happens when the pipelines breakdown from lack of maintenance since Ukraine's broke thanks to the Outlaw Us Empire's coup that razed its economy? Shouldn't the Empire and its NATO vassals who invaded Ukraine via their coup be forced to pay for such maintenance? And just who "weaponized" this entire situation in the first place?

Mar man , Jul 21 2021 18:21 utc | 11
From my understanding, NS 2 was mutually beneficial for Germany and Russia. As noted, Germany desperately needs energy and relying on the outrageously priced and unreliable US LNG was not a viable option.

Russia benefits also.
1.No more high transit fees Russia pays Ukraine. I imagine some of that was finding its way into US pockets after 2014.
2.Ukraine supposedly helped itself to plenty of stolen gas from the pipeline. That will stop.
3.Ukraine was occasionally shutting down the pipeline for political reasons until Russia paid the ransom. Not anymore.

So, Russia and Germany were both highly motivated to finish the pipeline ASAP.

Down South , Jul 21 2021 18:31 utc | 12
Arch Bungle @ 8
Germany would be 'down' no matter how much financial power it accumulates - i.e regardless of NS2.

The imperial garrison at Rammstein AFB will make sure of that.

Putin not too long ago (can't find the article now) said he was prepared to help Europe gain its independence should they wish to do so, Rammstein or no Rammstein.

What the Americans fear is the symbolic meaning of NS2 in terms of geopolitical influence for Russia. The loss of maneuverability against Russia that results from a key vassal not being able to move in complete obedience to Uncle Sam's wishes.
What they fear should this deal go ahead is a Germany/Russia/China Axis that would control the world island and thus the world.
Hoarsewhisperer , Jul 21 2021 18:33 utc | 13
I was convinced that the US of Assholery had lost its infantile anti-NS2 'battle' in September 2020, after watching an episode of DW Conflict Zone in which Sarah Kelly interviewed Niels Annen, Germany's Deputy FM. Annen came to the interview armed to the teeth with embarrassing facts about US hypocrisy including, but not limited to, the fact that USA, itself, buys vast quantities of petroleum products from Russia each year.

The interview is Google-able and, apart from pure entertainment value, Sarah is much easier on the eye than Tim Sebastian...

A.L. , Jul 21 2021 18:34 utc | 14
@Hoyeru | Jul 21 2021 17:54 utc | 6

1. China is ruthless. They waited until the last possible second to sign a deal with Iran, thus ensuring they are getting the best possible price for Iran's oil, basically robbing Iran blind.

Hmmm... I seem to remember Iran shafting China on the south Pars gas field when it looked like the JCPOA was looking likely...

If this memory of mine was correct (it may not be) then you really can't blame China for a little commercial payback.

In any case it was shown as soon as JCPOA Mk.1 was passed Iran RAN, not walked, to smooch up to the west for business, not China, not Russia. So if its just business for Iran then its just business for China.

There's no loyalty discount without loyalty.

robin , Jul 21 2021 18:38 utc | 16
I agree with Down South 2 and Abe 3.

In our eagerness to expose the empire's shortcomings in a quick 'gotcha!' moment we shouldn't rush head first into false premises. To suggest Dear Uncle Sam is concerned with anything other than his own navel is naive. He's the man with the plan. He knows that down the road, Oceania's eastern border won't run along the Dnieper but right off the shore of Airstrip One.

Stonebird , Jul 21 2021 18:59 utc | 17
As has been mentioned before, the NN2 pipeline gives Germany leverage over Russia , not the other way around.

US => Germany => Russia.
Which is now plan b for the US. If then they can use their leverage over Germany to steer it in any direction it wants to vs. Russia.

This will probably be followed by "targeted" sanctions on specific Politicians, Bankers and Heads of industry. They only need to propose such sanctions individually for them to have an effect. Using Pegasus for inside information to Blackmail those it wants to.
*****

Example of a sanctions racket :

Similar to the potential sanctions on any Lebanese Politian or Group Leaders if they get Oil from Iran, Russia or China. The Lebanese population be damned.

"Apparently US Treasury has informed the government of Lebanon, that if any Oil products from Iran make it into Lebanon, in any way; the government of Lebanon and all its members will be sanctioned. This includes the Central Bankers"

Just in case you didn't understand how the crisis in the country is manufactured.

Pegasus again:

"leaks on the targets of Israeli spy program Pegasus, show hundreds in Lebanon including the elected leadership of every party, every media outlet, & every security agency, have been targeted by clients in 10 countries; all belonging to the Imperialist camp.

But it is very easy to guess by looking at who are the external imperialist forces active in Lebanon. USA/UK/France/Turkey/Germany/Canada/Israel/Qatar; that's eight. Plus Saudi Arabia."
*******

PS. Lebanon; This comes as a response to Sayyed Nasrallah stating in his last speech that if the State in Lebanon is not able to provide fuel, he will bring it at the expense of Hizbullah from Iran, dock it in the port of Beirut, and dared anyone to stop it from reaching the people.
*****

Germany will only be the latest victim as the Mafia-US "protection" racket is ramped up.

Lysander , Jul 21 2021 18:59 utc | 18
Both b and the many commenters raise excellent points. Yes, the US wants to hurt both Russia and Germany. And yes the US *definitely* fears close cooperation between Moscow and Berlin. But the main take home lesson is that the US failed despite enormous efforts to block NS2. Russo-German cooperation is inevitable and the world will be better for it.
Passer , Jul 21 2021 19:02 utc | 19
Posted by: Hoyeru | Jul 21 2021 17:54 utc | 6

>>a lot of people think China is robbing Russia blind on the deal

Why would be Russia building Power of Siberia 2 and 3 to China then? Or selling LNG too? You don't have much knowledge on the topic, the way it looks. A giant gas plant was built near the border with China, the second biggest gas plant in the world, because the gas for China is rich in rare elements, thus turning Russia in of the the biggest producers of strategic helium, not to mention extracting many other rare elements. China gets gas that has been cleaned of anything valuable from it, with the exception of the gas itself.

>>merkel is leaving anyway in September and thw Green party that will be taking over

The latest polls show clear lead for CDU/CSU. And it looks like its too late.

>>the NS2 will never be 100 usable, tthe Green party will see to that. AT best it will be only 50% usage.

Do you even follow what has been going on? Germany is free not to buy russian gas, that is, to be left without gas if this is what it wants.

Do you see how nat gas prices exploded in Europe recently? Do you know why is that? Because Russia refuses to sell additional volumes via Ukraine's network. It is a message to finish the issues with NS 2 pipeline faster and then everything will be fine, there will be plenty of space for new gas volumes, and the gas price will drop.

robin , Jul 21 2021 19:12 utc | 21
@ A.L. 14

It is the UNSC resolutions of 2006, 2007 and 2010 which have laid the backbone for the incremental diplomatic, economic and material warfare against Iran. Without them, there would be no narrative framing Iran as an outlaw nor justification for crippling sanctions. That Iran should even be subjected to the JCPOA is in itself an objective injustice.

Each of these resolutions could easily have been blocked by the two permanent members of the UNSC we go to much lengths on this forum to depict as selfless adversaries of the Empire. All they had to do was raise a finger and say niet. In other words, by their actions, these two members placed Iran in a very disadvantageous trading position.

So, did they profit from this position of strength?

karlof1 , Jul 21 2021 19:24 utc | 23
It seems few care, but Sputnik followed its article from yesterday I linked to @10 with another that features an interview with Glenn Diesen . It reiterates:

"According to the draft deal, obtained by Bloomberg, Washington and Berlin would threaten sanctions and other retaliation if Russia 'tries to use energy as a weapon against Ukraine', with Germany being obligated to take unspecified actions in the event of Russian 'misbehaviour' . [My Emphasis]

The article then turns to the interview:

"Professor Glenn Diesen of the University of South-Eastern Norway has explained what is behind the US-Germany row is." [That last "is" appears to be a typo]

I suggest barflies pay close attention to Dr. Diesen who's the author of an outstanding book on the geoeconomics of Russia and China, Russia's Geoeconomic Strategy for a Greater Eurasia . I judge the following Q&A to be most relevant:

"Sputnik: The Biden administration waived sanctions on the firm behind the gas project, Nord Stream 2 AG, and its chief executive, Matthias Warnig. At the same time, Secretary of State Antony Blinken stated in June that the pipeline project was a Russian tool for the coercion of Europe and signaled that the US has leverage against it. What's behind Washington's mixed signals with regard to the project? How could they throw sand in Nord Stream 2's gears, in your opinion - or are Blinken's threats empty?

"Glenn Diesen: The mixed signals demonstrate that the completion of Nord Stream 2 was a defeat for the US. Biden confirmed that he waived sanctions because the project was near complete. Sanctions could not stop the project [link at original], rather they would merely continue to worsen relations with Berlin and Moscow. The best approach for Washington at this point is to recognise that Nord Stream 2 is a done deal, and instead Washington will direct its focus towards limiting the geo-economics consequences of the pipeline by obtaining commitments from Berlin such as preserving Ukraine's role as a transit state [Link at original].

"The US therefore waives sanctions against Nord Stream 2, yet threatens new sanctions if Berlin fails to accept US conditions and limitations on Nord Stream 2. Blinken's threats are loaded with 'strategic ambiguity', which could be aimed to conceal that they are merely empty threats . However, strategic ambiguity is also conducive to prevent Berlin from calculating the "costs" and possible remedies to US threats. Furthermore, ambiguity can be ideal in terms of how to respond as it is not a good look to continuously threaten allies." [Emphasis original]

The professor's closing remarks are also very important regarding Merkel's successor. Where I disagree is with the notion that the Outlaw US Empire has geoeconomic leverage over the EU--military yes, but the Empire is just as uncompetitive versus the EU as it is versus China.

A.L. , Jul 21 2021 19:25 utc | 24
@robin | Jul 21 2021 19:12 utc | 21

So, did they profit from this position of strength?

Of course they did, let's be real. China and Russia are not going to be the all benevolent saviors of the world, they never were, never will.

They will always serve their interests first and foremost. Sometimes, they do get suckered into UNSC resolutions like those you spoke of. Sometimes, there're backroom horse trading that we're not privy to and little countries are just chips on the table...

The best we can hope for is that they can behave with more integrity than currently shown by the incumbent anglospheric bloc in their re-ascendancy.

Either we ditch the UNSC system or everybody get nukes, because i can't see the current UNSC members willing ditch their own, ever.

Prof , Jul 21 2021 19:30 utc | 26
Lysander is correct. The most important point to know is that US hegemony in Europe is predicated on fear and hostility between Germany and Russia.

Types of interdependence between Germany and Russia, eg. NRG security, are a direct threat to US dominance over Europe as a whole.

There are many limitations to European strategic autonomy -- and the EU embodies those limits in many ways -- but the case of NS2 demonstrates an independent streak in German strategy. It amounts to a zero sum loss for Washington.

c1ue , Jul 21 2021 19:47 utc | 28
Way too much confusion over what Nord Stream 2 really means.

1) Russian gas transiting Ukraine had already fallen from 150 bcm to the high 90s/low 100s before Nord Stream 2 goes online. Even after NS2 goes online, a significant amount of Russian gas will still transit via Ukraine.

2) Energy demand generally increases over time, not decreases. Russian gas exports aren't increasing in a straight line, but keep in mind that there are significant new competitors now and in the process coming online. These include Azerbaijan as well as the ongoing pipeline struggle through the Black Sea/Turkey/Eastern Med.

I never believed there was any chance of NS2 not completing; the only question was when.

robin , Jul 21 2021 20:00 utc | 30
@ Stonebird | Jul 21 2021 18:59 utc | 17

Lebanon does illustrate the incredible reach of the Empire. A leverage so long that every door leads to self immolation. Your mention of the current spyware scandal is right on point. These are instruments of absolute power.

What we need now is a worldwide Me Too movement to denounce this leverage. Taking that first step would require a lot of courage for any blackmailed individual, but the one little breach could lead to a flood of world citizens just about fed up with the Empire's shit.

William Gruff , Jul 21 2021 20:12 utc | 32
psychohistorian @5

It pains me that I do not remember exactly who it was, but one of the more erudite posters here mentioned some time ago that Trump seemed more like a Bonapartist figure than a fascist or a typical and simple representative of a faction in the oligarchy. While Trump is certainly no representative of humanity, it just as certainly doesn't look like his rise was in the playbook of the dominant faction of the oligarchy. Trump really seems to fit the mould of a Bonapartist, though recast in the context of contemporary America. This would indicate that the imperial oligarchy is in crisis, which itself could lead to fractures in the empire, and among the empire's vassals in particular.

It is unwise to downplay the significance of Trump coming to power in 2016, regardless of what feelings one may have about the individual himself. The conditions that led to the rise of Trump not only persist, but have intensified. Those conditions cannot be resolved by mass media gaslighting and social media censorship, which actually seems to be having an effect more like holding the emergency relief valve on a boiler closed; it quiets an annoying sound, but causes the underlying issue to grow more severe.

Basically, further splits in the EU are inevitable. It is the timing of those splits that is difficult to predict, but the accuracy of that prediction hinges upon the accuracy of our assessment of events occurring now. Interestingly, Trump is still part of these unfolding events.

Christian J. Chuba , Jul 21 2021 20:33 utc | 34
Fracturing NATO and the West hmmm ... If Germany gains any independence from U.S. coercion they are 'fracturing Europe'. Bad Germany.

Germany must forever remain a vassal state of the U.S. by allowing the U.S. to use another vassal state to control their energy supply. And who says we don't believe in freedom. Neocons are such vile creatures. Always twisting words but remember, whenever they say something, the exact opposite is true.

schmoe , Jul 21 2021 21:00 utc | 37
One issue underlying this fiasco is I believe that the neocons / Atlantic Council were 100% certain that Russia did not have the expertise to lay pipelines at the required depths, and once Allseas was facing sanctions, the project would never be completed.

**********************************************************

Re: China/Russia deal

I believe that the exact pricing formula for Power of Siberia is confidential, but this much is known:

"The price of Russian gas supplies to China increased in the second quarter of 2021 for the first time since deliveries started via the Power of Siberia pipeline in 2019, but daily delivery volumes fell in April, Interfax reported on Sunday.

Russian gas giant Gazprom GAZP.MM has said it supplied China with 3.84 billion cubic metres of gas via the Power of Siberia pipeline in its first year of operation.

Citing Chinese customs data, Interfax said the price of gas increased to $148 per thousand cubic metres, rising from $121 in the first quarter, and reversing a downward trend."

**********************************************************************************

Also, Victoria Nuland informed the Senate Foreign Relations Committee today about Biden's cave to Russia. That must have been brutal for her. Regardless, nice to see a rare display of sanity from s US administration.

Baron , Jul 21 2021 21:16 utc | 39
@librul | Jul 21 2021 17:55 utc | 7

The primary and only objective of the US Foreign policy vis-a-vis Europe since WW2 has been to prevent Russia and Germany (now read the German run EU project) coupling up, that's it, nothing else matters on Europe.

The completion of N-2 presents a serious blow tho this aim, the new pipeline is a must for Germany, it must get finished, without it Germany's supply of energy would have been almost fully controlled by the Americans who have either direct or indirect authority over every major source of hydrocarbons except for Venezuela and Russia, the latter only partly, the Ukrainian pipeline is fully in their sphere of influence.

Energy fuels everything from private dwellings to major corporations, it's together with labour and technology the most important ingredient in every economy. To lose control of it would have been a catastrophe for Germany, in particular if one takes into account the secret treaty between Germany and the Allies (read the US) from 1949.

"On 23 May 1949, the Western Allies ratified a new German constitution, known as the "Basic Law" or Grundgesetz. However, two days prior, a secret state treaty - Geheimer Staatsvertrag - was also signed to grant complete Allied control over education and all licensed media, press, radio, television and publishing houses until the year 2099. This was confirmed by Major-General Gerd-Helmut Komossa, former head of German Military Intelligence in his book, "Die Deutsche Karte" or The German Card".

Has anyone read the Komossa's book in full?

karlof1 , Jul 21 2021 21:18 utc | 40
schmoe @37--

What's interesting about Power of Siberia-1 is that the gas is being stripped -- refined at the newly completed Amur Gas Plant -- of its components prior to being piped into China. I don't know if Germany's petrochemical industry will be deprived in similar manner with NS2.

CD Waller @36--

Nothing in the energy production realm is carbon neutral. ROSATOM has mastered the fuel cycle which means most if not all toxic waste will now be burned for energy. New reactors do NOT use water as coolant. Clearly you need to update what you know about nuclear power.

Jackrabbit , Jul 21 2021 21:31 utc | 41
The Russian 'victory' is very narrow and mostly consists of the patience and determination to follow-thru while consistently being derided/attacked by Western media, pundits, and politicians:
  1. Since Russia/Gasprom owns NS2 100% (paying for half the construction cost outright and financing the rest), there was never much need to stop construction, only to stop/limit consumption. The 'trick' was to find a way to accomplish US/NATO goals that would not make German leaders look like puppets.
  2. Biden's approach looks good compared to Trump's heavy-handed approach. As they are BOTH spokesman of the Empire's Deep State, we can surmise that this is merely good cop / bad cop theatrics.
  3. This USA-GERMAN agreement makes Germany appear to voluntarily support EU/NATO - a good thing(tm) that most Germans will accept without question. But behind the scenes, it's unlikely that there was ever any real choice, just a mutual desire to fashion a 'smart' policy that didn't undermine German political leaders.
  4. Germany can now be pressured to support USA-Ukraine belligerence - if they don't they will be portrayed as not living up to their obligations to US/NATO/EU/Ukraine as enshrined in this agreement.
  5. If Russia retaliates against German purchase reductions in any way they will be labeled as a politically-driven, unreliable supplier. That will 'invite' sanctions and spark efforts to force EU/Germany to eliminate all Russia goods from their markets.
  6. Russia and China are likely to be increasingly linked in Western media/propaganda. Deficiencies of one or the other will apply to BOTH.
The next few winters in EU will be very interesting.

!!

karlof1 , Jul 21 2021 21:44 utc | 43
Baron @39--

Thanks very much for mentioning Komossa's book!! Here's a very short but illuminating article about book and author . There appear to be copies available for downloading, but I've yet to find one.

karlof1 , Jul 21 2021 22:40 utc | 48
Jackrabbit @41 incorrectly says Russia owns NS2 100% It's owned by Nord Stream 2 AG, and here's its website listing its financial investors, while its shareholders/owners are global. The company is located in Zug, Switzerland. Here we are told who the financial companies are :

"In April 2017, Nord Stream 2 AG signed the financing agreements for the Nord Stream 2 gas pipeline project with ENGIE, OMV, Royal Dutch Shell, Uniper, and Wintershall. These five European energy companies will provide long-term financing for 50 per cent of the total cost of the project."

As with the first string, Russia doesn't own it 100% nor did it finance it completely; rather, its stake was @50% It appears both Nord Streams will be managed from the same location in Zug. I hope the company produces a similar sort of book to record its accomplishment as it did for the first string pair, which can be found and downloaded here .

Jackrabbit , Jul 21 2021 22:55 utc | 50
karlof1 @Jul21 22:40 #48

This Deutsche Welle (DW) explainer details NS2 ownership and financing :

Who is paying for it: Russia's energy giant Gazprom is the sole shareholder of the Nord Stream 2 AG , the company in charge of implementing the €9.5 billion ($11.1 billion) project. Gazprom is also covering half of the cost. The rest, however, is being financed by five western companies: ENGIE, OMV, Royal Dutch Shell, Uniper and Wintershall.
Emphasis is mine.

<> <> <> <> <>

Nord Stream 2 AG is a German company that is a wholly-owned subsidiary of Russia's Gazprom. The German subsidiary has borrowed half of the construction cost but is 100% owner of the NS2 project.

!!

Jackrabbit , Jul 21 2021 23:07 utc | 53
From karlof1's link to Nord Stream 2 AG's Shareholder and Financial Investors page makes it clear that NordStream 2 AG is a subsidiary of Gazprom international projects LLC, which is, in turn, a subsidiary of Gazprom. Under "Shareholder" there is only one company listed: Gasprom.

PS I was mistaken: Nord Stream 2 AG is a Swiss company, not a German one.

!!

schmoe , Jul 21 2021 23:20 utc | 56
Jackrabbit @ 41

I am no sure if this is that plausible:

"4. Germany can now be pressured to support USA-Ukraine belligerence - if they don't they will be portrayed as not living up to their obligations to US/NATO/EU/Ukraine as enshrined in this agreement.

If Russia retaliates against German purchase reductions in any way they will be labeled as a politically-driven, unreliable supplier. That will 'invite' sanctions and spark efforts to force EU/Germany to eliminate all Russia goods from their markets."

Germany has been portrayed as not living up to its NATO obligations one way or another since about 1985, and with respect to NS 2, since 2018. They do not seem fazed - maybe a Green win would change that. If the USA-Ukraine get (more) belligerent, Germany might be less likely to insist on Ukraine gas transit after 2024.

Jackrabbit , Jul 21 2021 23:20 utc | 57
The Russian government owns a majority of Gazprom. As majority owner they can be said to control the company and with that control comes an inescapable political dimension.

For the purposes of this discussion: the Russian government has biggest stake in the financial success of Nord Stream 2. That "success" depends on gas sold, not simply the completion of NS2 construction.

!!

[Jul 21, 2021] The Oil Industry Is Borrowing Again, But This Time It's Different

A lot of shale companies hedge their output at levels that they have no upside from the current prices...
Jul 18, 2021 | oilprice.com

Two years ago, Wall Street banks were on their way out of a long-term relationship with the oil industry. Now, with oil prices over $70 for the first time in three years, big bond buyers are snapping up oil bonds once again.

Only there is a condition this time.

The Wall Street Journal's Joe Wallace and Collin Eaton wrote this week that Wall Street was buying bonds from non-investment-grade U.S. energy companies, which took advantage of record low interest rates to raise some $34 billion in fresh debt in the first half of the year.

That's twice as much as the industry raised over the same period last year. But investors don't want borrowers to use the cash to drill new wells. They want them to use it to pay off older debt and shore up balance sheets.

It makes sense, really, although it is a marked departure from how banks normally react to oil industry crises. The 2014 oil price collapse, in hindsight, may have been the last "normal" crisis. Oil prices fell, funding dried up, supply tightened, prices went up, banks were willing to lend again, and producers poured the money into boosting production.

Since then, however, the energy transition push has really gathered pace and banks have more than one reason to not be so willing to lend to the oil industry. With the world's biggest asset managers setting up net-zero groups to effectively force their institutional clients to reduce their carbon footprint and with the Biden administration throwing its weight behind the push for lower emissions, banks really have little choice but to follow the current. Their own shareholders are increasingly concerned about the environment, too.

https://www.youtube.com/embed/aQXqMVeoOPs

Yet business is business, and nowhere is this clearer than in banks' dealings with the oil industry. Bank shareholders may be concerned about the environment, but they certainly would be more concerned about their dividend""and part of that comes from income made from lending to oil. And the higher oil prices go, the more willing banks will be to lend to those that produce it.

When they were unwilling to lend to the oil industry, other lenders stepped in . Last year, alternative investment firms scooped up hundreds of millions in oil industry debt from banks that were cutting their exposure to the politically incorrect industry. Hedge funds and other so-called shadow lenders don't seem to have banks' misgivings about profiting from oil and gas.

Now banks have mellowed towards oil somewhat, but it is an interesting twist that the current loans come with the condition of not boosting output. Again, it makes sense. For years, the shareholders of U.S. shale oil companies have been complaining about poor returns as the companies put everything into output growth. Now it's payback time, and shareholders want their returns.

So do lenders, apparently.

Per the WSJ article, this year, bond buyers "want to see companies repairing their balance sheets and delivering to creditors and shareholders rather than plowing money into new wells."

[Jul 20, 2021] Problems with labor in oil sector are real

Jul 20, 2021 | peakoilbarrel.com

SHALLOW SAND IGNORED 07/19/2021 at 10:33 pm

Rasputin.

We have owned rigs. We could never keep an operator around long enough to make it worthwhile. We had a double drum and a single drum. Mud pump. Power swivel. Power tongs on both. Testing truck. The whole enchilada.

We sold them all to a man who had worked for someone else and then went out on his own. We gave him a good deal, and he did a lot of work for us. He still does work for us, but he can't find help that will stay.

We also owned a tank truck. Sold it also. It is currently parked, the man we sold it to cannot find a driver. He is a one horse tank truck driver. He turns down work all the time. We had to shut down a lease we haul water on for a few days when he got COVID. Thankfully he recovered.

All of us around here just cannot quite believe what is going on with the oilfield labor force. It is a perfect storm.

Meanwhile, most recently we paid $5.63 per foot for 2 3/8" steel tubing, which was under $3 a year ago. We priced a 115 fiberglass tank for $6,800, would have been $3,900 a year ago.

We had a couple wells down for a few weeks because we could neither get new nor rewound motors for them.

The man who owns the backhoes, trackhoes and cranes that does contract work for us is in his 70's and has great grandkids. He works in the field daily beside his son and grandson.

One of the last rig hands we had broke into our shop last winter. He got out of jail after a few weeks and immediately got a job in a local factory. Hope he stays clean. He was a good hand when he was, and had learned to operate a single drum also.

The prosecutor in our county announced the first six months of 2021 that 162 felony cases had been filed in our small county, that in 2019 the total for the year was 204 felonies, and that 33 of the 34 jail inmates were addicted to meth.

We do have one pumper now under 50. The rest are from 51 to 63. REPLY INGRAHAMMARK7 IGNORED 07/20/2021 at 1:34 am

How much land do you have left? At one well per section how many can you drill and how long it takes? That's when your business wraps up. REPLY RASPUTIN IGNORED 07/20/2021 at 2:40 am

Holy Moly SS

I guess the days of vertical doing things in house are gone. That labor mess is unreal. However, here in nowhere USA it is hard to find good help but you can usually find help. I was so surprised at some of the job turnover even during peak covid when some businesses were restricted and some essential. How are people living that have no jobs? Over the years I hired relatives that never got it, didn't stay sober and didn't see the long term upside. Maybe it's all about today for the younger generation.

Over the past year and a half I've been following your posts including labor issues. Were they so dreadful before covid and helicopter money? It might appear to the uninformed that training rig help. pumpers and the like is easy, but it's not. One small oops for man is one huge oops for you.

Perhaps, as we move away from the false narrative that you must have a college degree to get a good or high paying job, things will improve in the trades and the oilfield.

About 20 years ago I was visiting with a substantial independent stimulation company that was having labor issues. The head honcho lamented that they had already poached all of the young guys that grew up on farms and knew machinery, getting up early and how to work. Having known a few guys and what they earned they most likely didn't point their kids at basket weaving degrees.

Sure wish I had an answer for you. Personally, I'm shrinking down to a few wells close to the house/shop/yard, one of which I could walk to for daily exercise. However, I'll run my equipment myself as long as possible.

The best to you. REPLY SHALLOW SAND IGNORED 07/20/2021 at 5:53 am

Rasputin.

The number of basically "homeless" people living here in my part of very rural USA is startling. People aren't generally sleeping in the parks. They have duffle bags and backpacks and crash place to place.

We have the tremendous labor shortage, yet the public defender and conflicts public defender have over 400 clients combined. This in a county of a little less than 20K people. That right there is the labor force for a decent sized factory around here.

To qualify for the PD you must have income below 125% of federal poverty guidelines, which is very low. During the height of COVID, nothing got done with their cases because the PD's couldn't get ahold of them. Few have cell phones that are permanent (track phones) and few have permanent addresses. The jail is full so there aren't a lot of warrants being issued for the lower level crimes. So people haven't been showing up for their court cases for months/ over a year. Our county is going to send close to 100 people to prison this year, almost all for meth delivery. This is the situation all over rural USA. People who live here and aren't in the court system are oblivious to it until they get broken into or robbed (or have an addicted relative, which many do).

The primary reason for the labor shortage here is a combination of young people moving to larger towns/cities, a very large percentage of the working age population being addicted to meth (which is now being cut with heroin, fentanyl, etc) and the significant benefits that have been paid to not work. I hate to think of how many billions of borrowed money stimulus our future generations are now indebted with that went directly into the pockets of the foreign drug cartels.

As for the oilfield, add to that the hard work, not the greatest pay in the world at the bottom end (rig hands) the need to find people who can work unsupervised outdoors, and the young people being told the industry is dead and a job in that field will soon be gone. Finally, a ton of "old timers" simply retired during COVID.

Our country has no idea how dependent we are on labor from Mexico and Central America that keeps us alive. The only farm workers are Hispanic. However, most don't want to work in the oilfield either, it seems. We just harvested green beans, and all the crew were Hispanic. The same will be the case here shortly as we harvest watermelons and cabbage. If Trump were successful and closed the borders and sent everyone back, we would starve.

The largest oil company here shut in everything it owned when oil went negative. Unfortunately for them they laid off a lot of people. Many of their wells are still idle.

Maybe we are an outlier. But I doubt it. A decent amount people at the lower end of the labor force seem to have decided they aren't going to work, and offering a lot more $$ won't bring them back. Maybe they will come back when the government benefits end.

Even the prisons can't find employees. They pay $70K+ plus great benefits. Mentally difficult work though. Also, can't have a criminal record and cannot use drugs, even pot.

Keep in mind a large percentage of the USA population now smokes or ingests pot. That doesn't work well in a lot of industries where sobriety is mandatory.

The gas station I fill up at is offering a $300 signing bonus which is paid after 30 days of no unexcused absences. $13 and hour to start at the cash register. They can't find people to take that.

I'm rambling now, and I'll stop.

Surely there are some shale basin people reading this. Could any of you comment about whether there is a labor shortage in your shale basin? If there isn't, maybe we could persuade a few of them to come to our neck of the woods and work on the simple, shallow wells. Not a lot of traveling, no weekends unless you pump, and work is daytime only. KANSAS OIL IGNORED 07/20/2021 at 9:10 am

Shallow Sand –

I echo all of your sentiments. We are a small operator in Kansas, producing about 300 bbl/day in 13 various counties. We have approximately 50-60 bbl/day offline pushing 3 weeks. We're talking 8/8ths approximately $75,000 in revenue. Pre-Covid you could count on getting a pulling unit sometimes next day if you had a mechanical failure. Now it's 3-4 weeks. $20/hour for green rig hands evidently isn't enough to move the needle, whether it's because the work is too difficult, or it's easier to keep cashing the government checks. And by my count we are in a similar situation with oil field pumpers. We have 13 of them. 2 are 50s, and the rest are all over 60. I'm in my early 40s and my field superintendent is 56. He loves to work and will probably do so until he's 70-75. When he checks out will probably be when I check out. REPLY SHALLOW SAND IGNORED 07/20/2021 at 9:55 am

Kansas Oil.

Great to hear from you.

Thanks for confirming what we are experiencing.

The big question is whether this is also going on in the shale basins, primarily Permian. If it is, don't see how USA production grows much.

I drive across Kansas on both I 70 and the South Route through Wichita to the OK panhandle quite a bit. Always keep my eyes open for whether pumping units are moving or not.

I worry about whether the huge feed lots, hog facilities and packing plants out there can find enough help. People have no clue how much of the USA is fed from the TX, OK panhandles on up through Western KS and NE.

Hang in there!

[Jul 20, 2021] The Oil Industry Is Borrowing Again, But This Time It's Different

A lot of shale companies hedge their output at levels that they have no upside from the current prices...
Jul 18, 2021 | oilprice.com

Two years ago, Wall Street banks were on their way out of a long-term relationship with the oil industry. Now, with oil prices over $70 for the first time in three years, big bond buyers are snapping up oil bonds once again.

Only there is a condition this time.

The Wall Street Journal's Joe Wallace and Collin Eaton wrote this week that Wall Street was buying bonds from non-investment-grade U.S. energy companies, which took advantage of record low interest rates to raise some $34 billion in fresh debt in the first half of the year.

That's twice as much as the industry raised over the same period last year. But investors don't want borrowers to use the cash to drill new wells. They want them to use it to pay off older debt and shore up balance sheets.

It makes sense, really, although it is a marked departure from how banks normally react to oil industry crises. The 2014 oil price collapse, in hindsight, may have been the last "normal" crisis. Oil prices fell, funding dried up, supply tightened, prices went up, banks were willing to lend again, and producers poured the money into boosting production.

Since then, however, the energy transition push has really gathered pace and banks have more than one reason to not be so willing to lend to the oil industry. With the world's biggest asset managers setting up net-zero groups to effectively force their institutional clients to reduce their carbon footprint and with the Biden administration throwing its weight behind the push for lower emissions, banks really have little choice but to follow the current. Their own shareholders are increasingly concerned about the environment, too.

https://www.youtube.com/embed/aQXqMVeoOPs

Yet business is business, and nowhere is this clearer than in banks' dealings with the oil industry. Bank shareholders may be concerned about the environment, but they certainly would be more concerned about their dividend""and part of that comes from income made from lending to oil. And the higher oil prices go, the more willing banks will be to lend to those that produce it.

When they were unwilling to lend to the oil industry, other lenders stepped in . Last year, alternative investment firms scooped up hundreds of millions in oil industry debt from banks that were cutting their exposure to the politically incorrect industry. Hedge funds and other so-called shadow lenders don't seem to have banks' misgivings about profiting from oil and gas.

Now banks have mellowed towards oil somewhat, but it is an interesting twist that the current loans come with the condition of not boosting output. Again, it makes sense. For years, the shareholders of U.S. shale oil companies have been complaining about poor returns as the companies put everything into output growth. Now it's payback time, and shareholders want their returns.

So do lenders, apparently.

Per the WSJ article, this year, bond buyers "want to see companies repairing their balance sheets and delivering to creditors and shareholders rather than plowing money into new wells."

[Jul 14, 2021] The US shale oil model does not work without credit.

Jul 05, 2021 | peakoilbarrel.com

MIKE IGNORED 07/05/2021 at 9:29 am

No. Not true and badly misleading. Remaining EIA PDP from the Permian will not generate sufficient net cash flow to self fund 123,000 wells (your estimate) costing nearly $1T, much less do that AND pay down over $100 B of existing debt in the Permian. That's using EIA PDP estimates; whack those by 30%. It is not possible to drill $9MM wells for a 135% ROI over 15 years and be financially self-sufficient, service and pay down debt, provide returns to investors and maintain a 100% RRR. The US shale oil model does not work without credit. $70 "assumptions" do NOT solve the issue of where the money is going to come from for your miracle of abundance to actually occur. ANCIENTARCHER IGNORED 07/05/2021 at 6:01 am

EIA is expecting excess supply in 2022.

Are they smoking some really good stuff to come up with this? I'd like to smoke that too 😉

As I see it, demand will slowly go back up to previous level of 100mmbpd and then resume its slow march upwards. Where is it that EIA are seeing that extra production from that will lead to oversupply 6-7 months down the line? All I see is that various regions of the world are slowly declining in production due to a combination of worsening asset quality and a paucity of capex over the last several years, especially in 2020/21. US Shale, Russia, Offshore, conventional onshore, small members of OPEC and even Saudi"¦ all are experiencing pressure on production.

OPEC seems to be concerned about the possibility of excess supply next year, probably due to this report by EIA. The Saudis are especially concerned and therefore are pushing to extend the supply cut to the end of 2022 which UAE is opposing.

So, am I missing a crucial element or are the EIA on to something here?

[Jul 14, 2021] Cryptos are a collectors item just like fine art.

Jul 13, 2021 | www.moonofalabama.org

jsanprox , Jul 12 2021 1:59 utc | 103

Cryptos are a collectors item just like fine art. While money has value based on the military jack boot of empire which insures its value only with its domination of most countries and the violent destruction of any attempt to set up a transparent real money system exchangable for gold (Libya). A painting by a hot painter is worth 900k because there are a handful of people who will pay that for it, they're interest in it keeps the value at a certain level. Same with Bitcoin, but that interest is spread out to millions of people. If they all decide its worthless than it is, but why would they? I think a lot of these evidence free claims of hacking and ransom wear are made to devalue the currency that the ransom is paid in, it could have easily been paid in dollars via the internet, as cryptos is basiclly just that: a stand in for the dollar being moved to an account that is a number. Cryptos in this way provide a window to real capitalism. This to me is natural human evolution toward anarchism and a system of exchange that is transparent and based on people working together instead of militaristic violence. You can exchange cryptos for gold, rubles and yaun, so saying that it exist only based on the dollars supremacy is wrong.


Hoarsewhisperer , Jul 12 2021 3:36 utc | 104

What I know about computers and Bitcoin would get lost in a thimble. However, what I've learnt about the US Govt over the years tells me that this problem wouldn't be happening if the USG hadn't dedicated itself to micro-managing, and dominating the www - for Top Secret (i.e. bullshit) reasons.

I was appalled when I learnt that the USG had made strong encryption ILLEGAL, and dumbfounded when I first heard about the PRISM 'co-operative' USG-mandated www surveillance program. Edward Snowden's NSA revellations confirmed that the USG has KILLED computer security for crappy, feeble-minded reasons.

It's more or less par for the course that the USG blames other entities for its own prying and mischief-making. Were it not for the USG placing LOW limits on computer security, we would all have access to Pretty Good Privacy and pro-active, timely means of detecting and defending and/or evading malware.

Stonebird , Jul 12 2021 8:31 utc | 107

Jörgen Hassler | Jul 12 2021 5:32 utc | 105

"They mostly never see the piece, it's kept in climate controlled storage."

This is standard practice. Using "Ports Franches" as in several Swiss towns including Geneva. Perfectly legal as they are not IN the country (for Tax purposes).

However, this is not really for "drug" cartels but just a way of transferring assets from one rich person to another. Many ownership deals are made inside the Port Franche itself, without the need to transport the work outside. There is a limitation on the time a work can be left inside the building, but I believe all that they have to do is drive more or less "round the block" and re-enter it. I'm a bit hazy about that detail, as I do not have a spare Rembrandt to verify this personally.

****

jsanprox | Jul 12 2021 1:59 utc | 103

A painting by a hot painter is worth 900k because there are a handful of people who will pay that for it, they're interest in it keeps the value at a certain level.

The primary dealers agree on a common price level for a stated painter. These paintings can even be used as collateral when borrowing money.
Other painters do not have a "guaranteed" price level but one based on auction values (ie. What the customer is willing to pay.)
The Primary dealers are a very small group who control all the big art fairs and which other dealers are allowed to sell or deal there -.
There are "rules" about "participation" (not sure about the terminology here), that various dealers will have made between themseves. ie. There is a split-up of profits following certain agreed parts. Woe unto a dealer that doesn't pay his part. (OK; personal note here, I once accidently fell foul of the "cartel" because a gallery owner with my works, had not paid "out" on a large sum that he had made on another artist he was representing. They decided to "get" him.)

****

Ransomware ; Why are people getting all hot and bothered about Corporations paying money in Bitcoin? Happens all the time.

Another Personal anecdote ; About five years ago I started recieving emails from unknown "people", Real first names, with an attachement. As normal, these go into trash without being opened (or into a folder I have, called "dodgy spam?) About 20 + of them. Next I recieved one email saying (in French) " I know your little secret, and if you don't want everyone else to know, pay (about €30) a "Small" sum into the following bitcoin account xxxxx."

In France you can " porter plainte" , ie, denounce and start a legal process against an "unknown person, or persons". This is to protect yourself, and is run by the Government/police. In my case, never having opened any of the "attachments", I don't know what they were, probably porn of some sort. IF they had been opened there would have been a suspicion that I was a "willling" victim. (The first question asked by the Gov. Site was "Have you paid them/it, and by how much". in my case - none)

******

Haven't heard anything since. BUT, Bitcoin was already being used for criminal purposes.

Nobody had to find a super-secret backdoor into my computer. Just buy a data base with working emails - Corporations use them all the time to send publicity. By looking at the address, and other more or less freely available information, they can target people, by location, age, etc.


vk , Jul 12 2021 15:47 utc | 113

@ Posted by: jsanprox | Jul 12 2021 1:59 utc | 103

But you only know a Picasso is worth a lot because you can calculate it in USD terms (ultimately: you can also calculate in any other fiat currency, but, since we live in the USD Standard, we only know a certain amount of fiat currency is worth if we can convert it to USDs). The USD is still the unit of accountancy and the means of payment even in the art market.

You can never pay your taxes or fill the tank of your car with a Picasso - you would have to sell it for USDs, and use these USDs to pay for everything you need. Sure, two megarich persons could exchange art between them as some kind of permute, but that doesn't constitute a societal unity (because billionares don't exist in a vacuum). It is a particularity of society, not society itself.

The same is true with crypto. And with gold. And with platinum. And with whatever else you want. It is a myth crypto is "fake" just because it is purely digital: the material specification of the thing doesn't matter for its status of money. Being digital is the lesser of crypto's problems. Crypto's main problem is the very economic foundations of its existence, which ensure it will never be money.

And no: subdividing crypto wouldn't solve it - they tried it with gold when capitalism lived through the Gold Standard (when it was on its death throes) and there's a limit to this. Even if the digital era allowed it, you would then simply have fiat money system with extra steps and double the brutality, because then the power to issue money would rest with few private individual hoarders of the crypto with no legal accountability and responsibility; it would be a dystopian "Pirates of the Caribbean" meets "Mad Max" scenario.

[Jul 12, 2021] Angela Merkel Doesn't Think U.S., Germany Will Come to Quick Agreement on Disputed Pipeline

Jul 12, 2021 | www.msn.com

Merkel is meeting with President Joe Biden on Thursday this week, and said while she will discuss the issue at the White House, she does not believe the matter will be resolved at that time.

"I don't know whether the papers will be fully finalized, so to speak. I believe rather not," Merkel said. "But these will be important talks for developing a common position."

Sanctions imposed against German companies involved in the project by the U.S. were recently waived, which raised hopes in Berlin that the two countries may soon be able to find an acceptable agreement on the matter.

For more reporting from the Associated Press, see below.

Washington has long argued that the Nord Stream 2 pipeline carrying natural gas from Russia to Germany endangers Europe's energy security and harms allies such as Ukraine, which currently profits from transit fees for Russian gas.

Germany is keen to increase its use of natural gas as it completes the shutdown of its nuclear power plants next year and phases out the use of heavily polluting coal by 2038.

Merkel's comments to reporters in Berlin came ahead of a meeting with Ukrainian President Volodymyr Zelenskyy, who has warned that Nord Stream 2 poses a threat to his country's energy security. Should Russia route all of its gas around Ukraine in the future, the country might be cut off from the supplies it needs, putting it at further risk of being pressured by Moscow.

Russia annexed Crimea from Ukraine in 2014 and supports separatists in Ukraine's eastern industrial heartland of Donbas.

Zelenskyy said he was looking for guarantees that Ukraine will remain a transit country for Russian gas beyond 2024. He also suggested that the gas issue should become part of four-way talks between his country, Russia, Germany and France on solving the conflict in eastern Ukraine and that the United States could join those negotiations.

Merkel said she took Ukraine's concerns seriously and that Germany and the European Union would use their weight in negotiations with Russia to ensure the agreements are extended.

"We have promised this to Ukraine and we will stick to that. I keep my promises and I believe that is true also for any future German chancellor," she said.

Merkel isn't running for a fifth term in Germany's national election on Sept. 26.

Ukrainian President Volodymyr Zelensky and German Chancellor Angela Merkel, not pictured, give statements ahead of talks at the Chancellery in Berlin, Monday, July 12, 2021. Stefanie Loos/Pool Photo via AP

Start your unlimited Newsweek trial

[Jul 09, 2021] Shale companies are paying off debt and sharing with investors rather than drilling more

The U.S. is producing roughly 2 million barrels a day less than it was before the pandemic.
In the USA shale patch many "sweet spots" are now gone and what remains is less proficableto drill and thus requres higher prices. In this sense the currentoil price might be not enough to spur additional activity.
Jul 09, 2021 | www.wsj.com

Frackers have been forced to rein in spending and live within their means after many investors lost faith in the companies following years of poor returns, lenders reduced their credit lines and capital markets showed little interest in funding expansive new drilling campaigns.

The result is that shale drillers, which in the past have played the role of the oil world's swing producer by quickly increasing output to meet demand, are largely standing pat for now, as the reopening of Western economies leads to a resurgence of global oil and gas prices .

The companies are raking in more cash than ever. Public shale companies that drill primarily for oil collectively generated a record $4.1 billion in free cash flow in the first quarter of 2021 and are poised to take in almost $15 billion for the year if prices remain higher, according to consulting firm Rystad Energy.

U.S. shale producers generated more free cash flow in the first quarter than any time in the industry's history, analysts said. Free cash flow Source: Rystad Energy billion 2014 '15 '16 '17 '18 '19 '20 '21 -12.5 -10.0 -7.5 -5.0 -2.5 0 .0 2.5 $5.0

But instead of pumping that money back into drilling as they have historically done, large producers such as Occidental Petroleum Corp. OXY +2.09% and Ovintiv Inc., the company formerly known as Encana Corp., have said they plan to focus on reducing debt , keeping U.S. output flat. Other sizable shale drillers such as Pioneer Natural Resources Co. PXD +0.66% and Devon Energy Corp. DVN +3.40% are socking away money to return to investors in the form of variable dividends, one of the enticements they want to use to lure more investors back.

"We're producing all this free cash flow, but it's not going out to investors yet," said Scott Sheffield, chief executive of Pioneer, noting that many companies are focusing on debt before they return cash to investors. "There's no reason for them to buy into this sector at this point in time."

... ... ...

In the heyday of the shale boom, publicly traded oil producers typically reinvested more than 100% of the cash flow they made from operations back into drilling campaigns. Now they are using about half of the income they generate on new drilling and are only growing output slightly, if at all.

... ... ...

Shale companies had about $148.6 billion in debt coming into the year, according to energy consulting firm Wood Mackenzie, and much of the cash they are collecting is going toward that debt pile. Securing new capital is increasingly difficult for many.

Many large U.S. banks have cut their energy lending, and some European ones such as Deutsche Bank AG and Société Générale SA SCGLY 5.48% have exited fossil fuel financing altogether...

Laredo Petroleum Inc., LPI +6.49% Centennial Resource Development Inc. and Callon Petroleum Co. CPE +4.88% saw the amount of money banks would lend to them on their revolving lines of credit cut about 24%, 42% and 36% respectively, during the pandemic. Lenders didn't increase their borrowing bases this year, despite higher energy prices.

Callon said it would cut its 2021 capital expenditures to $430 million, a 12% reduction from its 2020 budget. In 2019, it spent $515 million. As a result, the company said it would produce about 90,000 barrels of oil and gas a day in 2021, down from more than 101,000 barrels a day in 2020. Callon said it is focused on reducing its roughly $3 billion in debt. The company declined to comment.

M

Michael Hickey

Many frackers made bad bets early this year, hedging their production with oil in the forties and low fifties - especially Pioneer and Devon. This article, for some reason, fails to mention that fact and it's impact on their current production.
PAUL HUNT
After 38years in O&G E&P I filtered out of the industry due to changing industry. The loss of expertise and technology in the energy industry over the last 5 years has been huge. USA has given the energy industry to China. Look for overall energy prices to triple in less than 10 years.
DAVID LAWRENCE
What is left out in this article are the returns of the 600lb gorilla of frackers in the room.
XOM alone generated almost $7 billion in free cash flow last quarter. With oil prices where they are that figure is likely to rise to $10 billion next quarter. The company has only $53 billion in debt outstanding having already pared down $6 billion during the pandemic.

They are going to gobble up even more weaker little guys shortly.

Peter Sullivan
I don't see XOM significantly increasing production in US shale anytime soon. They are focusing CAPEX on deepwater assets that present a better ROI than shale. Who would of thought we have reached a time where it is less risky for a US based company to drill in a small South American country than within our own borders?
DAVID LAWRENCE
XOM CAPEX is greatly reduced (1/2) in 2021 across the board. This is because they spent nearly $20 billion in 2020 using piles of borrowed money that so many junior analysts obsessed over.. The plan is to pay that pile down with the windfall those investments are generating.

XOM is far from a pure play fracker and have always developed the largest offshore assets of any company and Guyana is a hot prospect!

Edward Cotterell
The oil market has always been boom and bust. When the pandemic hit people stopped driving and the oil market went bust. Prices fell and drillers went bankrupt. Now the economy is reviving, people are driving again and oil is booming. To those who think otherwise, get a grip. The price of gasoline today is about where it was in 2018 and 2019 pre-pandemic. You know, when Trump was president.

This article points out a longer term change in the market. The hype over fracking is over. The lenders want their principal back plus interest and they are not taking exaggerations from drillers any more. So oil prices may have to go a bit higher until the lenders are satisfied that they will get their money. Then they will lend to drillers and fracking will crank up.

Trash that 12 mpg pickup. Get a vehicle that gets better mileage. Some hybrids get over 50 miles a gallon. Electrics get the energy equivalent of 100 miles a gallon.

Ben Griffith
How is the electricity produced ? Coal, oil, natural gas produced by fracking, nuclear, hydroelectric dam, harnessing the hot air of Climate Change speech ?
ROBERT STUPP
Many don't realize how many older, experienced energy professionals took retirement over the last few years. Similar to the 1980's energy bloodbath, it will take a while to establish teams able to stabilize the companies, let alone grow them from survival mode. You can't turn on production like your kitchen faucet.
Jerome Abernathy
Fracking wells deplete so fast that the capex expenditures needed to maintain and grow production result in a low ROI for the industry. Worse yet, given the volatility of oil prices and the precarious state of their balance sheets, frackers are unattractive borrowers. The industry needs a new, creative financing model.
Matthew Oatway
An interesting article, but the authors should have acknowledged (a) the impact of consolidation in the sector on production discipline and (b) the fact that many shale producers have a large portion of their production hedged at lower crude prices. Both factors point to a more restrained return to production growth that we have seen in the past.

[Jul 08, 2021] New Jobless Claims Hold Near Pandemic Low, as Number on Benefits Falls

Jul 08, 2021 | www.wsj.com

What recovery ? What booming economy if they layoff people? Look like stagnation of the US economy continues unabated...

Initial unemployment claims, a proxy for layoffs, rose by 2,000 the week ended July 3, from a pandemic low the prior week, to a seasonally adjusted 373,000 , the Labor Department said Thursday.

... ... ...

...some unemployed workers say they are still struggling to find jobs. Marcellus Rowe of Dunwoody, Ga., said he has been unable to find a job that pays a salary near the roughly $50,000 he made working for the Metropolitan Atlanta Rapid Transit Authority. Mr. Rowe, 29 years old, lost that job in November 2019, before the pandemic, but was able to stay on unemployment benefits because of the federal extensions. Georgia cut off those benefits late last month.

Mr. Rowe said he has applied for more than 100 jobs, including security-guard and customer-service roles. He said the few employers who have responded to him said he doesn't have the experience needed for the positions. Mr. Rowe, a Black man, added that he thinks his race is a reason he has been passed over for some jobs.

me title=

He said he is reluctant to take a minimum-wage job because $7.25 an hour wouldn't be enough to pay his rent and other bills. He sought housing assistance from his county when benefits expired.

"The job market isn't looking so great," he said. "I'm looking for suitable jobs, but it's not happening here in Georgia."

[Jul 08, 2021] The Real Reason OPEC Talks Broke Down - ZeroHedge

Jul 08, 2021 | www.zerohedge.com

While much of the analysis of the recent OPEC+ disagreement has focused on why the UAE refused to commit to the new export plan, there are other factors that have been largely overlooked. A closer look at the ongoing investments by the UAE in its upstream and downstream industry is one such example. Abu Dhabi's national oil company ADNOC has put in place a production capacity increase that calls for a total reassessment of the underlying OPEC production baselines, which were agreed in 2018. At present Abu Dhabi is allowed to produce around 3.2 million bpd, based on the 2018 baseline, but has a capacity now of more than 3.8-4 million bpd. Looking at ongoing new projects and planned investments, production of more than 4 million bpd is possible in the coming years.

The aggressive investment strategy of ADNOC means that the UAE is plenty of incentives to increase production. An extended and controlled OPEC+ export quota system would not only impact the UAE's revenue streams but could even turn some of its multi-billion dollar investments into stranded assets in the long term.

Recently, Crown Prince Mohammed bin Zayed has been pushing an independent geopolitical and economic strategy for the UAE. After years of cooperating with Saudi Arabia on everything from OPEC policy to regional geopolitical crises, the two powers are now beginning to diverge. Former cooperation on issues such as the Yemen war and the Qatar blockade has weakened drastically.

At the same time, Mohammed bin Salman has been aggressively pushing Saudi Arabia's regional power. Saudi Arabia's Vision 2030, the Kingdom's economic diversification plan, has driven the crown prince to take aim on other GCC countries as he attempts to force international investors and companies to set up shop in Saudi Arabia rather than Dubai or Doha. This transformation in the relationship between Saudi Arabia and the UAE certainly played a part in the recent OPEC+ conflict.

Riyadh is also targeting the logistics industry, an industry that the UAE has long dominated, establishing itself as a regional hub for logistics and connecting EU-Asian commodity and trade flows. In the last couple of months, Saudi Arabia has become increasingly aggressive in this space. While there has no been a direct conflict in this area, it is generally assumed that there is not enough space in the region for two supra-regional maritime logistic hubs. MBZ and Dubai are clearly unimpressed with Saudi Arabia's attempts to muscle in on the industry.

Another area of discord between the two nations is the UAE's increased cooperation with Israel. UAE-Israel cooperation in logistics, technology, defense, and agriculture, is a possible threat to Saudi Arabia's Vision 2030 projects. By bringing Israeli tech and know-how to Abu Dhabi and Dubai, the UAE projects will compete with the Saudi Giga-Projects, such as NEOM, for international investment. In response to these moves by the UEA, Riyadh has blocked technology and products exports by the UAE that are linked to Israel.

This economic and geopolitical confrontation is normal in the Arab world and is unlikely to cause a major rift between the two nations. The current cracks will likely be mended when one of the two parties is calling for a Majlis in the Desert. MBS and MBZ have more to win from cooperation than confrontation. A breakthrough in the OPEC discussions is certainly a possibility, but first, some saber-rattling must be done. Ultimately, MBS understands that both Aramco's and ADNOC's future revenues are important. Both NOCs will be able to gain a lot of market share in the coming years if they play their cards right. By being flexible while not losing face, both the nations could go on to cooperate in other fields. Emirati SWFs are still a viable source of financing for major projects in Saudi Arabia, while energy-transition projects in the Emirates thrive on Saudi cooperation and cash.

By showing a strong position in international and regional media, both Crown Princes aim to boost their own positions. MBS's strong approach towards regional economic issues is clear and will inevitably come into conflict with others. MBZ's more aggressive regional and supra-regional power aspirations are also set out for all to see. OPEC's infighting is a natural place for these tensions to play out. Both parties know that their long-term alliance will be key in the future. A full confrontation between the two nations would only serve as an advantage to the long list of regional adversaries for these two nations. By threatening non-compliance, Abu Dhabi is showing its willingness to confront market developments head-on. Saudi Arabia and Russia now need to understand that a Riyadh-Moscow agreement is not going to be enough to placate the other members. ADNOC is unlikely to destabilize the market by opening up its taps, but the symbolism of its resistance is important. Statements about the UAE's willingness to leave OPEC are based purely on rumors, not on facts. Stability is key in oil and gas, being part of the discussion inside of OPEC is more valuable to the UAE than being independent. There is plenty of complexity to unpick behind the scenes, but this particular disagreement is unlikely to cause any real problems for OPEC+

play_arrow
slokhmet 1 hour ago

I have another hypothesis: with covid lockdowns and restricted travel, UAE's income from prostitution and laundering crashed. They needed to make it up somewhere else.

Simple, really.

jimmy12345 1 hour ago

An oil glut is coming. As electric vehicles get cheaper and better year by year, there will a rapid adoption of EV's creating a glut in the oil market. In 2022, 10% of china's vehicles sales will be electric and the auto industry has announce over 100 billion dollars in investments in electric vehicles. The Russian cucks on here are screwed.

GregT 1 hour ago

Wrong. Ev's have been around for over a decade & still don't have 1% of the automobile market. They're a novelty. Not a viable path to move billions of people around in the world. Look at a previous article from today on ZH. China produced 225k this yr. If you live to be a million they might catch up to combustion engine cars & trucks.

Ron_Paul_Was_Right 1 hour ago

I don't know about it taking a million years to get there, but to your point yes - EVs just aren't competitive with fuel burning vehicles at this time. It just doesn't work to drive 400 miles and have to wait an hour plus for a "fill up" to drive another 400 miles. Not when it takes 5 minutes to fill a gas tank, it just isn't competitive.

Delusion Spotter 45 minutes ago

More Correct Analysis:

" Statements about the UAE's willingness to leave OPEC are based purely on rumors, not on facts. Stability is key in oil and gas, being part of the discussion inside of OPEC is more valuable to the UAE than being independent. "

UAE's going to stay in OPEC, and the latest OPEC sideshow will result in higher Oil Prices, not lower.

radical-extremist 1 hour ago

How are world leaders allowing OPEC to produce or even exist at all...while Climate Change threatens our very existence on earth? They seem to be sending mixed messages.

GregT 1 hour ago

Because world leaders know climate change is a hoax to scare people into paying governments more taxes. They need & want oil as bad as everyone else.

bustdriver 1 hour ago

I am guessing there is money angle in the mix.

[Jul 03, 2021] Shadow Lenders Take Over In The U.S. Shale Patch

Jul 03, 2021 | peakoilbarrel.com

RON PATTERSON IGNORED 07/03/2021 at 1:51 pm

Shadow Lenders Take Over In The U.S. Shale Patch

Banks have started to cut their exposure to the U.S. shale patch, seeing more than 100 producers and oilfield services firms go bust last year and feeling the environmental, social, and governance (ESG) pressure to reduce credits to fossil fuels. While traditional lenders are cutting their losses and de-risking energy loan portfolios, alternative capital providers are stepping up to scoop up U.S. energy debt at a discount and take part in debt or equity transactions that could give them returns sooner than a loan would for a bank.

Since the oil price crash in 2020 and the downturn in the U.S. shale industry, banks have been wary of their exposure to the sector. The commodity price slump last year dramatically cut the value of the assets of oil and gas firms, against which they have traditionally obtained loans from banks.

Running for the Exit

Lenders slashed the amounts of reserve-based loans to the U.S. shale firms in the middle of last year.

But it is not only purely financial considerations that are driving reduced bank exposure to the oil and gas industry. ESG lending and aligning loan portfolios to the Paris Agreement goals are now more prominent than ever.

For example, asset manager Schroders, which holds many bonds in the banking sector, is engaging with banks to understand their fossil fuel exposure.

"Banks that are highly exposed to the fossil fuel industry face significant financial, regulatory and reputational risks as a result of the transition to a low-carbon economy," Schroders said, explaining its rationale to identify the exposure of the banks to oil, gas, and coal.

Increased pressure from the ESG universe, coupled with years of poor returns of U.S. shale firms, have prompted several major transactions in which banks have sold energy debt to hedge funds and private equity firms.

Hancock Whitney, for example, agreed last year to sell $497 million worth of energy loans to certain funds and accounts managed by alternative investment provider Oaktree Capital Management. Hancock Whitney expected to receive $257.5 million from the sale of the reserve-based loans (RBL), midstream, and non-drilling service credits.

Hancock Whitney's main reason to sell the energy loans was to minimize the risks to its loan portfolio.

"The primary objective of this sale is to continue de-risking our loan portfolio by accelerating the disposition of assets that have been impacted by ongoing issues within the energy industry, and have now been further complicated by COVID-19," Hancock Whitney's President and CEO John M. Hairston said.

At the end of 2020, Bank of Montreal decided it would wind down its non-Canadian investment and corporate banking energy business.

Most recently, ABN AMRO announced last week it would sell a $1.5 billion portfolio of energy loans to funds managed by Oaktree Capital Management and affiliates of Sixth Street Partners. The portfolio consists of loans to around 75 companies active in the North American energy markets.

With this sale, ABN AMRO is withdrawing from oil and gas related lending in North America as part of a process to wind down its non-core activities and significantly reducing the non-core loan book.

[Jul 03, 2021] We should know sometime between January and December 2022 if Russia is in decline

Jul 03, 2021 | peakoilbarrel.com

RON PATTERSON IGNORED 07/03/2021 at 1:44 pm

We should know for sure sometime between January and December 2022. We will know when it is confirmed that Russia is in decline. That will be the tipping point. Many producers are already in decline but Russia is now the largest. Of course, the US being in decline, the two largest producers in the world, would leave no doubt about it. LIGHTSOUT IGNORED 07/03/2021 at 11:47 am

Thanks Ovi. KSA,Russia and US are starting to look like a line of domino's.

[Jul 03, 2021] Iraqi minister says BP mulls quitting Iraq, Lukoil wants to sell up

Jul 03, 2021 | peakoilbarrel.com

POLLUX IGNORED 07/03/2021 at 2:27 pm

Some news about Iraq:

Iraqi minister says BP mulls quitting Iraq, Lukoil wants to sell up

Iraqi Oil Minister Ihsan Abdul Jabbar said in a video posted on Saturday on the ministry's Facebook page that BP (BP.L) was considering withdrawing from Iraq, and that Russia's Lukoil (LKOH.MM) had sent a formal notification saying it wanted to sell its stake in the West Qurna-2 field to Chinese companies.

Iraqi tax commission cracks down on international energy companies

Iraq's top tax authority has ordered government departments to stop issuing visas and halt imports for nearly two dozen international energy companies whom it accuses of late tax payments.

If enforced, the orders, dated June 27, 2021, could prevent some of the biggest players in Iraq's oil, gas, and electricity sectors from bringing staff and equipment into Iraq, effectively depriving the country of work that is needed to meet its own production targets at a time when insufficient gas feedstock is causing nationwide electricity failures.

Iraq power cuts stir protests as summer temperatures scorch country

The power cuts have hit the south of Iraq especially hard. In Basra, where Iraq's oil wells are situated, people have started taking to the streets in protest and main roads had to be shut down. POLLUX IGNORED 07/03/2021 at 2:59 pm

Gasoline Shortages In Iran As Tanker Drivers Shun Fuel Shipments

An official of Iranian Truck and Fuel Tanker Drivers' Union said Thursday that drivers were refusing to transport fuel due to low or late payments from the government. There has been a shortage of supply in gasoline stations in recent days in various parts of the country.

In a statement published on social media Thursday, the National Association of Drivers' Unions expressed solidarity with striking contract oil and petrochemical workers and said drivers would join their strike if the oil workers' demands were ignored.

[Jul 03, 2021] Plato oil: Russia edition

Jun 30, 2021 | peakoilbarrel.com

POLLUX IGNORED 06/28/2021 at 5:46 am

Russia plans to cut oil exports from its Western ports by 22% in July vs June – schedule

"On a daily basis, loadings will decline by 22% in July compared to the current month, Reuters calculations showed." REPLY POLLUX IGNORED 06/28/2021 at 1:37 pm

Russia struggles to raise oil output despite price rally -sources

"Russian oil production has declined so far in June from average levels in May despite a price rally in oil market and OPEC+ output cuts easing, two sources familiar with the data told Reuters on Monday.

Russia's compliance with the OPEC+ oil output deal was at close to 100% in May, which means the state is about to exceed its target in June.

Two industry sources said that lower output levels may be due to technical issues some Russian oil producers are experiencing with output at older oilfields." RON PATTERSON IGNORED 06/28/2021 at 2:38 pm

Yes, they are definitely experiencing issues with their older oilfields, it's called depletion. But that decline is only 33,000 bpd or .3%. But your post above that one says exports in the third quarter will decline by 22%. What gives there?

Their decline in May was 23,000 bpd. OVI IGNORED 06/28/2021 at 3:25 pm

Ron

I just checked the Russia site and they have revised up their original May estimate. It is one week later than the original. Production is now down 9,000 b/d. RON PATTERSON IGNORED 06/28/2021 at 4:50 pm

Yeah, they revised it up by 14,000 pbd. A pittance. Now they are down only 9,000 bpd instead of 23,000. Nothing to get excited about. Basically, they were flat in May. JEAN-FRANÇOIS FLEURY IGNORED 06/28/2021 at 4:09 pm

"Russia plans to decrease oil loadings from its Western ports to 6.22 million tonnes for July compared to 7.75 million tonnes planned for loading in June, the preliminary schedule showed." 7,75 x 10^6 – 6,62 x 10^6 = 1130000 t. 1130000×7,3/30 = 274966 b/d. Therefore, these decrease of oil export suggests a decrease of production of 274966 b/d. Precedently, it was announced that oil exports of Russia would decrease of 7,2 % for the period July-September or a decrease of 308222 b/d. Therefore, it's coherent. https://www.zawya.com/mena/en/markets/story/Russias_quarterly_crude_oil_exports_to_drop_72_schedule-TR20210617nL5N2NY2IQX8/?fbclid=IwAR0ZjvwzjVS427CbUAzTL1vJfqog7R8CDwaJAvI3uUdaw_0z5S5l_57SGFY I notice that it concerns the "Western ports", therefore the exports toward EU and USA. Well, EU is also the main customer of Russia with 59% of the oil exports of Russia. RON PATTERSON IGNORED 06/28/2021 at 4:59 pm

Western Syberia is where all the very old supergiant fields are. They produce 60% of Russian crude oil. Or at least they used to. LIGHTSOUT IGNORED 06/29/2021 at 2:11 am

Ron
If one of the West Siberian giants is rolling over in the same way as Daquing did, things could get very interesting very quickly. RON PATTERSON IGNORED 06/29/2021 at 7:24 am

Four of Russia's five giant fields are in Western Siberia. The fifth is in the Urals, on the European side. All five have been creamed with infill horizontal drilling for almost 20 years. All five are on the verge of a steep decline. Obviously, one and possibly more have already hit that point.

This linked article below is 18 months old but there is a chart here that shows where Russia's oil is coming from. Notice only a tiny part is coming from Eastern Siberia, the hope for Russia's oil future. Those hopes are fading fast.

The Worrying Truth About Russia's Oil Industry EULENSPIEGEL IGNORED 06/29/2021 at 6:32 am

As I have written a few months ago: When you reduce output voluntarily for a longer time, all the nickel nursers from accounting and controlling will cut you any investing in over capacity you can't use at the moment. That works like this in any industry.

So you have to drill these additional infills and extensions after the cut is liftet. And this will take time, while fighting against the ever lasting decline.

[Jul 03, 2021] Another important aspect of the collapse of neoliberalism -- reaching the natural resources limits, especially fossil energy extraction limits by George Kaplan

Notable quotes:
"... The US seems to be especially vulnerable to issues caused by lack of precarity as it has such a poor welfare system, previously relying on infinite growth to smooth things over or a, now failing, religious faith to keep things in order; prolonged economic and political success that has led to a sense of entitlement and self-belief in the American way, a history of putting personal liberty above all else, which embraces competition rather than co-operation; and a world beating phobia of death well beyond when reproductive age has passed. ..."
"... The gig economy, middle class collapse, MAGA, BLM (and the police actions that prompted its rise), cancel culture, (un)reality TV's attraction, FOMO, the increase in low level strife, self-harming, on-line pornography addiction, the Oxycodone/Fentanyl epidemic etc. are all manifestations and/or causes of that precarity. Civil wars and major revolts (and almost any that succeed in their aims) tend to happen only when there is intra elite infighting rather than uprisings from below. The most likely catalyst for that at the moment is Trump, which may be a good sign given his ineffectualness, ineptitude and general repulsive lack of charisma; anyone even a bit more like a real human being could cause serious ructions. ..."
Jun 26, 2021 | peakoilbarrel.com
Off Topic Finish: Waiting for the Great Leap Forward

I have been reading "˜A More Contested World: Global Trends 2040' by The National Intelligence Council; slowly as there's a lot in it but also a lot missing. No mention of specific resource limits, no discussion of GM just general "˜technology' concerns concentrating on AI and of course, god forbid any mention of overpopulation. It is very US-centric "" in the good scenarios the world gets to a better place only through US leadership "" and humanist focused with no consideration of the rights of the earth in general, only the perpetuation of our civilisation and to that end all future scenarios are some variant of technology led, growth obsessed, centralised BAU (maybe not with full globalism but still based around hegemonic power structures at some level). It's a view from mainstream economists and politicians carrying all the normal drawbacks that those words imply: i.e. bad things happen when the world doesn't do as it's told to do by us, and if you don't agree with us about what constitutes "˜bad' then you're wrong about that too.

I think similar studies from more global or European NGOs and governmental departments (both from individual countries or the EU) tend to be more objective and those from the militaries (from anywhere in the west) tend to be more honestly subjective. See for example: The Adaptation Committee's Independent Assessment of UK Climate Risk , Decoupling debunked "" Evidence and arguments against green growth as a sole strategy for sustainability ; Reinforcing Environmental Dimensions of European Foreign and Security Policy ; Arctic Climate Change Update 2021: Key Trends And Impacts ; Our Future on Earth ; and The State of the Global Climate 2020 or, for military sources: Implications of Climate Change for the U.S. Army ; NATO is responding to new challenges posed by climate change ; Ministry of Defence Climate Change and Sustainability Strategic Approach ; and Armed Forces, Capabilities and Technologies in the 21st Century Environmental Dimensions of Security .

The rising wealth gap and other inequality issues are a common theme in these global risk studies. However, theories in some recent studies have proposed that it is not inequality itself that is the problem so much as a prolonged sense of precarity (a new word to me and, apparently, to MS spellchecker, but it is essentially identical to precariousness) of the non-elites that accompanies it.

This makes sense from an evolutionary standpoint, as parents desire a stable and resource abundant household in which their children can be expected to reach a reproductive age. This might be expected to come more from the female side, as they are tied to their offspring more than males, who are free to spread their sperm and move on. I have read reorts, possibly anecdotal only, that it will invariably be the woman that will be the party insisting on buying the largest house that can be attained, whether affordable or not. I'm all for gender equality and women's rights but some things are innate and equal-rights do not mean equal hormones, ambitions, impulses and behaviors.

From this viewpoint therefore, solving the wealth inequality issue is actually anathema to population reduction. For example the already low birth rate in Italy had a further step down caused by the increased precarity due to the economic impact of Covid-19, the government has responded by offering direct incentives for having children. The apparent short term aims are in direct opposition to the what is best long term, this is called a dilemma rather than a problem.

The US seems to be especially vulnerable to issues caused by lack of precarity as it has such a poor welfare system, previously relying on infinite growth to smooth things over or a, now failing, religious faith to keep things in order; prolonged economic and political success that has led to a sense of entitlement and self-belief in the American way, a history of putting personal liberty above all else, which embraces competition rather than co-operation; and a world beating phobia of death well beyond when reproductive age has passed.

The neologism for the growing proportion of people affected by precarity is the precariat. The always readable Tim Watkins has a new post that touches on some of theses issues, with a particular eye on the possibility (or not) of significant inflationary issues ( The Everything Death Spiral ).

The gig economy, middle class collapse, MAGA, BLM (and the police actions that prompted its rise), cancel culture, (un)reality TV's attraction, FOMO, the increase in low level strife, self-harming, on-line pornography addiction, the Oxycodone/Fentanyl epidemic etc. are all manifestations and/or causes of that precarity. Civil wars and major revolts (and almost any that succeed in their aims) tend to happen only when there is intra elite infighting rather than uprisings from below. The most likely catalyst for that at the moment is Trump, which may be a good sign given his ineffectualness, ineptitude and general repulsive lack of charisma; anyone even a bit more like a real human being could cause serious ructions.

IRON MIKE IGNORED 06/26/2021 at 4:54 pm

Great post George thank you. It is quite evident for the astute observer that western democracy has over the years turned more and more into an amalgam of kleptocracy, oligarchy and plutocracy.

How many countries have colonial Europe and U.S foreign policy destroyed in the name of "democracy" and "freedom" ?
I've lost count.

Plato famously is said to have said:
"If you do not take an interest in the affairs of your government, then you are doomed to live under the rule of fools."

In Platos book the republic, Socrates despises democracy as one of the worst forms of government. His criticism those many years ago still resonates till this day (in my opinion).

WIthout invoking logic, I feel the world is in uncharted waters and heading towards a precipice which no one will see coming.

You have a typo, I believe you mean oxycontin (oxycodone) epidemic. HICKORY IGNORED HOLE IN HEAD IGNORED 06/27/2021 at 1:12 pm

Hicks , not being based in USA ,my view maybe incorrect . The US is undergoing an identity crisis . Where in the world did we have this gender crisis , male "" female heck can't people see between their thighs ? Red-Blue . White Supremacy vs BLM . North vs South . Growing up in the 70's US entrepreneurship was my inspiration . My hero's were Ford, Sloan , Edison etc and what do we have today, Musk ? What changed that a society where work was an ethic has transformed into a system where everyone is looking for an opportunity to suck at the teat of the government . Amazing transformation for someone who has a reference point . Now I am going into the stupid zone . What changed was the net surplus energy available per capita to the US citizen . Once that flipped it was downhill all the way . I reserve the right to be incorrect in my assessment .

06/27/2021 at 10:45 am

Regarding the off-topic finish, I don't think most people realize how fragile is the glue holding the US together.
Fragmentation along tribal lines is the biggest theme in American culture.
If a minority collection of tribes succeeds in the attempts to reverse election results, even more than the Electoral College already does, the country will undergo a major restructuring (polite description) with no guarantees on a recognizable outcome.

[Jul 03, 2021] Annual Reserve Revisions Part IV- Shale Producers "" Peak Oil Barrel

Jul 03, 2021 | peakoilbarrel.com

SHALLOW SAND IGNORED 06/26/2021 at 8:19 pm

I haven't paid attention for awhile, but I think OXY was the number one producer of CO2 flood oil in the lower 48.

Anadarko also owned a lot of lower 48 secondary and tertiary production, as I recall.

These big, public US operators have a lot more in common with us stripper well folks than they care to admit.

Old freakin fields discovered over a century ago is where they operate. REPLY LIGHTSOUT IGNORED 06/27/2021 at 3:15 am

Don't worry shallow the Paradox basin will save the day. (Sarc)

https://www.zephyrplc.com/ REPLY HOLE IN HEAD IGNORED 06/27/2021 at 1:17 pm

🙂 REPLY JOHN S IGNORED 06/28/2021 at 1:21 pm

Shallow Sand,

You are damned right about that! REPLY D COYNE IGNORED 06/27/2021 at 8:46 am

On Fri the July futures contact for WTI closed at 74/bo and on June 21, 2021 (last data points at EIA) the spot price for WTI was $73.64/bo and Brent spot price was $74.49/bo, so a spread of under a dollar, quite unusual in the past 5 years or so when typical spread has been roughly $5/bo between WTI and Brent (Brent usually has been higher). FRUGAL IGNORED POLLUX IGNORED 06/28/2021 at 5:42 am

Adnoc imposes deeper cuts to September crude exports

"Abu Dhabi's state-owned Adnoc has informed customers that it will implement cuts of around 15pc to client nominations of all its crude exports loading in September, even as the Opec+ coalition considers further relaxing production quotas.

It was unclear why Adnoc is deepening reductions for its September-loading term crude exports, with the decision coming ahead of the next meeting of Opec+ ministers scheduled for 1 July when the group is expected to decide on its production strategy for at least one month"

06/27/2021 at 6:41 pm

World Oil Situation 2021

https://www.youtube.com/watch?v=EaXoAfa1tAw

This is an in-depth video of World production and consumption.

[Jul 03, 2021] Plato oil, Abu Dabi edition

Jul 03, 2021 | peakoilbarrel.com

POLLUX IGNORED 06/28/2021 at 5:42 am

Adnoc imposes deeper cuts to September crude exports

"Abu Dhabi's state-owned Adnoc has informed customers that it will implement cuts of around 15pc to client nominations of all its crude exports loading in September, even as the Opec+ coalition considers further relaxing production quotas.

It was unclear why Adnoc is deepening reductions for its September-loading term crude exports, with the decision coming ahead of the next meeting of Opec+ ministers scheduled for 1 July when the group is expected to decide on its production strategy for at least one month"

[Jul 03, 2021] The Fed Faces The Greatest Risk In Its History- An Economic Crisis Accompanied By Inflation - ZeroHedge

Jul 03, 2021 | www.zerohedge.com

The Fed Faces The Greatest Risk In Its History: An Economic Crisis Accompanied By Inflation BY TYLER DURDEN SUNDAY, JUN 27, 2021 - 11:58 AM

From Eric Peters, CIO of One River Asset Management

The fed funds rate was 9.75% when I arrived in the pit, Chicago 1989. US GDP that year was 3.7%, unemployment 5.4%, and inflation 4.6%. But the S&L crisis was widening, as they do. So the Fed cut rates 75bps. Back then, the Fed certainly didn't signal its intentions. In fact, the Fed neither confirmed nor denied what changes it made to interest rates even after it made them. Unimaginable, right? So we had to guess Fed policy changes by observing what happened in money markets. I obviously didn't understand any of it, after all, I was an economics major.

The S&P 500 loved that 75bp rate cut more than it feared the S&L crisis, so stocks took out the 1987 peak, making new highs in the autumn of '89. There was still tons of brain damage from '87, and traders are notorious for being superstitious, so the pit was nervy that October. When the S&P plunged -6% out of the blue on October 13th, the trading pit went utterly berserk. I was so happy in that market mayhem. Soon enough, the Fed cut rates another 75bps. The S&P 500 grinded back up through the end of my first year, but never made new highs.

me title=

Pause Unmute Duration 0:33 / Current Time 0:06 Loaded : 40.09% Fullscreen Up Next

https://imasdk.googleapis.com/js/core/bridge3.469.0_en.html#goog_756093940 Wall Street Bounces, After Selloff Fed Boosts Liquidity NOW PLAYING SoftBank Said to Plan $14 Billion Sale of Alibaba Shares China's Companies Have Worst Quarter on Record, Beige Book Says U.S.-Saudi Oil Alliance Under Consideration, Brouillette Says ETF Volumes Surge in Current Market Environment Investors Have Given Up on a V-Shaped Recovery, BNY's Young Cautions

Despite the 150bps of rate cuts in 1989, and the record S&P highs, the economy soon entered a recession. The Fed kept cutting rates for a couple years, ending at an impossibly low rate of 3.00% in Feb 1992. US GDP was 3.5%, unemployment 7.4% and inflation was 2.9%. I had made my way to London that year as a prop trader, just in time for the Exchange Rate Mechanism collapse. The Europeans had created a system to ensure stability, certainty. And this naturally encouraged traders and investors to build massive leveraged investment positions.

When systems designed to ensure stability fail, which they inevitably do when applied to things as unstable as economies, the consequences are profound. As Europe worked through its ERM collapse, Greenspan held fed funds at 3.00% for what seemed an eternity. No one could understand anything he ever said, so you can't blame him for promising certainty, stability. But people see what they want to see, hear what they want to hear, believe what they want to believe. And soon, folks discovered how to make money by betting rates would never change, much as they had bet on stability and certainty ahead of the ERM collapse.

US GDP in 1994 was 4.0%, unemployment was 5.5% and inflation 2.7%. Greenspan hiked rates 25bps to 3.25% in Feb 1994. Employment gains had been on a tear, and yet, somehow no one expected that rate hike. Naturally, he hadn't pre-signaled a change. The bond market collapsed . Most people don't think bond markets can crash, but that's only because they haven't traded long enough to live through one. Like all crashes, that one happened for all sorts of complex reasons, but the biggest was that the system was highly leveraged to a certain future.

Each interest rate cycle has been different of course. Over the decades, the Fed became increasingly transparent. That transformation was surely well-intended, seeking to reduce the risk of creating crises like that '94 crash. But it is impossible to create certainty without also increasing fragility - that's how markets work . As the system became more fragile, it required increasingly aggressive Fed intervention with each downturn. The process has been reflexive. Now markets move based on what policy changes the Fed says it may make in 18-30 months.

* * *

Anecdote :

Congress mandated that the Federal Reserve promote maximum employment, stable prices, and moderate long-term interest rates. That was in 1978. Unsurprisingly, the nation was reeling from years of high unemployment, rapidly inflating prices, and soaring long-term interest rates. In the decades since, the Fed has done a remarkably good job at meeting their specific mandate. But like all systems built to create certainty, stability, it has simultaneously produced profound fragility. This is most clearly seen in the need for ever more dramatic monetary interventions with each cyclical downturn.

Less obvious is the rising political fragility which is increasingly destabilizing the nation . Having tasked the Fed with producing economic prosperity by any monetary means necessary, our politicians then stepped away. They stopped governing effectively, fanned the flames of animosity, shielded from the adverse economic consequences of their dereliction of duty.

In each economic crisis, it was the Fed that provided leadership, forestalling collapse, but at a compounding cost. Now the nation approaches a point of peak economic and political fragility . And while it is easy to condemn the Fed for having enabled the decades of dysfunction, it is the political system that must bear the blame. But no matter, the Fed must soldier on, like a magnificent machine, attempting the impossible, delivering certainty without fragility, spinning ever faster to stand still.

And the greatest risk it now faces in meeting its mandate is an economic crisis accompanied by inflation. Such a crisis would force it to choose between a return to orthodox policy and the consequent defaults that would devastate asset prices, or a currency collapse and runaway inflation that rebalances the value of our assets and liabilities. Without a determined improvement in our politics, it is increasingly likely that we must endure the latter, followed by the former. And this drama will surely play out in the decade ahead.

[Jun 26, 2021] Oil Prices Set To Head Even Higher As Market Tightens by Tsvetana Paraskova

Jun 23, 2021 | oilprice.com

By Tsvetana Paraskova

In the paper market, Brent Crude prices already hit $75 a barrel this week, for the first time in over two years.

WTI Crude was above $73 early on Wednesday as demand strengthened and as U.S. crude oil inventories were estimated by the American Petroleum Institute (API) to have shrunk by 7.199 million barrels for the week ending June 18.

Backwardation in the WTI futures continues to tighten "a sign of a tighter market.

For example, the September-October spread is at a seven-year high at $1.09 per barrel on expectations that storage levels at the WTI futures delivery hub at Cushing will continue to decline amid strong Midwest refinery demand, Saxo Bank said on Tuesday.

[Jun 26, 2021] Here comes $100 oil prices- BofA strategist

Jun 22, 2021 | finance.yahoo.com

The growing consensus on Wall Street is that the rally in oil prices has more room to the upside

At more than $74.63 a barrel currently , brent crude oil prices are trading at levels not seen since fall 2018. The price of brent crude is up about 88% over the past year .

... ... ...

Similar to BofA, Goldman Sachs is expecting firmer oil prices moving forward. Strategists at the investment bank don't rule out prices nearing $100 a barrel before year end.

"Near term our highest conviction long is oil where we still see brent [crude oil] averaging $80/bbl this third quarter with potential spikes well above $80/bbl. Global demand likely rose to 97.0 million barrels a day in recent days from 95.0 million barrels a day just a few weeks ago as the U.S. passes the baton to Europe and emerging markets, where even India is beginning to show improvements," Goldman Sachs global head of commodities research Jeffrey Currie contends .

Adds Currie, "With such robust demand growth against an almost inelastic supply curve outside of core OPEC+ (GCC + Russia), the global oil market is facing its deepest deficits since last summer at nearly 3.0 million barrels a day. With refiners quickly responding to small improvements in margins, petroleum product supplies have broadly matched this jump in end-use demand, leaving this deficit almost entirely in crude."

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance . Follow Sozzi on Twitter @BrianSozzi and on LinkedIn . ->

[Jun 26, 2021] The peak in shale was (is) the peak of oil production in USA . I have commented earlier that " all liquids " is BS . The 6mbpd of NGPL, CTL , GTL etc. are just "fill in the blanks"

Jun 22, 2021 | peakoilbarrel.com

TED WILSON IGNORED 06/20/2021 at 11:56 am

As oil price stays above $70/barrel, most shale will come back. However the max reached by USA was 13,100 million b/d. So whether World will hit 75 million b/d is doubtful. But NGL keeps increasing because of increase in natgas output. Besides nearly 6 million b/d that comes from CTL, GTL and bio-fuels will keep overall oil consumption above 100 million b/d.

Despite rapid increase in electric vehicles, oil will hold above 100 minion b/d mark. REPLY HOLE IN HEAD IGNORED 06/20/2021 at 1:34 pm

Ted , demand is governed by price and availability . Demand of 100 mbpd is immaterial if the supply is only 80mbpd . Shale is not coming back . USA has peaked . Period . The peak in shale was (is) the peak of oil production in USA . I have commented earlier that " all liquids " is BS . The 6mbpd of NGPL ,CTL , GTL etc. are just " fill in the blanks " . These are not transportation fuels and have 65% of the BTU of crude . HICKORY IGNORED 06/20/2021 at 2:30 pm

Hole- Hydrocarbon Gas Liquids are nothing to belittle. It is a lot of energy-
"HGLs accounted for over a quarter of total U.S. petroleum products output in 2018"

https://www.kindermorgan.com/getAttachment/babe6db9-ba7a-4f51-a100-5fd46b944540/White_Natural_Gas_Liquids.pdf D COYNE IGNORED 06/20/2021 at 3:04 pm

Hickory,

NGL has about 70% of the energy content of a barrel of crude. In addition most uses for HGLs are not for transportation which is the the main use for crude plus condensate.

As Ron has said we don't count bottled gas. I would say NGL should be put in a basket with natural gas.

Or we could define liquid petroleum as that which is a liquid at 1 atmosphere pressure and 25C aka STP.

By that standard only pentanes plus would qualify, which makes sense as it is essentially condensate, the proportion of pentanes plus in the US NGL mix is less than 12% by volume, 2020 data (582
kbpd). RON PATTERSON IGNORED 06/21/2021 at 4:01 pm

I am expecting prices a lot higher in 2022. An average of $85 would not shock me at all. They will be higher because oil production will not fully recover to the 2019 level as everyone expects it to.

The EIA Short Term Outlook has production fully recovered by the end of 2022 and total liquids about one million barrels per day higher for non-OPEC.

[Jun 26, 2021] US oil output growth will likely remain limited in 2021 despite rising prices,

Jun 20, 2021 | peakoilbarrel.com

OVI IGNORED 06/19/2021 at 8:37 pm

OPEC officials heard from industry experts that US oil output growth will likely remain limited in 2021 despite rising prices,

While there was general agreement on limited US supply growth this year, an industry source said for 2022 forecasts ranged from growth of 500,000 bpd to 1.3 million bpd

The forecasts for 2021 were for average output to be close to 200 kb/d. The 1.3 Mb/d prediction for 2022 is out to lunch. The 500 kb/d has a chance but I think the average will be closer to 350 kb/d.

https://economictimes.indiatimes.com/markets/commodities/news/opec-told-to-expect-limited-us-oil-output-growth-for-now-sources/articleshow/83639450.cms OVI IGNORED 06/20/2021 at 3:26 pm

Dennis

I think WTI will be $85 plus/minus $5 in mid 2022. This will push the average price of gasoline slightly above $3/gal. As for output, the US will add somewhere close to 300 kb/d average in 2022 over 2021. I am betting on some restraint on the part of the drillers. The Permian is the pivotal basin and I see that the early results for 2021 wells are not as good as 2020.

The big unknown for me is: What is a sustainable price for WTI, $100? At what point does gasoline suck too much money out of the economy. Once the economy starts to slow, oil demand will slow. We can all remember 2008.

If WTI crosses $90, OPEC might start to worry. However will they have the spare capacity to try to control it? Six months from now we can revise our estimates.

[Jun 26, 2021] I think we are heading for the confirmation of peak oil sometime between mid 2022 and late 2023

Jun 23, 2021 | peakoilbarrel.com

OVI IGNORED 06/19/2021 at 8:01 pm

Ron

Enjoy a fourth. I wonder how much production will drop due to Claudette.

I think we are heading for the confirmation of peak oil sometime between mid 2022 and late 2023. REPLY RON PATTERSON IGNORED 06/19/2021 at 8:16 pm

What do you mean by confirmation? Do you mean they will confirm that the peak was 2018-2019? If so, I cannot agree. No, there will be deniers all the way down. There is something about the human psyche that just cannot accept reality... MATT MUSHALIK IGNORED 06/19/2021 at 8:57 pm

Thanks for continuing to monitor crude oil production. As of now, we are back to 2005 levels!

I have been looking at BP

17/6/2021
BP peak oil (UK decline, asset sales and decommissioning part 2)
https://crudeoilpeak.info/bp-peak-oil-uk-decline-asset-sales-and-decommissioning-part-2

30/4/2021
BP peak oil (UK decline, asset sales and decommissioning part 1)
https://crudeoilpeak.info/bp-peak-oil-uk-decline-asset-sales-and-decommissioning-part-1

Many problems we see are now worse than in any peak oil scenario, especially in the airline industry. So I have been looking at the numbers and found:

22/5/2021
China-Australia passenger traffic has peaked 2018-19 before Covid
https://crudeoilpeak.info/china-australia-passenger-traffic-has-peaked-2018-19-before-covid

It is also generally assumed that electric vehicles will take over.

But in Australia power generation is insufficient to support any number of EVs which would be relevant to reduce oil demand:

14/6/2021
NSW power spot price spikes May 2021 become regular (part 2)
https://crudeoilpeak.info/nsw-power-spot-price-spikes-may-2021-become-regular-part-2

7/6/2021
NSW power spot price spikes May 2021 become regular (part 1)
https://crudeoilpeak.info/nsw-power-spot-price-spikes-may-2021-become-regular-part-1

[Jun 26, 2021] Exxon Prepares to Cull U.S. White-Collar Ranks by Up to 10%

Jun 22, 2021 | www.bloomberg.com


By Joe Carroll and Kevin Crowley
June 21, 2021, 3:30 PM EDT Updated on June 21, 2021, 4:00 PM EDT
Performance-improvement program will involve 5%-10% annually
Reviews are separate from sweeping job cuts disclosed in 2020

Exxon Mobil Corp. is preparing to reduce headcount at its U.S. offices by between 5% and 10% annually for the next three to five years by using its performance-evaluation system to suss out low performers, according to people familiar with the matter.

The cuts will target the lowest-rated employees relative to peers, and for that reason will not be characterized as layoffs, the people said, asking not to be identified because the information isn't public. While such workers are typically put on a so-called performance improvement plan, many are expected to eventually leave on their own. This year's evaluation is happening now but affected employees have not yet been notified, the people said.

"Our annual performance assessment process has been occurring over the last several months," Exxon spokesman Casey Norton said in an email. "Where employees are not contributing to their highest ability, they may need to participate in an improvement plan. This is an annual process which has been in place for many years, and it is meant to improve performance. This process is unrelated to workforce reduction plans."

The plan is separate from Exxon's announcement last year that it will cut 14,000 jobs worldwide by 2022, and it would extend reductions well beyond that original time frame. It's a tumultuous time for Exxon, which is still grappling with the fallout from last month's annual meeting, when shareholders rebuffed top management and replaced a quarter of the company's board over climate and financial concerns.

Exxon had 72,000 employees globally at the end of last year, of which 40% worked in the U.S., according to a company filing.

White-Collar Jobs

Several high-profile traders have also left in the last few weeks. While the performance-review process mostly applies to white-collar jobs in areas such as engineering, finance and project management, there's no suggestion the trading departures were related to the review program.

Exxon's other cost-cutting initiatives have included suspending bonuses and halting employee-contribution matches to 401k savings plans as the pandemic crushed demand for crude, saddling the company with a record annual loss.

International crude prices have surged 44% this year to almost $75 a barrel, improving Exxon's financial position markedly. Still, the supermajor has some way to go to pay down debts accumulated during 2020's market collapse. A smaller and more efficient workforce is key to further improvements.

Exxon achieved $3 billion of annual "structural cost reductions" in 2020 and will continue to make savings through 2023, Chief Executive Officer Darren Woods said at the annual meeting in May.

"We've got additional work to continue to take advantage of the new organization and find opportunities to reduce our costs," Woods said.

Exxon's shares rose 3.6% to $62.59 at the close in New York trading amid a broad rally in energy stocks on stronger oil prices.

[Jun 26, 2021] Why fracking is banned in France

Jun 20, 2021 | twitter.com


Frac Sand Baroness @sand_frac · Jun 16 There is currently a @chevron well uncontrollably blowing out on my land that I live and raise cattle on in West Texas. It is injecting super concentrated brine and benzene into my water supply. The casing (metal pipe) is so corroded that Chevron literally cannot re plug it. 5.7K views 0:01 / 0:06 3 60 117 Frac Sand Baroness @sand_frac · Jun 16 More concerningly, this well was plugged and abandoned (P&A) in 1995. For those not in the oil industry, a P&A blowout is extremely rare. A plugged well is exactly that: plugged. It is filled with concrete plugs, and considered to be permanently deactivated and safe. 2 7 67 Frac Sand Baroness @sand_frac · Jun 16 We've had issues with Chevron before. In 2002, we flushed a toilet at the ranch house (approximately 1.5 miles south of the blowout) and crude oil bubbled up. The leak source was never fully identified, and we shut in that water well. 2 6 66 Frac Sand Baroness @sand_frac · Jun 16 Chevron had operations nearby, so drilled water monitoring wells. These monitoring wells identified a crude oil plume in the groundwater, and also found a large salt water plume. See Texas Railroad Commission OCP #08-2423. Again, we never found the source. 1 5 57 Frac Sand Baroness @sand_frac · Jun 16 This required Chevron to provide an annual water test result to the landowners (me). Of course, they didn't comply from 2007 through 2013. We never heard about this, and thought our water was safe again.

[Jun 22, 2021] You Cannot Fight Geology

Jun 22, 2021 | peakoilbarrel.com

STEPHEN HREN

IGNORED 06/16/2021 at 12:44 pm

It looks like Shell is planning on selling all of its Permian holdings, could be a bellwether for the whole LTO business:

https://www.worldoil.com/news/2021/6/14/shell-said-to-consider-sale-of-largest-oil-field-in-the-us-valued-at-up-to-10-billion

RON PATTERSON IGNORED 06/17/2021 at 5:48 am

A very interesting article came out a couple of days ago concerning Shell:

Royal Dutch Shell: You Cannot Fight Geology , The Dutch Court Ruling Doesn't Change Their Future

One of the biggest pieces of news for Royal Dutch Shell recently has been the Dutch court ruling that forces them to make a larger 45% emissions reduction by 2030.

Despite this sounding very transformation, considering the geological and economic reality of their current situation, it actually does not significantly change their underlying future.

Their reserve life is only sitting at just above seven years and thus even if they wished to maintain their fossil fuel production, they already required significant investments before 2030.
SNIP
You Cannot Fight Geology

Upon reviewing their reserves, it may initially sound very impressive to hear that their oil and gas reserves currently stand at slightly over nine billion barrels of oil equivalent. Although in reality this actually sits rather low when compared to their annual production during 2020 of 1.239b barrels of oil equivalent. This effectively only leaves their reserve life at just above seven years, which is not particularly long and thus means that their fossil fuel production would already begin shrinking dramatically by the latter half of this decade. Admittedly they would likely continue replacing a portion of their oil and gas reserves in the future but their current production rate would still see them running very low by 2030 if approximately half were replaced per annum, as the graph included below displays.

There are two charts in this article. The second on titled: Oil Discoveries Lowest Since 1847 is alarming. STEPHEN HREN IGNORED 06/17/2021 at 8:25 am

Hi Ron, any thoughts on why Shell would bag their operations in the Permian while they are also running low on reserves everywhere else? Seems like they would be holding on to every scrap of producing land they could. Unless one of two things: 1) they are making a serious attempt to transition to a low carbon energy company; and/or 2) their holdings in the Permian are worth squat REPLY RON PATTERSON IGNORED 06/17/2021 at 9:22 am

Well, yes. One reason is (in bold) here:

Interest in Shell's Permian assets seen as a bellwether for shale demand

NEW YORK/HOUSTON, June 15 (Reuters) – A cadre of oil companies, seeing continued profits in shale, are mulling Royal Dutch Shell's (RDSa.L) holdings in the largest U.S. oil field as the European giant considers an exit from the Permian Basin, according to market experts.

The potential sale of Shell's Permian holdings, located in Texas, would be a litmus test of whether rivals are willing to bet on shale's profitability through the energy transition to reduce carbon emissions.

Shell would follow in the footsteps of other producers, including Equinor (EQNR.OL) and Occidental Petroleum (OXY.N) that have shed shale assets this year, looking to cut debt and reduce carbon output in the face of investor pressure.

Shell, like a lot of other companies, sees shale assets as a very low profit, or even a losing proposition. They can take the money from the sale, reduce their debt, and reduce carbon emissions of their company in one fell swoop. More from the article:

Against this backdrop, estimates for Shell's acreage run from $7 billion to over $10 billion, the latter implying a valuation of almost $40,000 an acre.

That would be in line with the per-acre price Pioneer Natural Resources (PXD.N) paid for DoublePoint Energy in April, the most costly deal since a 2014-2016 rush by producers to grab positions in the Permian.

Most Permian deals this year have closed between $7,000 and $12,000 per acre, said Andrew Dittmar, senior mergers and acquisitions analyst at data provider Enverus.

If they can get $40,000 per acre they have found a greater fool to offload their acreage on. HICKORY IGNORED 06/17/2021 at 9:44 am

Something about that doesn't make sense. The need or desire to downsize is likely due to an inability to project making profit on the shale assets rather than any concern over a carbon footprint- I don't believe they are in business to win any kind of beauty contest. REPLY ROGER IGNORED 06/17/2021 at 8:17 pm

https://en.wikipedia.org/wiki/Brent_Spar

"Shell's position as a major European enterprise has become untenable. The Spar had gained a symbolic significance out of all proportion to its environmental effect. In consequence, Shell companies were faced with increasingly intense public criticism, mostly in Continental northern Europe. Many politicians and ministers were openly hostile and several called for consumer boycotts. There was violence against Shell service stations, accompanied by threats to Shell staff."

Things are a little different for European companies I recall "Greenpeace sympathizers" fire-bombed a gas station back then; in light of what has transpired in the US recently who is to say it couldn't happen again?

Shell is well aware of peak oil, and can't solve the problem. So, what would you have them do? REPLY KOLBEINIH IGNORED 06/17/2021 at 1:26 pm

"Shell would follow in the footsteps of other producers, including Equinor (EQNR.OL) and Occidental Petroleum (OXY.N) that have shed shale assets this year, looking to cut debt and reduce carbon output in the face of investor pressure."

I don't think it has anything to do with shale oil specifically. For Equinor it has to do with that it can draw on competence in Norway in the harsh offshore environment in the North Sea. Floating offshore wind power is where Equinor is world leading with technology and know how; now about to be utilised in the North Sea, Japan, US East coast and California. It is not more economical than ground based offshore wind mills, but has some advantages when it comes to lifecycle costs. For one, the wind mills can be placed in optimal wind condition areas not in the way of fishing resources. The big size of wind mills will not cause problems (the height and diameter of the blades are necessary to capture enough wind energy). And also the wind mills can be more easily moved to land and recycled, e.g. the steel. Wear and tear offshore is on the minus side.
Usually the blades are made of carbon fiber to make it lighter, but it can also be made of aluminum in the future with lower efficiency.

Shell is just now investing in North Sea South II in Norway for ground based offshore mill farms together with BP. To make the North Sea work with the enormous amount of wind power coming online and connection cables everywhere is very serious business and just a priority. Shale oil is too much of a distraction for Shell and Equinor, not even within their core competence area. REPLY JAY WOODS IGNORED 06/18/2021 at 7:50 am

Shell was ordered by a Dutch court to cut by 45%. Of course, they will cut their "losers" first.

[Jun 22, 2021] Possibility of Seneca cliff are increasing

Jun 22, 2021 | peakoilbarrel.com

OVI IGNORED 06/17/2021 at 10:03 am

Ron

The chart is old and was published in 2016 by Wood Mackenzie and there is no data for 2016. It also leaves out the discovery of Ghawar in 1948, first bar/spike. I have not seen any updates since then. Not sure if Guyana had been discovered in 2016. The original is attached.

REPLY SCHINZY IGNORED 06/18/2021 at 5:57 am

Here is Rystad's discovery graph 2013-2019 including gas. 2019 was better than 2016-2018 in terms of BOE, but it was a bit gassy:

REPLY RON PATTERSON IGNORED 06/17/2021 at 6:00 am

Is the energy transition just a fad??? Irina Slav at Oil Price.com says it is.

Energy Transition Fad Will Send Oil Sky High

Ironically, the wave of ESG investing in global energy markets may lead to much higher oil prices as a serious lack of capital expenditure on new fossil fuels dries up just as demand for crude continues to grow

Pressure from investors, tighter emissions regulation from governments, and public protests against their business have become more or less the new normal for oil companies. What the world -- or at least the most affluent parts of it -- seem to want from the oil industry is to stop being the oil industry.

Many investors are buying into this pressure. ESG investing is all the rage, and sustainable ETFs are popping up like mushrooms after a rain. But some investors are taking a different approach. They are betting on oil. Because what many in the pressure camp seem to underestimate is the fact that the supply of oil is not the only element of the oil equation.

"Imagine Shell decided to stop selling petrol and diesel today," the supermajor's CEO Ben van Beurden wrote in a LinkedIn post earlier this month. "This would certainly cut Shell's carbon emissions. But it would not help the world one bit. Demand for fuel would not change. People would fill up their cars and delivery trucks at other service stations."

Van Beurden was commenting on a Dutch court's ruling that environmentalists hailed as a landmark decision, ordering Shell to reduce its emissions footprint by 45 percent from 2019 levels by 2030.

[Jun 22, 2021] Energy Transition Fad Will Send Oil Sky High

Jun 22, 2021 | peakoilbarrel.com

RON PATTERSON IGNORED 06/17/2021 at 6:00 am

Is the energy transition just a fad??? Irina Slav at Oil Price.com says it is.

Energy Transition Fad Will Send Oil Sky High

Ironically, the wave of ESG investing in global energy markets may lead to much higher oil prices as a serious lack of capital expenditure on new fossil fuels dries up just as demand for crude continues to grow

Pressure from investors, tighter emissions regulation from governments, and public protests against their business have become more or less the new normal for oil companies. What the world -- or at least the most affluent parts of it -- seem to want from the oil industry is to stop being the oil industry.

Many investors are buying into this pressure. ESG investing is all the rage, and sustainable ETFs are popping up like mushrooms after a rain. But some investors are taking a different approach. They are betting on oil. Because what many in the pressure camp seem to underestimate is the fact that the supply of oil is not the only element of the oil equation.

"Imagine Shell decided to stop selling petrol and diesel today," the supermajor's CEO Ben van Beurden wrote in a LinkedIn post earlier this month. "This would certainly cut Shell's carbon emissions. But it would not help the world one bit. Demand for fuel would not change. People would fill up their cars and delivery trucks at other service stations."

Van Beurden was commenting on a Dutch court's ruling that environmentalists hailed as a landmark decision, ordering Shell to reduce its emissions footprint by 45 percent from 2019 levels by 2030. REPLY HICKORY IGNORED 06/18/2021 at 9:37 am

Cute headline.
'Energy Transition Fad'
Wrong terminology.
Its a shift that has barely started.
The global economy isn't going to just sit around while fossil fuel sources go into decline, despite how poorly large human organizations perform in the job of planning.
The effort is very weak to this point.
Poor grasp of the situation.
It will be grasped eventually, and then the effort will be strong.
Fad no. REPLY likbez 06/22/2021 at 4:10 pm There is a possibility of Seneca cliff as major Western countries probably will not be able to adapt to dramatically shirking of oil supply. That raises the question of the size of Earth population which is sustainable without "cheap oil" and several other interesting questions about the destiny of the current civilization and neoliberalism. Which is already in crisis since 2008 and the USA economy is in "secular stagnation" mode since the same date. The USA standard of living is partially based on cheap oil and when cheap oil is gone the crisis of neoliberalism will probably became more acute. It is difficult to predict what forms it will take but Trump in the past and the current woke movement are two examples of mal-adaptation to the crisis of neoliberalism in the USA and loss of legitimacy of neoliberal elite (woke movement=, which is supported by Dems and several major companies, is the attempt to switch the attention from this issue -- "look squirrel") I suspect this that current "irrational exuberance" about EV among the neoliberal elite and upper middle class (especially techno hamsters of Silicon Valley) will play a bad joke with the USA. Prols can't care less about this fashion and will stick to tried and true combustion engine cars, especially with the current exorbitant prices on EV.

[Jun 18, 2021] Total DUCs in shale basins are falling at the rate of about 250 per month

Most of remaining DUC are unprofitable to finish...
Jun 14, 2021 | peakoilbarrel.com

RON PATTERSON IGNORED 06/14/2021 at 3:10 pm

Total DUCs in shale basins are falling at the rate of about 250 per month. I don't know how long this can continue. I have been told by some experts in the field that there are some DUCs that will never be completed because they would not produce enough oil to pay the completion cost. So we just cannot count the DUCs and divide by 250. The decline in DUCs will have to stop sooner or later.

REPLY FRUGAL IGNORED 06/14/2021 at 4:41 pm

What I don't understand is why wells are drilled but not completed right away? REPLY RON PATTERSON IGNORED 06/14/2021 at 5:02 pm

Frugal, I am not an oilman, and an oilman could obviously give a better answer than I. But I will give it a shot, and hopefully, I will be corrected for any mistakes I make.

Drillers are not frackers and frackers are not drillers. That is an entirely different operation requiring different crews, different equipment, and different CAPEX. But the driller leaves behind samples from the well, indicating just how productive the well should be. The best wells will obviously be fracked first. The less promising wells will be left for times when the price is high enough to justify the fracking cost.

But"¦. the total cost of the well is the drilling cost plus the fracking cost. And in a DUC, the drilling cost has already been spent. So when times get hard, and you can get a well, though it might not be the best well, you have already paid the drilling cost, so you can get it for only the fracking cost now. So you pay the fracking cost and recover what you can. And this would be the case especially if the new wells that are coming in are less promising than the poor wells already drilled.

But then, that's just my opinion, for what it's worth.

[Jun 14, 2021] Oil price supression agency (mistakenly called EIA) wants OPEC to increase input.

Jun 14, 2021 | www.zerohedge.com

Authored by Cyril Widdershoven via OilPrice.com,

In its latest Monthly Oil Report, the IEA called on OPEC+ to increase production in order to counter higher demand in 2022.

... ... ...

The current market situation is very clear. OPEC+ is leading the sector, no matter what political strategies or activist shareholders at IOCs are planning. The market is still fully hydrocarbon addicted, and this will not change overnight.

The IEA also needs to reassess its current strategies and press approach, as a continuation of the diffuse ''Lala-land predictions'' will not make their case stronger.

As indicated by the IEA OMR report demand will increase by 5.36 million bpd in 2021, and another 3.07 million bpd in 2022. At the end of 2022, global demand is expected to be at 99.46 million b/d on average.

This optimism in the market is widely shared, looking at price predictions from Goldman Sachs, Bank of America, and Citibank, with some analysts even predicting $100 per barrel in 2022.


cowdiddly 1 hour ago (Edited)

I do not listen to government clowns.

"You want to know what the price of oil is going to do watch the rig count" T. Boone Pickins

Single best piece of energy investment advice I ever had.

gregga777 48 minutes ago (Edited) remove link

The IEA seems to be following this very mature behavioral advice:

"When in trouble,

When in doubt,

Run in circles,

Scream and shout."

Falconsixone 40 minutes ago

Tanks eat a lot of fuel.

GrayManSix 23 minutes ago

Instead of "kill all the lawyers," it should now be "kill all the academics." People in ivory towers who have no inkling of the real world realities....

radical-extremist 39 minutes ago remove link

I highly recommend "Unsettled" by Steven E. Koonin.

He does the best job to date of unpacking what we know and don't know about Climate Change.

Educate yourself on it...and hurry before the book is banned.

19331510 48 minutes ago remove link

There is no climate emergency and absolutely no reason to pursue net-zero emissions.

Co2 is 0.04% of the atmosphere and it is impossible for that small amount of gas to significantly impact the climate.

Co2 is the key driver of photosynthesis and higher levels of atmospheric co2 increase agricultural production necessary to feed an ever growing population.

The UAH temperature data indicates the average global temperature is 0.08 C above the 30 year average. There is no global warming.

The severity of storms and and number of severe storms are not increasing.

The oceans may be rising between 1.8 mm/yr to 3.6 mm/yr if at all. Tide gauges a wrought with issues.

The pursuit of a green economy will destroy our economy. manhattan-institute.org Mark P. Mills

There is no need to end the use hydrocarbons. Please educate yourself.

SonOfSam 48 minutes ago remove link

...The IEA has ALWAYS wanted OPEC+ to keep their pumps running...

[Jun 13, 2021] America's Fuel-Making Corridor Prepares for Hurricane Laura - WSJ

Jun 13, 2021 | www.wsj.com

By Rebecca Elliott and Collin Eaton Updated Aug. 26, 2020 4:11 pm ET

Refineries, petrochemical facilities and ports along the Gulf Coast were closing as Hurricane Laura barreled toward the Texas-Louisiana border.

The hurricane strengthened to a Category 4 storm Wednesday, with sustained winds of 140 miles an hour, according to an afternoon update from the National Hurricane Center. It is projected to unleash a storm surge as high as 20 feet along portions of the Louisiana coast with as much as 15 inches of rainfall.

...

[Jun 13, 2021] Exxon (XOM) Sees US Shale Oil Production Decline Per Well

Jun 13, 2021 | peakoilbarrel.com

RON PATTERSON IGNORED e 06/13/2021 at 3:49 pm

Exxon (XOM) Sees US Shal Oil Production Decline Per Well Bold mine.

Exxon Mobil Corporation XOM has been generating fewer barrels of oil from the prolific shale fields of the United States since 2019, per Reuters.

According to a latest report, the company's oil wells, which are involved in some of the most promising shale fields, produced fewer barrels of oil per well despite an increase in overall expenditure and production.

In 2017, Exxon, which is one of the largest shale oil producers, acquired $6.6 billion of net acres in New Mexico, which doubled the company's assets in the Permian basin that spans west Texas and New Mexico. Notably, the company intends to boost shale output in the New Mexico portion of the Permian basin to 700,000 barrels per day (bpd) by 2025.

Per data released by the Institute for Energy Economics and Financial Analysis ("IEEFA"), Exxon's average liquid output for the first 12 months of a well dropped to 521 bpd in 2019 from an average of 635 bpd in 2018 in its Delaware basin assets of New Mexico.

That's an 18% drop in production per well. And this was before the pandemic

[Jun 13, 2021] Another scenario doe Seneca cliff is that some exporting nations realize they will need this oil as the world stares into a scarcity of oil. They might say: "Shit, why are we selling this stuff when we will desperately need it for ourselves in a few years?"

Jun 13, 2021 | peakoilbarrel.com

RON PATTERSON IGNORED 06/13/2021 at 2:44 pm

Another scenario is that some exporting nations realize they will need this oil as the world stares into a scarcity of oil. They might say: "Shit, why are we selling this stuff when we will desperately need it for ourselves in a few years?" And as they cut back, or stop exporting altogether, the problem gets a lot worse, and prices spike even higher. REPLY DOUG LEIGHTON IGNORED 06/13/2021 at 3:34 pm

L.O.L. The decision concerning the proportion of a domestic resource that should be preserved for domestic needs, and how much to export, is interesting. China's REE deposits come to mind. Also, the impact of the immediate use of a resource versus a lower level of exploitation over time might come into play in some (perhaps unrealistic) scenarios as well. Not many examples of countries that have exhaustible natural resources saving some for future generations I'm aware of; probably would result in an unwelcome war or another ugly result!

[Jun 13, 2021] WTI at $70 is probably still bearable. Higher numbers dramatically increase chances of the recession (actually the USA is in secular stagnation since 2008).

Jun 13, 2021 | peakoilbarrel.com

LIKBEZ IGNORED 06/07/2021 at 6:40 pm

WTI at $70 is probably still bearable. Higher numbers dramatically increase chances of the recession (actually the USA is in secular stagnation since 2008).

Today I read the EROEI of solar is around 0.8 outside of deserts. A recent paper by Ferroni and Hopkirk estimated an EROI=0.8 for PV in Switzerland. https://www.sciencedirect.com/science/article/pii/S0301421516307066

You need EROEI around 7 for the source of energy to be economically viable. Wind barely makes it, but solar, outside of deserts does not.

Another interesting figure is that the energy density ( KW/kg ) of lithium batteries is approximately 100 times less then energy density of diesel (gas has slightly lower energy density; kerosene approximately the same).

A subcompact car with a 10-gallon gas tank can store the energy equivalent of 7 Teslas, 15 Nissan Leafs or 23 Chevy Volts, according to industry sources. REPLY PHIL S IGNORED 06/07/2021 at 7:50 pm

" interesting figure is that the energy density ( KW/kg ) of lithium batteries is approximately 100 times less then energy density of diesel "
but don't forget the energy in the diesel is about 30% efficient converting into work while the battery is over 90% efficent doing work – so comparing energy "stored" in compact cars and teslas etc is either pretty useless or pretty misleading REPLY MIKE SUTHERLAND IGNORED HOLE IN HEAD IGNORED 06/12/2021 at 6:35 am

Likbez , I will make an effort to answer your 3 questions .
1. Peak oil was /is 2018 . Plateau will be 5 years . Why ? The parameter is exportable oil production and not total oil production . ELM is a bitch .
2 . Nuclear fusion . Not going to happen . It is like the horizon . We can see it but we can't reach it .
3 . USA situation . I am least qualified to comment as I am in Europe , but still the safest is that the current political system cannot continue for long especially when I look at it with the lenses of resource availability . There are no volunteers for starvation . What will replace this ? I don't know .
P.S :Your sentence "Like in war this is the question of strategy. Wrong strategy usually leads to defeat. " I am going to be using this . Hope you don't have a copyright on this . 🙂

06/09/2021 at 9:11 am

But your post is also misleading and leaves the reader with the impression that you're little more than an EV propagandist. Even at 30% efficiency for diesel, there is still 100/3 = 33.3x more energy available than a comparably sized lithium battery. That huge difference is far and anyway superior to anything a battery will ever do, ever. It will never be matched by any electrochemical storage scheme. So there is that. REPLY KLEIBER IGNORED 06/09/2021 at 1:42 pm

Indeed. The advantages EVs have come from efficiency in weight reduction (aside from the battery pack) and aerodynamics, along with electric motors being super simple and efficient. But in terms of raw energy density, you cannot beat chemical fuels, and there really isn't anything that threatens this by virtue of the chemistry.

Batteries, for all their advantages in simplicity, are never going to be lighter and more energy dense. Lithium is just about the best there is in terms of weight to energy ratio, something quite key for a moving vehicle. REPLY LIKBEZ IGNORED 06/09/2021 at 7:10 pm

Mike,

Electrical engines proved to be viable for small cars and delivery trucks with short ranges. No question about it. But that does not mean they are optimal. This is just a fashion partially fueled by people who missed their STEM classes 😉

I think natural gas is currently a viable competitor to EV and is IMHO a much better feat.

First of all charging efficiency of lithium battery is only 80%.
That's true that electrical motor is more efficient, but when you have a transmission using multiple gears most of this difference is lost.

Also you overestimated the efficiency of the tandem lithium battery -- electrical motor, as it includes converter with efficiency less then 90% and a lithium battery has its own internal resistance which increases with age and also lead to losses. 0.8*0.8*0.9=0.57. BTW modern diesel engines efficiency is about 43%-44%, based on 2013-2014 certified engines.

Moreover the efficiency of lithium battery in winter is dismal. And not only because at low temperatures is simply does not work well and its capacity is less. A lot of energy is consumed by the cabin heater. IMHO driving EV in severe winter is dangerous not withstanding short trips to nearby sky resort that some make on their Tesla 3 🙂 REPLY JOHN NORRIS IGNORED 06/10/2021 at 7:06 am

The average US car goes 0.74 miles on a kWh of gasoline. Many Teslas and the Hyundai Kona (among others) go 4.0 miles per kWh.

Cost per mile is $0.12 for gasoline, $0.06 for California EV, $0.03 for average EV. HICKORY IGNORED 06/07/2021 at 10:35 pm

Likbez.
Switzerland has poorer solar input than any place in the lower 48, even pacific northwest coastal, so its a lame site to use as a yardstick.
I know people who do 100% of their driving miles with solar from the roof, at lower cost than your miles.
And they didn't check the EROEI figures before or after the purchase of equipment.
The solar is already paid off for them, and they've got 2 to 4 more decades of electricity coming from that system.
And I know people who have driven across the entire country with no liquid fuel tank-nothing for energy storage in their EV but lithium. And the acceleration of their car will pin you deep in your seat if they aren't careful with the pedal.

Hey- look on the bright side- every mile that solar/electric vehicles travel is just another mile of gasoline left for you. REPLY MIKE SUTHERLAND IGNORED 06/09/2021 at 9:22 am

Hickory, how many of those solar panels were subsidized by government? A lot of them. And what's more, even though early adopters charged their Teslas from those subsidized panels, did that somehow change the EREOI from 0.8? How is the rest of society going to benefit if all the early opportunists managed to get cheap cells at an artificially low price, that actually were fantastically expensive in real terms regarding the cheap energy (at the time) that was used to make them?

And so what if they drove across the country in electric power??? WTF? What does that prove? Was there actually anything productive generated by this hugely energy intensive self-interested activity? No, there was not. It was nothing more than a display of self indulgence, and an excessive one at that. REPLY HICKORY IGNORED 06/09/2021 at 10:11 am

MikeS.
"The Energy Payback Time of PV systems is dependent on the geographical location: PV systems in Northern Europe need around 1.5 years to balance the input energy, while PV systems in the South equal their energy input after 1 year and less,"
https://www.ise.fraunhofer.de/content/dam/ise/de/documents/publications/studies/Photovoltaics-Report.pdf
After 25 years modern panels still have between 82-93% peak capacity output.

In regard to the feasibility of lithium batteries- I was pointing out that they work well enough (are dense enough) to get the job done. Its not a complicated idea. Likebz referenced diesel energy density. Thats very good, but in case you haven't been keeping up- peak crude oil is upon us, so time to adapt. Past time actually.

Bottomline- both solar energy and electric vehicles are viable systems for transportation. And that is nice considering the world faces peak oil supply.

Some people would prefer to witness the countries economy crash and burn as peak oil becomes a reality. I guess they think they would make more money for the short term. Others would like to see the country gradually deploy other ways to get around. REPLY KLEIBER IGNORED 06/09/2021 at 1:57 pm

If nothing else, this scenario will lead to a radical reshaping of how we as a species go about doing logistics. If the pandemic hasn't called into question the application of JIT logistics for all industries, then the loss of cheap diesel certainly will. Even if long haul electric trucks become a thing, it will require a different approach to matters.

Cars are otherwise a solved issue with EVs. There's nothing that an ICE can really offer over an EV. Trucking and heavy industry is another matter, and that's where problems will be. Frankly, I welcome this uprooting of a paradigm that has no resilience built in whatsoever. LIKBEZ IGNORED 06/10/2021 at 3:26 pm

You are both funny and superficial.

There is no question that "electric vehicles are viable systems for transportation. " that's true since 1940th I think. Just think about electric trains and diesel-electric trains :-). Also as compact cars they are viable in temperate climate (Leaf, Tesla, etc) and possibly in big cities and corresponding metropolitan areas.

Some people would prefer to witness the countries economy crash and burn as peak oil becomes a reality. I guess they think they would make more money for the short term. Others would like to see the country gradually deploy other ways to get around.

Like in war this is the question of strategy. Wrong strategy usually leads to defeat. I think the current EV fashion driven by people who missed their STEM classes is counterproductive and probably harmful.
It might well lead to problems in the near future. You should never put all eggs into one basket. Lightweight and emotion-driven arguments like your above just does not make the cut, if we are taking about the strategy.

Some interesting questions are

1. If we reached "plato oil" stage (I think so), then how long it will last before Seneca cliff? 10 year, 50 years, 100 years ? That's a big difference.

2. Will we get fusion energy driven energy generation or not.

3. Will neoliberalism be replaced in the USA by some other social system, because neoliberalism (and connected with it imperial tendencies ("Full Spectrum Domination" doctrine), and the corresponding level of military expenses -- money that should be allocated toward the energy transition are simply waited on maintaining and expanding of the empire) can't reform itself and probably will drive this country off the economic cliff, or to the WWIII (with even worse results).

[Jun 13, 2021] Chronic underinvestment in oil and gas supply while operational oilfields mature would lead to a supply crunch and a spike in oil prices down the road, analysts and Big Oil top executives such as TotalEnergies

Notable quotes:
"... "Ideology will obviously always trump common sense." So true ;). ..."
Jun 13, 2021 | peakoilbarrel.com

FRUGAL IGNORED ROGER IGNORED 06/11/2021 at 9:35 am

"Ideology will obviously always trump common sense." So true ;).

06/10/2021 at 6:22 pm

Saudi Arabia And Russia Warn Of Major Oil Supply Crunch

Environmentalists and activist shareholders intensified pressure on large public oil firms to align their businesses with a net-zero scenario, while some of the international majors acknowledged they have a part to play in the energy transition.

But the leaders of the OPEC+ group, Saudi Arabia and Russia, will continue to invest in oil and gas because, they say, the world will still need those resources for decades, despite the growing push against fossil fuels and investment in new supply.

Chronic underinvestment in oil and gas supply while operational oilfields mature would lead to a supply crunch and a spike in oil prices down the road, analysts and Big Oil top executives such as TotalEnergies' Patrick Pouyanné say.

Apologies if this has already been posted. REPLY RON PATTERSON IGNORED 06/10/2021 at 6:57 pm

From your link: BP's chief executive Bernard Looney wrote that forecasts of much lower investments in oil and gas were "in many ways consistent with our approach – to reduce our oil and gas production by 40% in the next decade.
Snip.
In Russia, the chief executive of the largest Russian oil producer, state-controlled Rosneft, warned that underinvestment in oil is setting the stage for a severe deficit in supply.

Yes, oil production will be falling and oil prices will be rising. Anyone with half a brain can see that. But it will have to happen before the world will be able to see what is right now as plain as the nose on their face. Their worldview keeps them from seeing the very blatantly obvious. Ideology will obviously alwayse trump common sense. REPLY FRUGAL IGNORED 06/10/2021 at 8:17 pm

It's looking more and more like peak oil is here right now. REPLY RON PATTERSON IGNORED 06/10/2021 at 8:56 pm

Nah, peak oil was in 2018.

[Jun 13, 2021] EV cars and alternative energy future

Jun 13, 2021 | peakoilbarrel.com

NIKO IGNORED 06/06/2021 at 1:22 pm

Wasn't sure which thread to put this in, but since it deals with much more than just oil scarcity, I thought I'd put it here.

After some on this board recommended Christopher Clugston's "Blip" I bought myself a copy. I just finished reading it and I'm pretty impressed. If I have a criticism, it's that Clugston tends to go over the same points ad nauseum. He could have made a much more streamlined work with some more editing.

However, despite some flaws, "Blip" is a tour de force. Clugston breaks the history of industrialism into a series of eras, which he calls Industrialism1, Industrialism2, and Industrialism3. Between the periods of industrialism are periods of scarcity, in which sub-global areas face non-renewable resource shortages in their domestic economies. These periods of scarcity cause significant pain before they are (somewhat) ameliorated through the use of imports (whether through trade or colonialism). Clugston demonstrates that, just as each local area hits a period of scarcity, eventually that scarcity must become global in reach, and there will be no where else to go to find the necessary materials to fix that scarcity.

It's refreshing to read a work in the "doomer" space that is not entirely focused on energy. Clugston demonstrates (using hard numbers) that we are rapidly running into limits in a variety of resources, not just oil, gas, and coal. He effectively shows the rates at which regions tend to experience scarcity issues after industrialism begins. He also connects the dots – instead of only showing how it is getting more and more difficult to supply industrial society with material inputs, he connects those observations to culture, politics, and finance, taking a historical perspective which clearly shows the likely path forward for humanity.

What I liked most about the book is the absolute dependence on data. Every chapter is full of charts, graphs, and tables, from reliable sources, which illustrate the point Clugston is making: that we are running out of mineral inputs to our society, and we are running out quickly.

This book really drove home the point for me (though I have thought it for a long time) that a successful transition to renewables simply will not happen. We do not have enough material runway to both sustain our current civilization and make the necessary transition. Industrial society will fall apart (in fact, as Clugston convincingly shows, is already doing so) long before we manage to successfully transition to a clean, bright, renewable future.

Well worth a read, although I recommend skimming quickly over the numerous parts where Clugston is repeating himself. REPLY HICKORY IGNORED 06/06/2021 at 9:42 pm

Hi Niko,
"a successful transition to renewables simply will not happen. We do not have enough material runway to both sustain our current civilization and make the necessary transition"
I suspect some places will get some of the energy transition job done, and others not so much. Its not an all or none scenario.
Is that what you think? REPLY NIKO IGNORED 06/06/2021 at 11:32 pm

Of course some areas will "make it" more or less than others, at least initially. Indeed, some already have thanks to abundant hydro reaources.

But without current global supply chains, it's really hard to see how an isolated successful implementation of certain renewable technologies will give them a significant advantage over anything but the short term.

Clugston makes clear that it is truly an all materials problem we are facing, not only an energy problem. Suppose some country, say Norway (since they are rather far along on renewables, or so I've heard) is able to sustain energy production after they no longer have access to fossil fuels. If the rest of the global supply network has fallen apart due to material scarcity, how long does this energy supply benefit them? Without material (shipped from all over the world) can they make anything with their energy? Can they keep in working order what they already have? Can they replace components that age out of service?

Whether or not you have energy, sustaining anything like our current way of life absolutely demands access to materials, materials which at this point must be shipped (not to mention mined, processed, and turned into goods) from all over the world. Few areas can get them locally anymore due to depletion.

So yes, some areas will transition, but only in the context of the global supply chains and materials resources that make transition possible. Once they can no longer get the industrial inputs they need from either local or far-away sources, their grid will be fated to fail at around the 30-50 year mark, since they will have no ability to maintain, repair, or expand it.

In the long run, the transition appears unlikely to be successful anywhere. And, in the areas where it is "successful", through some combination of build out during the present, and scavenging activities in the future to maintain the grid, you will still have a society with vastly reduced wealth, resources, and opportunities compared to the one we have now. REPLY HIGHTREKKER IGNORED 06/07/2021 at 9:47 am

The EU has 5,400 functioning offshore wind turbines, the USA has 7. REPLY HICKORY IGNORED 06/07/2021 at 9:59 am

Hightrekker- the EU has an extra incentive to develop wind faster than the USA. The solar potential of Europe north of the alps is generally poorer than any place in the 48 states.
good tool for seeing it (and it has a wind tab too)-
https://globalsolaratlas.info/map?c=48.57479,-46.669922,3 REPLY HIGHTREKKER IGNORED 06/07/2021 at 10:39 am

Thanks HICKORY IGNORED 06/07/2021 at 9:55 am

I agree with all that Niko.
An example of the global supply constraints is being seen in a minor form currently with semiconductors. Many automakers have curtailed production due to the shortage.
With the eventual global trade curtailment in particular materials and energy, it would be wise for many places to get going on a brisk pace of renewable deployment now, I think.
Longer term, it will be a challenge to downsize a country without being overrun, or drifting into severe poverty.
I have seen newer population projections showing that global population will peak by 2060, rather than around 2100.
It will happen even faster (and more painfully) if global material and energy shortage becomes significant in the shorter term. And it likely will. REPLY NIKO IGNORED 06/08/2021 at 3:50 am

Seems as though we pretty much agree on all points. Cheers! REPLY HICKORY IGNORED 06/08/2021 at 9:54 am

There is scenario that isn't addressed very much, and I see some version of it as very likely.
Many countries will have trouble maintaining stability within, as this century progresses. The gap between haves and have nots will be growing. especially once oil becomes scarce (and particularly in places that do not have well developed replacement energy sources and local food production).
Failed state status is a huge risk. and the list of countries failing into that category will be long, I lament. It is no picnic to be a human being in a failed state.

In the USA, I see the fight for country control in various facets. One big aspect is that people are trying to choose which political party is less likely to lead the country to failed state status (even if the analysis is not a conscious one). For the republican party, failed state status appears to mean loss of white priveledge/white supremacy, and loss of the supreme priveledge for the super wealthy. Thus the desperation from them that we see. Their desperation brings us dangerously close to loss of democracy here, and a replacement with a form of fascism. We are very close to generalized civil unrest here, depending on how things go. KOLBEINIH IGNORED 06/08/2021 at 12:14 pm

There are no easy answers to this. Energy questions are complex for sure. A lot have to do with energy security. One input is that there is some hope specifically when it comes to how electricity can be utilised. If the energy transition means getting rid of coal, oil and natural gas to solar, wind and hydro. Then it is actually possible to use heat pumps with 50-100% efficiency gain in average (in optimal solutions a lot more) to replace natural gas, and also use EV with just 1/3 energy use compared to gas/diesel due to heat generation in the combustion process or maybe 1/2 when accounting heat pump in the car or AC as often is the case. So in optimal conditions increase in renewable energy measured in exajoules (as measured by BP statistical review of world energy) can replace 2 folds of the energy content of fossil fuels lost for some years going forward (oil/gas in this case). That is why many scientists advocate the "green transformation" and it is something to rally behind. The policy prolongs the oil age for sure, but also makes it much easier for future generations. (a large drop in fossil fuel supplies without an alternative is a nightmare.) REPLY STEPHEN HREN IGNORED 06/08/2021 at 1:34 pm

This peak oil/resource book also looks good, has anyone read this one?

https://www.resilience.org/stories/2021-06-08/life-after-fossil-fuels-a-reality-check-on-alternative-energy/ REPLY HICKORY IGNORED 06/08/2021 at 2:40 pm

That looks like an excellent author (but the book is priced like a high end college textbook- perhaps it is). The intro is well worth the quick read.
Here is another work by that author- https://energyskeptic.com/2017/peaksoil/ NIKO IGNORED 06/08/2021 at 3:19 pm

For an incredibly excellent peak oil/resource textbook that is 100% free check out "Energy and Human Ambitions on a Finite Planet" by Tom Murphy.

Download link: https://escholarship.org/uc/energy_ambitions OFM IGNORED 06/07/2021 at 7:53 am

Somebody here can do a better job evaluating this than I can, but it looks promising, at least in terms of being worthy of research money.
https://newatlas.com/materials/kaust-lithium-phosphate-llto-hydrogen-desalination/

If it works at scale it could be a real game changer. REPLY KLEIBER IGNORED 06/11/2021 at 11:50 am

Not seeing too many details in that article, but if we're talking 70 kWh for 20 litres of water, that's pitiful. Average desal plants get a fraction of that for thousands of litres, so for helping in the area, it's a no go. Especially as it took a day to even do that paltry amount.

We're also not running out of affordable lithium on the land any time soon, so this is up there with mining seawater for gold in terms of practicality. Especially as it also relies on rare earths that ain't exactly cheap to scale up to anything like industrial output levels. REPLY DOUG LEIGHTON IGNORED 06/07/2021 at 1:24 pm

Not encouraging, or surprising!

WE ARE RUNNING OUT OF TIME TO REACH DEAL TO SAVE NATURAL WORLD

"Resource extraction, agricultural production and pollution are driving what some scientists believe is the sixth mass extinction of life on Earth, with one million species at risk of disappearing largely as the result of human activity. The world has never met a single UN target to prevent the destruction of nature."

https://www.theguardian.com/environment/2021/jun/07/age-of-extinction-running-out-of-time-to-reach-deal-to-save-natural-world-says-un-talks-chair REPLY DOUG LEIGHTON IGNORED 06/07/2021 at 3:37 pm

Meanwhile,

CARBON DIOXIDE LEVELS HIT 50% HIGHER THAN PREINDUSTRIAL TIME

The annual peak of global heat-trapping carbon dioxide in the air has reached another dangerous milestone: 50% higher than when the industrial age began. And the average rate of increase is faster than ever. The 10-year average rate of increase also set a record, now up to 2.4 parts per million per year.

"The world is approaching the point where exceeding the Paris targets and entering a climate danger zone becomes almost inevitable," said Princeton University climate scientist Michael Oppenheimer, who wasn't part of the research.

https://phys.org/news/2021-06-carbon-dioxide-higher-preindustrial.html REPLY STEVEN HANER IGNORED 06/07/2021 at 6:43 pm

For reference, these are all the UN globalist doomsday ecobullshit catastrophic narratives they've crafted in chronological order beginning in the 1970's
1. "Global Cooling"
2. "Acid Rain"
3. "Peak Oil"
4. "Global Warming"
5. "Sea Level Rise"
6. "Climate Change"
7. "Human Caused Hurricanes"
8. "Sixth Mass Extinction"
9. "Climate Emergency" REPLY MIKE B IGNORED 06/07/2021 at 7:05 pm

Sounds like a winning list to me, all except "Global Cooling." The others are on the mark. REPLY RON PATTERSON IGNORED 06/07/2021 at 8:27 pm

No Mike, this guy Steven Haner is obviously a blooming idiot. You should not encourage him. He is calling Acid Rain, Peak Oil, Global warming, Sea Level Change, and the Sixth Mass Extinction echobullshit. This guy is obviously a right-wing dumb and dumber dumbass. An idiot of the worst kind. No, he is nowhere near the mark. And you are not either if you believe him. REPLY MIKE B IGNORED 06/08/2021 at 4:58 am

Ron, you misinterpreted my remark. What he calls "bullshit" I call a "winning list," meaning the list is right on: these things are real and happening, "on the mark." REPLY MIKE B IGNORED 06/08/2021 at 5:00 am

(Which is why I leave off "global cooling" as it's the only one that ain't happening.) REPLY SURVIVALIST IGNORED 06/09/2021 at 12:51 am

Steven Haner is a Qtard.

"The best argument against Democracy is a five-minute conversation with the average voter." REPLY PETEREV IGNORED 06/12/2021 at 8:19 pm

I know the guys who were doing the study down in the SE USA. They were actually measuring very low PH mositure events. The set up was interesting in that that had a fan and cube with plastic mesh where the high RH's events would cause the moisture to condense and then fall into the cube. They would measure the PH and it was actually quite low. So the phenomena is not BS.

[Jun 12, 2021] Jet Fuel Demand Poised For A 30% Surge During Summer

Jun 12, 2021 | oilprice.com

John Kilduff of Again Capital has predicted Brent to hit $80 a barrel and WTI to trade between $75 and $80 in the summer, thanks to robust gasoline demand. Brent is currently trading at $71.63 per barrel, while WTI is changing hands at $69.13.

[Jun 12, 2021] Annual Reserve Revisions Part III- Larger Independents Peak Oil Barrel

Jun 11, 2021 | peakoilbarrel.com

HHH IGNORED 06/11/2021 at 4:57 am

On 05/07/21 the US 10year chart formed a hammer candlestick on daily chart within a consolidation pattern. Which suggested higher yields coming. Well little over a month later price broke below the bottom of that candlestick which suggest that the bond market doesn't believe the inflation we have seen is here to stay. Yield headed lower.

The inflation we have had seems to be supply side due to covid. If inflation is at peak which bond market is suggesting. Oil price might not have much more room to run higher. And I'd take it a step further and say price inflation due to a weaker dollar is starting to real hurt places like China and they are going to act by tightening monetary policy. You think this would be positive for the yuan and push the dollar even lower. But when you tightening monetary policy credit contracts and economic activity contracts.

I do expect oil price to rollover and head back to $50-$55 might happen from a slightly higher price from here because of lag time between when bond market signals rollover in inflation back into deflation and when prices start reacting to this. REPLY EULENSPIEGEL IGNORED 06/11/2021 at 10:07 am

This isn't your history bond market.

Inflation doesn't really matters, what only matters is the one big question: "How much bonds does the one market member with unlimited funds buy?".

And the time the FED was able to rise more than .25% is in the rear mirror "" when they hike now, inflation or not, all these zombie companies and zombie banks will fail and no lawyer in the world will be able to clean up the chaos after all these insolvency filings.

They have to talk the way out of this inflation. They have to talk until it stops, or longer. They can't hike. They can perhaps hike again when most of the debt is inflated away "" a period with 10+% inflation and 1% bond interrest.

And yes, they can buy litterally any bond dumped onto the market "" shown this in March last year when they stopped the corona crash in an action of one week.

I think most non-investment-banks are zombies at the moment, and more than 20% of all companies. They all will fail in less than 1 year when we would have realistic interrest rates. On the dirty end, this would mean 10%+ for all this junk out there "" even mighty EXXON will be downgraded to B fast.

In old times the FED rates would be more than 5% now with these inflation numbers. Nobody can pay this these days.

And now in the USA "" look for how much social justice and social security laws you'll get. The FED has to provide cover for all of them.

We in Europe will do this, too. New green deal, new CO2 taxes, better social security "" the ECB already has said they will swallow everything dumped on the market.

So, oil 100$ the next years "" but some kind of strange dollars buying less then they used to.

Just my 2 cents. REPLY D COYNE IGNORED 06/11/2021 at 7:58 am

From

https://longforecast.com/oil-price-today-forecast-2017-2018-2019-2020-2021-brent-wti

better resolution at link above, a very different oil price forecast from HHH. Over $100/bo for Brent by the end of 2021.

REPLY RON PATTERSON IGNORED 06/11/2021 at 8:28 am

This is nonsense. They have Brent crude oil prices peaking, so far, in March 2025 at $164.11. And they have WTI peaking the same month at $132.55, $32.56 lower. There is no way the spread could be that large. Also, they have natural gas prices dropping over the same period. Just who the hell are these "Longforcast.com" people?

REPLY KLEIBER IGNORED 06/11/2021 at 11:35 am

Disregard anything with "forecast" in the title. They don't have a time machine, and extrapolation is a horrible metric with dynamic markets as complex as the energy ones.

Might as well show me the tea leaves or goat entrails and tell me the price on 11 June 2027. REPLY SHALLOW SAND IGNORED 06/11/2021 at 3:58 pm

Dennis Gartman is still considered a commodities expert.

He infamously said in 2016 that WTI would never be above $44 again in his lifetime. He is still alive last I knew.

Since I have owned working interests in oil wells (1997) I have sold oil for a low of $8 and a high of $140 per barrel. 6/14 oil sold for $99.25 per barrel. 4/20 oil sold for $15.40 per barrel.

Predicting oil prices is impossible.

About the only oil price prediction I have had right so far is that if Biden won, oil prices would rebound. Of course, we can argue about why that is, and if there is even any connection.

There are still no drilling rigs running in the field we operate in. There are still hundreds of production wells shut in. There are still less than 10 workover rigs running in our field. The largest operator still has a help wanted sign up in front of its office. We finally found one summer worker, he is still in high school, but thankfully covered by our workers comp. He cannot drive our trucks, and is limited to painting, mowing, weed control, digging with a shovel, cleaning the shops and pump houses and other tasks like those. That's ok, because we need that, but not being able to drive is a pain. But auto ins won't allow anyone under 21 to be covered. REPLY IRON MIKE IGNORED 06/11/2021 at 11:53 am

Yea Ron i agree with Kleiber, I wouldn't take anything on that site too seriously. REPLY OVI IGNORED 06/11/2021 at 1:34 pm

The IEA is now starting to sound warnings about supply. Last week they were telling the oil companies to stop exploring and to move toward a renewable energy future.

IEA: OPEC needs to increase supply to keep global oil markets adequately supplied

In its monthly oil report, the International Energy Agency (IEA) has said that global oil demand is set to return to pre-pandemic levels by the end of 2022, rising by 5.4 million bpd in 2021 and by a further 3.1 million bpd next year. The OECD accounts for 1.3 million bpd of 2022 growth while non-OECD countries contribute 1.8 million bpd. Jet and kerosene demand will see the largest increase ( 1.5 million bpd year-on-year), followed by gasoline ( 660 000 bpd year-on-year) and gasoil/diesel ( 520 000 bpd year-on-year).

World oil supply is expected to grow at a faster rate in 2022, with the US driving gains of 1.6 million bpd from producers outside the OPEC alliance. That leaves room for OPEC to boost crude oil production by 1.4 million bpd above its July 2021-March 2022 target to meet demand growth. In 2021, oil output from non-OPEC is set to rise 710 000 bpd, while total oil supply from OPEC could increase by 800 000 bpd if the bloc sticks with its existing policy.

https://www.iea.org/reports/oil-market-report-june-2021

https://www.oilfieldtechnology.com/special-reports/11062021/iea-opec-needs-to-increase-supply-to-keep-global-oil-markets-adequately-supplied/ REPLY RON PATTERSON IGNORED 06/11/2021 at 2:09 pm

(IEA) has said that global oil demand is set to return to pre-pandemic levels by the end of 2022, rising by 5.4 million bpd in 2021 and by a further 3.1 million bpd next year.

That comes to about 500,000 barrels per day monthly increase, every month until the end of 2022. I really don't believe that is going to happen. No doubt most nations can increase production somewhat, but returning to pre-pandemic levels will be a herculean task for most of them.

[Jun 12, 2021] Energy Density of Natural Gas - The Physics Factbook by Jessica Yan

Jun 07, 2004 | hypertextbook.com

Energy Density of Natural Gas

An educational, fair use website

Bibliographic Entry Result
(w/surrounding text)
Standardized
Result
"Fuel." Encyclopedia Encarta . CD-ROM. Microsoft, 2003. "Gaseous fuels (Btu per cu ft): acetylene 1480; blast-furnace gas 93; carbon monoxide 317; coke-oven gas or coal gas about 600; hydrogen 319; natural gas 1050 to 2220; oil gas 516; producer gas 136." 39.1""82.7 MJ/m 3
Brennard, Timothy P. Natural Gas, A Fuel of Choice for China . Norwich: University of East Anglia, 2001: 81. "In calorific value it competes extremely well with other traditional commercial gasses: 37-41 MJ/m 3 i.e., twice coal gas, and eight times producer gas [Tiratsoo, 1976]." 37.0""41.0 MJ/m 3
E.N., Tiratsoo. Oilfields of the World . Scientific Press, 1973: 15. Reference in Understanding Natural Gas . "Calorific values: 900""1100 Btu/ft. 3 (33.4""40.9 MJ/m 3 )" 33.4""40.9 MJ/m 3
Bioenergy Conversion Factors . Bioenergy Information Network. "Natural gas: HHV = 1027 Btu/ft3 = 38.3 MJ/m 3 ; LHV = 930 Btu/ft3 = 34.6 MJ/m 3 [HHV""Higher Heating Level; LHV""Lower Heating Level]" 38.3 MJ/m 3
34.6 MJ/m 3

Natural gas, a combustible mixture of hydrocarbons, is a very important source of energy since it is clean, cheap and efficient. The major component is methane, but it may also contain small amounts of other hydrocarbon compounds such as ethane or butane. A natural gas is described as sweet (with low sulfur contents) or sour (with high sulfur contents). It may also be wet or dry, depending on the presence of natural gas liquids and other energy gases. When more than 90% of a natural gas is composed of methane, it is referred to as dry.

Source: Background of Natural Gas
Typical Composition of Natural Gas
Methane CH 4 70-90%
Ethane C 2 H 6 0-20%
Propane C 3 H 8
Butane C 4 H 10
Carbon Dioxide CO 2 0-8%
Oxygen O 2 0-0.2%
Nitrogen N 2 0-5%
Hydrogen sulphide H 2 S 0-5%
Rare gases A, He, Ne, Xe trace

There are three theories that explain the formation of natural gas. The first is that natural gas is formed when organic matter, such as the remains of a plant or animal, is compressed beneath the earth at high pressures for a long period of time. This is referred to as thermogenic methane.

Another theory suggests that natural gas is formed by the decomposition of organic matters by a microorganism. These microorganisms chemically break down the organic matters into pure methane, which is referred to as biogenic methane.

The third states that methane is formed by the reaction of hydrogen rich gases and carbon molecules deep inside the earth. In the absence of oxygen, they may combine to form hydrocarbon gases. Under high pressure, these gases may rise to the surface of the earth and form methane deposits.

Energy density is measured by the amount of energy stored in a given unit of matter or system. For natural gases, the energy density is the either the amount of energy stored per unit volume or per unit mass of the gas. The energy stored per unit volume is usually measured in British Thermal Units per cubic feet, or, the amount of natural gas that will produce enough energy to heat one pound of water one degree at normal pressure. The standard unit is megajoules per cubic meter. The energy density of a natural gas lies in the range of 900-2200 Btu/ft 3 or 33.4""82.7 MJ/m 3 .

Jessica Yan -- 2004

[Jun 12, 2021] Forget Activism- Chronic Underperformance Is Big Oil's Biggest Problem

Jun 06, 2021 | finance.yahoo.com

Whereas climate change issues are the presumptive reasons behind the latest wave of investor revolts at the oil and gas giants, lurking beneath the surface is a growing sense of apprehension about Big Oil's strategy and failure to generate adequate returns for shareholders in recent decades.

The naked truth is that Exxon and its cohorts have severely underperformed the broader market over the last two decades in terms of total returns to shareholders, implying the sector's woes are long-term and strategic rather than short-term and cyclical.

Chronic underperformance

XOM

Source: CNN Money

Big Oil's underperformance relative to the market is clearly evident whether you are looking at 2-year, 5-year, 10-year, or even 20-year timespans.

For instance, since 2015, Exxon shares have returned a -2.5% compound annual loss based on share prices and dividends, a far cry from the average annual gain of +14.4% by the S&P 500 over the timeframe.

Over the past two decades, Exxon's compound annual return has clocked in at +4.2%, still considerably lower than the broad market benchmark's return of +7.1%.

... ... ...

Exxon is hardly alone, with none of its peers, including Chevron, Royal Dutch Shell (NYSE:RDS.A), BP Inc. (NYSE:BP), and Total (NYSE:TOT) coming close to matching the returns by the broader share market over the past decade.

In fact, on an inflation-adjusted U.S. dollar basis, returns by Exxon, Shell, and BP have been negative over the past five years, a period which coincided with the biggest bull market in the history of the stock market.

The renewable energy conundrum

You cannot blame the oil majors for continuing to engage in a lot of hand-wringing at a time when investors are demanding they pump less oil and transition to cleaner energy.

For the oil majors, successfully transitioning to green energy companies is not going to be a walk in the park because these companies have to ride two horses.

That's the case because the majority are already battling dwindling cash flows which means they cannot afford to gamble with whatever little is left. Oil prices have been on a downtrend since 2014, a situation that has only worsened during the pandemic.

Oil and gas firms are still grappling with the best way to presently use dwindling cash flows; in effect, they are still weighing whether it's worthwhile to at least partially reinvent themselves as renewables businesses while also determining which low-carbon energy markets offer the most attractive future returns.

Most renewable ventures, like solar and wind projects, tend to churn out cash flows akin to annuities for several decades after initial up-front capital expenditure with generally low price risk as opposed to their current models with faster payback but high oil price risk. With the need to generate quick shareholder returns, some fossil fuel companies have actually been scaling back their clean energy investments.

Energy companies are also faced with another conundrum: Diminishing returns from their clean energy investments.

Related: ''We'll See $200 Oil": Russia & OPEC Ministers Blast IEA's Net Zero Plan

A paper published in Science Direct last August says that dramatic reductions in the cost of wind and solar have been leading to an even bigger reduction in revenue inflows leading to falling profits. This is particularly true for wind energy as later deployments of wind usually have lower market value than earlier ones due to wind energy revenue declining more rapidly than cost reductions. Solar is more resilient, with technological progress approximately balancing out the revenue degradation, which perhaps explains why solar stocks have gone ballistic.

Adding wind and solar to our grid tends to reduce electricity prices during peak generation times: Indeed, electricity prices in California can come down to zero during long sunny durations. This was not a problem for early deployments but is becoming a major concern as renewables increasingly play a bigger part in our electricity generation mix.

But, ultimately, Big Oil will have to take the plunge and engage in drastic internal restructuring and product cycle transitions even as activists like Engine No.1 promise to continue turning the screw. As Charlie Penner of Engine No.1 has told FT , the energy transition is happening faster than expected and has undermined Big Oil's assumptions about long-term demand for its oil.

By Alex Kimani for Oilprice.com

->


[Jun 09, 2021] If the pandemic hasn't called into question the application of JIT logistics for all industries, then the loss of cheap diesel certainly will.

Jun 09, 2021 | peakoilbarrel.com

KLEIBER IGNORED 06/09/2021 at 1:57 pm

If nothing else, this scenario will lead to a radical reshaping of how we as a species go about doing logistics. If the pandemic hasn't called into question the application of JIT logistics for all industries, then the loss of cheap diesel certainly will. Even if long haul electric trucks become a thing, it will require a different approach to matters.

Cars are otherwise a solved issue with EVs. There's nothing that an ICE can really offer over an EV. Trucking and heavy industry is another matter, and that's where problems will be. Frankly, I welcome this uprooting of a paradigm that has no resilience built in whatsoever.

[Jun 09, 2021] Saudi Aramco announced a mega preliminary agreement on Wednesday to buy 5 million tons of liquefied natural gas per year from the USA

Jun 09, 2021 | peakoilbarrel.com

RON PATTERSON IGNORED 06/08/2021 at 5:27 pm

There are a lot of things that can be done to mitigate problems due to declining oil production. When it comes to SA, they can start using natural gas from Ghawar or Qatar to replace fuel oil for power generation during especially summer.

Okay, first point: Qatar has plenty of natural gas. The problem is they are in a feud with Saudi and they do not trade with each other:

Saudi Arabia, Bahrain, the United Arab Emirates and Egypt severed diplomatic ties with Qatar in mid-2017 after accusing the country of supporting terrorism. Qatar has repeatedly denied the accusations. The boycotting countries, known as the Arab quartet, also cited political differences with Qatar over Iran and the Muslim Brotherhood.

Second point: Saudi does not have nearly enough natural gas to power their own power plants and desalination plants:

Saudi Arabia wants to buy tons of American natural gas

New York CNN Business --
Saudi Arabia has placed a huge bet on American natural gas.

In a sign of shifting energy fortunes, Saudi Aramco announced a mega preliminary agreement on Wednesday to buy 5 million tons of liquefied natural gas per year from a Port Arthur, Texas export project that's under development.

If completed, the purchase from San Diego-based Sempra Energy (SRE) would be one of the largest LNG deals ever signed, according to consulting firm Wood Mackenzie.

But this may change. Saudi is desperate for natural gas and this has led them to try to make amends with Qatar:

Arab countries agree to end years-long feud with Qatar that divided Gulf

Updated 4:08 PM ET, Tue January 5, 2021

(CNN)Saudi Arabia and its Arab allies agreed on Tuesday to restore diplomatic relations with Qatar and restart flights to and from the country, ending a three-year boycott of the tiny gas-rich nation.

Saudi Arabia, Bahrain, the United Arab Emirates and Egypt severed diplomatic ties with Qatar in mid-2017 after accusing the country of supporting terrorism. Qatar has repeatedly denied the accusations.

The boycotting countries, known as the Arab quartet, also cited political differences with Qatar over Iran and the Muslim Brotherhood. Doha, unlike its Gulf neighbors, has friendly relations with Tehran, supported the Muslim Brotherhood in Egypt and has hosted groups affiliated with the Islamist group.

Qatar's only land border -- which it shares with Saudi Arabia -- was sealed shut. Boycotting countries closed their airspace to Qatar, and nearby Bahrain and the UAE closed their maritime borders to ships carrying the Qatari flag. REPLY RATIONALLUDDITE IGNORED 06/08/2021 at 8:29 pm

Fantastic Ron. Too many people practising truth by assertion and liar's bluff / wishful thinking. They won't change, but you persuade others whom are genuinely seeking the truth and can distinguish between evidence supported logic and security blanket speculation.

As was previously linked to on POB, ( https://www.sciencedirect.com/journal/petroleum-exploration-and-development/vol/44/issue/6 , p. 1024) south Ghwar was pumping 60% water seemingly c 2008.

SA is going to end badly, as too will fever dreams that don't realise that their electric transition is a mirage – largely it's all fossil fuels in disguise and totally parasitic on upon the peak energy infrastructure of previous and current fossil fuel excess calories.

We may have an Electric Middle Ages (Ugo Bardi), but unless a new energy source AT LEAST as energy dense and net positive as FF is discovered like yesterday then this lovely wealth Blip we all enjoyed is going away.

[Jun 07, 2021] heard on Bloomberg radio yesterday that the Reddit investors are beginning to pour into oil and grains. So, worried about volatility.

Jun 07, 2021 | peakoilbarrel.com

SHALLOW SAND IGNORED 06/05/2021 at 9:49 am

Biden Admin proposing elimination of IDC expensing and percentage depletion, among other tax preferences.

Elimination of IDC expensing will affect US shale.

Percentage depletion only affects small producers. We can make it without percentage depletion. Will just result in us paying more income tax. But lower 48 onshore conventional production in US is below 2 million barrels per day and slowly falling. Hopefully we will be permitted to continue to produce oil for the many uses of it besides light transport.

As long as Biden doesn't try to sell these as "Big Oil Tax breaks" I'm not going to complain.

I think elimination of these tax preference items will lower US production, which will increase oil prices. US is historically the only major producer that has desired low oil prices. That is because we are still a net importer of crude oil.

Now that Trump is gone, it appears US also is not too concerned about oil prices.

What a turnaround from this time, last year. We had just reactivated our wells at the end of May, 2020, after oil had went negative on April 20.

Yesterday WTI closed around $69.50.

President Biden could turn out to be very good for small conventional lower 48 onshore producers. He just needs to recognize that our oil is still needed, and will still be needed for decades.

I will keep beating my drum. Stripper well oil is small footprint. Existing source. Very low methane emissions from upstream operations. Employs the highest number of persons per BO. Employs largely rural populace. Owned by small business. Family owned. Pays a lot in local taxes. Is very low decline. Predictable. Uses the smallest amount of materials, such as plastics and steel. I can go on, but won't.

Stripper well doesn't need "tax breaks" either, if it is afforded a strong, stable oil price. In my view, $60-70 WTI won't kill the consumer.

But, I heard on Bloomberg radio yesterday that the Reddit investors are beginning to pour into oil and grains. So, worried about volatility.

Only about 1/5-1/6 of voters in the very rural counties (25K or less in population) votes for Biden. Yet his policies appear to be a boon for those populations.

Here's to $5+ corn, $14+ soybeans, $6+ wheat, $6+ milo and $65+ WTI! Keeping prices there would really solidify a part of the US that is really struggling.

I suspect I might be the only person still posting here that lives in an oil and grain producing region. There just aren't many of us left.

Labor will be our huge problem. Maybe strong and stable commodity prices could bring some people back, or keep some of our young people here?

Thank goodness for the people from Mexico and Central America. Without them, rural USA would be in really big trouble. SHALLOW SAND IGNORED 06/05/2021 at 10:48 am

Dennis.

I will add, if rural is in big trouble, I believe the entire USA is in big trouble.

I have never seen the labor shortages that I am seeing today in my community.

I know there are many efforts to radically change how our country's food supply is produced. But, like energy transition, those will take decades.

It is not attractive to most to live in rural locations. Very, very difficult psychological and emotional transition for those that try to move from urban/suburban to rural. I have seen it first hand. We cannot keep doctors for that reason, for example. There are almost no attorneys here under the age of 60. Management of our factories has mostly been moved, because it can be due to technology, and because management doesn't want to live here.

Most in the factories here are being hired in at $16-19 per hour, and will be over $20 soon after. Most work at least 10 hours of overtime a week.

But we have a very high percentage of young adults in the rural areas struggling with hard drug dependency. Meth is the big one, and it is easier for a 20 year old to get meth than to get a beer in most rural areas.

Our country needs to do so much better across the board on hard drug dependency. One of the many reasons being to fill all of these job openings. Of course, there are more important ones than that.

I bet if hard drug dependency was completely eliminated, over 90% of child abuse and neglect court cases would also be wiped out. That is the most important reason we need to do better.

[Jun 07, 2021] Saudi Arabia Says It is energy producting country, not An Oil Producing Country pointing to diversification of enery sources produced

Essentially it's an admission that they've peaked. Looks like Saudis themselves can see the end of high production in their oil fields.
Jun 07, 2021 | peakoilbarrel.com
RON PATTERSON IGNORED 06/06/2021 at 5:21 pm

Saudi Arabia Says It is No Longer An Oil Producing Country

When Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman announced that Saudi Arabia was no longer an oil-producing country, he likely didn't mean literally.

"Saudi Arabia is no longer an oil country, it's an energy-producing country," the Energy Minister told S&P Global Platts this week.

Saudi Arabia has high green ambitions that include gas production, renewables, and hydrogen.

"I urge the world to accept this as a reality. We are going to be winners of all these activities.

Saudi Arabia will surely benefit from the green transition. While the Exxons, Chevrons, and Shells of the world are busy doing climate activists' bidding in the boardroom and courtroom, NOCs–particularly in various OPEC nations–are all-too-eager to take advantage of what will surely be increased oil prices.

Already Saudi Arabia has raised its official selling price for the month of July to Asia.

But that doesn't stop Saudi Arabia from pursuing its green ambitions–the Saudi Green Initiative–while funding those green ambitions through oil sales. Saudi Arabia plans to generate 50% of its energy from renewables by 2030, in part to reduce its dependence on oil. In 2017, renewables made up just 0.02% of the overall energy share in Saudi Arabia.

Saudi sees the handwriting on the wall. They know damn well that their high production numbers are limited, even if the rest of the world does not. I think they are actually hoping for a green transition and they hope to be a part of it. After all, what choice do they have? ANCIENTARCHER IGNORED 06/07/2021 at 5:51 am

Ron,
I have been following your posts for a while now. Thank you for sharing your knowledge.
You seem to be certain that the Saudis themselves can see the end of high production in their oil fields. I understand that all the super-giants in Saudi are very, very old and that Aramco is doing all sorts of things to keep production up and that is expected for old fields, even these super giants. However, we also haven't seen Cantarell type field declines from the Saudi super giants yet, or rather we don't know of any.

I can't understand why you believe Saudis are near their maxiumum production capacity and from here on their production is going to decline (rather sharply?). Nothing that I read in Aramco's annual report gave me that feeling. But I also understand that they will not divulge bad numbers.

In short, please can you share your views on Saudi future production and the reasons?

Many thanks REPLY RON PATTERSON IGNORED 06/07/2021 at 9:52 am

However, we also haven't seen Cantarell type field declines from the Saudi super giants yet, or rather we don't know of any.

Saudi announced in 2006, 15 years ago, that Abqaiq, (pronounced Abb -kay) was 74% depleted and Ghawar was almost 50% depleted; Saudi Arabia's Strategic Energy Initiative

They claimed, in 2006, that all Saudi was only 29% depleted. But that was a blatant falsehood. Ghawar, at that time, was about 60 to 70% depleted and all Saudi was well past the 50% mark. Around 2000, Their decline rate was about 8% per year but they, around that time, initiated an enormous infill drilling program that got their decline rate down to almost 2%:

• Without "maintain potential" drilling to make up for production,
Saudi oil fields would have a natural decline rate of a hypothetical
8%. As Saudi Aramco has an extensive drilling program with a
budget running in the billions of dollars, this decline is mitigated to
a number close to 2%.

The Saudi author of this piece then confuses decline rates with depletion rates:

• These depletion rates are well below industry averages, due
primarily to enhanced recovery technologies and successful
"maintain potential" drilling operations.

What anyone should realize is that when you decrease decline rates, by pumping the oil out faster, you increase the depletion rates. They began creaming the top of their fields, staying above the rising water, about 20 years ago. Really, what the hell would one expect to be happening by now?

Saudi, in their IPO a few years ago, said production from Ghawar was 3.8 million barrels per day. For the world's largest field, that is a Cantrell-style decline rate. Remember, the smaller the field, the faster the natural decline rate. And they have admitted that they brought old mothballed fields of Khoreis, Shaybah, and Munifa online, at massive expense, to make up for the decline in their older fields. However, they have no more mothballed fields.

I spent 5 years in Saudi and my son just retired from ARAMCO a couple of years ago after spending about 23 years there. You must understand that exaggeration is part of their way of life. They do it and they expect everyone else to do it. They will never admit that their total production is in steep decline. No, Khoreis, Shaybah, and Munifa are not in decline but their combined output is only around 2.5 million barrels per day. ANCIENTARCHER IGNORED 06/07/2021 at 1:25 pm

Very many thanks Ron.This is super.

Saudi has also been claiming that their proven reserves of oil are about 267bn bbl for the last, what 20-30 years now, notwithstanding the 3bn bbl they take out every year! Must be magic!

Cantarell is now at a bit more than 100kbpd down from 2.2mmbpd in the early 2000s. If any of the Saudi super-giants, especially Ghawar, are following that trend, it's going to make an impact. And it's a question of 'when' rather than 'if'.

There is also a rumour that their war in Yemen was because they wanted to get their hands on the oil in the rub al-khali because they don't have much left within their territories. Apparently, there's a lot of oil in the empty quarter and they don't want to share that with Yemen.

I agree with your judgment – exaggeration is a part of their culture in much the same way that every shopkeeper there expects you to bargain because prices are also exaggerated. You can barely trust the financials of Western companies, so can't take the Saudis at their word.

Very many thanks again for your comments. Your opinion informed by your experience is worth its weight in gold (or should I say bitcoin! :-)! REPLY RON PATTERSON IGNORED ROGER IGNORED 06/07/2021 at 8:53 am

" Saudi sees the handwriting on the wall. They know damn well that their high production numbers are limited, even if the rest of the world does not. "

Yep. Think about it every barrel they displace from (what I assume is) highly subsidized domestic consumption, is a "new " barrel for export -- a new revenue stream. That is, since they don't have the reserves to meet the anticipated future OPEC call, these additional export barrels are essentially "free money" (after pay-out on the so-called renewable energy investments) i.e., they do no defer any otherwise producible oil. Hence, expect SA to be a "world leader" in so called renewable energy of course, done in the name of a greener world for us all. 😉

06/07/2021 at 2:20 pm

Since 2005 they have averaged producing 3.43 billion barrels per year, crude only. That comes to about 55 billion since the beginning of 2005. If you count total liquids it would be well over 60 billion.

But as you say, they have "magic oil". For every barrel they pump out of the ground, another barrel magically appears to replace it.

[Jun 07, 2021] Rossneft CEO Sechin said that the world was facing an acute oil shortage in the long-term due to underinvestment amid a drive for alternative energy, while demand for oil continued to rise

Jun 07, 2021 | peakoilbarrel.com

OVI IGNORED 06/06/2021 at 8:40 pm

WTI Punched a $70 ticket sometime after 6:00 PM EST, June 6, 2021. The last time this happened was Oct 16, 2018, $71.92 before falling below $70 the next day.

HICKORY IGNORED 06/06/2021 at 10:59 pm

"Igor Sechin, the head of Russian oil major Rosneft (ROSN.MM), said on Saturday the world was facing an acute oil shortage in the long-term due to underinvestment amid a drive for alternative energy, while demand for oil continued to rise."

Indeed.

[Jun 07, 2021] Exxon Exits Oil Exploration Prospect in Ghana After Seismic Work - Bloomberg

Jun 07, 2021 | www.bloomberg.com

Exxon Mobil Corp. is pulling out of a deep-water oil prospect in Ghana just two years after the west African nation ratified an exploration and production agreement with the U.S. oil titan.

The company relinquished the entirety of its stake in the Deepwater Cape Three Points block and resigned as its operator after fulfilling its contractual obligations during the initial exploration period, according to a letter to Ghana's government seen by Bloomberg and people familiar with the matter, who asked not to be named because the information isn't public.

[Jun 07, 2021] BP Sees Global Crude Oil Demand to Last, CEO Bernard Looney Says - Bloomberg

Jun 07, 2021 | www.bloomberg.com

Energy giant BP Plc sees a strong recovery in global crude demand and expects it to last for some time, with U.S. shale production being kept in check, according to Chief Executive Officer Bernard Looney.

"There is a lot of evidence that suggests that demand will be strong, and the shale seems to be remaining disciplined," Looney told Bloomberg News in St. Petersburg, Russia. "I think that the situation we're in at the moment could last like this for a while."

[Jun 07, 2021] Energy Density of Natural Gas - The Physics Factbook

Jun 07, 2021 | hypertextbook.com

Energy Density of Natural Gas

An educational, fair use website

Bibliographic Entry Result
(w/surrounding text)
Standardized
Result
"Fuel." Encyclopedia Encarta . CD-ROM. Microsoft, 2003. "Gaseous fuels (Btu per cu ft): acetylene 1480; blast-furnace gas 93; carbon monoxide 317; coke-oven gas or coal gas about 600; hydrogen 319; natural gas 1050 to 2220; oil gas 516; producer gas 136." 39.1""82.7 MJ/m 3
Brennard, Timothy P. Natural Gas, A Fuel of Choice for China . Norwich: University of East Anglia, 2001: 81. "In calorific value it competes extremely well with other traditional commercial gasses: 37-41 MJ/m 3 i.e., twice coal gas, and eight times producer gas [Tiratsoo, 1976]." 37.0""41.0 MJ/m 3
E.N., Tiratsoo. Oilfields of the World . Scientific Press, 1973: 15. Reference in Understanding Natural Gas . "Calorific values: 900""1100 Btu/ft. 3 (33.4""40.9 MJ/m 3 )" 33.4""40.9 MJ/m 3
Bioenergy Conversion Factors . Bioenergy Information Network. "Natural gas: HHV = 1027 Btu/ft3 = 38.3 MJ/m 3 ; LHV = 930 Btu/ft3 = 34.6 MJ/m 3 [HHV""Higher Heating Level; LHV""Lower Heating Level]" 38.3 MJ/m 3
34.6 MJ/m 3

Natural gas, a combustible mixture of hydrocarbons, is a very important source of energy since it is clean, cheap and efficient. The major component is methane, but it may also contain small amounts of other hydrocarbon compounds such as ethane or butane. A natural gas is described as sweet (with low sulfur contents) or sour (with high sulfur contents). It may also be wet or dry, depending on the presence of natural gas liquids and other energy gases. When more than 90% of a natural gas is composed of methane, it is referred to as dry.

Source: Background of Natural Gas
Typical Composition of Natural Gas
Methane CH 4 70-90%
Ethane C 2 H 6 0-20%
Propane C 3 H 8
Butane C 4 H 10
Carbon Dioxide CO 2 0-8%
Oxygen O 2 0-0.2%
Nitrogen N 2 0-5%
Hydrogen sulphide H 2 S 0-5%
Rare gases A, He, Ne, Xe trace

There are three theories that explain the formation of natural gas. The first is that natural gas is formed when organic matter, such as the remains of a plant or animal, is compressed beneath the earth at high pressures for a long period of time. This is referred to as thermogenic methane.

Another theory suggests that natural gas is formed by the decomposition of organic matters by a microorganism. These microorganisms chemically break down the organic matters into pure methane, which is referred to as biogenic methane.

The third states that methane is formed by the reaction of hydrogen rich gases and carbon molecules deep inside the earth. In the absence of oxygen, they may combine to form hydrocarbon gases. Under high pressure, these gases may rise to the surface of the earth and form methane deposits.

Energy density is measured by the amount of energy stored in a given unit of matter or system. For natural gases, the energy density is the either the amount of energy stored per unit volume or per unit mass of the gas. The energy stored per unit volume is usually measured in British Thermal Units per cubic feet, or, the amount of natural gas that will produce enough energy to heat one pound of water one degree at normal pressure. The standard unit is megajoules per cubic meter. The energy density of a natural gas lies in the range of 900-2200 Btu/ft 3 or 33.4""82.7 MJ/m 3 .

Jessica Yan -- 2004

[Jun 07, 2021] Forget Activism- Chronic Underperformance Is Big Oil's Biggest Problem

Jun 06, 2021 | finance.yahoo.com

Whereas climate change issues are the presumptive reasons behind the latest wave of investor revolts at the oil and gas giants, lurking beneath the surface is a growing sense of apprehension about Big Oil's strategy and failure to generate adequate returns for shareholders in recent decades.

The naked truth is that Exxon and its cohorts have severely underperformed the broader market over the last two decades in terms of total returns to shareholders, implying the sector's woes are long-term and strategic rather than short-term and cyclical.

Chronic underperformance

XOM

Source: CNN Money

Big Oil's underperformance relative to the market is clearly evident whether you are looking at 2-year, 5-year, 10-year, or even 20-year timespans.

For instance, since 2015, Exxon shares have returned a -2.5% compound annual loss based on share prices and dividends, a far cry from the average annual gain of +14.4% by the S&P 500 over the timeframe.

Over the past two decades, Exxon's compound annual return has clocked in at +4.2%, still considerably lower than the broad market benchmark's return of +7.1%.

... ... ...

Exxon is hardly alone, with none of its peers, including Chevron, Royal Dutch Shell (NYSE:RDS.A), BP Inc. (NYSE:BP), and Total (NYSE:TOT) coming close to matching the returns by the broader share market over the past decade.

In fact, on an inflation-adjusted U.S. dollar basis, returns by Exxon, Shell, and BP have been negative over the past five years, a period which coincided with the biggest bull market in the history of the stock market.

The renewable energy conundrum

You cannot blame the oil majors for continuing to engage in a lot of hand-wringing at a time when investors are demanding they pump less oil and transition to cleaner energy.

For the oil majors, successfully transitioning to green energy companies is not going to be a walk in the park because these companies have to ride two horses.

That's the case because the majority are already battling dwindling cash flows which means they cannot afford to gamble with whatever little is left. Oil prices have been on a downtrend since 2014, a situation that has only worsened during the pandemic.

Oil and gas firms are still grappling with the best way to presently use dwindling cash flows; in effect, they are still weighing whether it's worthwhile to at least partially reinvent themselves as renewables businesses while also determining which low-carbon energy markets offer the most attractive future returns.

Most renewable ventures, like solar and wind projects, tend to churn out cash flows akin to annuities for several decades after initial up-front capital expenditure with generally low price risk as opposed to their current models with faster payback but high oil price risk. With the need to generate quick shareholder returns, some fossil fuel companies have actually been scaling back their clean energy investments.

Energy companies are also faced with another conundrum: Diminishing returns from their clean energy investments.

Related: ''We'll See $200 Oil": Russia & OPEC Ministers Blast IEA's Net Zero Plan

A paper published in Science Direct last August says that dramatic reductions in the cost of wind and solar have been leading to an even bigger reduction in revenue inflows leading to falling profits. This is particularly true for wind energy as later deployments of wind usually have lower market value than earlier ones due to wind energy revenue declining more rapidly than cost reductions. Solar is more resilient, with technological progress approximately balancing out the revenue degradation, which perhaps explains why solar stocks have gone ballistic.

Adding wind and solar to our grid tends to reduce electricity prices during peak generation times: Indeed, electricity prices in California can come down to zero during long sunny durations. This was not a problem for early deployments but is becoming a major concern as renewables increasingly play a bigger part in our electricity generation mix.

But, ultimately, Big Oil will have to take the plunge and engage in drastic internal restructuring and product cycle transitions even as activists like Engine No.1 promise to continue turning the screw. As Charlie Penner of Engine No.1 has told FT , the energy transition is happening faster than expected and has undermined Big Oil's assumptions about long-term demand for its oil.

By Alex Kimani for Oilprice.com

->


[Jun 06, 2021] I think it's worthwhile to note that this new low in relations is something that is not in Russia's interest as NordStream2 is still under attack.

Jun 06, 2021 | www.moonofalabama.org

Jackrabbit , Jun 5 2021 14:56 utc | 115

Who caused the flight to be diverted is still uncertain to me. It's clear that Roman was the target though. And that relations between the West and Russia are suffering.

With that said, I think it's worthwhile to note that this new low in relations is something that is not in Russia's interest as NordStream2 is still under attack.

Some say that Nordstream 2 is unstoppable. Well, the completion of the pipeline is near but whether Germany buys gas from Russia and/or how much gas is still a question. The Empire opposition to NS2 has been relentless but they may accept a pipeline that guarantees German energy security yet demand that it restrict purchases of Russian gas to only what is absolutely necessary.

!!


schmoe , Jun 5 2021 15:36 utc | 117

Barring a mistranslation, Putin said that continued gas transit through Ukraine depends on Ukraine's behaviour. Based on a quick impression, that contracts pretty much every previous Russian / Gazprom statement that Garprom intends to retain same flows through Ukraine. No one expects Russia to keep flows in the event of hostilities, but to give opponents of the pipeline a soundbyte to say "see, we told you they would do that" is a shocking blunder.

Skiffer , Jun 5 2021 16:22 utc | 124

In response to schmoe@116,

Actually, he kept repeating that the current transit contract will be maintained, but that if Ukraine wants to increase the volume of gas that goes through their territory, and subsequently earn more money from transit contracts, they have to make that option more lucrative for customers and suppliers. Primarily, by breaking up the gas monopoly on that territory -- harking back to the consortium suggestion by Shroeder in 2008-2009(?).

That said, he was fairly blunt about the advantages of supplying gas directly to Germany and the lack of any strictly economical reason to use Ukrainian gas transit, and that's a fairly obvious aspect of this entire project -- provided that the capacity of these auxiliary pipelines isn't exceeded, there's no good economic reason to use the Ukrainian infrastructure.

When asked about Ukrainian financial woes, in the comical context of Zelensky complaining that the gas transit income is essential for financing the Ukrainian army, he replied sardonically that it's not the responsibility of the Russian state to keep the Ukrainian state fed. There's a sort of Russian gag, where a guy asks his neighbor for something to eat, so that he has the strength to take a dump on his doorstep, which neatly fits the situation.

[Jun 06, 2021] GOM is the major factor in the USA oil prodcution comeback , not "shale plays " that are supposedly should be the last hurrah of oil production in the USA

Notable quotes:
"... LTO drilling locations are diminishing faster and faster. Look for massive consolidation as E&P companies can only grow through M&A. ..."
"... The energy transition will be painful and longer than anticipated. Criminalization of an industry that embodies national security and that gives the "haves" a competitive advantage in favor of hopes and prayers is folly and irresponsible. ..."
"... A few years ago I heard Chinese venture capitalist speak at the Aspen Institute. He claimed that democracy is not a form of government but instead a religion. He gave the example that in Nigeria, the US is concerned about human rights while the Chinese could care less who dies in Nigeria as long as they can get the oil. He also stated that the Chinese only care about how they can feed, shelter, move, and run their economy and human rights are not remotely introduced into their paradigm. Something to think about. ..."
Jun 01, 2021 | peakoilbarrel.com

HOLE IN HEAD IGNORED 05/30/2021 at 1:40 pm

Ovi, great work as usual .My POV is that it is GOM that is the major factor in the comeback , not "shale plays " that are supposedly going to be the saviors of Industrial civilisation . Confirms my argument ( and of many others )that shale is all juiced out . Better to lower expectations from LTO for the future . REPLY OVI IGNORED HOLE IN HEAD IGNORED 05/30/2021 at 1:40 pm

Ovi, great work as usual .My POV is that it is GOM that is the major factor in the comeback , not "shale plays " that are supposedly going to be the saviors of Industrial civilisation . Confirms my argument ( and of many others )that shale is all juiced out . Better to lower expectations from LTO for the future . REPLY OVI IGNORED 05/30/2021 at 5:00 pm

Thanks HH

I know the general opinion seems to be that the shale plays are finished. Looking at the data that is in the post doesn't confirm, at this time, that shale is overblown. Let's look at the two states at the top of the post, Texas and NM and the onshore L48 first chart.

Looking at the Texas increase from January to March one gets 4,745 – 4,661 = 84 kb/d or 42 kb/d/mth.
Looking at NM from November to March, one gets 1,155 – 1,112 = 43 or 11 kb/d/mth.
The total being 53 kb/d/mth.

Looking at the total onshore L48 increase from January to March, one gets 8,861 – 8,814 = 47 or a net of 23.5 kb/d/mth. So within the onshore lower 48 there is 30 kb/d/mth of decline.

I would not bet much on my two month or four month analysis, but I think we will need to monitor what is happening in Texas and NM for another six months to get a better idea of what is happening in the Permian. The price of oil will be the determining/critical factor.

05/30/2021 at 5:00 pm

Thanks HH

I know the general opinion seems to be that the shale plays are finished. Looking at the data that is in the post doesn't confirm, at this time, that shale is overblown. Let's look at the two states at the top of the post, Texas and NM and the onshore L48 first chart.

The total being 53 kb/d/mth.

Looking at the total onshore L48 increase from January to March, one gets 8,861 – 8,814 = 47 or a net of 23.5 kb/d/mth. So within the onshore lower 48 there is 30 kb/d/mth of decline.

I would not bet much on my two month or four month analysis, but I think we will need to monitor what is happening in Texas and NM for another six months to get a better idea of what is happening in the Permian. The price of oil will be the determining/critical factor.

LTO SURVIVOR IGNORED 05/31/2021 at 12:39 am

LTO drilling locations are diminishing faster and faster. Look for massive consolidation as E&P companies can only grow through M&A. Many companies have drilling inventories of less than four years. The LTO revolution is over as we knew it and the number of E&P companies will shrink dramatically. There will be minimal growth and much less than 75kbd per month.

The energy transition will be painful and longer than anticipated. Criminalization of an industry that embodies national security and that gives the "haves" a competitive advantage in favor of hopes and prayers is folly and irresponsible.

China will bury us as they try to capture as much of the hydrocarbon as they can knowing that energy equals power.

A few years ago I heard Chinese venture capitalist speak at the Aspen Institute. He claimed that democracy is not a form of government but instead a religion. He gave the example that in Nigeria, the US is concerned about human rights while the Chinese could care less who dies in Nigeria as long as they can get the oil. He also stated that the Chinese only care about how they can feed, shelter, move, and run their economy and human rights are not remotely introduced into their paradigm. Something to think about.

[Jun 03, 2021] Climate activists scored a major victory with a Dutch court ruling requiring Shell to drastically cut emissions, which in effect means cutting oil and gas output

Jun 03, 2021 | www.reuters.com

Defeats in the courtroom and boardroom mean Royal Dutch Shell (RDSa.L) , ExxonMobil (XOM.N) and Chevron (CVX.N) are all under pressure to cut carbon emissions faster. That's good news for the likes of Saudi Arabia's national oil company Saudi Aramco (2222.SE) , Abu Dhabi National Oil Co, and Russia's Gazprom (GAZP.MM) and Rosneft (ROSN.MM) .

It means more business for them and the Saudi-led Organization of the Petroleum Exporting Countries (OPEC).

"Oil and gas demand is far from peaking and supplies will be needed, but international oil companies will not be allowed to invest in this environment, meaning national oil companies have to step in," said Amrita Sen from consultancy Energy Aspects.

... ... ...

Climate activists scored a major victory with a Dutch court ruling requiring Shell to drastically cut emissions, which in effect means cutting oil and gas output. The company will appeal.

The same day, the top two U.S. oil companies, Exxon Mobil and Chevron, both lost battles with shareholders who accused them of dragging their feet on climate change.

...Western oil majors control around 15% of global output, while OPEC and Russia have a share of around 40 percent. That share has been relatively stable in recent decades as rising demand was met with new producers like smaller private U.S. shale firms, which face similar climate-related pressures.

...Despite pressure from activists, investors and banks to cut emissions, Western oil majors are also tasked with maintaining high dividends amid heavy debts. Dividends from oil companies represent significant contributions to pension funds.

[Jun 03, 2021] US March Oil Production Rebounds Strongly From Winter Storm Low

Jun 03, 2021 | peakoilbarrel.com

RON PATTERSON IGNORED 06/03/2021 at 7:34 am

Dennis,

If all sanctions on Iran are lifted, very soon, they may reach 3.5 million barrels per day by Q1 2022, but no way before then. I doubt they will ever reach 3.8 million again.

At any rate, to get to 29.54 million bpd by Q4 OPEC would need to increase production by 4.5 million bpd from April's production level. Dennis, we both know that is not going to happen.

[Jun 01, 2021] Oil Price Hits Two-Year High as OPEC Sees More Demand

Usual WSL take -- partially false reasoning mostly along EIA talking points. The real problem is that there is no cheap way to increase oil output Iran or no Iran. It would be funny to read WSJ coverage in February -May of 2020 in view of current events and the price level. They completely discredited themselves.
Jun 01, 2021 | www.wsj.com

Brent crude rose 93 cents, or 1.3%, to $70.25 a barrel, the highest close since May 2019. West Texas Intermediate futures gained $1.40, or 2.1%, to $67.72 a barrel. The U.S. gauge settled at its highest level since October 2018.

... ... ...

The OPEC cartel and its allies agreed Tuesday to press ahead with earlier plans to increase output by 450,000 barrels a day starting in July. Meanwhile, Saudi Arabia will continue to unwind its unilateral cuts of one million barrels a day that it put in place earlier this year.

"Demand growth is outpacing supply gains even with the agreed month-by-month OPEC+ production increases taken into account," said Ann-Louise Hittle, vice president of Macro Oils at consulting firm Wood Mackenzie. "Sticking to increases planned at the April meeting is what the market needs," she added.

... ... ...

Both oil prices and future OPEC+ policy could be affected if as much as 1.5 million barrels a day of Iranian oil, currently restricted by U.S. sanctions, return to the market, according to Robert McNally, a former adviser in the George W. Bush administration and president of consulting firm Rapidan Energy Group.

[May 31, 2021] Oil is the strategic resource and all dirty tricks with "paper oil" and the power of Wall Street financial behemoths will be used to keep price low

May 31, 2021 | peakoilbarrel.com

DENNIS COYNE IGNORED 05/30/2021 at 10:05 am

Ron,

If non-OPEC+ output grows slowly or not at all, oil prices are likely to rise. Eventually the price may rise to a level that entices non-OPEC+ producers to invest in new oil production. My guess is that a $75 or $80/bo Brent oil price might change things, we may know by November 2021 whether my guess is correct. REPLY LIKBEZ 05/30/2021 at 5:53 pm

Dennis,

You assume that oil price is independent of the general condition of the USA economy and is determined by supply and demand. I think this is a fallacy.

Oil is the strategic resource and all dirty tricks with "paper oil" and the power of Wall Street financial behemoths will be used to keep price low. Rise of oil prices is an invitation to the recession which Biden administration is determined to avoid.

The only established fact now that the rise of oil output probably will never happen and the countries need to adapt. The USA put all eggs into EV backets and is toying with wind and solar; which means that it probably will be burned because the increase of the number of EV on the roads above single digits will destroy the stability of the USA electrical network.

In 2020, there were 286.9 million cars in the US. Of them the plug-in are less then 1.4 million. Forty-five models were sold in 2019 (the last "normal" year), but the all-electric Tesla Model 3 was the most popular by far, with over 154,000 vehicles sold -- or 47% of total plug-in electric sales in 2019.

So currently EV are less then 0.5% of the total car fleet despite all the noise.

Consequences of reaching 10% are tremendous both for electrical grid and for consumers (lion share of those cars are luxury personal cars, exemplified by Tesla and are badly suited (even dangerous; somebody here proposed Norway as a counterexample, but that's plainly stupid as they have their share of problems (dead Tesla in airports car lots after a week or less, strangled vehicles on country roads, etc) and is a tiny country with climate determined by Golfstream ).

EV in northern states (think not only border with Canada like Chicago and Alaska but even NY, PA and NJ ) or a state with very hot summer (think Texas, Florida) and generally outside California (or any similar region without harsh winter and/or very hot summer) are very problematic.

Building of new nuclear stations is politically incorrect and that will have consequences of EV deployments. Burning natural gas to produce electrical energy, while gas can be used as a car fuel directly is plain vanilla stupid. But this is the path the USA had taken.

As neoliberal elite lost legitimacy political stability in the USA is also an interesting question to ponder. The rise of gas price might serve as a yet another tipping point.

[May 30, 2021] US March Oil Production Rebounds Strongly From Winter Storm Low

May 30, 2021 | peakoilbarrel.com

RON PATTERSON IGNORED OVI IGNORED 05/30/2021 at 9:16 am

Ron

Great find.

For me that article was behind a paywall. Yahoo has it here.

https://ca.finance.yahoo.com/news/time-different-outside-opec-oil-040000053.html

05/30/2021 at 7:49 am

Well, I'm not one to say "I told you so", but I did, didn't I. 🙂 Bold mine.

This Time Is Different: Outside OPEC+, Oil Growth Stalls

"This time is different" may be the most dangerous words in business: billions of dollars have been lost betting that history won't repeat itself. And yet now, in the oil world, it looks like this time really will be.

For the first time in decades, oil companies aren't rushing to increase production to chase rising oil prices as Brent crude approaches $70. Even in the Permian, the prolific shale basin at the center of the U.S. energy boom, drillers are resisting their traditional boom-and-bust cycle of spending.

The oil industry is on the ropes, constrained by Wall Street investors demanding that companies spend less on drilling and instead return more money to shareholders, and climate change activists pushing against fossil fuels. Exxon Mobil Corp. is paradigmatic of the trend, after its humiliating defeat at the hands of a tiny activist elbowing itself onto the board.

And what they don't realize is that the two largest producers in OPEC+, Russia and Saudi Arabia, are on the ropes also. Russia has admitted it but Saudi is still trying to deny the fact.

[May 30, 2021] This Time Is Different- Outside OPEC+, Oil Growth Stalls by Javier Blas

May 30, 2021 | finance.yahoo.com

"This time is different" may be the most dangerous words in business: billions of dollars have been lost betting that history won't repeat itself. And yet now, in the oil world, it looks like this time really will be.

For the first time in decades, oil companies aren't rushing to increase production to chase rising oil prices as Brent crude approaches $70. Even in the Permian, the prolific shale basin at the center of the U.S. energy boom, drillers are resisting their traditional boom-and-bust cycle of spending.

The oil industry is on the ropes, constrained by Wall Street investors demanding that companies spend less on drilling and instead return more money to shareholders, and climate change activists pushing against fossil fuels. Exxon Mobil Corp. is paradigmatic of the trend, after its humiliating defeat at the hands of a tiny activist elbowing itself onto the board.

The dramatic events in the industry last week only add to what is emerging as an opportunity for the producers of OPEC+, giving the coalition led by Saudi Arabia and Russia more room for maneuver to bring back their own production. As non-OPEC output fails to rebound as fast as many expected -- or feared based on past experience -- the cartel is likely to continue adding more supply when it meets on June 1.

'Criminalization'

Shareholders are asking Exxon to drill less and focus on returning money to investors. "They have been throwing money down the drill hole like crazy," Christopher Ailman, chief investment officer for CalSTRS. "We really saw that company just heading down the hole, not surviving into the future, unless they change and adapt. And now they have to."

Exxon is unlikely to be alone. Royal Dutch Shell Plc lost a landmark legal battle last week when a Dutch court told it to cut emissions significantly by 2030 -- something that would require less oil production. Many in the industry fear a wave of lawsuits elsewhere, with western oil majors more immediate targets than the state-owned oil companies that make up much of OPEC production.

"We see a shift from stigmatization toward criminalization of investing in higher oil production," said Bob McNally, president of consultant Rapidan Energy Group and a former White House official.

While it's true that non-OPEC+ output is creeping back from the crash of 2020 -- and the ultra-depressed levels of April and May last year -- it's far from a full recovery. Overall, non-OPEC+ output will grow this year by 620,000 barrels a day, less than half the 1.3 million barrels a day it fell in 2020. The supply growth forecast through the rest of this year "comes nowhere close to matching" the expected increase in demand, according to the International Energy Agency.

Beyond 2021, oil output is likely to rise in a handful of nations, including the U.S., Brazil, Canada and new oil-producer Guyana. But production will decline elsewhere, from the U.K. to Colombia, Malaysia and Argentina.

As non-OPEC+ production increases less than global oil demand, the cartel will be in control of the market, executives and traders said. It's a major break with the past, when oil companies responded to higher prices by rushing to invest again, boosting non-OPEC output and leaving the ministers led by Saudi Arabia's Abdulaziz bin Salman with a much more difficult balancing act.

Drilling Down

So far, the lack of non-OPEC+ oil production growth isn't registering much in the market. After all, the coronavirus pandemic continues to constrain global oil demand. It may be more noticeable later this year and into 2022 . By then, vaccination campaigns against Covid-19 are likely to be bearing fruit, and the world will need more oil. The expected return of Iran into the market will provide some of that, but there will likely be a need for more.

When that happens, it will be largely up to OPEC to plug the gap. One signal of how the recovery will be different this time is the U.S. drilling count: It is gradually increasing, but the recovery is slower than it was after the last big oil price crash in 2008-09. Shale companies are sticking to their commitment to return more money to shareholders via dividends. While before the pandemic shale companies re-used 70-90% of their cash flow into further drilling, they are now keeping that metric at around 50%.

The result is that U.S. crude production has flat-lined at around 11 million barrels a day since July 2020. Outside the U.S. and Canada, the outlook is even more somber: at the end of April, the ex-North America oil rig count stood at 523, lower than it was a year ago, and nearly 40% below the same month two years earlier, according to data from Baker Hughes Co.

When Saudi Energy Minister Prince Abdulaziz predicted earlier this year that "'drill, baby, drill' is gone for ever," it sounded like a bold call. As ministers meet this week, they may dare to hope he's right.

More stories like this are available on bloomberg.com

Subscribe now to stay ahead with the most trusted business news source.

©2021 Bloomberg L.P.

[May 30, 2021] A Critical Shift In The War For Oil by Tom Luongo

May 30, 2021 | www.zerohedge.com

Authored by Tom Luongo via Gold, Goats. 'n Guns blog,

Biden backed down on Nordstream 2 and, at The Davos Crowd's insistence, he will back down on the JCPOA.

Davos needs cheap energy into Europe. That's ultimately what the JCPOA was all about. The basic framework for the deal is still there. While the U.S. will kick and scream a bit about sanctions relief, Iran will be back into the oil market and make it possible for Europe to once again invest in oil/gas projects in Iran.

Now that Benjamin Netanyahu is no longer going to be leading Israel, the probability of breakthrough is much much higher than last week. The Likudniks in Congress and the Senate just lost their raison d'etre. The loss of face for Israel in Bibi's latest attempt to bludgeon Gaza to retain power backfired completely.

U.S. policy towards Israel is shifting rapidly as the younger generations, Gen-X and Millennials, simply don't have the same allegiance to Israel that the Baby Boomers and Silent generations did. It is part of a geopolitical ethos which is outdated.

So, with some deal over Iran's nuclear capability in the near future, Europe will then get gas pipelines from Iran through Turkey as well as gain better access to the North South Transport Corridor which is now unofficially part of China's Belt and Road Initiative.

Russia, now that Nordstream 2 is nearly done, will not balk at this. In fact, they'll welcome it. It forms the basis for a broader, sustainable peace arrangement in the Middle East. What's lost is the Zionist program for Greater Israel and continued sowing dissent between exhausted participants.

But the big geopolitical win for Davos, they think, is that by returning Iran to the oil markets it will cut down on Russia's dominance there. That the only reason Russia is the price setter in oil today, as the producer of the marginal barrel, is because of Trump taking Iranian and Venezuelan oil off the market.

With these negotiations ongoing and likely to conclude soon I'm sure the thinking is that this will help save Iranian moderates in the upcoming elections. But with Iran's Guardian Council paving the way for Ebrahim Raeisi to win the election that is also very unlikely( H/T to Pepe Escobar's latest on this ) :

So Raeisi now seems to be nearly a done deal: a relatively faceless bureaucrat without the profile of an IRGC hardliner, well known for his anti-corruption fight and care about the poor and downtrodden. On foreign policy, the crucial fact is that he will arguably follow crucial IRGC dictates.

Raeisi is already spinning that he "negotiated quietly" to secure the qualification of more candidates, "to make the election scene more competitive and participatory". The problem is no candidate has the power to sway the opaque decisions of the 12-member Guardian Council, composed exclusively by clerics: only Ayatollah Khamenei.

I have no doubt that Iran is, as Escobar suggests, in post-JCPOA mode now and will walk away from Geneva without a deal if need be, but Davos will cut the deal it needs to bring the oil and gas into Europe while still blaming the U.S. for Iran's nuclear ambitions because they've gotten what they actually wanted, Netanyahu out of power.

Trump's assault on Iran did what Neocon belligerence always does, increase domestic sympathies for hardliners within the existing government. I told you his assassinating Gen. Qassem Soleimani was not only a mistake but a turning point in history , it sealed the alliance between Russia/China/Iran into a cohesive one which no amount of Euro-schmoozing will undo.

Seeing the tenor of these negotiations and the return of Obama to the White House, the Saudis saw the writing on the wall immediately and began peace talks with Iran in Baghdad put off for a year because of Trump's killing Soleimani.

The Saudis are fighting for their lives now as the Shia Crescent forms and China holds the House of Saud's future in its hands.

Syria will be restored to the Arab League and all that 'peace' work by Trump will be undone quickly. Because none of it was actually peaceful in its implementation. Netanyahu is gone, Israel just got defeated by Hamas and now the rest of the story can unfold, put on hold by four years of Jared Kushner's idiocy and U.S. neoconservatives feeding Trump bad information about the situation.

The Saker put together two lists in his latest article (linked above) which puts the entire situation into perspective:

The Goals:
  1. Bring down a strong secular Arab state along with its political structure, armed forces, and security services.

  2. Create total chaos and horror in Syria justifying the creation of a "security zone" by Israel not only in the Golan but further north.

  3. Trigger a civil war in Lebanon by unleashing the Takfiri crazies against Hezbollah.

  4. Let the Takfiris and Hezbollah bleed each other to death, then create a "security zone," but this time in Lebanon.

  5. Prevent the creation of a Shia axis Iran-Iraq-Syria-Lebanon.

  6. Break up Syria along ethnic and religious lines.

  7. Create a Kurdistan which could then be used against Turkey, Syria, Iraq, and Iran.

  8. Make it possible for Israel to become the uncontested power broker in the Middle-East and force the KSA, Qatar, Oman, Kuwait, and all others to have to go to Israel for any gas or oil pipeline project.

  9. Gradually isolate, threaten, subvert, and eventually attack Iran with a broad regional coalition of forces.

  10. Eliminate all centers of Shia power in the Middle-East.

The Outcomes:
  1. The Syrian state has survived, and its armed and security forces are now far more capable than they were before the war started (remember how they almost lost the war initially? The Syrians bounced back while learning some very hard lessons. By all reports, they improved tremendously, while at critical moments Iran and Hezbollah were literally "plugging holes" in the Syrian frontlines and "extinguishing fires" on local flashpoints. Now the Syrians are doing a very good job of liberating large chunks of their country, including every single city in Syria).

  2. Not only is Syria stronger, but the Iranians and Hezbollah are all over the country now, which is driving the Israelis into a state of panic and rage.

  3. Lebanon is rock solid; even the latest Saudi attempt to kidnap Hariri is backfiring. (2021 update: in spite of the explosion in Beirut, Hezbollah is still in charge)

  4. Syria will remain unitary, and Kurdistan is not happening. Millions of displaced refugees are returning home.

  5. Israel and the US look like total idiots and, even worse, as losers with no credibility left.

The net result is everyone in the region who were aggressors are now suing for peace. This is why I expect some kind of deal that returns Iran to the global economy. There's no way for Germany's shiny new trade deal with China to work without this.

Trump's hard line against Iran was always a mistake, even if Iran's nuclear ambitions are real. But with the Open Skies treaty now a dead letter the U.S. has real logistical problems in the region and they only multiply if Erdogan in Turkey finally chooses a side and gives up his Neo-Ottoman ambitions, now very likely.

But when it comes to economics, as always, Davos has this all backwards vis a vis oil. They still think they can use the JCPOA to drive a wedge between Iran and Russia over oil. They still think Putin only cares about oil and gas sales abroad. It's clear they don't listen to him because the policy never seems to change.

So, to Davos, if they bring 2.5 to 3 million barrels per day from Iran back online and oil prices drop, this forces Russia to back down militarily and diplomatically in Eastern Europe. With a free-floated ruble the Russians don't care now that they are mostly self-sufficient in food and raw material production.

None of that will come to pass. Putin is shifting the Russian economy away from oil and gas with an announced ambitious domestic spending plan ahead of this fall's State Duma elections. Lower or even stable prices will accelerate those plans as capital no longer finds its best return in that sector.

This carrot to Iran and stick to Russia approach of Brussels/Davos is childish and it will only get worse when the Greens come to power in Germany at the end of the year. Unless the German elections end in a stalemate which is unforeseen, the CDU will grand coalition as the junior partner to the Greens, just as Davos wants it.

Don't miss the significance of the policy bifurcation either when it comes to oil. The Biden administration is trying to make energy as expensive as possible in the U.S. -- no Keystone Pipeline, Whitmer trying to close down Enbridges's Line 5 from Canada into Michigan, etc. -- while Europe gets Nordstream 2 from Russia and new, cheap supplies from Iran.

This is what had Trump so hopping mad when he was President. This is part of why he hated the JCPOA. Israel and the EastMed pipeline was what should have been the U.S. policy in his mind.

Now, those dreams are dead and the sell out of the U.S. to Davos is in full swing. Seriously, Biden/Obama are going to continue on this path of undermining U.S. energy production until they are thrown out of office, either by the overwhelming shame of the election fraud lawsuits which recall Senators from Arizona, Georgia and Michigan, the mid-term elections which brings a more pro-Trump GOP to power or by military force. That last bit I put a very low probability on.

Bottom line, for now global oil prices have likely peaked no matter what drivel comes out of John Kerry's mouth.

The Brent/WTI spread will likely collapse and go negative for the first time in years as Iran's full oil production comes online over the next two years while U.S. production falls. We'll see rising oil prices in the U.S. while global supply rises, some of which China is getting at a steep discount from who? Iran.

Meanwhile Russia continues to hold the EU to account on everything while unmasking the not just the latest Bellingcat/MI6/State Dept. nonsense in Belarus surrounding the arrest of Roman Petrosovich, but also filling the void diplomatically left by a confused and incompetent U.S. policy in the Middle East.

If I'm the Bennett in Israel, the first phone call I make after taking office is to no one other than Putin, who now holds the reins over Iran, Hezbollah and a very battle-hardened and angry Syria who just re-elected Assad because he navigated the assault on the country with no lack of geopolitical skill.

Because it is clear that Biden/Obama, on behalf of Davos , have left Israel out to twist in the wind surrounded by those who wish it gone. We'll see if they get their wish. I think the win here is clear and the days of U.S. adventurism in the Middle East are numbered.

The oil wars aren't over, by any stretch of the imagination, but the outcome of the main battles have decisively shifted who determines what battles are fought next.

* * *

Join my Patreon if you like critical thinking.


wellwaddyaknow 2 hours ago (Edited)

About time that fcking Project for the New American Century(aka Greater Israel from the Nile to the Euphates) got derailed .

Fcking useless neocon sh its gutted and bankrupted the U.S. for their fcked up ziosh it garbage.

Sheldon Adelson belongs in the Aus witz Mengele suite in hell. He was the biggest cheerleader for the last 20 years of this hell on earth that was created in the middle east.

Woodenman 2 hours ago remove link

Trump got it *** backwards , he should have defunded Israel and fast tracked Iran to be a nuclear power, Iran is an oil producer, what does Israel do for us?

Would I care that Israel cannot sleep at night knowing Iran has the bomb, not at all.

AGuy 37 minutes ago

" what does Israel do for us? "

Keeps the ME unstable so the US has the excuse to keep a lot of military resources in the ME, in the name of being the worlds policemen. Plus the US needs to protect the Petro dollar, but at this point I don't think that will matter soon considering the amount of money printing & spending the US is doing at the momement.

wellwaddyaknow 2 hours ago (Edited)

Soleimani was very good at destroying ISIS trash.

And which countries backed ISIS?

JR Wirth 2 hours ago

NeoCon tears as the world attempts to move on from deranged foreign policy. Will the US throw a fit and drag the world into war? Let's call Tel Aviv and find out.

Der Steppenwolf 2 hours ago remove link

Iran already sells huge amounts of oil to China and likely many others, there just isn't going to be a significant increase in Iranian oil hitting the market as a result of any deal. Moreover, this relatively small increase will occur over time. Even if Iran eventually increases production the 2.5-3 million bpd the author cites, world consumption in 2021 is forecast to increase about 6 million bpd over 2020. Considering these facts any changes in Iranian oil production should do little to affect the overall price.

lay_arrow
AGuy 42 minutes ago

" Iran has huge potential to increase production "

I doubt that very much. Iran has very old oil fields which have been producing since the 1920s. Global Oil production peaked in 2018 & is now in permanent decline. Iran could increase NatGas production, but Oil production is in permanent decline.

Apollo 32 minutes ago

God, I hope half of the above comes true. Bibi needs to be court martialed and Israel needs to go back into smaller and more peaceful version of itself (if that is even possible) . USA can just bugger off home, and try to deal with transgendered army, president's dementia and critical race theory nonsense first.

What the world needs is less wars, less central bankers screwing the game and less stealing of other people's natural resources. Instead it just more plain old hard work, honest trading and no bs diplomacy.

dead hobo 1 hour ago (Edited) remove link

Amazingly perfect analysis.

Israel will survive. I wish them well.

So many US wars are oil based. Lies abound to cover this up. Neocon Economics turns every war opportunity into a profit center. No Profit = No War potential. Whenever you see a Neocon pumping a war somewhere, you need to look for who will make scads of money from it.

Trump isn't an angel. He's the guy who destroyed Establishment Republicanism. That begat populism. I detested him working his book when he pumped QE and ZIRP. I considered it a temporary price to pay to remove Establishment Republicans from the world. Yes, the US also needed a good Front Door with a lock. He also did good there. Trump playing the Imperialism Game clumsily worked in the favor of Peaceful Coexistence. Probably by mistake. Ok by me if everyone else declares peace anyway.

The US economy can still outpower anyone even if it is forced to play fair.

This brings us to the Deep State. Who exactly are they?

Are they Neocons who want war profits by making it look like others are the war mongers? Are they anti-peace as long as it doesn't start a full blown war - providing a profit can be made from it by their oligarch bosses?

Or is the Deep State the Davos oriented oligarchs who wants the 99% to whistle while they work to support uncountable billions of dollars flowing into the asset piles of the 1%?

Why did the Deep State allow the BLM / Antifa / Democrat cabal take over? Are they stupid? Or did they think Covid-19 along with these freaks would work in their favor somehow?

Is the Deep State only common ordinary Imperialism? Is it only oil, and natural gas and who gets to control the markets? Ukraine has a lot of natural resources. Is that a coincidence?

https://www.worldatlas.com/articles/what-are-the-major-natural-resources-of-ukraine.html

What is it about Peaceful Coexistence that makes them go crazy?

What does The Deep State really want?

AGuy 49 minutes ago

" The only difference will be the wars will be fought for lithium and other rare metals. "

Unlikely Oil will remain the King for causing wars. electricification of transportation is doomed to fail. First average Americans cannot afford EV. heck they are struggling with cheaper ICE vehicles. Auto loan duration have ballooned & most Americans are rolling over debt from their older vehicle when they buy a new one. Second the grid is struggling. Most of the older power plants are getting replaced by NatGas fired plants & at some point we are going to see NatGas prices shoot up. Much of the US grid was built in the 1930s & 1940s and will need trillions just to maintain it and replace equipment & power lines operating beyond their expected operating lifetime.

The US economy is slowly collapsing: Mountains of debt, demographics, dumbed down education, and worthless degrees for Millennials, failing infrastructure (ie I-40 bridge). We are on borrowed time.

AJAX-2 1 hour ago remove link

The fly in the ointment is that the banksters desperately need higher oil prices to prop up their derivative portfolios. As a result, they are at odds with the Davos Crowd and their desire for cheap/plentiful oil for Europe. We shall see who prevails.

AGuy 1 hour ago

" The fly in the ointment is that the banksters desperately need higher oil prices to prop up their derivative portfolios. "

Nope:

Higher oil prices leads to higher defaults, which is likely to trigger derivative losses. Banker shady deals come under congressional\agency scrutiny usually ending with billion dollar fines, and bad press. A lot of banks probably will get nationalized when the next banking crisis happens & all those bankers will lose out on the financial scams they play.

European Monarchist 46 minutes ago remove link

Currently:

  1. The Syrian state has survived, and its armed and security forces are now far more capable than they were before the war started (remember how they almost lost the war initially? The Syrians bounced back while learning some very hard lessons. By all reports, they improved tremendously, while at critical moments Iran and Hezbollah were literally "plugging holes" in the Syrian frontlines and "extinguishing fires" on local flashpoints. Now the Syrians are doing a very good job of liberating large chunks of their country, including every single city in Syria).

  2. Not only is Syria stronger, but the Iranians and Hezbollah are all over the country now, which is driving the Israelis into a state of panic and rage.

  3. Lebanon is rock solid; even the latest Saudi attempt to kidnap Hariri is backfiring. (2021 update: in spite of the explosion in Beirut, Hezbollah is still in charge)

  4. Syria will remain unitary, and Kurdistan is not happening. Millions of displaced refugees are returning home.

  5. Israel and the US look like total idiots and, even worse, as losers with no credibility left.

The net result is everyone in the region who were aggressors are now suing for peace. This is why I expect some kind of deal that returns Iran to the global economy. There's no way for Germany's shiny new trade deal with China to work without this.

ut218 2 hours ago remove link

Solarcycle 25 had a bad start. By 2028 people will realize we are in a period of global cooling. oil prices will soar

Itinerant 18 minutes ago

There won't be major investments of European majors in Iran's oil industry.

  • For Iran, Western partners have proved too fickle
  • For Western corporations, the risk is too great for long term investment.

China will be reaping most of the investement opportunities.


2 play_arrow
Marrubio 1 hour ago

.... the NWO & Davos idiotards ,they have been trying since March for oil not to exceed the $ 70 barrier and they are not succeeding. Week after week they try to lower the price, frightening with the covid, the production of Iran or whatever, and the following week the oil rises again. The only thing left for them is mass slaughter ... but now people know that what is going to kill them is in the "vaccine". Of course they will be stupid enough to do it; if they have shown anything it is that they are profoundly idiots. They will not be successful in getting cheap oil, simply because PeakOil is running since 2018 and since then oil production decreases at 5% per year: -5% per year, I am telling to the NWO deep idiotards.

European Monarchist 55 minutes ago (Edited)

Interesting, but it remains to be seen where this is going, short term and long.

Now that Benjamin Netanyahu is no longer going to be leading Israel, the probability of breakthrough is much much higher than last week. The Likudniks in Congress and the Senate just lost their raison d'etre. The loss of face for Israel in Bibi's latest attempt to bludgeon Gaza to retain power backfired completely.

U.S. policy towards Israel is shifting rapidly as the younger generations, Gen-X and Millennials, simply don't have the same allegiance to Israel that the Baby Boomers and Silent generations did. It is part of a geopolitical ethos which is outdated.

So, with some deal over Iran's nuclear capability in the near future, Europe will then get gas pipelines from Iran through Turkey as well as gain better access to the North South Transport Corridor which is now unofficially part of China's Belt and Road Initiative.

Russia, now that Nordstream 2 is nearly done, will not balk at this. In fact, they'll welcome it. It forms the basis for a broader, sustainable peace arrangement in the Middle East. What's lost is the Zionist program for Greater Israel and continued sowing dissent between exhausted participants.

play_arrow
Einstein101 55 minutes ago remove link

Now the Syrians are doing a very good job of liberating large chunks of their country, including every single city in Syria).

Really? Hell no! The Syrians and the mighty Russians and the Hezbollah for many months now are not able to overcome lowly terrorists militia in northern Syria's Idlib. Plus, the Israelis has been launching hundreds of airstrikes over Syria while the Russian made Syrian anti air defense can do nothing about it.

[May 29, 2021] Washington has lifted sanctions on German companies involved with the pipeline but imposed new ones on Russian entities

May 29, 2021 | turcopolier.com

NORDSTREAM. Washington has lifted sanctions on German companies involved with the pipeline but imposed new ones on Russian entities . What are we to make of this? A realisation that Berlin is determined on completion combined with face-saving meaningless toughness. Amusingly Biden's now being called " Putin's $5 million man " (because of the supposed payout by the pipeline to the supposed Russian supposed hackers). Nordstream was a " key Putin goal ", giving power to Putin , what does he have on him ? Hilarious, isn't it? Biden loved it then: here he is calling Trump Putin's puppy .

jerseycityjoan says: May 27, 2021 at 4:27 pm

Patrick:

I saw this today and while I can't say it is surprising, I am sorry that we are officially at the end of the "engagement" period with China. I hate to see our major challenges in the world increase.

I was wondering if you think we will officially recategorize our relationship with Russia, too? If so, would you expect us to also label that "competitive?" How do you think this change in our China stance will affect Russia?

Thanks.

"The U.S. is entering a period of intense competition with China as the government running the world's second-biggest economy becomes ever more tightly controlled by President Xi Jinping, the White House's top official for Asia said. "The period that was broadly described as engagement has come to an end," Kurt Campbell, the U.S. coordinator for Indo-Pacific affairs on the National Security Council, said Wednesday at an event hosted by Stanford University. U.S. policy toward China will now operate under a "new set of strategic parameters," Campbell said, adding that "the dominant paradigm is going to be competition." (via Bloomberg News) Reply

[May 28, 2021] The US Is Not Ready For An All-Electric Future - ZeroHedge

May 20, 2021 | www.zerohedge.com

The U.S. is woefully unprepared to handle "the electrification of everything," as Amy Myers Jaffe, a research professor at Tufts University's Fletcher School, describes the drive to electrify transportation and buildings and parts of industry in The Wall Street Journal .

Increased electrification in all sectors will need huge investments in the electric grid, in battery storage to back up renewable power generation, in charging points for EVs, and in technologies such as green hydrogen to help those technologies to reach maturity and cost efficiency enough to start replacing fossil fuels.

[May 28, 2021] Biden aministsration is building a coalition to challenge China. It wants to neutralize Russia. Nord Stream 2 is an element of contention

May 20, 2021 | www.moonofalabama.org

Max , May 19 2021 21:16 utc | 26

@ Old man of the sea | May 19 2021 20:46 utc | 22

One can't blame everything on Israel. Yes, it is part of five eyes, more like SIX eyes.

Biden (JB) is building a coalition to challenge China. JB's administration wants to neutralize Russia. Nord Stream 2 is an element of contention and by making a concession JB is making Germany and Russia happy. Agree, that its completion will be a "huge geopolitical win for Putin". Let's see when Nord Stream 2 becomes fully operational. Time will tell.

Russia's main focus is De-Dollarization, stability in Russia and in its neighborhood.

China's announcement about Bitcoin led to it dropping by 30%. What will China, Russia, Turkey and Iran announcement about the U$A dollar do to its value and the market? When will China become the #1 ECONOMY?

THE MOST DANGEROUS DECADE: 2018-2028

Stonebird , May 19 2021 21:42 utc | 29

Old man of the sea | May 19 2021 20:46 utc | 22

The US is now the largest provider of LNG, so there is relatively little more financial advantage to be gained from a direct confrontation with Germany or Russia. Political maybe, but the dedollarisation is starting to take hold. (Aside; even Israel depends on the strength of the dollar to continue, like musical chairs, when the music stops there will be precious few chairs left ). The Gas/Oil lobbies in the US who are behind the sanctions may have some other trick up their sleeve, but the deflation of Zelensky in Ukraine, and the opening up of a steal-fest of Ukrainian assets might compensate.

***
Note that the West has closed Syrian Embassies so as to stop Syrians voting for Assad. They steal it's oil, and Syria is still next to Israel and doing relatively well in spite of tanker bombings, and missiles. It is also possible that, as you say, there is a price for non-interference in Israel itself.

[May 28, 2021] Ukraine has become a financial black hole for the West, and the USA is trying to get rid of it by throwing it to the EU's arms

May 23, 2021 | www.moonofalabama.org

vk , May 23 2021 15:36 utc | 4

The The Hill piece linked in the week in review here confirms our suspicions Ukraine has become a financial black hole for the West, and the USA is trying to get rid of it by throwing it to the EU's arms:

Instead of expending diplomatic capital on a campaign to stop Nord Stream 2, the Biden administration should work with its European partners to prepare Ukraine to withstand the pipeline's completion. The deadline for action is 2024, when Kyiv's current gas contract and President Biden's term effectively end. By that time, Washington and Brussels should formulate and implement an economic package that, first and foremost, covers Ukraine's inevitable budget shortfall from the loss of transit fees to keep the Ukrainian state running. This package should, however, also invest in the country's sustainable growth. That would entail material and technical support for Kyiv's ongoing anti-corruption campaign, whose success is a prerequisite for attracting long-term investment. One idea worth considering is a loan to cover revenue shortfalls, whose repayment would be incrementally forgiven in exchange for concrete progress on reforms by Kyiv.

That won't happen. The easiest way you can infer that is that the USA and Germany don't even have the resources to invest in green energy in their own territories, let alone on third-parties' territories. Hell, the USA doesn't even have the resources to rebuild Puerto Rico.

This is not the 1950s. The American Empire's bottomless pocket is no more.

[May 28, 2021] Note To Greenwald - The 'Russian' Pipeline Is A Germany Need

May 23, 2021 | www.moonofalabama.org

Caliman , May 20 2021 16:44 utc | 5

Glenn Greenwald writes that President Trump acted more hostile to Russia than President Biden does, even while the media claimed that Trump was 'a Russian agent'. It is probably a fair point to make but in his piece Greenwald himself falls for anti-Russian propaganda nonsense.

The problem starts with the headline:

Biden, Reversing Trump, Permits a Key Putin Goal: a New Russian Natural Gas Pipeline to Germany
That Trump was controlled by Putin and served his agenda was the opposite of reality. First Obama, and now Biden, have accommodated Moscow far more.

Greenwald seems to presume that it is the right or the job of a U.S. president to 'permit' pipelines between two foreign country? That is of course completely false. The U.S. has no right, duty or whatever to interfere in regular businesses between foreign partners. Such interference is in fact illegal under international law. Biden, as well as Trump, should be criticized for even thinking about 'permitting' it.

On to Greenwald's main point:

When it came to actual vital Russian interests" as opposed to the symbolic gestures hyped by the liberal cable and op-ed page circus" Trump and his administration were confronting and undermining the Kremlin in ways Trump's predecessor, Barack Obama, had, to his credit, steadfastly refused to do.

Indeed, the foreign policy trait relentlessly attributed to Trump in support of the media's Cold War conspiracy theory" namely, an aversion to confronting Putin" was, in reality, an overarching and explicit belief of President Obama's foreign policy, not President Trump's.

Obama waged a massive undercover war to overthrow the Syrian government, an old Russian ally. He arranged a fascist coup in the Ukraine and he sent the anti-Russian academic Michael McFaul as ambassador to Russia where McFaul immediately started to prepare a color revolution against President Putin. It was the Obama administration which launched the 'Russiagate' campaign against Trump which further infested U.S. policies with anti-Russian sentiment.

Seen from the Russian side Obama certainly showed absolutely no 'aversion to confronting Putin'.

While Trump ripped up arms treaties with Russia and gave a few useless weapons to the Ukraine, making sure they would not reach the front lines, he otherwise took, thankfully, few other damaging steps.


bigger

Now on to the Nord Stream 2 pipeline of which Greenwald writes:

Cont. reading: Note To Greenwald - The 'Russian' Pipeline Is A Germany Need

Well, the fact that the pipeline has not been finished for years, despite being near completion, tells us that it's not actually true that the "pipeline would have been finished with or without US sanctions." Certainly, it seems that Trump's pressure did work to severely slow down if not completely stop the completion of the project and presumably Biden could have continued that pressure. Btw, didn't the front-running Green party head come out against the pipeline, showing that there's not unanimous support in Germany for its completion?

But more importantly, Greenwald's main point is that Trump's actions had nothing to do with the Russian Puppet narrative against him. That both Biden and previously Obama were less "anti-Russian" in practice and yet were thought to be "tough" on Russia, while Trump (providing lethal arms to Ukraine and stopping NS2) was a "puppet" ... narrative building by the Deep State. Greenwald's larger point is in fact accurate.


jared , May 20 2021 17:10 utc | 8

I think Greenwald was thrown off by what seems a sudden reversal and positive step by Biden administration.

Personally I think Biden Administration was stunned at almost having instigated WW3 within 100 days of taking office. They looked fairly like amateur idiots even to the unwashed such as myself. Then they realized that it would be difficult and given their evident ineptness they chose the well proven political tactic of taking the loss and making it a win. Voila they are genious - why didnt Trump think of that?

We in the US must accept that our government is craven incompetents and have to hope that they might accidentally do something good by virtue of being so incompetent.

Harry , May 20 2021 17:15 utc | 9

Greenwald makes an error but it is understandable. NS2 pipeline wont deliver enough gas to truly make a significant difference to Germany. Where it makes a difference is to Ukraine, which will struggle to steal as much gas from Russia as it has in the past. Gas transit rates will fall, and if Ukraine doesnt like it RF will still be able to supply Germany without Ukraine stealing gas which was meant for Germany.

But who will make good any shortfall in Ukraine's budget?

Roger , May 20 2021 17:51 utc | 13

The early closure of the Netherlands Groningen natural gas field, due to land subsidence, was a big hit to European energy security - especially with the move from coal/nuclear to natural gas. B is very right in stating that Europe desperately needs Russian gas to fill a yawning future hole between supply and demand. Russia is also developing their Arctic gas reserves, which can be provided as LNG to Europe (as well as Asia). Very bad for the Ukrainians, but they (or the US and the Nazis) picked their bed and can deal with the consequences.

The Russians opened the Power of Siberia gas pipeline to China, and have agreements to start development on additional pipelines. China is rapidly expanding natural gas usage so no demand problem there.

Seems like the Biden administration took their "hardass" shot in the past months and it blew up in their face. Now they have to take a step back and play a bit better with their so-called allies. Probably won't last long, the US elite have extreme learning difficulties when it comes to the reality of their decline from the Unipolar moment.

karlof1 , May 20 2021 17:56 utc | 15

This is somewhat OT to the subject, but it's clear to me a greater understanding of the Russian POV is needed. Although the transcript is currently incomplete, this meeting of the Russian Pobeda (Victory) Organising Committee provides an excellent insight into the Russian mind, and IMO this excerpt says a great deal:

"Regrettably, the ranks of the great generation of victors are thinning out. But this is only increasing our responsibility for preserving their legacy, especially now that we are witnessing increasingly frequent attempts to slander and distort history and to revise the role played by the Red Army in the routing of Nazism and the liberation of European nations from the Nazi plague.

"We understand the reasons for this, and attempts to hamper the development of this country, regardless of its name, be it the Russian Empire, the Soviet Union or Russia, were made in different times and historical epochs and under different political systems. These approaches and principles remain the same. There is one principle or rather, one reason for containing Russia: the stronger and more independent Russia becomes, the more consistently it defends its national interests, the greater the striving of foreign forces to weaken it, to discredit the values uniting our society and sometimes to slander and distort what people hold dear, the things that are instilled in the younger generations of Russians and which help them acquire a strong character and their own opinions .

"This is why all kinds of Russophobic individuals and unscrupulous politicians are trying to attack Russian history, to promote the ideas of revising the results of World War II and to exonerate Nazi criminals." [My Emphasis]

And the geopolitical dynamic has drastically shifted from Greater Europe to Greater Eurasia. Here are Putin's comments from yesterday :

"Very soon, we will be celebrating 20 years of our core bilateral document, the Treaty of Good-Neighbourliness, Friendship and Cooperation. Since the signing of this treaty, Russia and China have achieved great success in strengthening our multidimensional cooperation and mutual trust across all areas without exception: politics, international affairs, trade and the economy, cultural and humanitarian exchanges. It can be said that Russia-China relations have reached their highest level in history."

And those relations will certainly reach much greater heights regardless the nature of Russian-EU relations.

S , May 20 2021 18:36 utc | 20
@SoMuchToLearn #18:
I'm puzzled by b's arithmetic on the gas flow rates

Apart from Nord Stream 1 and Nord Stream 2, there are also old Soviet pipelines that go through Belarus and Ukraine, as well as the recently completed Turk Stream, part of which is used to export gas to Bulgaria, Romania and Serbia (and soon Hungary, Bosnia and Austria).

ZigZag , May 20 2021 18:38 utc | 21
@11
My two cents on that is that the old surface Power-structure of Germany has been crumbling rapidly for around the last decade. Merkel has left the christian conservative party in shambles and there's no one with enough gravitas around to fill the giant sized shoes she's left vacant, same thing with the social democrats who've been in a freefall from 35% to now barely 15% for the last 15 years. Environmentalism coated Neoliberalism seems to be the maxim of the hour in the leftists and centrists spheres, and almost everyone, but foremost the Green Party, is trying to ride that wave to the finish line. Don't expect peoples first policies, climate change will dominate the election, and we'll likely be wrapped up in more deindustrialization coupled with an ever more chaotic energy policy. If anything the average persons cost of living in terms of rent, energy, food and transportation will continue to rise, while jobs in traditional industry sectors will continue to fall off. I haven't heard a coherent plan on how the German economy is supposed to work like 10 years from now, and there likely is none, all I expect is more taxes and the possibility of plundering social security trust funds to address whatever critical infrastructure issue will face us next.

@14
Green-Party was about to oust the Conservatives in a major federal state election. People got really riled up by nuclear, especially since there already was an ongoing controversy around long term waste storage. It was one of Merkels signature opportunistic moves that aimed to size the moment in absence of long term planing. It didn't work btw, Greens still ousted them, but once you make a big move like that there's not going back without losing face, but it does seem like exiting nuclear proved to be a popular strategy with the electorate in the long run. I'm sure that are more complex/intricate theories around, but I can't speak on that

FMG , May 20 2021 18:56 utc | 26

Here in Brasil Greenwald is known as a CIA asset. Just ask Pepe Escobar.

Michael Crockett , May 20 2021 19:11 utc | 31

Thanks b. The Empire of the Deranged is in a steady downward slide. By its own hand, through financial engineering (stock buy back schemes fueled by bailout's of bankrupt corporations plus derivatives etc. etc.) Add to this, restrictions on the use of swift. The US devalues its own currency. Other countries are not so interested in purchasing US debt to offset rising US deficit. Include all of that with our foreign policymaking which angers even our allies like Germany, as you point out with NS2. The Leaders think they can snap their fingers and bring the world to heel. That ship sailed a long time ago. The multi-polar world is a reality that the paper tiger struggles with. To Glen Greenwald's Brazil, US influence evaporates should Lula get elected as the next President. The tiger is toothless Glen, no need to give it more authority than it has.

DougDiggler , May 20 2021 19:32 utc | 35

With the US pressuring Germany to end NS-2 in favor of importing much more expensive fracked US gas, we see that the US thinks there is nothing wrong with asking it's vassal states to cut their own throats (forego steps to retain their economic competitiveness) to please their patron. The idiocy of Cold War 2 is costing US allies a lot and seems inimical to the very idea of US allies even regarding their own national interests. One would hope this is leading to either a re-evaluation of these alliances or a revolt of the satraps.

Max , May 20 2021 19:40 utc | 37
thanks b... Agree that "the U.S. has no right, duty or whatever to interfere in regular businesses between foreign partners." Every journalists needs to be making this key point.

Any geopolitical article that doesn't address the MONETARY arena is missing an important element and thereby incomplete. Greenwald's article is missing many key points and mistaken (&/or misleading) by taking U$A's political trickery angle. It is all about the POWER game that involves deceptions, like sending the director of the Federal Reserve Bank of New York on a Red Cross mission to Russia or committing to not moving NATO forces towards Russia in 1991.

HISTORICAL CONTEXT
Vladimir Putin in his Munich (2007) speech announced Russia's pivot away from the Dollar Empire and unwillingness to be a vassal. The Dollar Empire challenged Russia through Georgia in 2008. Obama & Clinton fooled Russia through their reset announcement and got a go ahead to attack Libya. The relationship was calm in 2012. Obama fooled Medvedev by saying, "he will have "more flexibility" to deal with contentious issues," after reelection, in early 2012. However, Vladimir Putin was back in 2013 and the Dollar Empire realized it has been outplayed. It moved aggressively after the two outside Russian military bases in Syria and Ukraine. Russia captured Crimea in 2014, and Putin declared Russia's willingness to go to war in Syria (2015). The Imperial Council of the United States was surprised by Russia's move into Syria and wasn't ready for a war. In the meantime, China was developing strong. Here comes Trump in 2017. It seems like the Imperial Council and its Intelligence Community came with a new ploy to associate Trump with Russia, so they can bully China and bend it over on trade. China stood up to Empire's challenge and developed its independence plan! In the meantime Trump increased sanctions on Russia using the Congress as a pretext while strengthening Ukraine. The sanctions on the Nord Stream 2 brought halt to work in December 2019. Did Trump FOOL Putin/Russia by stating, "he will have "more flexibility" to deal with contentious issues," after reelection? The reasoning behind this question is that Russia didn't start work on the pipeline until the election was over in December 2020. One year wait to start work on the pipeline.

MISSING DIMENSIONS
Why isn't Greenwald speaking against the dollar monetary imperialism and enslavement? Very rarely one come across a journalist that shines light on reality and exposes truth. It seems like Empire's MSM and journalists are making a big deal of this minuscule Nord Stream 2 sanction waiving. Why? It is just propaganda and perception management to create distrust in the China-Russia relationship? No one is mentioning Russia's redlines or its ability to retaliate to additional sanctions. Andrei Martyanow gets it right!

Please analyze every geopolitical development from the MONETARY lens too. Russia as part of its De-Dollarization plan is offering energy deals in national currencies to win nations in Eurasia, including Japan. In which currency is the U$A offering its LNG ? US$? Also, it seems like Russia's transit payments to Ukraine are in the US$. In addition to providing an alternate route, the Nord Stream 2 increases Russia's leverage with Ukraine. Imagine if those transit payments were in Rubles to Ukraine, Russia's leverage will be immense.

China, Russia, Germany, Japan... (Non-$ Bloc) are standing up to dollar's monetary imperialism, and seeking more trade in their respective national currencies. The EU and Germany will pay for its energy in Euros and reduce threats to their economies. Why don't journalists address the monetary or currency dimensions?

RUSSIAN SUCCESSES?
Successfully completing the Nord Stream 2 and supplying gas to Europe in Euros will be a huge victory for Russia and Germany. It has yet to implement its agreements (Minsk, Astana, JCPOA...). All its conflicts are frozen and unresolved. Please share agreements that Russia has successfully delivered on in the 21st Century, particularly when the Dollar Empire is involved. Will the Empire surprise Russia by attacking on multiple fronts?

The Logic of U$A Foreign Policy

bjd , May 20 2021 19:44 utc | 38
Very worthwhile opinion, the debate between you and Greenwald sharpens the mind on this issue.
Alpi , May 20 2021 19:47 utc | 39
To say that there is a shift in US geopolitical policies, is an understatement. In short, IMO, Biden is going back to Obama's plan and his pivot to Asia. Therefore, it is China, China, China. Nothing else matters that much right now.

1. Nordstream 2 settled"¦..check
2. Germany and Europeans happy"¦..check
3. Settling ME problems with going back to JCPOA, promoting KSA and Iran peace, pulling out of Afghanistan (not ME)"¦..check
4. Putting Israel in its place (via a shift in media coverage and taking away support slowly and congress expressions of outrage) "¦..check
5. Abstention form UN resolution punishing Israel"¦"¦.coming up
6. Taking Europeans to the South East China confrontation"¦..coming up
7. Prying away Iran and Russia away from China"¦"¦wishful thinking, hopefully.
8. Ousting Netanyahoo"¦"¦coming up

Although, Biden is a zionist, Netanyahu and his antics are not convenient at this time and Israel takes a back seat to grand chessboard strategy.

Greenwald's and b's commentaries are a bit of a sideshow, in my opinion. Best concentrate on the outcome and the bigger picture instead of this he said she said.

Passer by , May 20 2021 19:53 utc | 42
What happened this year is that the winter was cold, gas storage in Europe was nearly depleted, and Europe needed huge amounts of russian gas.

The other problem is that LNG is more expensive in Asia, causing LNG producers and shippers to prefer the asian market.

There are many more issues as well - such as the hit on US producers by the Covid crisis, Germany moving the carbon goal posts from 2050 to 2045, green energy problems this winter in Germany, explosions on pipelines in Ukraine, and so on.

It is also true that Russia is readying Power of Siberia 2 and 3 pipelines to China, as well as actively developing its own LNG exports.

Skiffer , May 20 2021 20:06 utc | 43
In response to SoMuchToLearn@18,

The disputed claim by Greenwald is that, "Nord Stream 2... is designed to double Russian sales capacity to an EU addicted to cheap Russian natural gas, producing massive revenue for the Russian economy and giving Moscow greater leverage when dealing with its European neighbors." This is very different from the statement that NS2 together with NS1 is twice the capacity of NS1 on its own.

There are several, to my mind, wrongful assumptions in Greenwald's claim.

The first, that the EU wants to increase its purchases of Russian gas, but is prevented from doing so solely due to the lack of infrastructure which, presumably, is operating at full capacity. From this assumption, it then follows that Russia is expecting massive revenues from an increase in transit capacity, since customers are already standing by. Finally, as a result of supplying significantly more gas to Europe and earning substantially more money from it, Moscow can be expected to take advantage of its position as an energy supplier to pressure Europe over political matters.

While it's true that European gas-needs are growing, it's more of a long-term projected development and not some energy crisis straining the current configuration. A more topical and urgent crisis is the situation in Ukraine and the state of disrepair of the gas transit infrastructure in that country, which not long ago accounted for 80% of Russian gas supplied to Europe. IIRC, official estimates gave these pipelines a few short years before becoming unusable without major repair efforts -- something like 5 years -- and coupled with the state of the country itself, it's not impossible that the pipelines outlive the state.

If we, for the sake of argument, assume that Ukraine and/or the gas infrastructure on that territory ceases to function tomorrow, halting all gas transits to Europe in the blink of an eye, which isn't as far-fetched as you might think, the result would be an energy crisis. Already, this crisis would not be of catastrophic proportions as it would have been a mere decade ago, due to alternative transit routes established to lessen reliance on Ukrainian pipelines. NS2 is designed to eliminate reliance on Ukrainian pipelines completely, if one disregards various political commitments made by Russia on Europe's behalf to retain part of its gas export through Ukraine, which I'm sure would fall to the wayside the moment European capitals started going dark. Of course, cutting off transit states also has the added benefit of making the gas cheaper and thus the contract becomes more lucrative, but that's more of a bonus.

If we, for the sake of argument, assume that all the pipelines to Europe are working at full capacity, and Europe desperately needs more gas -- say, 25 years from now when no new green alternatives have presented themselves and no new pipelines have been built because the war of sanctions continues -- there's always LNG, which Russia can supply at a competitive price, and the port infrastructure for that is already available, provided the EU is willing to resolve its energy problems collectively.

From this it follows that, no, Russia isn't expecting massive revenues to come flooding in at the completion of NS2. They're presumably expecting massive revenues from new energy projects in Asia, but they're at worst expecting to retain the current revenue in the European market, and at best see it grow in connection with European economy. Certainly, they wouldn't like to lose the European market, especially due to unpredictable incidents abroad that are outside of their control, but Europe is arguably much more vulnerable and has more to lose from such an eventuality.

Lastly, since we are no longer expecting an immediate increase in European reliance on Russian energy following NS2, how does it translate to Russian leverage over European politics? Russia is already Europe's main supplier of, not only gas, but crude oil which accounts for 2/3 of Europe's energy supply (gas is 24%). If Russia wants to leverage its position as the main energy supplier to Europe, it does not need NS2 to do so, and shutting down NS2 will not prevent it from doing so.

Passer by , May 20 2021 20:10 utc | 44
Posted by: Roger | May 20 2021 17:51 utc | 13

>>The early closure of the Netherlands Groningen natural gas field, due to land subsidence, was a big hit to European energy security

Yes, this too.

Posted by: Dutch | May 20 2021 19:51 utc | 41

>>The impressive year-on-year surge, to nearly 53 billion cubic meters, is reportedly due to the cold (in European terms) winter season.

Exactly.

[May 28, 2021] Electricity usage in the USA will take " until 2022 to get back to 2019 levels': Duke Energy CEO

Highly recommended!
That means there there was no industrial recovery at all: stagnation continues unabated. Claims that the the U.S. economy surges in this sense are fraudulent.
But the fact is that stock market casino is now is completely detached from real economy and lives with its own life and dynamics. Of cource, this will not end well, but nobody knows when the bubble will burst or will be deflated by FED.
Apr 30, 2021 | finance.yahoo.com

Duke Energy CEO Lynn Good joins 'Influencers with Andy Serwer' to disccuss the pandemic's long-term impact on the energy industry.

Duke observed 10-15% deline in some months of 2020 and 3% for 2020 as a whole.

[May 28, 2021] The danger of blocking North Stream Ii is that Russia can start delivering LNG to Western and Northern Europe at much more competitive prices than the American LNG, through the Arctic route

May 19, 2021 | www.moonofalabama.org

vk , May 20 2021 0:15 utc | 49

@ Posted by: ptb | May 19 2021 23:58 utc | 45

It's Izvestia and it was in Russian, that's why I'm not able to recover it. It was also machine translated, so I may well have gotten the wrong message.

But yeah, from what I understood, the spirit of the article was that it was just a matter of time before Russia start to deliver LNG to Western and Northern Europe at much more competitive prices than the American LNG, through the Arctic route (investment in icebreakers, gas pipelines, oil pipelines, nuclear reactors etc. etc.).

[May 28, 2021] US jobs numbers " so bad' media thought it was an " error'

May 14, 2021 | www.youtube.com

David James , 3 days ago

The MSM always covers for Sleepy Joe! This is the bull sh-t we have to put up with here in the USA now. It is very sad our News outlets are unable and unwilling to tell the truth and be journalists like you are here! Thank you Sky News Australia for telling it real!


Noodle Hat
, 2 days ago

We're going to have Jimmy Carter 1970's stagflation.


dewwed1965
, 5 days ago

I'm a trucker in Nebraska. I went to Wendy's they were closed, no staff. Went to Taco Bell they were closed to restock because only 2 people showed up to work


Tenderfoot Prepper
, 4 days ago

"Google's algorithms might be covering for Sleepy Joe." GEE, YA THINK???

[May 28, 2021] EU Parliament report says regime change needed in Russia, recommends Brussels launch propaganda TV channel to help it happen

Notable quotes:
"... A draft report published online by the assembly's Committee on Foreign Affairs caused consternation in Russian media on Monday, after statements came to light that argued the bloc "should establish with the US a transatlantic alliance to defend democracy globally" and "deter Russia" from supposed aggression in Eastern Europe. ..."
May 20, 2021 | www.moonofalabama.org

vk , May 19 2021 22:31 utc | 35

Very aggressive stuff from the EU:

EU Parliament report says regime change needed in Russia, recommends Brussels launch propaganda TV channel to help it happen

A draft report published online by the assembly's Committee on Foreign Affairs caused consternation in Russian media on Monday, after statements came to light that argued the bloc "should establish with the US a transatlantic alliance to defend democracy globally" and "deter Russia" from supposed aggression in Eastern Europe.

As part of its "vision" for future ties with Moscow, the paper concludes that the EU should put forward a number of incentives designed to persuade Russians that a turn to the West would be beneficial, including visa liberalization and "free trade investment."

[...]

At the same time, the committee puts forward a number of extreme steps that it says the bloc should take. It insists that Brussels "must be prepared not to recognize the parliament of Russia and to ask for Russia's suspension from international organizations with parliamentary assemblies if the 2021 parliamentary elections in Russia are recognized as fraudulent."

The success or failure of this operation will depend entirely on the Russian people. Will it fall for the Western European honey trap once again?

After Putin is gone, bets are off. Also, the EU continues to suffer from refugee waves from Syria and Libya, and its economy continues to deteriorate (recession confirmed for Q1 2021). The whole system is so exhausted that they don't talk about even of the absorption of Moldova anymore (the Moldovan president had to bring that up to the Kremlin; good they remembered them).

--//--

US waives sanctions against Nord Stream company and CEO as Blinken & Lavrov meet in Iceland

This looks like Biden had some surge of sanity, but it's not: I read an article on Izvestia some days ago and it seems Russia won the war for the Arctic and has expelled the USA from that sea. That, combined with the fact that Russia has been ramping up investment on the sector, results in the fact that, soon enough, Russia will also have the infrastructure to deliver cheaper LNG by ship to Europe, too.

That means the USA has given up on the NordStream II in order to hurt the Russian LNG investments. Yes, people, that's the insanity of the situation: the USG is completely lost. It still has its ace in the hole, though: the Green Party is set to win the next German general elections, and they're rabid Atlanticists. Like, this would cost Germany dearly and they wouldn't last two years in government, but at least Russian gas to Europe through a non-Ukrainian route would be stopped.

Speaking of the Ukraine, this whole situation makes us reflect: it is patent at this point in time that the EU is a subsidiary of NATO - it expands eastwards after those countries become NATO members. They're the "socioeconomic" version of NATO. This has created a huge problem for the EU, though, because the Ukraine is a massive financial black hole to the American economy (through the IMF) and the USA is pressuring the EU to make it a member quick, so that this black hole goes to European (i.e. German) hands. The thing is Germany obviously doesn't want that, because it needs the Euro to keep at where it is or stronger (you can only enter the EU by entering the EZ nowadays). The Ukraine is salivating to become an EZ member - that's the whole point of the Maidan coup in the first place - so Ukraine entering the EU without entering the EZ is out of the table. The EU must've told the USA that no, the Ukraine must first become a NATO member, then they'll make it an EZ-EU member. The Ukraine is the proverbial hot potato.

All of that coupled with the hard economic fact that, without the Russian gas transit exclusivity, you can't leverage Ukraine's debt, because, after Maidan, all of the public goods and infrastructure were privatized to American capitalists. That means we have the absurd situation where Germany has to give up cheaper gas for itself (which would be essential for its economic recovery) in order to make the Ukraine happy so that it enters the EU, so that it becomes a financial black hole... to the German economy! Germany has to pay the Ukraine for the privilege of having to pay it even more, for eternity.

The price of nation-building has become more and more expensive to the capitalist world. Turns out those Third World shitholes have learned something after all those decades.

--//--

Well, well, well... how the tables have turned:

Iron Curtain reversed? EU agrees to open up to foreign tourists fully vaccinated against Covid-19, but NOT to those who've had Russia's Sputnik V jab

Taiwan is also suffering from a significant brain drain to the Mainland. They're trying to solve the problem by demonizing those people by calling them "traitors".

Interesting times.

--//--

Colonial Pipeline CEO confirms paying $4.4 million ransom to hackers, says he did it for America

This is USSR-of-the-1980s level of propaganda.

Either way, give that man a statue in D.C.!

P.S.: this is the quotation of what the CEO really said, so you don't accusing me of just reading the headline:

"[it was very hard, difficult to me etc. etc.] But it was the right thing to do for the country," Blount, who leads the company since 2017, added.

--//--

No shit, Sherlock:

Russian Sputnik V Covid-19 vaccine hasn't been approved by EU due to political pressure from top officials – Moscow's spy chief

[May 28, 2021] Was the Colonial Pipeline Co. ransomware attack a false flag operation ?

Probably it was not a false flag. First of all the state of IT security at Colonial Pipeline was so dismal that it was strange that this did not happened before. And there might be some truth that they try to exploit this hack to thier advantage as maintenance of the pipeline is also is dismal shape.
Notable quotes:
"... "As for the money-nobody really knows where it really went." If you are right about the perpetrators, my guess would be that it went into the black-ops fund, two birds one stone. ..."
"... I have become so used to false flags, I am going to be shocked when a real intrusion happens! ..."
"... an in depth article researching solarwinds hack - looks like it was Israel, not a great leap to see that colonial was a false flag https://unlimitedhangout.com/2021/01/investigative-reports/another-mega-group-spy-scandal-samanage-sabotage-and-the-solarwinds-hack/ ..."
"... Regarding the ownership of Colonial Pipeline: 'IFM Investors, which is owned by 27 Australian union- and employer-backed industry superannuation funds, owns a 16 per cent stake in Colonial Pipeline, which the infrastructure manager bought in 2007 for $US651 million.' ..."
"... 'The privately held Colonial Pipeline is valued at about $US8 billion, based upon the most recent sale of a 10 per cent stake to a unit of Royal Dutch Shell in 2019.' ..."
May 19, 2021 | www.moonofalabama.org

Blackhat , May 19 2021 18:51 utc | 6

The Colonial Pipeline Co.,ransomware attack was a false flag. They wanted to blame Russian hackers so they could derail Nordstream II

It is common knowledge that the only real hackers that are able of such sabotage is CIA and Israeli. It's the same attack types they do to Iranian infrastructure on a regular basis.

The Russians are not that stupid to do something they know will be blamed on them and is of no political use to them. And could derail Nordstream2.

As for the money-nobody really knows where it really went. CEO is ultra corrupt. They never ever invested in their infrastructure so when it went down they came up with a profitable excuse. Just look at their financials/balance sheet over the years. No real investment in updating and maintaining infrastructure. Great false flag. Corruption and profiteering.


MarkU , May 19 2021 19:04 utc | 7

@ Blackhat | May 19 2021 18:51 utc | 6

"As for the money-nobody really knows where it really went." If you are right about the perpetrators, my guess would be that it went into the black-ops fund, two birds one stone.

james , May 19 2021 19:08 utc | 9

@ 6 blackhat..

I have become so used to false flags, I am going to be shocked when a real intrusion happens!

abee , May 19 2021 19:21 utc | 10

@ blackhat 6

an in depth article researching solarwinds hack - looks like it was Israel, not a great leap to see that colonial was a false flag https://unlimitedhangout.com/2021/01/investigative-reports/another-mega-group-spy-scandal-samanage-sabotage-and-the-solarwinds-hack/

vinnieoh , May 19 2021 20:05 utc | 15

Blackhat | May 19 2021 18:51 utc | 6

I'm not familiar with your handle - hello. IMO, it would be counterproductive for Russia to initiate such a hack. What really affects and debilitates US oil and gas interests is low prices, both at the pump and on the stock exchange. The hack helped jack up prices (which were already being jacked-up despite demand still lagging behind supply) which only HELPS those energy interests. It has long been known, the math isn't complicated, what level crude must trade at for US domestic oil & gas operations to be profitable. Remember that just as the pandemic was emerging Russia and Saudi Arabia once again sent the global crude market into the depths of despair.

I do agree the hack can be interpreted in light of the desperation of US energy interests to try to kill NS2. I have not yet read the recent articles discussing Biden's recent moves in that regard. If these moves are a recognition that US LNG to Europe (and elsewhere) are diametrically opposed to climate responsibility, I'd welcome those moves. As is usually the case though, environmental responsibility is probably the least likely reason.

vk , May 19 2021 22:31 utc | 35

Colonial Pipeline CEO confirms paying $4.4 million ransom to hackers, says he did it for America

This is USSR-of-the-1980s level of propaganda. Either way, give that man a statue in D.C.!

P.S.: this is the quotation of what the CEO really said, so you don't accusing me of just reading the headline:

"[it was very hard, difficult to me etc. etc.] But it was the right thing to do for the country," Blount, who leads the company since 2017, added.

--//--

No shit, Sherlock:

Russian Sputnik V Covid-19 vaccine hasn't been approved by EU due to political pressure from top officials – Moscow's spy chief

Paul , May 19 2021 23:42 utc | 42

Posted By Oldhippy @28

Thanks for your comment.

Regarding the ownership of Colonial Pipeline: 'IFM Investors, which is owned by 27 Australian union- and employer-backed industry superannuation funds, owns a 16 per cent stake in Colonial Pipeline, which the infrastructure manager bought in 2007 for $US651 million.'

also

'The privately held Colonial Pipeline is valued at about $US8 billion, based upon the most recent sale of a 10 per cent stake to a unit of Royal Dutch Shell in 2019.'

see Australian Financial Review 6 days ago.

Koch may well own another multi million $ stake.

[May 20, 2021] These energy stocks are expected by Wall Street to rise up to 37% over the next year

May 20, 2021 | finance.yahoo.com

A growing economy has helped lift oil prices 31% this year.

Jesse Felder was cited in MarketWatch's Call of the Day for his opinion that energy is the neglected sector of the stock market even though it has been outperforming other sectors since last fall. (You can read Felder's entire posting here .)

He pointed out that energy stocks make up a smaller percentage of the S&P 500 SPX, 1.31% than they did 20 years ago. Looking at numbers provided by FactSet, it appears Felder expressed this phenomenon mildly. As of the close on May 19, the S&P 500 energy sector made up 2.85% of the index's market capitalization, down from 6.95% 20 years earlier.

The collapse in crude oil prices from the summer of 2014 through February 2016 was enough to push some energy companies out of the S&P 500 -- their market values had declined too much to remain in the benchmark large-cap index. And the worst point of the COVID-19 crisis for financial markets even led to forward-month oil futures contracts falling below zero in April 2020. (The price of West Texas crude oil per continuous forward contract CL00, -1.93% was up 31% for 2021 to $63.35 on May 19, according to FactSet.)

The S&P 500 now includes only 23 energy stocks. Our look at the sector will be broadened to the 63 energy companies in the S&P Composite 1500 Index SP1500, 1.19% , which is made up of the S&P 500, the S&P 400 Mid Cap Index MID, 0.52% and the S&P Small Cap 600 Index SML, 0.25% .

Here's how the 11 sectors of the S&P 1500 have performed this year through May 19 and also since the end of 2019 and since the end of 2015:

S&P COMPOSITE 1500 SECTOR PRICE CHANGE - 2021 PRICE CHANGE FROM END OF 2019 PRICE CHANGE FROM END OF 2015
Energy 37.3% -13.9% -15.5%
Financials 25.6% 20.1% 89.6%
Materials 20.1% 40.5% 101.4%
Industrials 15.7% 26.9% 92.4%
Real Estate 14.0% 5.5% 31.8%
Communication Services 11.6% 36.0% 64.5%
Health Care 8.1% 21.7% 76.5%
Consumer Discretionary 5.6% 39.1% 116.6%
Consumer Staples 4.4% 12.7% 40.6%
Utilities 4.2% -0.2% 50.5%
Information Technology 2.9% 45.8% 222.8%
S&P Composite 1500 10.2% 27.6% 100.7%

[May 15, 2021] Which organization OPEC or IEA has the most credibility?

May 15, 2021 | peakoilbarrel.com

RON PATTERSON IGNORED 05/14/2021 at 7:23 am

The OPEC Monthly Oil Market Report said the world oil supply fell by 150,000 barrels per day in April.

World oil supply
Preliminary data indicates that global liquids production in April decreased by 0.15 mb/d to average
93.06 mb/d compared with the previous month, and was lower by 6.45 mb/d y-o-y.

While the IEA Oil Market Report – May 2021 sais the world oil supply rose by 330,000 barrels per day.

World oil supply rose 330 kb/d to 93.4 mb/d in April and will increase further in May as the OPEC+ alliance continues to ease output cuts. Based on the current agreement, global oil production is set to grow by 3.8 mb/d from April to December. For 2021 as a whole, world oil production expands by 1.4 mb/d year-on-year versus a collapse of 6.6 mb/d in 2020. Canada leads non-OPEC+ with growth of 340 kb/d while the US is set to contract by a further 160 kb/d.

That's a difference of just under half a million barrels per day, (480,000 bpd). That's a huge difference. Which one should we believe? Which organization has the most credibility?

[May 12, 2021] The Energy Crisis That No One Is Talking About - OilPrice.com

May 12, 2021 | oilprice.com

GAIL TVERBERG

Gail Tverberg is a writer and speaker about energy issues. She is especially known for her work with financial issues associated with peak oil. Prior

More Info SHARE Facebook Twitter Linkedin Reddit PREMIUM CONTENT Russia Withdraws Troops From The Ukrainian Border Why The Outlook For Oil Prices Shifted This Week Fighting Continues In Yemen Amid Secret Ceasefire Talks U.S. Natural Gas Production Poised To Soar By Gail Tverberg - May 06, 2021, 5:00 PM CDT Trade Oil Futures Now

We live in a world of half-truth where words are very carefully chosen. Companies hire public relations firms to give just the right "spin" to what they are saying. CEO make statements that suggest that everything is going well. Newspapers would like their advertisers to be happy. Still is at the limit of Moore's law and fither shriking of dier is impossible due to physical limits. One of the key challenges of CPU engineering is the design of transistors gates. As device dimension shrinks, controlling the current flow in the thin channel becomes more difficult. So callled 8mn process (not that this is a marketing not technological term) is possible and now used in production, 5mn is problematic but used for example by Apple in A14 CPU ( iPhone 12) / According to some sources, the A14 processor has the transistor density of 134 million transistors per mm2. 3mn is probably the current technological limit (TSMC is on track for production first 3 nm chips at the end of 2022 Anton Shilov, Anandtech April 26, 2021 ). It is unclear, if 2mn process will be technologically viable or not. So the only way for CPU manufactures to increase the processing power of CPUs is to increase the number of cores.

I We live in a finite world; we are rapidly approaching limits of many kinds. Which creates problem, in some ways, somewhat similar to the world of the 1920s.

[May 11, 2021] January Non-OPEC Oil Production Climbs Again

May 11, 2021 | peakoilbarrel.com

HHH IGNORED 05/09/2021 at 9:35 am

Yields on the US 10 year formed a bullish hammer within consolidation on Friday. Suggests that yields are headed to 2% or above. It suggests that the move higher is now. Higher yields will lead to stronger dollar. Might be the beginning of where price inflation becomes a drag on economy as yields rise on debt. And as long as price inflation continues yields will rise.

Might put a cap on oil price in near future. Maybe we get another $5-$15 rise in oil price before credit blows up due to rise in yields.

As the cost of credit rises due to price inflation. If you borrowed money at rock bottom interest rates and you now have to rollover debt at a higher interest rate that is a problem for corporate USA.

Anyone that doesn't believe that there will be a huge price to pay for the policy response of Covid-19 is kidding themselves.

Even just on a relative basis. When you expand monetary and fiscal policy by that much in one year. Things tighten on a relative basis as what comes next in the years after is less support.

[May 08, 2021] There is no alternative to the thrust-lifting energy jet fuel provides

May 08, 2021 | www.wsj.com

There is no alternative to the thrust-lifting energy jet fuel provides Carlos Lumpuy

⏤But Yellen said yesterday:
"I don't think there is going to be an inflationary problem.
Biden has proposed further substantial spending packages we would love to be enacted into law."

There is no alternative to the thrust-lifting energy jet fuel provides.
Daily demand is about 6 million barrels a day, a third in the USA.
Price rise is nearing a third in just the last three months.
There is no stopping an airline's largest revenue, the cargo jet planes carry; passengers above are incidental.

[May 08, 2021] Does IEA really believe the shit they predict?

May 08, 2021 | peakoilbarrel.com

JEAN-FRANÇOIS FLEURY IGNORED RON PATTERSON IGNORED 05/01/2021 at 8:38 pm

Jean, I cannot get into the heads of the EIA analysis and figure out why they make the predictions they do. That is, do they really believe the shit they predict? Or do they do it as some kind of propaganda campaign to keep the shale Ponzi scheme afloat as long as possible because they think it is their civic duty to do so? I just don't know but I would imagine it is a little of both.

But we must look at the history of all the peak oil predictions. It all started around 2005 when almost everyone thought peak oil had arrived. But it did not happen. Then many thought it had arrived every couple of years since then. But the peak oil prognosticators became fewer and fewer. Now because all the predictions have been wrong in the past, it is just naturally assumed that peak oil will never happen.

So, even though almost every major producer has peak, including the three largest, the US, Russia, and Saudi Arabia, people cannot bring themselves to believe that peak oil has finally arrived, or did arrive a couple of years ago. So all we can do is shake our heads as they continue to predict that oil production will keep going up and almost forever.

But I find it rather fun to watch as finally someone else's predictions are going up in flames. 😉

05/01/2021 at 6:48 pm

There is something I don't understand. How EIA can project that the world oil production will be almost at the level of April 2020 in December 2022? If I am not wrong. KSA has apparently so much difficulties to maintain its production that they decreased their production of 1Mb/d in February to announce after a plan to decrease the domestic oil consumption of 1Mb/d to increase the amount of oil for export. And currently, they are at 8 Mb/d : in March 2020, their production was at 10 Mb/d. Russia is in oil production decline and the goal of increasing the production to the level of March 2020 (11 Mb/d) is and will be a goal for a long time as most the oil produced to compensate the loss of production (1Mb/d) will come from EOR (costly) and fracking (even more costly). For the US, I don't know how the DUC which are currently changed into completed wells and fracked will produce but as the growth of the number of operated rigs is slowing in Permian fields, I don't know how the decline of the current operated rigs will be compensated in the near future (in 6 or 12 months). I am not speaking of Baker, Eagle Ford and Niobara which are in decline. As the lower 48 states conventional oil production is in decline, as the Alaska oil production is in decline and as the GOM oil production is fairly stable, I don't know what will be the increase of US oil production in future. But I have a hunch that it won't be as glorious as the EIA can imagine (predict). Between now and December 2022, there are 6 Mb/d to compensate. If it is not coming the three main oil producers of the world, from where this will come? Iraq : no. They are sparing their oil ressources. Brazil? With pre-salt formations, they will be able to add only a maximum of 500 kb /d. Canada? They are at 5 Mb/d. I am not sure of their possibilities of production growth and even at their production growth rate, they will only add 290 kb/d or so in December 2022. Guyana will produce at most 750 kb/d in 2026. Assuming a constant rate of increase, this will give an additional 120 kb/d in December 2022. The rest of non-opec producer are, at best, only able to maintain their production. Among the rest of OPEC producers ,all are in production decline. There is only Iran which could increase its production but only 1,5 Mb/d at most. With all of this, we are a long way from increasing global oil production by 6 Mb/d until December 2022. HOLE IN HEAD IGNORED 05/02/2021 at 1:35 am

Ron , simple answer . "It is difficult to get a man to understand something, when his salary depends on his not understanding it." . –Upton Sinclair

[May 03, 2021] Deepest Backwardation Since 2007 Shows World Short on Commodities

Notable quotes:
"... That is, the premium for commodities that can be delivered now versus later into the future is the highest it has been since at least 2007, signaling just how strong the world's demand is for raw materials and how tight supplies are. ..."
May 03, 2021 | www.bloomberg.com

For an idea of exactly how strong the fundamentals are for commodities such as metals, agriculture and oil today, consider this: These markets are now showing the steepest backwardation in more than 14 years.

That is, the premium for commodities that can be delivered now versus later into the future is the highest it has been since at least 2007, signaling just how strong the world's demand is for raw materials and how tight supplies are.

In commodities markets, futures are frequently pricier at longer maturities because they reflect the cost of carrying inventories over time as well as future demand expectations. But urgent demand has flipped about half of major commodity markets tracked by the Bloomberg Commodity Index including oil, natural gas, copper, soybeans into backwardation.

[May 02, 2021] Goldman- Oil To Hit $80 On Largest Ever Demand Jump, by Tsvetana Paraskova

May 02, 2021 | oilprice.com

Apr 28, 2021

Goldman Sachs expects global oil demand to realize the biggest jump ever over the next six months, the investment bank said on Wednesday, keeping its bullish forecasts for oil prices this summer.

... ... ...

At the beginning of March, the bank expected Brent Crude prices to hit $80 a barrel in the third quarter this year, up by $5 compared to the previous forecast issued two weeks earlier.

Even after the sell-off in oil in mid-March, Goldman said that the "big breather" was a buying opportunity for oil and continued to forecast Brent hitting $80 per barrel in the summer.

[Apr 30, 2021] Switch to EV -- will it append and if yes, when

Apr 30, 2021 | peakoilbarrel.com

DENNIS COYNE IGNORED 04/26/2021 at 7:47 pm

Nick,

I don't really. I estimate total fuel consumption for light and heavy vehicles (road only) worldwide in 2018, then I simply assume the non-land transport demand for C+C (for farm equipment, water transport, air transport, and everything else that isn't for road vehicles (heavy trucks, buses, motorcycles, and light vehicles). I simply assume that quantity remains fixed (greater need for miles travelled by air and water matched by less fuel use due to efficiency improvements so the two factors exactly offset).

Essentially it is just a simplifying assumption. NICK G IGNORED 04/26/2021 at 7:55 pm

Dennis,

So you're assuming that global land transport oil consumption (excluding farm, rail, buses, heavy off-road trucks, motorcycles, chainsaws, etc) is 55 Mb/d, or 64% of all C&C? That seems a little high. How did you estimate that? DENNIS COYNE IGNORED 04/27/2021 at 6:52 am

Nick,

I used US data for average fuel economy for heavy trucks and light vehicles, then I used a 1300 million global fleet size, assumed average miles driven was about 10k per year, did something similar for commercial (heavy truck) fleet globally. It is a rough estimate, BP has gasoline and diesel consumption for World at 52 Mb/d in 2019, I assume most of that is for light vehicles and heavy trucks, not sure how much is used in ships (I assumed they mostly use fuel oil/bunker/residual fuel).

Also see figure 2 on page 6 of EIA document below, 55 Mboe/d in 2020 looks about right, and they estimate about 57 Mboe/d in 2025, my estimate is about 56 Mboe/d, with decreases starting in 2028.

The model is no doubt imperfect and does not account for the drop in demand in 2020 due to pandemic (the model was done in 2019 before the pandemic).

https://www.eia.gov/analysis/studies/transportation/scenarios/pdf/globaltransportation.pdf NICK G IGNORED 04/27/2021 at 1:56 pm

Thanks.

It's interesting how quickly this 2017 study has become out of date:

" The combined share of electric and plug-in hybrid electric vehicles in OECD countries increases from less than 1% in 2015 to 10% in 2040. In non-OECD countries, diesel, natural gas, and electric and plug-in hybrid electric vehicles experience a three-to-five percentage point increase in the total share of LDVs sold in non-OECD countries. In 2040, diesel and natural gas vehicles each represent approximately 11.5% of the total LDV new sales market in non-OECD countries, and electric and plug-in hybrid electric vehicles combined represent 4.5%."

They thought EVs would be about 10% in 2040, while diesel and NG vehicles would each be about 11.5%. Based on how quickly car makers are abandoning diesel and NG and adopting EVs, I'd say EVs will take pretty much all of the 23% projected for diesel and NG and, of course, much more. LIKBEZ 04/30/2021 at 1:12 pm

Dennis,

I know that you are EV enthusiast, and even own Tesla, but still we need to be realistic.

For heavy trucks transporting goods over long distances the switch to EV is very problematic and might never happen. The switch to natural gas is a possibility but this is an expensive solution. For local trucks the problem is the cost of the battery and it might happen but very slowly, as gradual displacement due to high gas prices. Even in this case natural gas will eat lithium.

Three large users of fuel that you did not account are military, airplanes and agricultural machinery. In the USA we also need to add trains as the level of electrification of railroads leaves much to be desired.

Those three categories of consumers of fuel are not switching to EV in foreseeable future. If you account for the growth of population the demand actually might increase until the price of fuel will come into play.

Globally Africa, China, India (and Asia in general), xUSSR space very rapidly add personal cars so those areas will experience growth of fuel demand. And cars in those regions often run for 15-20 years not 12 like in the USA. .

And that will affect African producers and, especially Russia. So when talking about Russia it is important to understand that the internal consumption will grow (Russia adds around 1.5 million cars a year) and that will cut exports https://knoema.com/atlas/Russian-Federation/Primary-energy-consumption although many Russian cars are running of natural gas as it is cheaper.

https://carsalesbase.com/russia-car-sales-data/

The number of cars per capita in Russia still is twice less than in the USA and this gap will gradually diminish. https://en.wikipedia.org/wiki/List_of_countries_by_vehicles_per_capita

The initial fascination with EV as passenger cars will soon pass as outside places like California with no winter they are very problematic during winter periods. I would say they are dangerous.

Currently they are kind of status symbol in certain circles and IMHO represent "conspicuous consumption." Conspicuous consumption is a term coined by American economist and sociologist Thorstein Veblen.

I wonder whether Tesla stock will be able to sustain the current crazy valuation in three-five years period. (139 minutes and 25 seconds)
DENNIS COYNE IGNORED 04/27/2021 at 5:17 pm

Hickory,

Here is a transition scenario that assumes the 37% growth rate in plug in sales continues, personally I think this is too optimistic, sales for light vehicles is 100% plugin by 2031 and the ICE light vehicle fleet is replaced 100% by 2044 with plugin vehicles. Interesting that you believe this is pessimistic. Also interesting that Ovi believes my original EV scenario is too optimistic, I seem to be somewhere between your optimism and the pessimism of Ovi. It will be interesting to watch (and I hope you are right).

REPLY HICKORY IGNORED 04/27/2021 at 9:51 pm

We shall see. It seems to me that at a certain point, there is going to be a very rapid realization that we are in new territory. Most of the manufacturers now get it, and are scrambling to react.
It will be very interesting to see if there is a component supply crunch ( I think likely) in the late decade.
A big piece of the unknown on this this is the general state of the world economy.
If there is stability and resumed growth after pandemic, the transition to plugin vehicles will be quicker.
If there is economic stagnation/contraction- it will be much slower as people hold on to what they've got.
And of course, the price oil will play a leading role in the incentive/disincentive equation.

I also think it is important to acknowledge that we are talking about percent of new sales, but not the absolute magnitude of sales. That may be more important. Vehicles last so much longer now, and if petrol is available at reasonable price, the best bet for most people financially will be to milk their current vehicle for as long as possible. But after that, the next one will probably have a plug. STEPHEN HREN IGNORED 04/28/2021 at 3:32 pm

At some point people will stop buying ICE vehicles even if no EV option is available. Operating a gas station, especially in an urban environment, is a low margin, high regulation enterprise. As gas stations in urban areas either go out of business or give up on selling gas, gas cars will lose most of their appeal for urban and suburban residents because of "range anxiety" – i.e. not enough places to fill up. I would guess that at about 20-30% EV saturation, selling gas will no longer become profitable in any given area. This will add to the spiral of concerns about resale value for ICE cars as the inevitability of the EV transition becomes ever more apparent. HICKORY IGNORED 04/28/2021 at 10:31 pm

This kind of action is hard to predict from past performance, but get used to these kind of news items-

Germany March 2021
"The number of new passenger plug-in car registrations increased to 65,681 (up 232% year-over-year), which is 22.5% of the total [new car]market. That's more than one in five new cars!" OVI IGNORED 04/26/2021 at 5:17 pm

Dennis

To me the EV market is bifurcated. From what I can see there are four concentrated EV markets in the world.
– California due to its history with car pollution.
– Norway using its massive oil revenues to heavily subsidize EVs along wth other perks.
– China with their heavy EV sales mandate and getting away from its achilles heal, oil.
– Japan also wants to reduce dependence on oil.

Looking at what is happening in two US states provides some insight on how fast the EV take up will occur in the US. California with a population of 39.5 M sold 133,000 EVs in 2020 or put another way 3,360 EVs per million population. New York with a population of 19.45 M sold 21,000 EVs in 2020 or 1,080 EVs per million population. That is a ratio of three to one. it would be a lot higher in other states.

Total US 2020 sales were 296,000. California accounts for 45% of US sales.

My point is that these 4 concentrated regions are not representative of the rest of the world. The only region that will continue to grow at a significant pace will be China with its sales mandate and I think with an eye to becoming a world leader in EV design. EVs are coming, no doubt, but at a pace that is slower than most prognosticators are forecasting, primarily because of cost.

[Apr 30, 2021] Shallow Sand has remarked that in the 1990s $20/barrel was considered a good price but today most wells, either onshore or off, are not profitable at $50/barrel

Apr 30, 2021 | peakoilbarrel.com

HOLE IN HEAD IGNORED 04/26/2021 at 5:35 am

Mr Shellman has it correct .
https://www.oilystuffblog.com/single-post/decline-baby-decline?postId=607d9b8fae97f80015baa566 REPLY DENNIS COYNE IGNORED 04/26/2021 at 6:48 am

Hole in head,

He is right that it doesn't work at $55/b, at $61 (today's price for WTI) it works in the Permian basin. Note that I also use the data from shaleprofile as the basis for my models. Though I clearly don't know the oil business as well as an old pro like Mike, not even close.

The average price of oil in 2020 was about $36/b, in 2021 it will be about $60/b and in 2022 about $70/b (WTI prices). Decline will stop at $70/b for sure and probably at $60/b.
Note that in 2017 the average WTI price was about $52/b, and in 2018 it was $67/b, and in 2019 it was $60/b. 2018 saw a very large increase in tight oil output and the increase in 2019 was pretty big as well.

My Permian model assumes new wells are financed from cash flow rather than new debt, debt paid back in full by 2026. REPLY SCHINZY IGNORED 04/27/2021 at 4:21 am

Dennis,

Your observations are correct with the implicit assumption that extraction costs do not rise at the same rate as the price of oil. Shallow Sand has remarked that in the 1990s $20/barrel was considered a good price but today most wells, either onshore or off, are not profitable at $50/barrel. Shallow is our invaluable guide to the evolution of costs in the oil patch.

My prediction is that oil prices will stay in the current range ~$55-$65/ barrel until decreased investment (see http://peakoilbarrel.com/december-non-opec-oil-output-continues-rebound-from-may-low/#comment-715646 ) results in a shortage. I believe the shortage will cause oil prices to kick on the order of 50% in a year. The price kick will then provoke a financial crisis similar to that of 2008, but central banks will have far fewer options to alleviate the crisis. REPLY HOLE IN HEAD IGNORED 04/27/2021 at 6:24 am

Schinzy , I agree with you . Dennis is underestimating a few critical issues ;
1. End of OPM finance .
2. Underestimating the GOR and WOR rise .
3. Underestimating decline rates in shale .
4. Underestimating the rise in costs now ( steel above by 50% in 2021) which makes $ 75 non viable .
5 . His contention that the big corporations will buy out the bankrupt corporations . The flaw is that the big corporations themselves want to exit . Further as Mike S has pointed out " who wants to buy wells which are at the tail end of their production and are going to have a shutdown expense of $ 100000 to bear " .
All three agree that there is going to be shortage in 2022 sometime in the second or third half and your scenario that the resultant high price will provoke an even deeper financial crisis than that exists now will play out . Let me add that Covid damage cannot be assessed at this stage as the virus is mutating at a rapid pace . It has moved from India to Pakistan.
https://www.rt.com/news/522199-pakistan-military-coronavirus-khan/
P.S : He always give's EOG as an example of a well run shale play but " one swallow does not the summer make " . For every one EOG there are 10/15 waiting in line for bankruptcy . SHALLOW SAND IGNORED 04/26/2021 at 6:48 am

I don't see how these wells can be profitably operated by a company with a lot of overhead, which I assume these publicly traded companies have. DENNIS COYNE IGNORED 04/26/2021 at 7:31 pm

Shallow sand,

See

https://finance.yahoo.com/quote/EOG/financials?p=EOG

From 2017 to 2019 EOG's cumulative net income was $8.7 billion.

It can be done by a well run company. REPLY SHALLOW SAND IGNORED 04/28/2021 at 6:57 am

Dennis.

I have discussed before the uselessness of GAAP accounting in US shale.

Raw Energy, who writes articles on Seeking Alpha, has addressed this much better than I can.

Over 3,000 of the approximately 19,000 oil wells in ND produced 0 barrels of oil in the last reported month, 2/21. Some of this could be weather related. I suspect more of the problem is economic, even at improved oil prices.

I suspect the numbers are similar in the other shale basins. Mike says there are many inactive shale wells in EFS, where he operates his conventional production.

[Apr 30, 2021] Around 80% of Russia oil wells will be in serious decline for the rest of this decade.

Apr 30, 2021 | peakoilbarrel.com

RON PATTERSON IGNORED 04/25/2021 at 2:12 pm

A bit more about Russia. Dennis first posted this link a couple of weeks ago. It has a wealth of information. It was published in September 2019 . The Future of Russian Oil Production in the Short, Medium, and Long Term

They published another paper in 2017 predicting Russian production would hit 11,268,000 bpd in 2018. They did not quite make it but they did average 11,252,000 bpd in 2019. They predicted Russia to peak at 11.5 million bpd in 2020.

In our 2017 paper we identified that projects already in the pipeline, combined with efforts to slow the
natural decline of brownfields, could push oil production from an average of below 11 mb/d in 2016 to
around 11.5 mb/d by 2020 before going into gradual decline towards 2025.

Of course, the pandemic hit and kept that from happening. But from their 2019 paper, linked above, concerning brownfield management:

However, the success to date can be seen in the performance of six of the country's largest production companies, all of which are subsidiaries of the Russian oil majors. (These majors) have demonstrated a combined average rate of decline of 2 percent per annum over the past decade, compared to a natural decline rate for fields in West Siberia of around 10-15 percent per annum.

Massive infill drilling has gotten their brownfield decline down from a natural decline rate of 10-15 percent to 2 percent. But they do not believe this decline rate can be held:

An additional concern is that our long-term forecast for brownfield decline, of 2-3 percent per annum,
may be too optimistic if the current performance cannot be maintained as fields move further into their
final years

And they say, concerning the below chart", bold mine.

Figure 10 below. As can be seen, the overall output figure in 2030 of just over 8 mb/d is close to the "Brownfield+2 per cent" case in the corporate analysis above, implying that the regional analysis assumes a more normal decline curve for average oilfields in Russia. In other words, it confirms that the corporate analysis assumes continued technology progression, especially in slowing the brownfield decline, and therefore it is important to assess how this may be achieved. Indeed, an overall question is how can the Russian oil industry
achieve the target set for it by the Ministry of Energy of maintaining production at 550 mm tonnes per
annum (11.05 mb/d) until the end of the next decade? In other words, will the Russian oil sector be
able to fill a 2.5 mb/d gap by 2030, particularly when it seems that its major producing regions (West
Siberia and the Volga-Urals) will be in permanent decline by then?

What they are saying here is there may be serious problems with the Ministry of Energy's production goals. They seem to doubt it. Their brownfield production, (West Siberia and the Volga-Urals) shown in blue in the chart below, was about 80 percent of total Russian production in 2018 and 2019. Hey, 80% of their production will be in serious decline for the rest of this decade. Does anyone really believe the small fields they are finding in the East Siberian Arctic will replace that?

REPLY
RATIONALLUDDITE IGNORED 04/25/2021 at 6:39 pm

Terrific post. Thanks Ron. I like the candidness of the Russians on important issues. Far more realistic than EIA et al elevation of "wishful thinking" to the status of "data".

OVI IGNORED 04/25/2021 at 11:42 pm

HICKORY

I totally disagree with this statement, which is very commonly made by too many.

" I suspect that combustion-only vehicles will only make a small percent of new vehicles sales by 2030, but it will take a long time to retire the current fleet of combustion-only vehicles throughout the world. "

Last week Honda said that by 2030. they were expecting their vehicles sales to be 40% EVs. While I certainly respect their decision, which is less ambitious and more conservative than other auto manufacturers, let's just do a quick and simple calculation to see what this really means.

US EV sales, BEVs plus PHEVs, in 2020 were close to 2%. So how much of a yearly rate increase in sales do we need to get to 40% in 10 years. How about 2*(1.3493^10) = 40. So EV sales have to increase at the rate of a shade less than 35% each year to get to 40% by 2030. Recent trends have been closer to 10% and slowing.

I think 40% by 2040 is more realistic. That would only take a 16% annual increase to get to 40% and even that may be a stretch.

[Apr 29, 2021] The car makes a COVID comeback, and that means burning more oil

Apr 29, 2021 | www.bnnbloomberg.ca

After being stuck in their homes for so long, people are itching to get out again. It's a boon to newly reopening economies, with consumers ready to start spending more at gas stations, convenience stores, restaurants, hotels and attractions. Daimler AG, BMW AG and Toyota Motor Corp. all started the year with sales at records, and things are so hot that used car prices in the U.S. are soaring to all-time highs.

The jump in vehicle sales is a strong sign that this is more than just a passing fad.

Gasoline is the big winner.

Profits from making the fuel are near seasonal five-year highs and are expected to stay strong as the Northern Hemisphere heads into summer driving season. U.S. refiner Valero Energy Corp. says gasoline sales are nearly at pre-pandemic levels, and the biggest bulls are predicting demand could hit a record. The U.S. Energy Information Administration expects summer fuel prices to be the highest since 2018 this year.

[Apr 27, 2021] The Greens, if they "win" will not win with a majority. That means they will need coalition partners. Neither the CDU or the SPD is going to go along with their plan to stop NS2. The Greens, in order to form a govt. will cave in on NS2 and probably other things.

Apr 27, 2021 | www.moonofalabama.org

robert , Apr 22 2021 20:00 utc | 16

Just a couple of notes:

-The Greens, if they "win" will not win with a majority. That means they will need coalition partners. Neither the CDU or the SPD is going to go along with their plan to stop NS2. The Greens, in order to form a govt. will cave in on NS2 and probably other things.

-The Ukies are still fleeing the country to avoid going to the front. The Ukie brass says as much. These are not soldiers. They are farm kids. At the 1st sign of serious war, they will all head for the russians with hands in the air.

-V. Putin handled the western MSM narrative quite well, imo, when he said "Those behind provocations that threaten the core interests of our security will regret what they have done in a way they have not regretted anything for a long time." It can't be clearer than that. And that tells me that the ussa is in the crosshairs. This may be the 1st time in history that the oceans will offer no protection for the warmongers that have been at war for 222 years of 237 years of their existence

The comedian is still flaying about and now trying to play the SWIFT card (last week it was nuclear weapons, before that it was...). Which, of course, the west will not honor because it would cripple the west as much or more than RU. I would imagine he needs to change his undershorts on an hourly basis these days. He is literally caught between a rock and a hard spot. No more support from DE, FR, US, NATO, TR except good wishes. And demands from his brain-dead Banderites are only growing more shrill. What's a poor comic to do?

The west is basically done with him and with the show of force by the russians they are more done with him than before. For his sake, i hope his khazarian passport app has been approved.

Another failed state compliments of the khazarians in DC. And the beat goes on.


passerby , Apr 22 2021 21:17 utc | 18

Eighthman @10 North Stream 2 will be the last mayor cooperation between Russia and Europe for the next 10, 20 years. If you had to choose where to put your money, would you put it in a gas pipeline to China (Power of Siberia) or a gas pipeline to Europe (North Stream2)?

Putin will be the last Russian president who looked west, to Europe; the next president will look east, to Asia. It's where the money is.

Nick , Apr 22 2021 23:52 utc | 28

I know how the German system works. Yet I am not seeing the Greens win or compose the next government if they threaten to cancel NS2. The NS2 is not about the CDU/CSU but about the German elite interest. No way they are going to give green light to the Greens. Speaking of someone which city is on the border.

Bernard F. , Apr 23 2021 1:15 utc | 35

Dans l'œil du cyclone

The only antiwar party in Germany is AfD. They don't buy at all the "narrative" Die Linke is only " pacifistes bêlants ".

The meeting of German parliament was interesting. Unfortunately, only found german SNA report

https://snanews.de/20210422/bundestagsdebatte-ostukraine-parteienvertreter-gespalten-1826965.html

About green leadership in west Germany, it was a fake election, no meeting, no campaign...just ridiculous posters in the streets. Massive abstention.

A post Covid-19 election, with young people back, could be surprised. East Germany is to be analyse.

Germany often surprises the world for the better , SS-20 and Pershing II missiles crisis 1978-87 and Mauerfall 1989.


[Apr 27, 2021] On the subject of LNG, is it even possible to transport enough LNG from the United States to Germany in quantity equal to the flow of Nordstream II?

Apr 27, 2021 | www.unz.com

Jim Christian , says: April 19, 2021 at 4:56 am GMT • 3.9 days ago

There is ONE little thing Mike Whitney missed, or maybe it developed as/after he wrote this, the State Department told Germany last week there would be no further sanctions on Germany or her companies as regards Nordstream II. I believe also that a four-Euro-country coalition told the U.S. a couple of weeks ago that this was for Germany's energy security, Nordstream that is and they sounded like they're serious about any further American interference in the matter.

On the subject of LNG, is it even possible to transport enough LNG from the United States to Germany in quantity equal to the flow of Nordstream II? That pipe they're laying looks of sufficient diameter to walk through standing up, it's going to pass a LOT of gas. I don't know what the flow rates and pressures are, but I know one thing; Boston has a large LNG terminal and it's a dangerous setup. Pipelines seem to me a safer enterprise.

Anyone familiar with this stuff?

shylockcracy , says: April 19, 2021 at 5:14 am GMT • 3.9 days ago

-The Ziocorporate globalist NATO/EU terrorists: We supported Chechen terrorist separatists and KLA organ-harvesting Jihadis, dismembered Yugoslavia and bombed Serbia, used your Russian airspace that you opened for us to invade Afghanistan after the 9/11 Zioterrorist self-attacks, instigated Georgia into war with Russia, used your UNSC vote to destroy Libya with ISIS, turned EUkraine into a NATO satellite complete with an bloody massacre in Odessa and yet another massmurderous war on Russia's border and blamed and sanctioned you for it, shot down your planes in Syria; and we're gonna be taking Belarus the moment Lukashenko blinks. But we're really good business partners, and need some gas, you know...

Miro23 , says: April 19, 2021 at 5:42 am GMT • 3.9 days ago

To my American readers I'd say that the US is very strong and the people of the US can have a wonderful life even without world hegemony, in fact, hegemony is not in their interests at all. What they should seek is a strong nationalist policy that cares for the American people and avoids wasteful foreign wars.

The problem here, is that the American people are crushed and powerless, and in the grip of something morphing into a Neo-Bolshevik style dictatorship. Similarly to the mid 1930's this dictatorship wants world power – and from this perspective Ukraine looks more like Spain 1936 (the first act of a much bigger show).

Biden's recent phone call to Putin suggests that the administration has decided not to launch a war after all. The unconfirmed report of two US ships turning away from the Black Sea fits this assessment. However, we cannot be sure about this since the Kremlin refused to agree to Biden's offer for a meeting. The Kremlin's response was a frosty "We shall study the proposal". Russians feel that the summit proposal might be a trick aimed at buying time to strengthen their position.

Except that the US ordered two British warships to go there instead.

TASS, April 18. Two British warships will sail for the Black Sea in May. According to The Sunday Times, a source in the Royal Navy indicated that this gesture is intended to show solidarity with Ukraine and NATO in the region against the background of the situation at the Russian-Ukrainian border.

According to the newspaper, one Type 45 destroyer armed with anti-aircraft missiles and an anti-submarine Type 23 frigate will peel off from the Royal Navy's carrier task group in the Mediterranean and sail through the Bosphorus into the Black Sea.

It is reported that the decision was made in order to support Ukraine after the US cancelled its plans of sending two destroyers to the Black Sea in order to avoid further escalation in the region and tensions with Russia. It is noted that in case of a threat on the part of Russia, the UK is ready to send other military equipment to the region.

https://tass.com/world/1279483

I would guess that the US Trotskyites plan to push the Ukrainians into a war and then launch a massive international media barrage, "heroic Ukrainian patriots", "Russian atrocities", "killer Putin" etc. sufficient to finish with Nord Stream 2 and scare France and Germany back into the US fold.

If this is right, then they're not expecting Russia to retake the whole of the Ukraine, and they're not planning to start WW3.

However, Russia's lowest risk strategy would probably still be to only defend their existing positions making it difficult to claim a "Russian invasion". They've probably already lost Nord Stream (which is really a German loss – and the Germans know what the ZioGlob are doing here). This buys time, and given that the US is already on a fast downward slope, lets them keep sliding.

The Alarmist , says: April 19, 2021 at 12:16 pm GMT • 3.6 days ago
@Jim Christian

Let's just say that Germany relying on LNG from the US and ME is somebody's pipe dream.

MarkU , says: April 19, 2021 at 12:19 pm GMT • 3.6 days ago
@Anonymous point the finger and shriek about 'Russian aggression' in order to pressure the Germans into cancelling Nordstream 2 and any other Russian supplied energy.

Of course if the Europeans weren't run by (((banker))) stooges and if they had any balls between them they would force the US to call the whole thing off and pressure the Ukrainian fascists to honour the Minsk 2 agreement. Sadly we are just going to have to prepare for the worst and hope it doesn't go nuclear.

I see my own government (I am from the UK) has decided to send some sacrificial ships to the Black sea (the US apparently doesn't want to risk theirs) What else can we expect when 2/3 of our parliament are in 'Friends of Israel' groups?

BorisMay , says: April 19, 2021 at 12:47 pm GMT • 3.6 days ago

As Andrew Anglin writes, watch out for an upcoming false flag

Zarathustra , says: April 19, 2021 at 12:50 pm GMT • 3.6 days ago
@Schuetze

Like Mike did say in Godfather:" You are not lucky." Neither is US

Brooklyn Dave , says: April 19, 2021 at 1:07 pm GMT • 3.5 days ago
@Marshall Lentini

The Ukrainians who would the hardest to pacify are in the Ukie Diaspora in US, Canada and Western Europe. These folks still maintain a WW II mentality, act as if the Holodomor (which was terrible) only happened the other day and have a fair number of Banderists among their number. They do not wish to acknowledge that the Holodomor was orchestrated by the same Jews who launched the Bolshevik Revolution and killed millions of Orthodox Russians more than a decade beforehand. The ideal would be for Ukraine to maintain it territorial integrity minus perhaps the Donbas and go forward with a positive relationship with Russia.

Fiendly Neighbourhood Terrorist , says: Website April 19, 2021 at 3:26 pm GMT • 3.4 days ago
@Anonymous refugees, including tens of thousands of Russian passport holders, trek into Russia, creating a nightmare for Putin. Ukranazistan is enormously emboldened, joins NATO de facto if not yet de jure, Russia is tremendously weakened, loses all allies and prospective allies. Win for Amerikastan.

Scenario 2: Putin intervenes.

Result: Amerikastan leaves the Ukranazis high and dry, but shrieks about Evil Russian Invasion; NordStream II and all other economic connections with Europe are severed. Amerikastan immensely reasserts its control over Europe, sells its LNG to Germany at much inflated prices, and its useless weapons to everyone to "defend against Russia". Hands Russia the unenviable burden of the ruin of Ukranazistan, which Amerikastan has looted for 7 years till there is nothing left. Win for Amerikastan.

Art thou answer'd yet? What, art thou answer'd?

PokeTheTruth , says: April 19, 2021 at 3:27 pm GMT • 3.4 days ago
@Fiendly Neighbourhood Terrorist ttlement of Disputes". Hopefully it will direct the attention of the Security Council or the General Assembly to realize the Russian Federation and permanent member of the UNSC, see no other path to peace if the representatives of the UN fail to make a just and fair decision on this particular matter that has gone on for far too long.

This in itself does not necessarily mean the armies of Russia will pour over Ukraine's western border and over their northern border from Belarus. But the declaration of defensive war puts US-NATO in a Hobson's choice predicament and that is to choose peace. If they choose to cross the Rubicon then the necessity of defense war as theoretically stated will happen to preserve the sovereignty of Mother Russia.

RadicalCenter , says: April 19, 2021 at 3:31 pm GMT • 3.4 days ago
@kszat

Less than 11% of ukrainians are Catholic -- less than 1% "Latin Rite" and 10% Uniate Catholic -- and they are concentrated overwhelmingly in the oblasty bordering Poland and Slovakia etc. in the west. Catholicism does not exist in the Donbass region and has almost zero presence or influence in the rest of the Ukraine excluding the far west.

Russian and Ukrainian are even more similar than you make out, albeit not nearly-identical like Russian and Belarussian.

In any event, many Ukrainians consider BOTH Russian and ukrainian to be their native languages.

Moreover, a large minority of people, especially around Kiev, use the Russian-Ukrainian mix called Surzhyk.

annamaria , says: April 19, 2021 at 3:33 pm GMT • 3.4 days ago
@Carlton Meyer

If the MIC/Banksters like the brinkmanship games so much, it would be interesting to see Russian nuclear submarines emerging near Patagonia (Jewish "retreat") and Cuba. A piece of leaked information about the City of London being on a crosshair of Kinzhal will be a bonus. Add to that the publication of a detailed map of underground luxury bunkers for the "deciders;" that would be super nice.
The cannibals – the "globally-oriented elites" – need to feel the flaming spear directed towards each of them (and their progeny) personally. The confrontation has indeed become personal: the ZUSA's "elites" against humankind.

steinbergfeldwitzcohen , says: April 19, 2021 at 3:52 pm GMT • 3.4 days ago
@Miro23 re it fit best how would that be a bad thing?
Some to Russia, some to Poland, some to a rump State.
I would love to see Putin, Lavrov and Shoigu cook up a feast for Bidet Joe and Camel Toe tbat would see them humiliated. Bidet is a fraud and anything that makes him and his little goblin Blinkenfeld look like idiots is great.
We can only hope!
P.S. It must really suck to be a Ukrainian. Here we are in the 21st century and these guys can't get out from being stuck in the mud. The young have to leave for Poland to get jobs. And for what reason, so American Jews can get their Hate On for the Czar?! All the Greenblatts need war crime charges. Convict and execute the next morning. All legal. Force is all these vermin understand.
Oscar Peterson , says: April 19, 2021 at 4:01 pm GMT • 3.4 days ago
@Anonymous oke Putin into overreacting, thus, proving that Russia poses a threat to all of Europe. The only way Washington can persuade its EU allies that they should not engage in critical business transactions (like Nordstream) with Moscow, is if they can prove that Russia is an "external threat" to their collective security.

Shamir unfortunately became fixated on Whitney's use of the word "overreact" (though I agree it's not the right word) and mostly failed to address the substance of the question and its underlying premise.

And, as a postscript, I agree with animalogic. Your kindergarten language is embarrassing. I mean, if you're going to insult Escobar et al., at least use adult insults.

Oscar Peterson , says: April 19, 2021 at 4:07 pm GMT • 3.4 days ago

In the unlikely event that Ukraine does try to take back the Donbas by force, Shakespeare has already devised the appropriate stage direction for the Zelensky government:

Exit, pursued by a bear.

annamaria , says: April 19, 2021 at 4:08 pm GMT • 3.4 days ago
@Ray Caruso ref="https://www.wsws.org/en/articles/2009/05/zime-m11.html">https://www.wsws.org/en/articles/2009/05/zime-m11.html
Krystian Zimerman, a man of dignity, loathed the treacherous snake obama.
https://blazingindiscretions.blogspot.com/2009/04/krystian-zimermans-pro-peace-speech.html

"Get your hands off my country," Zimerman told the stunned crowd in a denunciation of US plans to install a missile defence shield on Polish soil. Some people cheered, others yelled at him to shut up and keep playing. A few dozen walked out, some of them shouting obscenities.

SafeNow , says: April 19, 2021 at 4:46 pm GMT • 3.4 days ago

I've played hundreds of Russians at chess, and they prefer what chess players call "quiet moves." (Unlike US players, who are more impetuous). Same for Putin; quiet moves. But if provoked, he will finish the job. (Adm Spruance, after Pearl Harbor: By not attacking the tank farms, sub base, and machine shops, they had not "finished the job.

Majority of One , says: April 19, 2021 at 6:01 pm GMT • 3.3 days ago
@Prester John

The "western" Ukraine you cite may have been culturally Ukrainian/Russian/eastern Slavic, several hundred years ago. But as they were under Polish and later Austro-Hungarian overlordship for many generations, they became westernized–culturally deracinated. They are Galicians, NOT Ukrainians.

If Ukraine retains some level of political independence, they need to divorce these culturally undigestible Uniates and their fascistic leadership. Currently that group poses a toxicity to the body-politick of Ukraine, however else you may wish to define Kievan Rus.

RadicalCenter , says: April 19, 2021 at 6:02 pm GMT • 3.3 days ago
@Prester John

Wrong to say that "West Ukraine" is Catholic. Only TEN percent of Ukrainians are Uniate Catholic, less than 1% Roman Catholic.

Majority of One , says: April 19, 2021 at 6:11 pm GMT • 3.3 days ago
@Bombercommand > In some ways your take is apropos, particularly regarding potential Russian overextending.

You do place a lot of reliance on "International Law". With little incidents like Trump's overturning of the uranium-processing accords with Iran, plus numerous other violations by the U$/British consortium working as the intel and military enforcement arms for the Bank$ter Cabal; international law has been constantly and consistently violated.

Geopolitically speaking, in terms of realistic "real politick", as per Bismark, no national regime regards such nice-sounding accords as valid and inviolable. At some unknown future time, genuine International Law may become a reality. At present, it is primarily a smiley-faced mask.

Russian_Deplorable , says: April 19, 2021 at 6:23 pm GMT • 3.3 days ago

A bear has never been a "Russian totem animal". Eagles, falcons, wolves – but never bears. "Russian bear" is a product of the British russophobic propaganda of the Crimean war of the 19 century.

The ukies are not Russians. Russian society looks forward demolition of the ukronazi statehood, but without any form of integration of the Northern Somalia into our country. A few million insurgent anarchists on top of all our problems would finish us.

Alfred , says: April 19, 2021 at 6:35 pm GMT • 3.3 days ago
@Brooklyn Dave for Ukraine.

The fanatics who actually live in Ukraine can be easily traced and kept under control. Their funding would be cut off. They are a tiny portion of the population.

In the last elections that were won by Zelensky, the parties that wanted peace with Russia represented over 95% of the population. Zelensky deceived everyone by continuing exactly the same policies of Poroshenko. In fact, he was worse as he recently shut down all opposition TV stations.

1n 2019, the only area in favour of continuing the war was brick-red on this map. Today, due to the collapsing economy and the lockdowns, there are even fewer people in favour of war. The Russians would be welcomed almost everywhere.

Lucy Lipinska , says: April 19, 2021 at 6:42 pm GMT • 3.3 days ago
@steinbergfeldwitzcohen

Fraud Bidet and little goblin Blinkenfeld; amusing but true nevertheless.

And I couldn't agree more when it comes to what you say about Ukraine, i.e. the borderland. According to my sister who lives in Poland, Ukraincy (in Polish "those from bordeland) are everyplace.

Sally'sDad , says: April 19, 2021 at 6:49 pm GMT • 3.3 days ago
@Majority of One

I would add that the western part of Ukarine "released" to join Poland would just allow the evil empire to occupy that much land even closer to Russia. I don't see that as desirable. Perhaps that western
extremity is something that needs to be made "independent" and demilitarized, perhaps with UN peacekeepers present. At any rate, it needs to be rendered as no danger to Russia.
I have thought that by making Ukraine unavailable to the native neo-nazies there, they are forced to relocate, and then become a major headache for their damaging and dangerous influence in Europe.
Call it "blowback" . just another reason for the Europeans to defuse any American smart ideas in their neighbourhood.

Aaron Hilel , says: April 19, 2021 at 7:13 pm GMT • 3.3 days ago
@Fiendly Neighbourhood Terrorist t.
Russia wins.

Fourth variant.

Canadian, British and hand-picked nazi battalions attempt to enter the no mans land, come under mortar fire, go to ground and ask their artillery to save them.
Ukrainian/nato artillery battalions get counter-batteried into oblivion by ru artillery regiments stationed in range.
Commanders at battalion level ask for a cease-fire, evacuate their troops back to the starting line.
V.V. Putin, being merciful and kind, agrees.
Russia wins.

Fifth variant

Nothing happens except for a lot of hot air, troop movements and wails from Lugenpresse.
Status quo is maintained, zato keeps paying for the Ukrainian Project.
Russia wins.

Marshall Lentini , says: April 19, 2021 at 7:25 pm GMT • 3.3 days ago
@Bombercommand

Absolutely solid take. Only thing I would add –

Russia would instantly become an outlaw state.

They are already being treated as an outlaw state, and although Russians are inhumanly patient, as I've seen for too long firsthand, this may figure into any looming brinkmanship – as Lavrov's recent exasperated remark about the US being incapable of negotiation may indicate.

Jake , says: April 19, 2021 at 8:49 pm GMT • 3.2 days ago
@SteveK9

True, There is zero need for the US to play Imperial Global Overlord because of the natural resources on North America. It is only the greed and hubris of the Elites, who cannot ever be satisfied.

The Anglo-Zionist Empire is very much an Evil Empire.

[Apr 26, 2021] Oil-Field Services -- Lots to Like Beneath the Surface

Apr 26, 2021 | www.wsj.com

The macro conditions for oil and gas are undoubtedly improving: OECD oil inventories have been drawn down to levels near their five-year average, working off the massive overbuild from the last year. Brent crude prices also are back to their immediate pre-pandemic levels. Halliburton noted in its Wednesday earnings call that while smaller, private energy companies have dominated the recovery so far, listed drillers are expected to pick up activity in the second half of the year.

Oil field servicers' collective discipline should help them command higher prices as energy companies require more of their services. Despite flattish revenue compared to the prior quarter, all three saw continued margin improvement , benefiting from efforts last year to pare costs, including head count reductions and the use of remote technology for certain services. Also helping their outlook is considerably weakened competition: Oil field services bankruptcies rose to an all-time high of $45 billion in debt affected in 2020 and are continuing this year.

... ... ...

Despite their resilience, oil field service companies have underperformed a broad basket of oil-and-gas exploration companies year to date. The three industry leaders are trading at or below their historical multiple of enterprise value to earnings before interest, tax, depreciation and amortization.

For investors looking to ride the coattails of the oil demand recovery, servicers are an inexpensive way to do it.

[Apr 25, 2021] Gold The Coming Oil Shortage - Part II - ZeroHedge

Apr 25, 2021 | www.zerohedge.com

US shale oil:

US shale oil producers shut in production because it became hugely. A large part of US production even saw negative prices. But even as prices recovered quickly to $40/bbl, hardly any producer could cover their operating costs, let alone being profitable. This lead to a continuous decline in output and only very recently we saw a modest recovery in production. At this point, production is down around 2.5mb/d from peak.

One might argue that we have seen the same dynamics before. Back in 2014, US shale oil production was also growing at breakneck pace. This eventually led to a much oversupplied global market and a price crash from $110/bbl to $30/bbl over 18 months. As a consequence, US shale oil production also sharply declined, which eventually rebalanced the market. Prices recovered and stabilized at around $60-70/bbl. Subsequently US shale producers slowly adapted to the new price environment and by 2019, production again grew at over 2mb/d. But in 2019, the market had not much trouble absorbing that kind of production. In fact, it depended on it.

However, the recent price crash and ensuing production decline doesn't seem to follow the same path. Oil prices have fully recovered by now, but production has not. In fact, US production is near the lowest it has been since the outbreak of the pandemic. Moreover, drilling activity is also greatly lagging. Arguably the US oil rig count has recovered from 172 in August 2020 to currently 344, but this seems not enough to keep production even constant.

Exhibit 11: US production has yet to show any meaningful recovery despite the full price recovery (Kb/d year-over-year)

Source: EIA. Goldmoney Research

In fact, the reason why US shale output is not lower despite this very low rig count is because producers reverted to high grading. High grading means the producers are producing from their most prolific acreage. This also means that any production increase would require a massive redeployment of rigs as new wells would be less prolific than the current ones. But US producers vowed to their investors as well as to their banks that – unlike the last time prices recovered – they would refrain from growing output and focus on profitability instead.

Exhibit 12: As the rig count fell, average production per rig increased due to high grading (B/d and rig count (Permian Basin))

Source: EIA, Goldmoney Research

A further issue is the size of US shale output and the steep decline rates. Unlike shale gas producers which somehow managed to flatten their decline curves, shale oil producers still struggling with decline rates around 70% in the first year. The larger total US shale oil output gets, the more new production has to be brought online to simply offset the decline rates in existing output. This is not a new problem, but the recent reluctance of US producers to grow output at all costs means this issue is now real.

Exhibit 13: Steep decline rates remain a problem as US shale oil output remains high even after the crash (B/d all basins)

Source: EIA, Goldmoney Research

The pandemic and the price crash have also accelerated phenomenon that was already known from the shale gas market, but is new to the shale oil market. In the US, there used to be multiple shale oil basins which all showed production growth, albeit at different speeds. The Permian basin became sort of the king of shale oil, but other basins such as the Bakken (the first), Eagle Ford, Mississippi Lime and Niobrara all grew as well. But in this price recovery, and despite the rebound in the rig count, all those basins show a continuous decline. The Permian Basin is the only shale oil Basin that shows a recovery in supply (albeit a small one). This is not unlike what we have seen in US gas, where shale gas production started in the Barnett shale, then Haynesville Basin outgrew everything else, but now the Marcellus shale is dominating US gas markets.

Exhibit 14: Only the Permian Basin shows some output recovery (b/d)

Source: EIA, Goldmoney Research

If this fully repeats in the shale oil space, then production is limited to how much pipeline space can grow out of the Permian. Arguably that was an issue before, but if production continues to decline in other basins, then the Permian has to offset those declines as well. This would further restrict how fast production can growth in the future.

We believe that the necessary focus on profitability, combined with the issue of high decline rates which become more dominate as base production grows, limit US shale oil production growth long term. We don't think we see production again growing at the record rates of the past, certainly not at these prices. Much higher prices would likely ignite another rush in the sector, but eventually the decline rates will dominate and effetely limit production growth.

The future of global supply growth:

On net, this means that supply will struggle to return to pre-COVID-19 levels quickly as non-OPEC ex US shale will be permanently lower and continue to decline while it will take time for US to reach old highs. US shale oil production is unlikely to grow again at past rates, particularly with current prices. And once US shale production has reached the previous peaks, it will be increasingly difficult to grow much further as high decline rates simply limit to how high production can go. Even before the pandemic, most OPEC countries were already more concerned about maintaining their production rather than growing it over the long run. Low prices and high spare capacity also prompted core OPEC members to lower their CAPEX, at least temporarily.

The duration mismatch between supply and demand peaks

The problem is, while oil producers are preparing for a low carbon future with potentially declining oil demand, oil demand itself will still grow for many years to come. The oil space is facing a duration mismatch.

Oil demand is primarily driven by the transportation sector and to a lower extent by the petrochemical industry and industrial sector as a whole. Together they account for 84% of global oil demand, 87% if demand from the agricultural, forestry and fishing sectors are added (as it is likely also mostly transportation related oil demand). The transportation sector accounts for about 2/3 of global oil demand and it is still growing. The petrochemical sector accounts for 11% and is the fastest growing sector for oil demand. Industrial demand comes in third at 7% and it has been declining for decades.

The future of oil demand

Industrial demand will likely continue to decline slowly. Wherever possible it's substituted as oil tends to be one of the most expensive energy sources compared to power or gas. But this is an ongoing process and the low hanging fruits have been harvested decades ago. Hence this future decline is irrelevant in the grand scheme of things.

In contrast, demand from the petrochemical sector will continue to grow in the foreseeable future as plastics demand will continue to rise with population growth and global economic expansion. We expect Petchem demand growth to offset declines from all sectors other than the transportation sector.

The big question therefore is what will happen to transportation demand. Transportation fuel demand has been declining for many years in most Western economies even as Western economies continued to expand and both the population as whole and mobility continued to rise. This is mainly due to much better fuel economies in transportation vehicles driven mostly by regulations. Importantly, the regulatory frameworks that drive these efficiency gains are not new. In the US, the Corporate Average Fuel Economy (CAFE) standards were introduced already in 1975 as a reaction to the 1973-1974 oil embargo. The regulatory frameworks aims at fuel consumptions directly. The CAFE standards have been continuously tightened over the past 45 years.

Exhibit 17: Fuel efficiencies have been increasing for decades without electrification

Source: Wikipedia

The European Union adopted a regulatory framework with a dual mandate that not just targets fuel economy, but also emissions. European manufacturers have a binding emission target of CO2 95g/km for the average mass of their vehicles from 2021 onwards. It was CO2 130g/km from 2015-2019. Other OECD nations have similar standards that have tightened over the past decades.

The result is that fuel consumption in most OECD countries has actually peaked a while ago. Countries with high population growth such as the US have seen their overall fuel consumption rising, but not at the same speed as their population and economy was growing.

The main contributor to fuel demand growth over the past 20+ years this were the emerging markets. In Emerging Markets, the fuel economy of newly sold cars is already quite high as the cars sold tend to be smaller, lighter and equipped with smaller engines. According to the SIPA center on global energy policy, the fuel economy of average car sold in China in 2018 was roughly 5.8 liters per 100km, equivalent to 40.5Mpg. In contrast, the average vehicle sold in the US had a fuel economy of around 33.8Mpg. However, given the rapid expansion of the car fleets in these countries, fuel demand has been strongly rising over the past decades.

Importantly, the rise in popularity of hybrid cars and EVs over the past years has not yet lead to a complete change in trend in fuel consumption. The efficiency gains over the past years were still primarily driven by more fuel efficient cars with combustion units. The reason is that despite their popularity, hybrid and full EVs are still only a small fraction of all transportation vehicles sold in the world and even a smaller share of the global car fleet.

According to the international Energy Agency (IEA) roughly 90 million of cars are sold worldwide, up from around 60 million units by 2005. According the IEA, only 2.1 of the vehicles sold in 2019 were electric in some form, which includes hybrid cars.

According to Bloomberg, there are currently 1.2 billion vehicles in the world. According to the IEA, the total electric car flight is just 7 million. Again, this includes hybrid cars.

[Apr 24, 2021] Gold The Coming Oil Shortage Part I - ZeroHedge

Apr 24, 2021 | www.zerohedge.com

The important part for future production is that we make a clear distinction between those three supply sources (counting OPEC and the + states as one source). There are very different reasons for why production is down from each source and more importantly, what the long term prospects are.

In the second part of this report, we will discuss the prospects of each source in detail and show that the pandemic, and the ensuing price crash, have accelerate a process where global production will hardly be able to grow. At the same time, demand will not peak as quickly as people believe. This has the potential for a massive supply shortfall in the medium term.


smellmyfingers 2 hours ago

The only real shortage we have is truth.

We're all being fed a huge steaming pile of BS on everything. Oil build/draw. Crypto currencies based upon what? Fiat money, paper.

All these lying politicians and banksters just jockeying for positions to steal as much as they can as they push the human family to genocide.

wick7 38 minutes ago

Either way oil is going over the Seneca cliff and then Mad max here we come.

wick7 35 minutes ago

Every oil well that has ever existed has followed a bell curve. Pretending oil is infinite is like believing in a flat earth.

Galtmandu 1 hour ago (Edited)

This is some weak sauce analysis on the relationship between gold and energy prices. Here is a summary:

Energy prices and gold prices tend to correlate.

I have simplified,

Galtmandu

PS, your model is basically, interest rate policy, fed reserves of gold supply, and inflation - not groundbreaking stuff. You have created an algorithm that uses these three inputs to overlay on gold prices. Simple stuff. In fact, a basic polynomial exercise gets you your best fit.

Now, predict the movements of fed gold reserves, inflation, and interest rate policy. You can't. Therefore, your model has no predictive capability beyond your opinion. Otherwise, you would be spending your days sipping umbrella drinks.

If I seem aggressive about this stuff its because I hate this kind of faux-analytical b@llsh&t that is just sales propaganda.

Thrashed10 2 hours ago

I'm sitting mostly in cash right now. I do have a little exposure to oil. And food.

The oil market is so manipulated. Probably a smart move long term. But I have to trade so my kids get ice cream. I already know my trade for Monday if I feel motivated. I trade commodities and industrials. The boring stuff that is not sexy.

hanekhw 1 hour ago

Oil prices linked to the worthless dollar won't continue and this Administration is working hard to make our dollars even more worthless.

[Apr 19, 2021] As demand picks up further, global inventories will decline at a rate of 2.2 million barrels a day in the second half, propelling Brent crude to $74 a barrel or even higher, Citigroup predicts

Originally from Historic Oil Glut Amassed During the Pandemic Has Almost Gone By Grant Smith and Julian Lee
Apr 18, 2021 | www.bloomberg.com

..."Commercial oil inventories across the OECD are already back down to their five-year average," said Ed Morse, head of commodities research at Citigroup Inc. "What's left of the surplus is almost entirely concentrated in China, which has been building a permanent petroleum reserve."

... Oil inventories in developed economies stood just 57 million barrels above their 2015-2019 average as of February, down from a peak of 249 million in July, the IEA estimates.

... In the U.S., the inventory pile-up has effectively cleared already.

Total stockpiles of crude and products subsided in late February to 1.28 billion barrels -- a level seen before coronavirus erupted -- and continue to hover there, according to the Energy Information Administration. Last week, stockpiles in the East Coast fell to their lowest in at least 30 years.

... There have also been declines inside the nation's Strategic Petroleum Reserve, the warren of salt caverns used to store oil for emergency use. Traders and oil companies were allowed to temporarily park oversupply there by former President Trump, and in recent months have quietly removed about 21 million barrels from the location, according to people familiar with the matter.

...For the 23-nation OPEC+ coalition led by Saudi Arabia and Russia, the decline is a vindication of the bold strategy they adopted a year ago. The alliance slashed output by 10 million barrels a day last April -- roughly 10% of global supplies -- and is now in the process of carefully restoring some of the halted barrels.

The Organization of Petroleum Exporting Countries has consistently said its key objective is to normalize swollen inventories, though it's unclear whether the cartel will open the taps once that's achieved. In the past, the lure of high prices has prompted the group to keep production tight even after reaching its stockpile target.

... For better or worse, the re-balancing should continue. As demand picks up further, global inventories will decline at a rate of 2.2 million barrels a day in the second half, propelling Brent crude to $74 a barrel or even higher, Citigroup predicts.

[Apr 19, 2021] The danger here is that the US and the EU vassals push Russia into having nothing to lose. I don't see how NS2 can be finished if Navalny dies.

Apr 19, 2021 | www.moonofalabama.org

Eighthman , Apr 18 2021 1:26 utc | 65

The danger here is that the US and the EU vassals push Russia into having nothing to lose. I don't see how NS2 can be finished if Navalny dies. I hope Russia/Putin are working to prevent this, if they can.

[Apr 14, 2021] After The Bear Showed Its Teeth The Ukraine Filed For Peace

Now it looks more and more like a deliberate provocation. With Ukraine striving to get attention and the USA striving to stop NS2.
Notable quotes:
"... The new 2020/2024 Russia/Ukraine transit gas contract is 'pump or pay' in that Russia pays $7B over 5 years regardless of whether gas is shipped or not. So it doesn't matter if the volume drops. I am actually surprised that it has given the still harsh weather in Europe. ..."
"... Meanwhile more figures are out on NS2 and it looks, given good weather, that both Fortuna and AC could finish pipe laying in both Danish and German waters by the end of May. So operational by the end as of year as stated by Gazprom looks on the cards, if not earlier. ..."
"... I suspect that the US and its NATO lapdogs are playing a distraction game. And I think that the Russian government knows this; but also realizes that the Western nations are cirrently in the grips of madcap rulers. Thus Russia is not taking any chance. One can bet that, as the whole empire crashes, it would like to bring down as much of humanity down with it as it can. The future of the earth is not bright. ..."
"... The Oil Shock only added to the 1973-75 recession. The Oil Shock was political in nature, and somewhat coordinated with the USG itself. The deeper causes of the early 70s economic crisis, and of the end of Bretton Woods, was declining profitability across all advanced capitalist states. See Robert Brenner's book, The Economics of Global Turbulence. ..."
"... Nuland et al may be trying to show themselves loyal agents of Israel, testing whether Russia can be distracted from Syria, or pretending to raise the cost of NS2. Russia and China could make balanced moves in the Caribbean to tame the bullies, but may see no advantage in counterthreats. ..."
"... This will be followed by an attack on the two Republics, dead bodies everywhere, un indisputable reason to convince the Germans with to scrap Nord-2. ..."
"... I am wondering if this might be an advantage for Russia and other countries in the mid to long term, that their companies are forced to master all the complex technologies involved as fast as possible? Maybe they will even become competitors to their western equivalents? ..."
Apr 14, 2021 | www.moonofalabama.org
Jamesp , Apr 10 2021 14:58 utc | 1

First the Ukraine said it would use force to recover the renegade Donbass region as well as Crimea. It then moved heavy troops towards the contact lines. The ceasefire at the contact line was broken multiple times per day. Several Ukrainian soldiers died while attempting to remove a minefield in preparation of an attack.

It became clear that a war in Ukraine's east was likely to soon braek out. A successful war would help Ukraine's president Zelensky with the ever increasing domestic crises. A war would also give the U.S. more influence in Europe . The U.S. and NATO promised "unwavering support for Ukraine's sovereignty".

Russia gave several verbal warnings that any Ukrainian attack on the renegade provinces of Luhansk and Donetsk or Crimea would cause a serious Russian intervention. There was never a chance that the U.S. or NATO would intervene in such a war. But it was only after Russia started to move some of its troops around that sanity set in. It dawned on the Ukrainian leadership that the idea of waging war against a nuclear armed superpower was not a good one.

Late yesterday it suddenly decided to file for peace (machine translation):

The Armed Forces ruled out the use of force to "liberate" Donbass

KIEV, April 9 - RIA Novosti. "Liberation" of Donbass by force will lead to mass deaths of civilians and servicemen, and this is unacceptable for Kiev, said Commander-in-Chief of the Armed Forces of Ukraine Ruslan Khomchak.

"Being devoted to universal human values ​​and norms of international humanitarian law, our state puts the lives of its citizens in the first place," the General Staff's press center quoted him as saying.

According to Khomchak, the Ukrainian authorities consider the political and diplomatic way to resolve the situation in Donbass a priority. At the same time, he added that the Armed Forces of Ukraine are ready for an adequate response both to the escalation of the conflict and to "the complication of the military-political and military-strategic situation around the country."

Zelensky himself chipped in (machine translated):

Zelensky spoke for a truce in Donbass

MOSCOW, April 9 - RIA Novosti. President of Ukraine Volodymyr Zelenskyy announced the need for a new truce in Donbass after visiting the contact line.

The head of state wrote on Facebook that shooting at the front lines had become "a dangerous routine." "After several months of observing a complete and general ceasefire, we returned to the need to establish a truce," Zelensky said.

As the commander-in-chief of the Armed Forces of Ukraine Ruslan Khomchak emphasized earlier, the use of force to "liberate" Donbass is unacceptable for Kiev, as it is fraught with casualties among the civilian population and military personnel. At the same time, last week he said that the Armed Forces of Ukraine will strengthen the grouping of troops in the Donbass and in the Crimean direction - in response to the "build-up" of Russian forces on the border with Ukraine.

It seems that order has come from Washington to stand down - at least for now. U.S. reconnaissance flights near Russia's border continue . One should therefore consider that the sudden call for a renewed ceasefire might be a ruse.

But if it is not why was all of this allowed to happen in the first place?

Posted by b on April 10, 2021 at 14:44 UTC | Permalink

It would be so beneficial to Russia in so many ways to fix the Ukraine problem once and for all, that America is now backpedalling fast and hoping the Russians do not get their fix. They want this to continue to be a set of problems for Russia. Avoiding a war would be great for all, but if the West thinks they can resume this contentious scenario, they will find they are wrong. I am willing to bet that most common citizens of ukraine are sick of all this vitriol and tension, crashing economy, and other hardships. Maybe the majority will finally speak up and get their say.

JohninMK , Apr 12 2021 22:42 utc | 160

Stonebird @ 155

The new 2020/2024 Russia/Ukraine transit gas contract is 'pump or pay' in that Russia pays $7B over 5 years regardless of whether gas is shipped or not. So it doesn't matter if the volume drops. I am actually surprised that it has given the still harsh weather in Europe.

Meanwhile more figures are out on NS2 and it looks, given good weather, that both Fortuna and AC could finish pipe laying in both Danish and German waters by the end of May. So operational by the end as of year as stated by Gazprom looks on the cards, if not earlier.

andreweed , Apr 10 2021 15:04 utc | 2

"why was all of this allowed to happen in the first place?"

because this is what bullies do. and when they sense they are about to lose in a fight, they ask for peace.

Mao Cheng Ji , Apr 10 2021 15:25 utc | 5

Once again, the World is saved. Pure West-emitted Goodness stopped The Dark Lord Putin in his tracks.

Jackrabbit , Apr 10 2021 15:38 utc | 7

At the same time, last week he said that the Armed Forces of Ukraine will strengthen the grouping of troops in the Donbass and in the Crimean direction - in response to the "build-up" of Russian forces on the border with Ukraine.

If war is really unacceptable to Ukraine why aren't they pulling back their forces?

1) Because the "Russian aggression' propaganda must continue until Nord Stream 2 is terminated.

2) Because the threat of a war with NATO-supported Ukraine must be sustained to deter Russia in Idlib and elsewhere.

!!

Don , Apr 10 2021 15:42 utc | 8

@MapleLeaf

The only deterrent US ships provide is the type that Russia wants to avoid engaging the US directly for fear of an eventual nuclear exchange. Otherwise, those ships provide no challenge to their military capabilities.

I submit the ships are there to encourage Zelensky to take a risk thinking the US has his back. But it appears even he isn't this dumb and this whole thing is going to blow over as I predicted a week or two ago.

imo , Apr 10 2021 15:44 utc | 9

So, was it always about bluff, theater and optics? ... Or did they simply lose their will to die young? I guess Zelensky is a bad-joke comedian after all. He gets the local nazis off his neck (for a while) by being a bold bad-ass boy and passing ideological laws (far from reality); and then goes listen to the frontline generals as they explain the suicidal meaning of his comic bluster. Being an actor, it's all just a stage for a gig, it seems. So, now he tells his pet nazi thugs that Ruslan Khomchak has their phone numbers. Perhaps now that Phil-the-(UK)Greek has died the Nato biolabs will be working on the next 'Plan B' reincarnation-virus pandemic mix. Sputnik-V 2.0 better be ready soon.

bevin , Apr 10 2021 16:25 utc | 13

Maybe I missed it but there were elections in Ukraine last Sunday and
"The new Verkhovna Rada (parliament) of the Ukraine, elected on Sunday, will have an overwhelming national mandate to negotiate peace terms to end the five-year civil war.

"Sluha Narodu ("Servant of the People"), the party of President Volodymyr Zelensky, having won more than 43% of the votes countrywide, will now command majorities of both the party-list and the single-constituency seats in the new parliament; 253 seats altogether out of 422, or a "mono-coalition" as the party is calling the result, or as the hostile Ukrainian media term it, "a landslide [which] has never occurred in the contemporary history of Ukraine and it is more typical for post-Soviet Asian dictatorships..."

"...This beats earlier pollster predictions that Zelensky would be forced into a coalition with Holos ("The Voice"), a US-invented spoiler organization of Lvov region (Galicia) led by pop singer, Svyatoslav Vakarchuk. He ended up with less than 6% of the national votes, fewer than forecast. Holos has proved to be neither the voice of youth, nor an organization without oligarch support (it was backed by Victor Pinchuk), nor a political party at all.

"Polling better than predicted was the Donbass (Donetsk, Lugansk regions) party, Opposition Platform led by Victor Medvedchuk, which ended up with 13% nationally; 48% in Lugansk; 42% in Donetsk; 24% in Odessa; and 19% in Nikolaev. If the additional votes of the eastern Opposition Bloc of Boris Kolesnikov and Vadim Novinsky are counted with Medvedchuk's aggregate, together they have drawn majorities of 53% to 54%, putting Zelensky's party in the east in a minority.

"This is the first time democracy has defeated a US Government-installed putsch and junta in Europe since the election of Andreas Papandreou's Pan-Hellenic Socialist Movement (PASOK) in 1982."

According to John Helmer "President Volodomyr Zelensky (right) is suffering from memory failure, mood swings, and other neurological disorders after his hospitalisation for Covid-19 five months ago..." The obvious theory is that Zelensky was playing for time while giving the ultra fascists and their Canadian sponsors free rein until the elections gave the Ukrainian people- powerless political flotsam and jetsam, tossed around by Ottawa Nazis, Anglo imperialism and a corrupt oligarchy which has been robbing everyone in sight, blind since time immemorial a chance to indicate that it would be an extremely dumb move to attack Russia. Amongst other reasons, because the average Ukrainian would very likely side with the Russians against their ancient persecutors the Poles and Balts.

For Helmer:
http://johnhelmer.net/reminder-of-july-21-2019-for-democrats-suffering-acute-memory-failure/#more-46171

psychohistorian , Apr 10 2021 16:25 utc | 14

b wrote
"
It seems that order has come from Washington to stand down - at least for now. U.S. reconnaissance flights near Russia's border continue. One should therefore consider that the sudden call for a renewed ceasefire might be a ruse.

But if it is not why was all of this allowed to happen in the first place?
"

Good question. It fits with the characterization of late empire flailing at trying to exert/maintain control over global narratives. Empire keeps hoping that Russia and China back down because they have no other options than bullying. This is just the latest example of the bully being faced up to.....thank you Mr. Putin!....we just hope the bully goes down without taking all the rest of us with it.

Steve , Apr 10 2021 16:44 utc | 16

I suspect that the US and its NATO lapdogs are playing a distraction game. And I think that the Russian government knows this; but also realizes that the Western nations are cirrently in the grips of madcap rulers. Thus Russia is not taking any chance. One can bet that, as the whole empire crashes, it would like to bring down as much of humanity down with it as it can. The future of the earth is not bright.

AriusArmenian , Apr 10 2021 16:58 utc | 19
If Ukraine doesn't start their self-destruction by launching war before end of June then I will believe the danger has passed this year and only because the crazies in the US are hesitating to push the final button.
JohnH , Apr 10 2021 16:59 utc | 20
Meanwhile the New York Times, which always claims to know everything about Russian intentions, is left clueless!
https://www.nytimes.com/2021/04/09/world/europe/russia-ukraine-war-troops-intervention.html
vk , Apr 10 2021 17:05 utc | 22
But if it is not why was all of this allowed to happen in the first place?

The only plausible explanation is that time isn't in favor of the Ukraine (and maybe the USA). Time is running up.

We should stop seeing capitalism as this unmovable, eternal and indestructible system, and the USA as this eternal and indestructible empire with endless resources. Both presuppositions are entirely false: capitalism and the USA are historically specific phenomena, and they will - 100% certainty - collapse and disappear eventually.

In politics, time is always relative. You know you won't last forever, but you know you don't need to: you just need to last longer than your political enemy. The fact that USA outlived the USSR gave it almost 17 years of incontestable supremacy, even though, analyzing the numbers, we know that the economic apex of the American Empire (its "golden age") was between Eisenhower and Lyndon B. Johnson. The absence of its geopolitical rival resulted in the fact that the American Empire reached its pinnacle during Bill Clinton and George W. Bush, not at the time its people was the most happy, during 1945-1969.

But geopolitical apex doesn't always translate automatically to economic apex. The USA also suffered a lot with the Oil Crisis of 1974, after which it quickly started to financialize and deindustrialize, in a process that was best symbolized by the Nixon Reforms (the creation of the Petrodollar in 1971 with the secret talks with the Saudi royal family and the deal with China in 1972). This crisis was masked solely by the fact that the USSR suffered even more with the Oil Crisis than the USA, resulting into a relative ascension. This relative ascension can be verified by the fact that Ronald Reagan was the most popular POTUS of the post-war USA: his reign was, by all economic metrics, a monumental failure, but it was during his watch that the USSR started to collapse.

Signs of cracks in the USA were already evident when George H. W. Bush wasn't re-elected because of a tax revolt by the electorate. During Bill Clinton, the American Empire gained a lot of breathing space thanks to the absorption of the vital space left by the ex-USSR countries, which were ransacked by the American and, to a lesser extent, German, capitalists (Victoria Nuland's husband, for example, got extremely rich with the privatization of the communications services in ex-Yugoslavia, hence her particular interest in Eastern Europe affairs). But even during Bill Clinton we could already see some dark clouds, e.g. the infamous "twin deficits" increase. Bill Clinton also governed long enough to see the crisis of the Asian Tigers (1997) and the Dotcom Crisis (2000). The dark clouds that would result in the storm of September 2008 were already there, gathering.

Analyzing the economic data, we can clearly see that the USSR wasn't the only one in an age of stagnation: since 1990, only China and SE Asia genuinely grew. If the 21st Century is to be consolidated as the "Asian Century", then a historian of the 22nd Century will have to go back to that year (or even earlier, to the mid-1980s) to try to understand the Asian rise. Growth elsewhere (when it happened) was either vegetative or fruit of a relocation (i.e. rise in inequality, bankruptcy of some sectors in favor of others) of wealth. During the 2000s, almost all the economic growth can be exclusively traced back to China (Russia's and Brazil's commodity booms, SE Asia's continued dynamism due to China's outsourcing or financing of American debt).

The 2008 crisis ended Neoliberalism as a hegemonic ideology. Today's world is still very much neoliberal, but only because the global elites don't know what to do and, either way, it's being implemented in a very distorted way, very far from its ideological purity of the 1990s. No one takes neoliberalism seriously anymore, even among the high echelons of the economics priesthood. Some remnants of neoliberal thought are still alive in the form of some living fossils in Latin America, but its end if fait accompli.

It is in this world that the Ukraine chose to align with the American Empire. To put it simply, it chose the wrong side at the wrong time: it chose the West in an era that's shifting to the East. The euphoria of the fall of socialism masked the degeneration of capitalism that was started at the same time and it particularly impacted the Warsaw Pact (Comecon) and the Western ex-USSR nations.

The Ukraine debacle has two aspects. First of all: the Maidan color revolutionaries clearly envisioned a neonazi, pro-Western Ukraine in its territorial integrity, i.e. with Crimea, Luhansk and Donbas. They didn't see the pro-Russians being well-organized enough to be able to quickly fall back to Russia (Crimea being the most spectacular case, rapidly organizing a referendum and fully integrating with Russia). Those losses are big: without Crimea, Ukraine essentially lost any significant Black Sea influence, and without Donbas + Luhansk, it practically lost all its industry and economy. Donbas specifically was a huge blow to the Ukrainians: since the Tsarist era, it was the most industrialized and advanced region of the Russian Empire (even more than Moscow and St. Petersburg) and it continued to be so during the Soviet Era - three of the main Soviet General-Secretaries of the post-war era came from the region (Krushchev, Brezhnev and Gorbachev).

Secondly, Ukraine, by choosing capitalism, has put itself withing the capitalist metabolic clock. The era of the Marshall Plan is gone. The USA needs wealth and it needs now. It will have to pay tributes to its new metropolis, and the price is high. The USA will settle for nothing less than the entire Ukraine - including the rich regions of the Donbas basin, plus the Crimea (over which its powerful Navy will be able to project into Russian territory). It also won't settle for anything less than a fully NATO-integrated, IMF-controlled Ukraine. That's the price for a full accession to the capitalist club post-2008.

In this sense, Ukraine's time is very short, as it is sucking the IMF dry (financial black hole) and it will collapse soon. The patience of the Empire is short and is getting shorter. As is common with capitalist societies, the Ukraine is also starting to devour itself as it collapses with the lack of vital space: the liberal elites governing it are having to ask themselves how can they get out of this mess without being murdered by the neonazi base that sustains it; at this point, they're more worried about avoiding another Night of the Long Knives than in reconquering the Donbas and Crimea.

The only good aspect I see in the dissolution and extinction of the Ukraine is that it can finally put to rest the myth that Nazism is a brutal, but highly efficient, "system": there's not such a thing - and never was - as a "Nazi system". Germany already was the second industrial superpower by the time Hitler rose to power; he never elaborated any kind of economic theory or even policy, instead delegating it to the already existing (Weimarian) industrial elite. Hitler was just a very powerful cheerleader who dreamed in being an epic movie. There was never such a thing called "national socialism" - it was just the name of the Bavarian party that already existed when Hitler crossed the border; it was by mere chance of destiny that he came from Austria (Southern border) and not Denmark (Northern border), France/Alsace-Lorraine (Western border) or Poland-Sudentenland (Eastern border). Nazism is not a system, it is just crazy liberalism, and I hope the white supremacists and traditionalists in the West take note of that - if they don't want to be crushed.

MarkU , Apr 10 2021 17:28 utc | 27 Prof , Apr 10 2021 17:33 utc | 28
VK
The Oil Shock only added to the 1973-75 recession. The Oil Shock was political in nature, and somewhat coordinated with the USG itself. The deeper causes of the early 70s economic crisis, and of the end of Bretton Woods, was declining profitability across all advanced capitalist states. See Robert Brenner's book, The Economics of Global Turbulence.
oldhippie , Apr 10 2021 17:35 utc | 29

It is more than 24 hours since the initial announcement of a stand down and it would be nice to see some confirmation. Troops withdrawing would be confirmation. If it is happening in is not reported. What we get tends to be like the NYT item cited by John H @ 20. Nothing in that article but fantasy and delusion. The ongoing narrative crowds out facts until nothing is left. No one is as bad as NYT, still it is hard to trust anything we read.

Keeping an army in the field indefinitely is difficult. At minimum the troops must be fed and must be kept busy. Does Ukraine have the wherewithal to do that? I tend to doubt that, and yes, I am speculating. We will find out much later how bad desertion has been. We will find out much later how the hodgepodge of conscripts, mercs, Special Forces, and NATO got along. Reporting from 2014 had it that 600 NATO of every flavor were captured in the Debaltsevo cauldron. If you believe that. I can't see how Ukraine musters and fields another army after this if it is in fact over. More likely future armies will resemble what US manipulates in Syria -- Turks, Uighurs, jihadis from whole planet, mercs.

Domestic politics in Uke have to be crazy. No one can possibly know what is happening except the US Embassy. And they have their brains fogged by a lifetime of NYT fiction. No good locals for them to work with. If there was anyone good we would have seen them by now.

El Cid , Apr 10 2021 17:49 utc | 32

One must be awestruck with the talent the neo cons have for nation destruction. What they created in Ukraine is a virtual post nuclear war. Neither the EU or Russia want this basket-case-failed-Nazi state. Like the Israeli invasion of Lebanon, it has fortified its enemy whom it intended to weaken. Now, Putin has a Hezbollah type ally in the Donetsk and Lugansk region, and it has Russian Crimean back to the Motherland.

jayc , Apr 10 2021 18:02 utc | 34

Rick Rozoff, writing for the Antiwar website, has taken note of other activity - not least next week's scheduled appearances at NATO hdq of both the US Sec State and US Defence sec with Ukraine discussions on agenda.
https://www.bloomberg.com/news/articles/2021-04-09/blinken-is-set-to-return-to-brussels-for-more-nato-meetings

Rozoff also notes that the CC of Ukraine armed forces continues with bluster about Ukraine's "territorial integrity" and invoking NATo Article 5.
https://news.antiwar.com/2021/04/09/ukraines-top-commander-invokes-natos-article-5-military-assistance-clause-as-west-continues-to-oversee-ukraines-war-in-the-donbass/

Sam F , Apr 10 2021 18:10 utc | 35

Nuland et al may be trying to show themselves loyal agents of Israel, testing whether Russia can be distracted from Syria, or pretending to raise the cost of NS2. Russia and China could make balanced moves in the Caribbean to tame the bullies, but may see no advantage in counterthreats.

Such an utter humiliation of the US to pursue such foolish and racist FP, admitting its complete control by money power in all federal branches and mass media.

dadooronron , Apr 10 2021 18:21 utc | 36

As others here suggest, it's possible to read this as a success for the neocons. Ukrainian gov't troop movements set off Russian troop movements, which are then portrayed as aggressive, justifying whatever. It is very hard to believe that they seriously contemplated an attack on Russia's doorstep, or in its antechamber. But the question remains as to how far Zelensky's can has been kicked down the road.

Baron , Apr 11 2021 9:00 utc | 108

It's a trap, the calls for peace, new negotiations and stuff, it's to create the impression that the West and Ukraine are the good boys.

The next stage will be a heap of accusations that Russia is breaking the peace, makes threatening moves, is poised to take over rUkraine.

This will be followed by an attack on the two Republics, dead bodies everywhere, un indisputable reason to convince the Germans with to scrap Nord-2.

Martin , Apr 11 2021 11:07 utc | 114

After foreign pressure, several western companies abandoned building the Nord Stream 2 pipeline. For example, the pipes are now laid by the Russian ship Fortuna instead of a Swiss one ( https://www.unz.com/pescobar/ukraine-redux-war-russophobia-and-pipelineistan/).

I am wondering if this might be an advantage for Russia and other countries in the mid to long term, that their companies are forced to master all the complex technologies involved as fast as possible? Maybe they will even become competitors to their western equivalents?

Usually, when governments decide about big industry projects, they demand that their national companies get some orders to profit from the project. Now, it seems reversed. The German government is still not openly against Nord Stream 2, but it has to be finished without some of the companies originally involved.

[Apr 12, 2021] Many Drilled U.S. Wells Will Never Be Completed by Julianne Geiger

Apr 12, 2021 | oilprice.com

...Raymond James analyst John Freeman, who claimed this year in a note to clients that the United States' true DUC count is much lower, given that many of the wells included in the EIA's DUC count are dead in the water and many years old, likely never to be completed. According to Freeman, this figure is as much as 22% too high.

A 2019 Federal Reserve of Dallas survey of oil and gas company executives suggests that half of the respondents agree that the EIA is overestimating the number of DUCs. Related: Investors Rush To Oil Stocks Despite ESG Push

In a low oil price environment, oil and gas companies may spend money on finishing off an already drilled well, rather than on drilling a new well. But companies will continue to strive to keep that DUC inventory in their back pocket should the market call for it. But when oil prices have been low for a long time -- and demand for crude or gas remains low, those low oil prices may never justify completing a well, resulting in another dead DUC.

Still, those DUCs are counted.

... ... ...

By Julianne Geiger for Oilprice.com

[Apr 12, 2021] The U.S. Shale Ponzi Scheme will continue a bit longer until the day the highly-leveraged over-inflated broader stock markets finally crash

The essence of shale operation is generation of the stream of junk bonds along with the stream of oil and gas. In other words profitability is low or nagative. Junk bond need buyers do this is a confidence gate -- as sson as confidence drops buyers will evaporate. At this point there will be writing on the wall. We do not need necessary a stock crash for that. But as just bond moves in parallel with stock that will also be the Minsky moment for shale oil production.
Apr 12, 2021 | peakoilbarrel.com
SRSROCCO IGNORED 04/10/2021 at 8:56 am

George,

Nice charts and summary of U.S. Oil & Gas Reserves.

However, it seems to me that a large percentage of these "supposed" unconventional reserves will never be extracted. Thus, the U.S. Shale Industry will have permanent DUCs that will never be completed and proved undeveloped reserves that will evaporate into thin air.

Why? Well, if we look at some of the top shale players, total long-term debt from just five companies increased from $17 billion in 2006 to $133 billion in 2020 (XOM, CVX, EOG, OXY & CLR).

With Equinor selling its Bakken assets (liabilities), writing down $11.5 billion from the company's original price-tag, and saying it was a big mistake to get into shale . why would it be any different for ExxonMobil or OXY?

Indeed, the U.S. Shale Ponzi Scheme will continue a bit longer until the day the highly-leveraged over-inflated broader stock markets finally crash. At that point there will not be a SHALE 3.0. I see U.S. shale oil production falling 75% by 2030. WATCHER IGNORED 04/09/2021 at 11:05 pm

Feb this year Exxon erased oil sands from its reserves.

Article talked pandemic so doubt they sold anything. Probably just a price determinant. JEAN-FRANÇOIS FLEURY IGNORED 04/11/2021 at 2:51 pm

This one is also laughable : "That gives plenty of incentive for giants like Total or Royal Dutch Shell Plc, plus the hundreds of smaller explorers that remain in business, to keep searching the world's frontiers for the next place to sink their drill bits." Royal Dutch Shell stated that their production did peak in 2019 and that their production will decrease by 1 or 2 % per year. That means that they decided to cease exploration and implementation of new oilfields or gasfields, if I am not wrong.Therefore, why there are still people who decide that oil companies should look for new oilfields ? They want to make real their dreams despite the crude reality ?

[Apr 11, 2021] Reject Nord Stream 2 Once and for All

Apr 11, 2021 | www.wsj.com

William Wahl SUBSCRIBER 2 days ago

Just put Hunter on it. He'll fix this right up.
RODNEY SMITH SUBSCRIBER 2 days ago
Where does Burisma stand on the issue? Will be Biden's brief.

[Apr 11, 2021] Reject Nord Stream 2 Once and for All - WSJ by Oleksii Reznikov April 8, 2021 6:37 pm ET
A pipe bearing the Nord Stream 2 logo at a plant in Chelyabinsk, Russia, Feb. 26, 2020. PHOTO: MAXIM SHEMETOV/REUTERS
Listen to this article 5 minutes 00:00 / 05:07 1x Ukrainian President Leonid Kuchma found himself in the company of a political titan, France's President François Mitterrand, on a gloomy day in December 1994. "Young man, you will be tricked, one way or another," Mitterrand told Mr. Kuchma, who was then the leader of a newly independent nation. Unsettled as he felt, Mr. Kuchma accepted the security assurances of the U.S., U.K. and Russia and signed the Budapest Memorandum. In exchange, Ukraine gave up its nuclear arsenal, then the third-largest in the world. Little did we know that two decades later one of the signatories -- Russia -- would attack Ukraine and occupy its sovereign territory. Now, after many years of wooing and cajoling, Russia's attitude toward Ukraine is again growing belligerent. The Minsk process to resolve the conflict is stalled, and foreign troops have yet to leave the Donbas, the Ukrainian region where fighting rages on. Despite the supposed cessation of hostilities agreed to in September 2014, when the Minsk protocol was signed, little progress has been made. Ukrainians therefore are bewildered by the continuing construction of the Baltic Sea pipeline, known as Nord Stream 2. Unlike the attack on Crimea, which came as a surprise, the pipeline's completion will have entirely predictable consequences for our national security. Ukraine will be irreparably weakened as soon as Russia has a new direct gas link to Germany. Ukrainian President Leonid Kuchma found himself in the company of a political titan, France's President François Mitterrand, on a gloomy day in December 1994. "Young man, you will be tricked, one way or another," Mitterrand told Mr. Kuchma, who was then the leader of a newly independent nation. Unsettled as he felt, Mr. Kuchma accepted the security assurances of the U.S., U.K. and Russia and signed the Budapest Memorandum. In exchange, Ukraine gave up its nuclear arsenal, then the third-largest in the world. Little did we know that two decades later one of the signatories -- Russia -- would attack Ukraine and occupy its sovereign territory. Now, after many years of wooing and cajoling, Russia's attitude toward Ukraine is again growing belligerent. The Minsk process to resolve the conflict is stalled, and foreign troops have yet to leave the Donbas, the Ukrainian region where fighting rages on. Despite the supposed cessation of hostilities agreed to in September 2014, when the Minsk protocol was signed, little progress has been made. Ukrainians therefore are bewildered by the continuing construction of the Baltic Sea pipeline, known as Nord Stream 2. Unlike the attack on Crimea, which came as a surprise, the pipeline's completion will have entirely predictable consequences for our national security. Ukraine will be irreparably weakened as soon as Russia has a new direct gas link to Germany. Now, after many years of wooing and cajoling, Russia's attitude toward Ukraine is again growing belligerent. The Minsk process to resolve the conflict is stalled, and foreign troops have yet to leave the Donbas, the Ukrainian region where fighting rages on. Despite the supposed cessation of hostilities agreed to in September 2014, when the Minsk protocol was signed, little progress has been made. Ukrainians therefore are bewildered by the continuing construction of the Baltic Sea pipeline, known as Nord Stream 2. Unlike the attack on Crimea, which came as a surprise, the pipeline's completion will have entirely predictable consequences for our national security. Ukraine will be irreparably weakened as soon as Russia has a new direct gas link to Germany. Now, after many years of wooing and cajoling, Russia's attitude toward Ukraine is again growing belligerent. The Minsk process to resolve the conflict is stalled, and foreign troops have yet to leave the Donbas, the Ukrainian region where fighting rages on. Despite the supposed cessation of hostilities agreed to in September 2014, when the Minsk protocol was signed, little progress has been made. Ukrainians therefore are bewildered by the continuing construction of the Baltic Sea pipeline, known as Nord Stream 2. Unlike the attack on Crimea, which came as a surprise, the pipeline's completion will have entirely predictable consequences for our national security. Ukraine will be irreparably weakened as soon as Russia has a new direct gas link to Germany. Ukrainians therefore are bewildered by the continuing construction of the Baltic Sea pipeline, known as Nord Stream 2. Unlike the attack on Crimea, which came as a surprise, the pipeline's completion will have entirely predictable consequences for our national security. Ukraine will be irreparably weakened as soon as Russia has a new direct gas link to Germany. Ukrainians therefore are bewildered by the continuing construction of the Baltic Sea pipeline, known as Nord Stream 2. Unlike the attack on Crimea, which came as a surprise, the pipeline's completion will have entirely predictable consequences for our national security. Ukraine will be irreparably weakened as soon as Russia has a new direct gas link to Germany. With the Nord Stream 1 and Turk Stream pipelines already operational, Nord Stream 2 will complete the encirclement of Ukraine, Poland and the Baltic states, decoupling our energy security from Western Europe. Russia has tried to bully Ukraine by threatening gas cutoffs, most recently in June 2014. But Moscow has always had to be careful -- a large percentage of Russia's gas reaches Europe through Ukraine. If Nord Stream 2 is built, this consideration will be null and void. With the Nord Stream 1 and Turk Stream pipelines already operational, Nord Stream 2 will complete the encirclement of Ukraine, Poland and the Baltic states, decoupling our energy security from Western Europe. Russia has tried to bully Ukraine by threatening gas cutoffs, most recently in June 2014. But Moscow has always had to be careful -- a large percentage of Russia's gas reaches Europe through Ukraine. If Nord Stream 2 is built, this consideration will be null and void. me title=
NEWSLETTER SIGN-UP

Opinion: Morning Editorial Report
Apr 11, 2021 | www.wsj.com

All the day's Opinion headlines. PREVIEW SUBSCRIBE


The Kremlin has demonstrated time and again its willingness to use energy trade to advance its geopolitical ambitions. It would be unwise, if not reckless, for Europe to increase its dependence on Gazprom , Russia's state-owned energy company, and give Moscow direct control over which countries are supplied with gas and which can be cut off.

The current contract between Gazprom and Ukraine's gas-transit operator guarantees the flow of westward exports via Ukraine until the end of 2024. But make no mistake: The day Nord Stream 2 is completed, that promise will be worthless. Even if some transit through Ukraine persists, Ukraine will be subject to the Kremlin's whims.

The fighting in the Donbas, where Russia operates through its proxies, mercenaries and even regular troops, has continued unabated for more than seven years. The gas pipeline has been spared from shelling -- Russia needs uninterrupted gas flows through Ukraine as much as we do. This mutual dependence is a deterrent that Nord Stream 2 will remove.

Ukraine is grateful to the U.S. Congress, which recognized the true nature of this pipeline project, and the European Parliament, which voted 10-to-1 on Jan. 21 to demand a halt to construction with a resolution on the arrest of Russian dissident Alexei Navalny in Moscow.

Germany and Europe already have access to a massive gas-transit network spanning the Black and Baltic seas, Belarus and Ukraine. The existing capacity is more than 50% higher than current consumption of Russian gas in the European Union. Even if the demand increases as Germany is working to phase out nuclear and coal power generation, there is no commercial need for another pipeline.

While Germany has little to gain, Ukraine stands to lose billions of dollars in transit revenue if the second Baltic Sea gas link is built -- a fact that Nord Stream 2 apologists often present as the only basis for Ukrainian opposition. The economic effect will be significant, but the claim is deliberately misleading. Ukrainian soldiers will be putting their lives on the line if Russia decides to escalate the conflict in the Donbas after it no longer needs to consider the effect on gas exports.

Ukraine understands the need to strengthen the trans-Atlantic alliance and the desire to find a solution that works for both Washington and Berlin. It is, however, incumbent on the Kremlin first to demonstrate respect for international law. The ball is in Moscow's court. It can and should end hostilities in the Donbas region, withdraw its troops from the Crimean Peninsula and restore Ukrainian sovereignty.

me title=

President Biden was right to call the pipeline "a bad deal for Europe." As the project inches closer to completion, Ukrainians can't help but recall Mitterrand's words from nearly 30 years ago. Ukraine was tricked, just as the French president predicted. Let us not repeat history but learn from it. We must come together and reject Nord Stream 2 once and for all.

Mr. Reznikov is Ukraine's deputy prime minister for reintegration of the temporarily occupied territories. V


V Lee SUBSCRIBER 1 day ago

The Ukrainian kleptocracy will see their cut shrink or disappear when gas will start flowing via Nord Stream 2. Not "a bad deal for Europe" just for Ukraine.
A Koster SUBSCRIBER 17 hours ago
Did i mention Turkey's role in Syria ?

It's interesting that everyone conveniently fails "to mention the role that gas line geopolitics played in the "fallout" between Erdogan and Assad; as soon as Assad vetoed the Qatar-Turkey pipeline that would have brought massive wealth to his family's energy transshipment business (BMZ Ltd), Assad instead signing on to the Iran-Iraq-Syria "Friendship Pipeline", the friendship was ended and the war on Assad commenced"

A Koster SUBSCRIBER 1 day ago
This article is about one thing.. absolutely nothing to do with a risk to Ukraine's national security

'Ukraine stands to lose billions of dollars in transit revenue if the second Baltic Sea gas link is built"

And Turkey is in there like a dirty shirt.. see "Russia Warns of Full-Scale War in Eastern Ukraine, Blames Kyiv".. like it was with Azerbaijan as they slaughtered thousands of Christians in Armenia.. and all for the first find in the Caspian Sea by Azerbaijan since Russia's breakup.. HINT: they wanted.. not needed.. a direct route west for a pipeline from Azerbaijan to Turkey.. which they got in a Russia brokered peace deal

So i guess congratulations are in order to Biden's NATO as they loyally keep working on enlarging the EU and keeping the oil baron families of Erdogan and Alyiev filthy rich

James Schumaker SUBSCRIBER 1 hour ago
I suggest you look up the Budapest Memorandum. The U.S. gave no guarantees. Like Russia, it gave assurances. I also suggest you stop falling for pro-Trump talking points and look at what Trump actually did with regard to Ukraine. He tried to extort its President into digging up dirt on his main political opponent by threatening to withdraw military aid. That's what he was impeached for -- the first time.
RODNEY SMITH SUBSCRIBER 2 days ago
Where does Burisma stand on the issue? Will be Biden's brief.
Jens Praestgaard SUBSCRIBER 2 days ago
Otto von Bismarck's maxim for the newly formed German state was to always keep cordial relations with Russia. NordStream 2 is a step towards normalization of the German/Russian relationship after 120 years of failure.
Jim Mcdonnell SUBSCRIBER 2 days ago
Bismarck's policy made sense in 19th Century Europe, and had Kaiser Wilhelm II not scuttled it we would be living in a very different world. But he did scuttle it, and the world has changed - largely in ways Bismarck sought to prevent - a great deal, as has Europe.
Heiko Muhr SUBSCRIBER 2 days ago
Bismarck's thoughts about Germany's geopolitical situation are still relevant today. He argued that the map that matters for German politicians is the map of Europe [and since 1945 that frame has been enlarged, has included the US and Canada]. That Germany needed to pay particular attention to relationships with its neighbors. That the country was to small to dominate Europe, and should rely on a system of stable alliances to ensure stability, Ukraine and Russia are neighbors, Bismarck would have seen relationships with both countries as relevant. Communication channels need to be kept open, those relationships need to be managed. One neighbor, Russia, is an authoritarian state and since 2014 more openly aggressive. It needs to be contained and challenged. The US has not been a reliable partner in doing that in the last 4 years under Trump. That might change under a Biden, but will he be able to make and lock in the appropriate policy decisions? We'll see.
John Bute SUBSCRIBER 2 days ago
Germany has made a terrible strategic mistake by abandoning nuclear power to become more and more dependent on Russian natural gas. France gets 70% of its electricity from nuclear power and about 10% from fossil fuel. Only moderate increases in hydro power and renewable energy will make it fossil fuel independent.
Heiko Muhr SUBSCRIBER 2 days ago
German voters make their own decisions about climate change and definitely don't look for US advice. Power plants burning coal and producing nuclear energy are coming off the grid. Natural gas will continue to be important in that mix for quite some time. The Green Party's power is growing. It successfully expanded its electoral base in 2 state elections this spring with broad support from middle class voters. After all, environmentalism is a full belly movement. The Greens will challenge the German Conservatives, Merkel's Christian Democrats, in September at the ballot box in national elections and other state elections. And Merkel will not be on the ballot. Her CDU, which has been consistently the most pro-American party in Europe, finds that pro-American stance is now a big liability. 4 years of the Trump regime. which treated Germans as clients, changed the political landscape. Fewer Germans see the US is as a reliable partner, and that is now true even in Merkel's party.
SCOTT CORE SUBSCRIBER 1 day ago
Germany may view the US as an unreliable partner but they still rely on the US for economic and military protection. Perhaps Germans have replaced the US with NATO in their minds and ignored the fact that the US is the majority of NATO. Where Russia to threaten Germany where do you think Germany would turn? France? UK? China?
So Germans are free to trash Trump for asking them to provide a modicum of their own protection but in the end they will look to the US should they be threatened either economically by a cutoff of gas from Russia or a military threat from Russia.
Heiko Muhr SUBSCRIBER 20 hours ago
Look at Gallup polling data or the Pew Research Center's data in its Global attitudes program. In many countries Trump ranked even below Xi or Putin. He was perceived as the bigger threat--unstable, angry, without a strategic vision, just a ventilator of his emotions, a middle schooler craving attention, a clown. Yet he made these huge claims, all lies, that the US was respected and listened to. The polling data tells us otherwise. Trump's lying and the hubris that fell from these lies, that is unprecedented.
And now; THE LOSER. The Mouse-of-Mar-a-Lago. But, the Republican Party still follows him.. The man will be remembered as the worst president the US ever had, ranking even below the corrupt Harding and the imbecile Buchanan. The lowest of the low. And as THE LIAR [-->Trump should register that as a trademark]. History books won't be kind to him and the suckers that still gobble up his lies even now after the putsch or whatever you want to call the Capitol "riot." Barnum was right!
michael ring SUBSCRIBER 2 days ago
England and France have their own nuclear deterrents. Europeans just want cheap steady supply of energy. Russia is in the Middle East because Hillary and Obama destroyed Syria and Libya. Bush put us in Iraq and Afghanistan for 20 years! Trump started the withdrawal. Let's hope sleepy preacher Biden continues it.
Heiko Muhr SUBSCRIBER 2 days ago
A little reality check: At the very moment when Washington supposedly champions energy independence and warns European allies against becoming too dependent on Moscow, American refineries are buying more Russian oil than ever before.
Check out the article by Javier Blas on the Bloomberg News site, published Mar. 24, 2021: "U.S. Thirst for Russian Oil Hits Record High Despite Tough Talk."
David Thomson SUBSCRIBER 2 days ago
Puerto Rico buys Russian LNG because there are no American-built LNG tankers. Thanks to the Jones Act, we can't ship LNG from Texas to PR.
Eugene Boutz SUBSCRIBER 2 days ago (Edited)
Ukraine is composed of three *identities* which have nothing in common and want nothing in common.

There are the Russian speakers in the East and along the Black Sea, the people surrounding Lviv in the West which want to be European and the denizens of Kiev who tend to favor the values and views of the Chancellor of Germany in the '30s.

Ukraine already has a tripartite schism and is most likely headed for a tripartite split once the Russian Federation, having had its absolute fill of Kiev's games, obtains Beijing approbation to bring the matter to a conclusion with weaponry of which Kiev can only dream.

The United States is not going to fight a nuclear war with Russia over the interests of the Kiev faction nor does Germany want it to.

Nor do I.

Nor do you.

Heiko Muhr SUBSCRIBER 2 days ago (Edited)
The Germans are not going to cave. They will finish the pipeline. It is now 96 % built. The West Europeans started importing Russian gas more than 40 years ago. Ronald Reagan failed when he tried to stick it to the Germans with sanctions. And so will Cancun Ted. The old pipeline system that runs through Ukraine has been reverse-engineered with EU funds about a decade ago. Ukraine has already been reliably supplied from the West when the Russians cut supplies. The talking points in this piece are based on Cancun Ted's hallucinations, and not the facts on the ground. For a factual analysis see Eugene Rumer's long piece published today in Defense News "Punishing Germany for Nord Stream 2 does nothing to stop Putin." Rumer is the director of the Russia and Eurasia Program at the Carnegie Endowment for International Peace. He previously worked as a national intelligence officer on Russia and Eurasia for the U.S. National Intelligence Council. He actually knows what he is talking about.
William Wahl SUBSCRIBER 2 days ago
Just put Hunter on it. He'll fix this right up.
michael ring SUBSCRIBER 2 days ago
Biden has been on the wrong side of every foreign policy decision in his entire career in Washington. Mitterrrand was a bureaucrat who started his rise in vischy France. Ukraine is in a tough spot. So is Russia. They have been fighting for 7 years. Body counts go up,citizens do not like it. Russia will not sacrifice one pipeline for another. Ukraine and Russia can agree to no NATO troops on their border and tensions will go down.
bruce miller SUBSCRIBER 2 days ago
And who talked Ukraine into giving up their nukes? Well we did. Or rather, Slick and his pals did. Bet the Ukrainians wish they'd kept a bunch. Just for old time's sake.
michael ring SUBSCRIBER 2 days ago
What bargaining power would they be?No person or government in their right mind would use them. This is about land grabbing.

[Apr 09, 2021] Is Ukraine just a tool in the US hands to shut down Nordstream?

Apr 09, 2021 | www.zerohedge.com

vic and blood

GreatCaesar'sGhost called it: Ukraine is a tool to shut down Nordstream. Ukraine will push until Russia does something, then Germany shuts down Nordstream, shooting themselves in the foot.

Puppyteethofdeath 1 hour ago

There's always the chance that election fraud will bring the Green Party to rise in Germany also.

They'll gladly get rid of Nordstream 2 and destroy the German economy.

[Apr 09, 2021] Behind the fog of war, though, a clear scenario emerges: the deep state/NATO combo using Kiev to start a war as a Hail Mary pass to ultimately bury NS2, and thus German-Russian relations.

Apr 09, 2021 | www.unz.com

Originally from: Ukraine redux, by Pepe Escobar - The Unz Review

Ukraine and Russia may be on the brink of war – with dire consequences for the whole of Eurasia. Let's cut to the chase, and plunge head-on into the fog of war.

On March 24, Ukrainian President Zelensky, for all practical purposes, signed a declaration of war against Russia, via decree No. 117/2021.

Ukrainian President Volodymyr Zelensky speaks during a joint press conference with European Council President in Kiev on March 3, 2021. Photo: AFP / Sergey Dolzhenko

The decree establishes that retaking Crimea from Russia is now Kiev's official policy. That's exactly what prompted an array of Ukrainian battle tanks to be shipped east on flatbed rail cars, following the saturation of the Ukrainian army by the US with military equipment including unmanned aerial vehicles, electronic warfare systems, anti-tank systems and man-portable air defense systems (MANPADS).

More crucially, the Zelensky decree is the proof any subsequent war will have been prompted by Kiev, debunking the proverbial claims of "Russian aggression." Crimea, since the referendum of March 2014, is part of the Russian Federation.

It was this (italics mine) de facto declaration of war, which Moscow took very seriously, that prompted the deployment of extra Russian forces to Crimea and closer to the Russian border with Donbass. Significantly, these include the crack 76 th Guards Air Assault Brigade, known as the Pskov paratroopers and, according to an intel report quoted to me, capable of taking Ukraine in only six hours.

It certainly does not help that in early April US Secretary of Defense Lloyd Austin, fresh from his former position as a board member of missile manufacturer Raytheon, called Zelensky to promise "unwavering US support for Ukraine's sovereignty." That ties in with Moscow's interpretation that Zelensky would never have signed his decree without a green light from Washington.

On March 8, 2021, US Defense Secretary Lloyd Austin speaks during observance of International Women's Day in the East Room of the White House in Washington, DC. Photo: AFP / Mandel Ngan

Controlling the narrative

Sevastopol, already when I visited in December 2018 , is one of the most heavily defended places on the planet, impervious even to a NATO attack. In his decree, Zelensky specifically identifies Sevastopol as a prime target.

Once again, we're back to 2014 post-Maidan unfinished business.

To contain Russia, the US deep state/NATO combo needs to control the Black Sea – which, for all practical purposes, is now a Russian lake. And to control the Black Sea, they need to "neutralize" Crimea.

If any extra proof was necessary, it was provided by Zelensky himself on Tuesday this week in a phone call with NATO secretary-general and docile puppet Jens Stoltenberg.

NATO Secretary-General Jens Stoltenberg gives a press conference at the end of a NATO Foreign Ministers' meeting at the Alliance's headquarters in Brussels on March 24, 2021. Photo: AFP / Olivier Hoslet

Zelensky uttered the key phrase: "NATO is the only way to end the war in Donbass" – which means, in practice, NATO expanding its "presence" in the Black Sea. "Such a permanent presence should be a powerful deterrent to Russia, which continues the large-scale militarization of the region and hinders merchant shipping."

All of these crucial developments are and will continue to be invisible to global public opinion when it comes to the predominant, hegemon-controlled narrative.

The deep state/NATO combo is imprinting 24/7 that whatever happens next is due to "Russian aggression." Even if the Ukrainian Armed Forces (UAF) launch a blitzkrieg against the Lugansk and Donetsk People's Republics. (To do so against Sevastopol in Crimea would be certified mass suicide).

In the United States, Ron Paul has been one of the very few voices to state the obvious: "According to the media branch of the US military-industrial-congressional-media complex, Russian troop movements are not a response to clear threats from a neighbor, but instead are just more 'Russian aggression.'"

What's implied is that Washington/Brussels don't have a clear tactical, much less strategic game plan: only total narrative control.

And that is fueled by rabid Russophobia – masterfully deconstructed by the indispensable Andrei Martyanov, one of the world's top military analysts.

A possibly hopeful sign is that on March 31, the chief of the General Staff of the Russian Armed Forces, General Valery Gerasimov, and the chairman of the Joint Chiefs of Staff, General Mark Milley, talked on the phone about the proverbial "issues of mutual interest."

Days later, a Franco-German statement came out, calling on "all parties" to de-escalate. Merkel and Macron seem to have gotten the message in their videoconference with Putin – who must have subtly alluded to the effect generated by Kalibrs, Kinzhals and assorted hypersonic weapons if the going gets tough and the Europeans sanction a Kiev blitzkrieg.

French President Emmanuel Macron speaks as German Chancellor Angela Merkel looks on after a German-French Security Council video conference at the Elysee Palace in Paris, on February 5, 2021. Photo: AFP / Thibault Camus

The problem is Merkel and Macron don't control NATO. Yet Merkel and Macron at least are fully aware that if the US/NATO combo attacks Russian forces or Russian passport holders who live in Donbass, the devastating response will target the command centers that coordinated the attacks.

What does the hegemon want?

As part of his current Energizer bunny act, Zelensky made an extra eyebrow-raising move. This past Monday, he visited Qatar with a lofty delegation and clinched a raft of deals , not circumscribed to LNG but also including direct Kiev-Doha flights; Doha leasing or buying a Black Sea port; and strong "defense/military ties" – which could be a lovely euphemism for a possible transfer of jihadis from Libya and Syria to fight Russian infidels in Donbass.

Right on cue, Zelensly meets Turkey's Erdogan next Monday. Erdogan's intel services run the jihadi proxies in Idlib, and dodgy Qatari funds are still part of the picture. Arguably, the Turks are already transferring those "moderate rebels" to Ukraine. Russian intel is meticulously monitoring all this activity.

A series of informed discussions – see, for instance, here and here – is converging on what may be the top three targets for the hegemon amid all this mess, short of war: to provoke an irreparable fissure between Russia and the EU, under NATO auspices; to crash the Nord Steam 2 pipeline; and to boost profits in the weapons business for the military-industral complex.

So the key question then is whether Moscow would be able to apply a Sun Tzu move short of being lured into a hot war in the Donbass.

On the ground, the outlook is grim. Denis Pushilin, one of the top leaders of the Lugansk and Donetsk people's republics, has stated that the chances of avoiding war are "extremely small." Serbian sniper Dejan Beric – whom I met in Donetsk in 2015 and who is a certified expert on the ground – expects a Kiev attack in early May .

The extremely controversial Igor Strelkov, who may be termed an exponent of "orthodox socialism," a sharp critic of the Kremlin's policies who is one of the very few warlords who survived after 2014, has unequivocally stated that the only chance for peace is for the Russian army to control Ukrainian territory at least up to the Dnieper river. He stresses that a war in April is "very likely"; for Russia war "now" is better than war later; and there's a 99% possibility that Washington will not fight for Ukraine.

On this last item at least Strelkov has a point; Washington and NATO want a war fought to the last Ukrainian.

Rostislav Ischenko, the top Russian analyst of Ukraine whom I had the pleasure of meeting in Moscow in late 2018, persuasively argues that, "the overall diplomatic, military, political, financial and economic situation powerfully requires the Kiev authorities to intensify combat operations in Donbass.

"By the way," Ischenko added, "the Americans do not give a damn whether Ukraine will hold out for any time or whether it will be blown to pieces in an instant. They believe they stand to gain from either outcome."

Gotta defend Europe

Let's assume the worst in Donbass. Kiev launches its blitzkrieg. Russian intel documents everything. Moscow instantly announces it is using the full authority conferred by the UNSC to enforce the Minsk 2 ceasefire.

In what would be a matter of 8 hours or a maximum 48 hours, Russian forces smash the whole blitzkrieg apparatus to smithereens and send the Ukrainians back to their sandbox, which is approximately 75km north of the established contact zone.

In the Black Sea, incidentally, there's no contact zone. This means Russia may send out all its advanced subs plus the surface fleet anywhere around the "Russian lake": They are already deployed anyway.

Russian President Vladimir Putin looks on as Novator Design Bureau director-general Farid Abdrakhmanov and Deputy Defense Minister Alexei Krivoruchko shake hands during a signing ceremony for government contracts in Alabino, Moscow region, Russia. on June 27, 2019. Photo: AFP / Alexei Druzhinin / Sputnik

Once again Martyanov lays down the law when he predicts, referring to a group of Russian missiles developed by the Novator Design Bureau: "Crushing Ukies' command and control system is a matter of few hours, be that near border or in the operational and strategic Uki depth. Basically speaking, the whole of the Ukrainian 'navy' is worth less than the salvo of 3M54 or 3M14 which will be required to sink it. I think couple of Tarantuls will be enough to finish it off in or near Odessa and then give Kiev, especially its government district, a taste of modern stand-off weapons."

The absolutely key issue, which cannot be emphasized enough, is that Russia will not (italics mine) "invade" Ukraine. It doesn't need to, and it doesn't want to. What Moscow will do for sure is to support the Novorossiya people's republics with equipment, intel, electronic warfare, control of airspace and special forces. Even a no-fly zone will not be necessary; the "message" will be clear that were a NATO fighter jet to show up near the frontline, it would be summarily shot down.

And that brings us to the open "secret" whispered only in informal dinners in Brussels, and chancelleries across Eurasia: NATO puppets do not have the balls to get into an open conflict with Russia.

One thing is to have yapping dogs like Poland, Romania, the Baltic gang and Ukraine amplified by corporate media on their "Russian aggression" script. Factually, NATO had its collective behind unceremoniously kicked in Afghanistan. It shivered when it had to fight the Serbs in the late 1990s. And in the 2010s, it did not dare fight the Damascus and Axis of Resistance forces.

When all fails, myth prevails. Enter the US Army occupying parts of Europe to "defend" it against – who else? – those pesky Russians.

That's the rationale behind the annual US Army DEFENDER-Europe 21 , now on till the end of June, mobilizing 28,000 soldiers from the US and 25 NATO allies and "partners."

This month, men and heavy equipment pre-positioned in three US Army depots in Italy, Germany and the Netherlands will be transferred to multiple "training areas" in 12 countries. Oh, the joys of travel, no lockdown in an open air exercise since everyone has been fully vaccinated against Covid-19.

Pipelineistan uber alles

Nord Stream 2 is not a big deal for Moscow; it's a Pipelineistan inconvenience at best. After all the Russian economy did not make a single ruble out of the not yet existent pipeline during the 2010s – and still it did fine. If NS2 is canceled, there are plans on the table to redirect the bulk of Russian gas shipments towards Eurasia, especially China.

Connecting German infrastructure for Nord Stream 2 is in place. In this handout photo released February 4, 2020, by the press service of Eugal, a view shows the Eugal pipeline, in Germany. The Eugal pipeline, which will receive gas from Nord Stream 2 in the future, has reached full pumping capacity, and the second line of the pipeline has been introduced. Photo: AFP / Press-service of Eugal / Sputnik

In parallel, Berlin knows very well that canceling NS2 will be an extremely serious breach of contract – involving hundreds of billions of euros; it was Germany that requested the pipeline to be built in the first place.

Germany's energiewende ("energy transition" policy) has been a disaster. German industrialists know very well that natural gas is the only alternative to nuclear energy. They are not exactly fond of Berlin becoming a mere hostage, condemned to buy ridiculously expensive shale gas from the hegemon – even assuming the egemon will be able to deliver, as its fracking industry is in shambles. Merkel explaining to German public opinion why they must revert to using coal or buy shale from the US will be a sight to see.

As it stands, NATO provocations against NS2 proceed unabated – via warships and helicopters. NS2 needed a permit to work in Danish waters, and it was granted only a month ago. Even as Russian ships are not as fast in laying pipes as the previous ships from Swiss-based Allseas , which backed down, intimidated by US sanctions, the Russian Fortuna is making steady progress, as noted by analyst Petri Krohn: one kilometer a day on its best days, at least 800 meters a day. With 35 km left, that should not take more than 50 days.

Conversations with German analysts reveal a fascinating shadowplay on the energy front between Berlin and Moscow – not to mention Beijing. Compare it with Washington: EU diplomats complain there's absolutely no one to negotiate with regarding NS2. And even assuming there would be some sort of deal, Berlin is inclined to admit Putin's judgment is correct: the Americans are "not agreement-capable." One just needs to look at the record.

Behind the fog of war, though, a clear scenario emerges: the deep state/NATO combo using Kiev to start a war as a Hail Mary pass to ultimately bury NS2, and thus German-Russian relations.

At the same time, the situation is evolving towards a possible new alignment in the heart of the "West": US/UK pitted against Germany/France. Some Anglosphere exceptionals are certainly more Russophobic than others.

The toxic encounter between Russophobia and Pipelineistan will not be over even if NS2 is completed. There will be more sanctions. There will be an attempt to exclude Russia from SWIFT. The proxy war in Syria will intensify. The hegemon will go no holds barred to keep creating all sorts of geopolitical harassment against Russia.

What a nice wag-the-dog op to distract domestic public opinion from massive money printing masking a looming economic collapse. As the empire crumbles, the narrative is set in stone: it's all the fault of "Russian aggression."


Alfa158 , says: April 8, 2021 at 12:05 am GMT • 1.9 days ago

Well, I'm hoping the Ukrainians will finally remember Bernard Lewis's warning about the U.S. and realize they are being used like a Kleenex: "America is harmless as an enemy but treacherous as a friend."
Americans have had it and will never tolerate sending combat troops into a Russia/Ukraine conflict no matter how much rah-rah let's you and him fight we'll hold your coat for you, faux patriotism the lugenpresse throw at them. Those of us who volunteered for the US military in the past have learned our lesson.

Agent76 , says: April 8, 2021 at 8:09 pm GMT • 1.1 days ago

Aug 10, 2020 Nord Stream 2 final stretch & Russia-Cyprus try to mend fences

https://www.youtube.com/embed/s4S_wOvCQAU?feature=oembed

Apr 4, 2019 NATO EXIT: Prof. Michel Chossudovsky

NATO is a criminal entity, an instrument of the Pentagon. There is no "Alliance". There is military Occupation.

https://www.youtube.com/embed/649_HXyJPAg?feature=oembed

Petermx , says: April 8, 2021 at 12:46 am GMT • 1.9 days ago

"The problem is Merkel and Macron don't control NATO." I don't know how a decision is made whether NATO will go to war or not but if Germany and France have no say in whether their soldiers will be sent to war or not, that must by a very scary thought for them.

I found the following analysis interesting and I think it makes sense. It suggests France and Germany have a say in matters and that they oppose any offensive Ukraine has in mind. The commentator analyzes the diplomatic language and Germany and France appear to be fed up. Without coming out and saying so directly, they see things more as Russia does than Ukraine. It's very unfortunate things have developed this way for Ukraine. In addition, if Merkel wants to be perceived as a complete failure as chancellor in Germany, only then will she let NS2 be stopped from being completed. This analysis suggests there may be some strain between France and Germany versus the USA.

https://www.youtube.com/embed/30Lzq-K-cO4?feature=oembed

Zarathustra , says: April 8, 2021 at 4:59 am GMT • 1.7 days ago

I do have to disagree. If Ukraine start a war Russia must take back all eastern part of Ukraine that has prevalent Russian population. Odessa and Zaporozhie is particularly important. Russia must also tale all Kiev area back.

Carlton Meyer , says: Website April 8, 2021 at 5:04 am GMT • 1.7 days ago

Several things to note:

1. Senior Ukrainian officers were once Soviet officers. They, and most of their troops, don't want to fight Russians and know it's foolish. The Ukrainian army will crumble if they come in contact with regular Russian troops. It's not that they are cowards, but sane. It would be like Canadian troops ordered to attack across the American border.

2. The American empire is furious and concerned that its long-time puppet disobeyed orders. Germany wants Russian gas and the empire wants that pipeline stopped. Not only to hurt Russia, but to teach the Germans a lesson. If fighting occurs in the Ukraine, would the Germans dare to buy natgas from evil Russians?

3. Most importantly, Israel controls the American government. A major goal is the destruction of Syria to allow the expansion of Greater Israel, as explained in the video below. This nearly succeeded until the Russians intervened. Fighting in Ukraine would divert Russian military resources from Syria so that nation can be destroyed, or Russia may give up Syrian support as part of a grand peace deal.

https://www.youtube.com/embed/P512QBpjoq4?feature=oembed

The Biden administration is fully supportive of finishing off Syria and Lebanon, then moving on to destroy Iran. The new talks about Iran's nuclear program will go nowhere. It's just a show so Biden can say he tried.

https://www.youtube.com/embed/pEigig2qWkc?feature=oembed

Silicon Silence , says: April 8, 2021 at 5:11 am GMT • 1.7 days ago
@anon

It makes all the difference when the revolving-door regulator-capture reframing is not "USA/Nato vs Russia" -- but rather the more accurate "Raytheon (et al) vs Russia."

The modern truth is: Russia and China have governments in control of policy and industry. The USA (and therefore also its yapping poodle collection) have Industry setting policy and running government for their 1%-er shareholder benefits.

Majority of One , says: April 8, 2021 at 6:06 am GMT • 1.7 days ago

Part of me wants to think that the Ukies will want to fold at the last moment. Yet all this apparent evidence points to their going for it and promptly getting their collective noses smashed in. Those who speculate in meta-political geo-strategic analysis cannot make sense of the moves by the largely incompetent shot-callers and their even more incompetent minions who cut the orders to their chessmen.

Heavy pressure by the equally incompetent regime in the Di$trict of Corruption, where carrot and stick are equally in play, is as Escobar points out, the force behind this nearly automatic death-sentence for the Kiev regime and the poor slobs who make up the draftee elements in the Ukrainian military.

Again, geopolitically, one wonders at the deeper string-pullers within the Pentagram, the CIA and the mass media of mind-control and message-massaging. Is this essentially a move to keep the American people–most particularly the edjumacated managerial and technical classes who make up the core of the alleged "middle-class"–"on message and in line"?

Yes, the WarDefense industry (aka Eisenhower's "Military-Industrial Complex") insist on ongoing wars and threats of war to maintain their profit margins for the prime owners of that false economic basis,prime actors such as the Rottenchild Crime Clan and the rest of the parasites clustered in City of London and Wall $treet.

How will the canny and ever wary Russians proceed? Will they operate in the manner that Escobar proposes, by not directly employing the considerable ground-forces which now stand on alert just to the eastwards of their mutually agreed upon Swiss-cheese border with the Novorussians in Donetsk and Luhansk? Or will Russian strategy be somewhat more comprehensive by liberating the rest of the primarily Russian-speaking parts of eastern and southern Ukraine which had largely backed the overthrown legitimate government of that bedizened composite nation and are still smarting under the heels of the Galician fascists and the smaller grouping of Russophobic Ukrainian nationalists who still harbor nightmares about the Bolshevik/Stalinoid Holodomar? There are, after all human considerations which may influence Kremlin policy.

Should Russia decide to make a move, it is my projection that they would never be likely to even attempt to occupy central Ukraine and would set a stop-line well to the east of Kiev. Something that bemusingly intrigues me is the Belarus factor. It would appear that the Minsk regime, smarting from the attempted coup by the Poles, Baltic states and Ukraine backing of "pro-Westerners, may be mobilizing to get into the action and perhaps readjust their boundaries somewhat southwards. This could indicate a countering move by the Uniates in Galicia to make common cause with their Roman Catholic brethren in the afore-mentioned Poland along with Lithuania and remove their lands of control from a shattered Ukraine and form a confederation with their neighbors to the west.

There is little doubt in my mind that Russia has numerous human assets in central and southwestern Ukraine, who along with elements of a disintegrating Ukie military, would unite to overthrow the rotten regime in Kiev and establish a markedly neutral smaller but more cohesive Ukraine–a natural though smaller nation which could serve as an essential buffer between a strengthening Russia and a collection of NATO nations which would then comprise a hodgepodge of hawks and doves, a discombobulated collection of politico-economic entities attempting to swim their ways to calmer shores or to maintain some semblance of "Great Reset" programming in the face of popular resistance to lockdowns and mandated AstraGenica jabbings.

Worst possible scenario is that someone in the Pentagon-dominated NATO command complex loses their cool and initiates a conflict that could result in planet-wide chaos and destruction. One would hope that cooler heads will take a few hits to their expansionist fantasies and decide to make the best of a failed bit of adventurism and bide their time -- if they feel they have any time remaining before globalist economies hit the skids, leading to a potential collapse to the myth of progress.

Vojkan , says: April 8, 2021 at 6:16 am GMT • 1.7 days ago

Everyone gets American logic. It's the Ukrainian logic that is truly baffling. Just how stupid do the Ukrainians have to be to attack when anyone with a brain knows what will be the outcome?

Silicon Silence , says: April 8, 2021 at 5:11 am GMT • 1.7 days ago
@anon

It makes all the difference when the revolving-door regulator-capture reframing is not "USA/Nato vs Russia" -- but rather the more accurate "Raytheon (et al) vs Russia."

The modern truth is: Russia and China have governments in control of policy and industry. The USA (and therefore also its yapping poodle collection) have Industry setting policy and running government for their 1%-er shareholder benefits.

GMC , says: April 8, 2021 at 6:37 am GMT • 1.7 days ago

You can't do any Normal business with a Crime Syndicate like the USA/ EU and or Israel. Turkey, Saudi Arabia and others. Russia is so close to being self sufficient , they could turn their back on the West and it's cut throat allies , and just look to the East until the West implodes. They will have to destroy all armies within close proximity to their borders, including the Ukrainian/Mercenary one. Moscow must still have Jew Oligarchy baggage, that is making money on Wall Street and those ties need to break apart or come to a Pro Russian agreement or else. Rename Kyiv to Berlin 1944, and Lviv to Dresden and take it from there – and don't look back anymore. And PS : on way to Lviv, Agent Orange every F..n Monsanto/Bayer, Dupont and Cargil farm – like they did to Vietnam.

Levtraro , says: April 8, 2021 at 6:50 am GMT • 1.7 days ago

Behind the fog of war, though, a clear scenario emerges: the deep state/NATO combo using Kiev to start a war as a Hail Mary pass to ultimately bury NS2, and thus German-Russian relations.

Yes but also the Ukraine needs to save those gas transit fees that will go kaput if NS2 is completed and operational, so it is the Ukraine the one with the most immediate incentive to start a war. Though they need just a small war, a little war to force the hands of the Germans to cancel NS2. Problem is the Russians have promised to give the Ukrainians more than what they bargained for. To save those gas transit fees the Ukrainians may end losing the country to a puppet installed by the Kremlin.

Schuetze , says: April 8, 2021 at 7:19 am GMT • 1.6 days ago

Escobar, besides not naming the Jew, does not mention which side Israel is likely to support. We can be pretty certain that whichever side Israel supports is going to be the victor in this conflict. Turkey is also important because of the Bosphorus, and Turkey and Israel are working together to exploit the Leviathan gas field to the detriment of Cyprus and Syria, so Israel can jerk Turkey around like a pitbull on a chain.

The US has been moving drones into Ukraine and they now are right on the border with Crimea. The US Marines also have a large presence in Romania, also likely including all kinds of drones. The Israelis are among the planet's leaders in drone technology, and surely own even more patents. Israel provides much of its drone technology to Turkey, and the Azerbeijanis used Turkish and Israeli drones in their short war with Armenia. During this short war the Azerbeijanis shot up all kinds of Russian equipment with their drones including Pantsir's and ZSU-23's.

The US also has all kinds of stealth drones and missiles, likely that is one area where they lead the entire planet.

Miro23 , says: April 8, 2021 at 10:13 am GMT • 1.5 days ago

https://vk.com/wall-57424472_304332

If this assessment is correct (in Russian but comes out OK in Google translate), then the US / NATO have to get involved to compensate for the lack of a Ukrainian air force – and in fact the rest of their obsolete equipment.

Personally, I can't imagine US or NATO troops on the ground in the Ukraine – and I don't see any planning for it, so what's the idea?

One possibility seems to be 1) to start the fighting 2) then start the real game, which is a massive anti-Russian media barrage "heroic Ukrainian patriots", "Russian atrocities", "killer Putin" etc. sufficient to finish with Nord Stream 2, divide Russia from France/Germany, plus reanimate NATO and sanction Russia. Basically to force Europe back into US hegemony, and away from independent decision making.

They won't have any problem with the UK (their most slavish follower) but at some point the French and Germans are surely going to become tired of all this CIA/Neo-con BS.

The Alarmist , says: April 8, 2021 at 10:18 am GMT • 1.5 days ago

[German Industrialists] are not exactly fond of Berlin becoming a mere hostage, condemned to buy ridiculously expensive shale gas from the hegemon .

German Industrialists and financiers have been repeatedly shaken down by the hegemon for fines related to a number of "infractions." The scuttlebutt I've heard from a number of them is that it got old a long time ago; what point is it to participate in the US market when your profits are repeatedly clawed back as "fines," and those in the US with whom you compete are given a leg up not just in the US, but on the world stage. Left to most industrialists, Germany might have gone its own way years ago. Oddly enough, it is the Ossivergeltungswaffe who dithers over breaking ranks with the "ally" that openly spied on her.

And even assuming there would be some sort of deal, Berlin is inclined to admit Putin's judgment is correct: the Americans are "not agreement-capable." One just needs to look at the record.

The most recent example would be the Doha agreement on the US withdrawal of forces and personnel from Afghanistan. Apparently the Pentagon recently awarded a number of contracts for contractor services in that country for some time well past the "agreed" withdrawal date, strongly suggesting the agreement to leave was a ruse.

Garliv , says: April 8, 2021 at 10:34 am GMT • 1.5 days ago
@J. Alfred Powell

Unfortunately we live in a world where history is/was erased, facts don't matter or they can be twisted to fit anything no matter how ridiculous, the present is what I say it is. Thus US and its vassals are just interested in their today's narrative.
Ukrainian leadership is hopelessly incompetent and corrupt so will do anything Biden's gang tells them. It's simply a depressing scenario.

street worm , says: April 8, 2021 at 12:59 pm GMT • 1.4 days ago

Blinken poking the Ukies to attack is a Hail Mary to stop NS2. Maybe it will work, maybe not. But a few hundred or a few thousand dead Ukies is worth the Russian boogeyman psy-op for the empire.

Marckus , says: April 8, 2021 at 1:23 pm GMT • 1.4 days ago

""Ukraine and Russia may be on the brink of War blah blah""

Contrary to what Pepe asserts the rest of the world will not give a shit. Memories of Chechnya? The sooner Putin over runs the place the better. You can bet the Ukrainian ruling elite, for all their gumption, have their jets all fuelled and ready with flight plans for the US via Switzerland...

Reaper , says: April 8, 2021 at 1:56 pm GMT • 1.4 days ago

"NATO puppets do not have the balls to get into an open conflict with Russia."

Sadly not so sure.
Some has it`s own agenda, like POland, Lithuania. Not even NATO/ US are in full control over that, and needs no more than a misstep. Like activate some system which is potentionally dangerous for Russia.
Or in different NATO/ US bases elsewhere in continental Europe.

"to provoke an irreparable fissure between Russia and the EU, under NATO auspices"
"When all fails, myth prevails. Enter the US Army occupying parts of Europe to "defend" it against – who else? – those pesky Russians."

This sounds to be the real goal.
For long since the US is jealous to Europe as it became more and more equal in economic and political power, and prevail better even with this "global pandemic".
EU wants more independence, US wants it`s colony to more obidient and follow commands.

If not just occupy, but "let" Europe partly destroyed even better: the treat of dominance reduced, and again can be the "nice savior" who helps and "brings democracy".

So seems far too real in the Ukrainian conflict Ukraine is just a side character.

Anonymous [902] Disclaimer , says: April 8, 2021 at 2:54 pm GMT • 1.3 days ago
@Vojkan

Good point. They simply can't "win" anything by attacking.

The (((US))) will provide plenty of encouragement and support as long as they get mountains of Ukrainian corpses in return. Those corpses can then be photographed and the photos broadcast all over the world as "proof" that Putin is Hitler. Basically, Ukrainians are being funnelled into the meat grinder for a globohmo psyop opportunity. What a way to die...

Realist , says: April 8, 2021 at 2:59 pm GMT • 1.3 days ago
@Fred777

The crumbling US economy will provide more than enough meat for the neocon's grinder.

Perhaps they will turn their attention to problems at home. The question is are they smart enough to recognize where the problem lies.

MLK , says: April 8, 2021 at 3:01 pm GMT • 1.3 days ago
@Robert Bruce

Are you referring to the Ukraine fiasco? Would that it were so that it was just a distraction. Just apply some reverse engineering to how Germany and Russia have a pretext to link up energy-wise when Ukraine was a perfectly serviceable transit point until NeoCon filth started working their magic.

[Apr 09, 2021] German Chancellor Merkel spoke to President Putin yesterday and apparently told him she wanted to see immediate de-escalation

Apr 09, 2021 | www.zerohedge.com

Indeed, let's not worry: German Chancellor Merkel spoke to President Putin yesterday and apparently told him she wanted to see immediate de-escalation or else she might not sell Russia any German cars; or buy Russian vaccine; or complete Nord-Stream 2 and tie the German economy into Russian gas supplies. Isn't realpolitik a German word originally?

"Destiny guides our fortunes more favourably than we could have expected. Look there, Sancho Panza, my friend, and see those thirty or so wild giants, with whom I intend to do battle and kill each and all of them, so with their stolen booty we can begin to enrich ourselves. This is noble, righteous warfare, for it is wonderfully useful to God to have such an evil race wiped from the face of the earth."

"What giants?" asked Sancho Panza.

"The ones you can see over there," answered his master, "with the huge arms, some of which are very nearly two leagues long."

"Now look, your grace," said Sancho, "what you see over there aren't giants, but windmills, and what seems to be arms are just their sails, that go around in the wind and turn the millstone."

"Obviously," replied Don Quixote, "you don't know much about adventures."

Or labour vs. capital; or realpolitik. But Happy Friday!


GreatCaesar'sGhost 1 hour ago

No nato troops will ever set foot in Ukraine. They're trying to pressure Russia into doing something so they can force the Germans to stop nordstream. The Ukrainians can't win here and they're being used. Not good.

USAllDay 56 minutes ago

Germans need the gas and Russia needs the revenue. These are facts that can not change.

GreatCaesar'sGhost 53 minutes ago

US has gas to sell. Greater Israel and their Saudi partners believe that after they overthrow Assad they will have gas to sell. I'm not sure the constantly virtue signaling German government will buy Russian gas if there's a war.

BeePee 43 minutes ago

Russia already sells gas. This will continue. Mistake to destablize Russia's economy.

GreatCaesar'sGhost 53 minutes ago

US has gas to sell. Greater Israel and their Saudi partners believe that after they overthrow Assad they will have gas to sell.

I'm not sure the constantly virtue signaling German government will buy Russian gas if there's a war.

land_of_the_few 51 minutes ago (Edited) remove link

They should just mock them mercilessly.

Formation flypasts with rainbow colored smoke, Village People blasting from frigates buzxing them, that kind of thing.

land_of_the_few 40 minutes ago

"In the Navy", anyone?

[Apr 04, 2021] The level of incompetence of some authors at OilPrice.com is just staggering

Russia a major producer of electricity using nuclear power. Which is preferable to Wind turbines or burning money for solar panels (Russia is a northern country with no so much sunlight). As simple as that.
Apr 04, 2021 | oilprice.com

Originally from: Russia Is Being Left Behind In The Energy Transition By Haley Zaremba

When it comes to climate change and the need to update and innovate in the face of changing weather patterns, Russian President Vladmir Putin's strategy is simple: deny, deny, deny. While other fossil-fuel dependent economies scramble to diversify or race to build up clean energy infrastructure in a bid to put themselves at the forefront of the coming renewable revolution, Russia has taken the opposite approach: the world's largest nation is sitting tight and waiting to be the last man standing in a shrinking fossil fuels market. While Russia, with its massive land area and enviable geopolitical positioning, is extremely resource-rich, its oil is more costly to extract than other oil superpowers. Nevertheless, Putin is trying to outlast them all as they are forced to transition away from the oil due to falling prices and political pressure. The world is still decades away from weaning itself off fossil fuels and there will potentially be even more money to be made as the competition begins to fall away. The calculation Russia needs to make is when will its oil industry move from being a profit driver to a burden as demand plateaus and then falls.

While the potential for profit is undeniably in oil markets, when it comes to the clean energy transition, Russia is being left behind . They are being left behind in terms of infrastructure, innovation, and a dogmatic attachment to business as usual. "Putin and other Russian leaders have periodically flirted with outright climate change denial," Bloomberg reports. "Scientists have estimated that melting permafrost could cost Russia $84 billion in infrastructure damage by mid-century while releasing vast quantities of greenhouse gases. Carbon Action Tracker, a non-profit, gives Russia's climate policies a bottom grade of 'critically insufficient.'"

While Russia will soon be feeling the pain from the side effects of climate change, there will also be a silver lining to all that northern ice-melt for the world's largest country. The receding ice caps will unveil a veritable treasure trove of oil, gas, and minerals never before accessible - not to mention an extremely valuable set of new sea lanes to ease access for trade. The tradeoffs for this new natural capital, however, are so costly in terms of devastating ecological externalities that almost all of the world's biggest banks won't touch it .

Related: Recent SEC Decision Could Spark Investment In Big Oil

In the meantime, Russia has doubled down on natural gas. "In recent years, the Kremlin has bet the country's economic and geopolitical future on natural gas," Bloomberg reports, "building new pipelines to China, Turkey, and Germany, while aiming to take a quarter of the global LNG market, up from zero in 2008 and around 8% today." Within the vast expanses of Russia, where entire regions are reliant on fossil fuel for their entire economy, the prevailing belief is that natural gas is the future, and will always be cheaper domestically than renewable alternatives. "What's the alternative? Russia can't be an exporter of clean energy, that path isn't open for us," Konstantin Simonov, director of the Moscow consultancy National Energy Security Fund, told Bloomberg. "We can't just swap fossil fuel production for clean energy production, because we don't have any technology of our own."

While renewable energy is still an emerging sector, with plenty of potential opportunities for Russia to stake its claim in the global clean energy game, it's clear that the Kremlin has a long way to go in terms of ideological politicking for that to become possible.

By Haley Zaremba for Oilprice.com

[Apr 03, 2021] Rapid production increases in tight oil are likely a thing of the past. Most likely a good thing for everyone.

Apr 03, 2021 | peakoilbarrel.com

STEPHEN HREN IGNORED 04/02/2021 at 11:43 pm

Consolidation continues in the Permian. Pioneer CEO Sheffield has stated repeatedly recently that the goal is free cash flow now and not growth at all costs. As smaller producers continue to get marginalized, rapid production increases in tight oil are likely a thing of the past. Most likely a good thing for everyone.

https://www.msn.com/en-us/money/news/fracking-titan-is-bulking-up-with-dollar64-billion-acquisition-as-oil-prices-recover/ar-BB1ffqwP

[Apr 03, 2021] Nord Stream 2 Warns Of Security Risks From Warships Low-Flying Planes - ZeroHedge

Apr 03, 2021 | www.zerohedge.com

Nord Stream 2 Warns Of Security Risks From Warships & Low-Flying Planes BY TYLER DURDEN SATURDAY, APR 03, 2021 - 09:20 AM

Authored by Dave DeCamp via AntiWar.com,

A senior official from Nord Stream 2 AG, the project company leading the Nord Stream 2 Russia to Germany natural gas pipeline project, has reported an uptick in "provocative" activity from warships and planes in the area where the pipeline is being built .

"Higher activity of naval vessels, airplanes and helicopters and civilian vessels of foreign states is observed in the work area after restarted construction of the offshore segment of the Nord Stream 2 gas pipeline, whose actions are often clearly provocative ," said Nord Stream AG official Andrei Minin, according to the Russian news agency TASS .

Above: the pipe-laying vessel Fortuna, which is operated by the Russian company KVT-RUS and recently targeted by US sanctions. Image via Reuters

Minin said a 1.5-mile safety zone is established around the construction area where vessels are not supposed to enter. "Nevertheless, naval vessels of foreign countries are constantly registered near service ships performing work," he said.

He added that a Polish antisubmarine warfare airplane is "regularly flying around the work area at a small height and closely to the pipelay vessel."

Minin said in one provocation, an unidentified submarine was above surface within one mile of the pipeclay vessel Fortuna , a ship that was hit with US sanctions on January 19th. Minin said the activity indicates "obviously planned and prepared provocations." Besides warships and planes, he said fishing vessels have also come dangerously close to the construction area.

https://platform.twitter.com/embed/Tweet.html?dnt=false&embedId=twitter-widget-0&frame=false&hideCard=false&hideThread=false&id=1377891924300939264&lang=en&origin=https%3A%2F%2Fwww.zerohedge.com%2Fgeopolitical%2Fnord-stream-2-warns-security-risks-warships-low-flying-planes&siteScreenName=zerohedge&theme=light&widgetsVersion=e1ffbdb%3A1614796141937&width=550px

The Nord Stream 2 pipeline has been in the crosshairs of the US for years, but despite sanctions and threats, Nord Stream AG reported on Thursday that the project is now 95 percent complete . Construction restarted in December 2020 after being suspended due to threats of US sanctions.

Although it's not clear if the US is involved in these provocations, it is likely. Washington seems willing to take extreme measures to stop the project and is threatening to sanction its ally Germany . Besides the US, another country keen to stop the project is Ukraine, which stands to lose up to $3 billion a year in gas transportation fees if the pipeline is complete.

The original Nord Stream consists of two lines that run from Vyborg, Russia, to Lubmin, Germany, near Greifswald. The new project would add two more lines, doubling the amount of natural gas Russia could export to Germany.
play_arrow


Be of Good Cheer 1 hour ago

$3 billion loss to the Biden Crime Family. No wonder he wants to stop NS2.

NoPension 1 hour ago

^^^^^!!!

Pair Of Dimes Shift 45 minutes ago

10% to the big guy would be $300M.

Damn right the big guy's handlers are pissed.

Rid'n Dirty 1 hour ago

The US spends over $1 trillion on "defense" with over 800 bases worldwide, yet we have no control over who illegally takes up residence here. America has become an ugly hegemon run by Wall Street and other corporate whores. Almost 2/3rds of the world is under some type of US sanction designed to wreck economies and starve innocent people (Houthis, Syrians and Iranians).

Let's see if Germany can do what's best for its economy for the first time since 1945.

Based Fren 1 hour ago

It's so tiresome. We just have to stick our finger in everyone else's business.

naro 1 hour ago

Have you heard of the MILITARY INDUSTRIAL COMPLEX. Wars is their oxygen.....they are looking for wars wherever they can find it.

ManOnFirst 59 minutes ago

a Polish fishing vessel rammed a construction ship and blamed a faulty engine for the incident. I really hate the Poles. They are the whiniest, most cowardly country in the world. They lament the fall of their empire 1000 years ago and think they could still be a superpower if only the big, bad Russians weren't so mean. Oh, and the big, bad Germans too.

SoDamnMad 27 minutes ago

I'm surprised the Russians didn't throw a 3 liter gasoline jug with a burning rag taped to it down on that fishing vessel. Your telling me no steerage and no engine control. Two can play this game. Poles best not try to lay any communication cables in the next 20 years.

Games Without Frontiers 1 hour ago (Edited)

Globalists from the US doing everything they can to prevent a more independent EU. The further away you can get from a dying and dangerous empire the better.

2banana 1 hour ago

Established by whom?

Oh, you just made that sh!t up in international waters in one of the most heavily used trade routes in the world.

Minin said a 1.5-mile safety zone is established around the construction area where vessels are not supposed to enter. "Nevertheless, naval vessels of foreign countries are constantly registered near service ships performing work," he said.

Games Without Frontiers 1 hour ago

It's international waters but safety zones are always established on this type of industrial project, it's hard to enforce in open waters but the West looks like a bunch of tools as usual.

not-me---it-was-the-dog 43 minutes ago (Edited) remove link

google is your friend, my friend.

https://www.nord-stream.com/press-info/images/exclusion-zone-around-pipelay-vessel-2665/

https://ens.dk/sites/ens.dk/files/OlieGas/15_-_nord_stream_2_-_transboundary_impacts_-_environmental_impact_assessment_denmark_north-western_route._august_2018.pdf

.... Shipping and shipping lanes In Danish waters, the proposed NSP2 route will run inside and along the TSS Bornholmsgat for approximately 42 km close to the Swedish EEZ. The TSS Bornholmsgat carries most of the ship traffic to/from the Baltic Sea and experiences over 50,000 ship passages per year. The proposed NSP2 route additionally crosses the TSS Adlergrund in the Danish and German EEZs, which has approximately 7,000 ship movements per year. Safety exclusion zones will be implemented around slow-moving construction vessels. Only vessels involved in the construction of NSP2 will be allowed inside the safety zone; therefore, all other vessels not involved in construction activities will be requested to plan their journeys around the safety zone. The shipping lanes crossed by the proposed NSP2 route in Danish waters provide sufficient space and water depth for ships to plan their journey and safely navigate around possible temporary obstructions. The impact on ship traffic associated with the imposition of a safety zone is assessed to be minor and associated with local and temporary changes to the traffic scheme. Therefore, it is assessed that there will be no significant transboundary impacts on Baltic Sea ship traffic caused by the NSP2 project in Danish waters.

so....umm....since the work is being done in danish waters, well, gosh, i would guess the exclusion zones are set up with......wait for it......danish authorities. and the last bits in german waters will require german authorities to set up the exclusion zone.

https://www.argusmedia.com/en/news/2193430-construction-on-remaining-nord-stream-2-string-to-start

Jerzeel 17 minutes ago remove link

Ukraine gets 3B a year in transit fees for Russian gas...

rejectnumbskull 15 minutes ago

Besides the US, another country keen to stop the project is Ukraine, which stands to lose up to $3 billion a year in gas transportation fees if the pipeline is complete.

Did you not read this sentence in the article correctly?

[Apr 02, 2021] The construction site of Nord Stream 2 has been suffering harassment by various vessels and aircraft in recent months, which nearly led to damage to the pipeline itself, according to Nord Stream AG representative Andrey Minin.

Apr 02, 2021 | www.moonofalabama.org

karlof1 , Apr 1 2021 22:22 utc | 49

Nice work on pulling all the puzzle pieces together, b!

The really big problem will be weaning the Outlaw US Empire from its addiction to Unilateralism, which is its primary mode of operation aside from a very brief interlude when FDR was POTUS, devised the UN and its Charter, and got the Senate to ratify it so it would become an integral part of the USA's fundamental law of the land.

All one need do to see the gravity of the bolded text is to examine the Outlaw US Empire's behavior since FDR died--The USA immediately transformed into the Outlaw US Empire on 22 October 1945 when the UN Charter came into full force and the Empire was already in grave violation of its fundamentals.

That those millions of violations have never seen the inside of a courtroom doesn't mean they never occurred or aren't now happening globally.

I was going to post this on the other thread but will use it here as an example that's grave:

"Nord Stream AG Says Warships, Submarines and Helicopters Tried to Disrupt Pipeline's Construction":

"However, it seems that in March threats to the pipeline multiplied and became more 'real'.

"The construction site of Nord Stream 2 has been suffering harassment by various vessels and aircraft in recent months, which nearly led to damage to the pipeline itself, according to Nord Stream AG representative Andrey Minin. He stressed that the disturbances were 'clearly planned and thoroughly prepared provocations,' devised to stop the joint Russian-European project in its tracks ." [My Emphasis]

Unilateral Act of War anyone?!! Yes, its the Poles once again.

IMO, it's sad b omitted mentioning the newly formed Friends of the UN Charter Group in his article since it aims at drowning the "Unilateral, rules based international order" once and for all time. My promotion of it isn't going to be enough. If all but the Neoliberal nations become members, then they can jointly aver that there's only one system of international Law and its based on the UN Charter and all relevant treaties thus shutting up the Outlaw US Empire regardless its protests. Of course, a movement within the Empire that says the same as the Friends would go a long ways to getting us where we as humans want to go to--a peaceful planet that's concerned about the wellbeing of humans and all they need for support instead of making the rich ever richer through the terror of unremitting Class War.

And if you don't think that War isn't based on Terror, then you haven't seen migrant families busted up with the little kids being kidnapped and all put into concentration camps. ( China is beginning to bark up that very inhuman tree watered so well by the Outlaw US Empire.)

Nick , Apr 2 2021 0:16 utc | 71

Dumb Polacks are getting desparate
https://sputniknews.com/europe/202104011082512013-nord-stream-ag-says-warships-submarines-and-helicopters-tried-to-disrupt-pipelines-construction/

[Apr 02, 2021] Tentions in Ukraine are about stopping North Stream: The USA treats business as war, while treating war as business

Apr 02, 2021 | www.moonofalabama.org

karlof1 , Apr 2 2021 18:16 utc | 70

So Alfie, What's it all about?

Geoeconomics and Market Weight and it's not behind a paywall. Escobar intones:

"As it stands, Russia is very much focused on limitless possibilities in Southwest Asia, as Foreign Minister Sergey Lavrov made it clear in the 10th Middle East conference at the Valdai club [Link at Original]. The Hegemon's treats on multiple fronts – Ukraine, Belarus, Syria, Nord Stream 2 – pale in comparison."

Awhile ago, I posted the following acutely correct adage: The USA treats business as war, while treating war as business. I added what Coolidge was misquoted as saying in 1925--The business of America is business (He actually said, "the chief business of the American people is business.") So when the POTUS says its just business, you should prepare for war.

Back to the linked article. While reading it ought to be easy to see why the BRI interconnectivity is seen as a huge threat to the two Outlaw Maritime Empires--UK/US--who initially set forth the parameters of the Great Game. (BTW, Lavrov's Great Game program interview English transcript is now complete.) They have no seat at the table whatsoever. You'll also see why the Outlaw US Empire will try to remain in Afghanistan forever as well as the reason why it can't admit the real reason for being there--to interdict the BRI and the development boom it promises to bring to a great many impoverished people throughout Eurasia. Talk about Human Rights!

But it looks like all the Empire's efforts will amount to little more than a mosquito attacking an elephant for there's no way it can stop BRI or Eurasian integration; at best, it can merely delay it and earn the enmity of the planet, including its own people. Clearly, India will cease its role in the Quad as staying locks it out from what it needs most--development that uplifts its impoverished tens of millions. And the loss of India means the certain loss of the Great Game for the Outlaw Empire.

In the grand scheme of things, Ukraine is merely a tsetse fly as is NATO ultimately. The real prize lies with the geoeconomic riches BRI and Eurasian Integration will generate and being a partner with it, not an adversary.

[Apr 01, 2021] Many shale companies have hedged a majority of expected 2021 oil production at an average price below $45 a barrel discouraging near-term growth

Apr 01, 2021 | peakoilbarrel.com

RON PATTERSON IGNORED 03/30/2021 at 7:43 am

Why US shale oil production will not show a recovery this year. This article was published yesterday, March 29th.

Exxon, Chevron take a slow walk on the path to U.S. shale recovery Bold mine

(Reuters) – Exxon Mobil and Chevron Corp have scaled back activity dramatically in the top U.S. shale oil field, where just a year ago the two companies were dominating in the high-desert landscape.

The cautious approach of the two largest U.S. oil companies is a major reason domestic oil production has been slow to rebound since prices crashed during pandemic lockdowns in 2020. Production now is about 11 million barrels per day (bpd), down sharply from the record of nearly 13 million bpd hit in late 2019.

The share of drilling activity by Exxon and Chevron in the Permian Basin oil field in Texas and New Mexico dropped to less than 5% this month from 28% last spring, according to data from Rystad Energy.

"We essentially hit a pause button," said Chevron Chief Financial Officer Pierre Breber. "When the world was oversupplied we didn't see the virtue in putting more capital to add barrels." (Graphic: Exxon and Chevron slash Permian drilling, here)

Neither company is likely to boost spending until next year, according to the companies and analysts. Chevron expects to produce around 1 million barrels daily by 2025 and Exxon 700,000 bpd by 2025, the companies said at investor days this month.

Chevron will increase Permian spending from $2 billion now to pre-Covid levels of $4 billion annually "over the course of the next several years," Breber said, but the company will not increase drilling in the Permian this year. It is currently running about five rigs in the Permian with two completion crews, down from just under 20 a year ago.
SNIP
However, output is unlikely to increase dramatically, due to the swift decline rates for shale wells.

"We would need three months of oil prices sustained at current levels followed by six months of drilling activity before production begins to climb higher on a sustained basis," said Peter McNally at Third Bridge.

Exxon and Chevron are not the only producers keeping spending down. Many shale companies have hedged a majority of expected 2021 oil production at an average price below $45 a barrel, well below current market prices, Enverus' Andy McConn said. The hedges reduce exposure to the recent increase in oil prices, discouraging near-term growth. (Graphic: Permian oil production stalls, )

It looks like they hope to return to normal production by 2025.

[Apr 01, 2021] if expensing intangible drilling costs is eliminated, the shale boom will officially be dead.

Apr 01, 2021 | peakoilbarrel.com

SHALLOW SAND IGNORED 04/01/2021 at 1:53 am

Biden's plan will end tax preferences for fossil fuel companies. I am not sure if there are more specifics than that.

However, if expensing intangible drilling costs is eliminated, the shale boom will officially be dead.

As percentage depletion applies only to the first 1,000 BOEPD per company, elimination of that would primarily hurt marginal wells.

Also, Biden has proposed $16 billion to plug abandoned wells and reclaim abandoned mines.

Of course, at this point, the infrastructure bill is not entirely specific. There will be a lot of negotiation in Congress.

To me, it would seem short to medium term positive for oil prices. Shale companies will finally have to pay income taxes, and assuming the corporate rate goes to 28%, I don't see how there would be another drilling boom in shale, absent a super spike in oil and/or natural gas prices.

Further, the bill would cause a spike in US oil demand. Lots of heavy equipment and materials that will consume petroleum, even that needed for more clean energy.

Future will be more clear once the plan is signed into law.

I would note grain spiked on the USDA estimates for corn and soybean acres. This could affect oil prices short term.

[Apr 01, 2021] Oil price might get one last surge off this infrastructure bill

Apr 01, 2021 | peakoilbarrel.com

HHH IGNORED 03/28/2021 at 2:03 pm

Short interest in US stock is at all time lows. Hardly anybody is short. Means there are hardly any shorts to squeeze out to ramp valuations higher. My guess is there will be one last ramp higher on the release of US infrastructure bill. Which Biden will release I think it is Wed of this coming week.

Short interest in the dollar is near all time highs. Hardly anybody is long. These shorts will start to be squeezed out soon sending dollar much higher as shorts cover.

Oil price might get one last surge off this infrastructure bill but it will be short lived if it comes at all.

With margin debt set to shrink starting April 1st. There won't be a continued ramp of prices. There will be a contraction of prices. Might take a month for this contraction to start showing itself in prices as banks tighten down on margin debt.

[Mar 30, 2021] Russian gas meets only a fraction of Germany's needs - Germany's Scholz

Mar 30, 2021 | finance.yahoo.com


More content below More content below More content below More content below More content below More content below More content below More content below

BERLIN, Sept 21 (Reuters) - Gas contributes only a fraction of Germany's energy consumption, and Russian gas only a fraction of that, so it is wrong to say that the Nord Stream 2 pipeline will make Germany dependent on Russian energy, Finance Minister Olaf Scholz said.

Asked about the flagship Kremlin project, which has been heavily criticised by the United States and some European countries, Scholz on Monday restated the German government's position that the pipeline was a private investment and should not be the target of U.S. sanctions.

The poisoning of Kremlin critic Alexei Navalny, blamed by most Western governments on Russian state actors, has led to renewed calls for the nearly complete pipeline, built by state-owned Gazprom, to be cancelled.

Critics of the pipeline say it increases Germany's reliance on Russian energy and deprives transit countries Poland and Ukraine of crucial leverage over the giant country to their east. (Reporting by Thomas Escritt; Editing by Maria Sheahan)

[Mar 28, 2021] The five largest fields in Russia produce approximately 75% of Russian oil. And they are all in serious decline.

Mar 28, 2021 | peakoilbarrel.com

POLLUX IGNORED 03/25/2021 at 9:18 am

Russia's crude oil export set to drop 3pc in Q2 vs Q1

Russia plans to decrease its oil exports in the second quarter 2021 despite an OPEC decision to allow the state an additional output hike from April.

On a daily basis, Russia's oil exports will drop by some 3% in April-June compared to the first quarter of 2021, Reuters calculations showed. REPLY RON PATTERSON IGNORED 03/25/2021 at 12:23 pm

And no one asked why? There is a reason for everything.

Hint: Four of the five largest fields in Russia are located in West Siberia, Samotlor, Priob, Lyantor, and Fedorov. 61% of Russian production currently comes from Western Siberia.

Russia's second-largest field, Romashkino, discovered in 1948, is located in the Volga-Ural Basin and is also in serious decline.

The five largest fields in Russia produce approximately 75% of Russian oil. And they are all in serious decline. RON PATTERSON IGNORED 03/25/2021 at 1:00 pm

I wrote, in 2015: Reserve Growth in West Siberian Oil Fields

"Russian oil production will not get any help from reserve growth in Western Siberia. Old dying fields, like old dying men do not grow."

I really don't like to brag, but I was dead on. From 2015 to 2019, Russian oil production increased by about 200,000 barrels per day per year, for a total of 800k barrels per day. That growth came from new fields in Eastern Siberia. The largest of those new fields, Vankor, peaked in 2019 at just under 500,000 barrels per day. Hell, even their new fields are starting to peak.

But those old dying fields did not grow one iota. They are all now in decline. JEAN-FRANÇOIS FLEURY IGNORED 03/26/2021 at 6:14 am

And world oil production is going to skyrocket, according to IEA and EIA projections. Of course. JEAN-FRANÇOIS FLEURY IGNORED 03/28/2021 at 7:39 am

...About Brazil, the oil production will increase at most of 500 kb/d according to the post of George Kaplan. ... About Irak, they are not going to produce more oil. Indeed, after different episodes of wars, UNO sanctions, invasion by US, insurrections against US and British troops and after EI insurrection, they did extract less than half of their oil reserves.

... About Norway, by looking at the post of Georges Kaplan about current state of oil reserves and production, it seems rather unlikely that they will be able to increase significantly their oil production.

[Mar 28, 2021] RON PATTERSON

Mar 28, 2021 | peakoilbarrel.com

IGNORED 03/28/2021 at 10:22 am

The 12 nation group might not see annual C plus C output increases of 1400 kbo/d in the future, but it will take time for the rate of increase to fall to 455 kbo/d (where a plateau in World output would occur) especially if oil prices rise to $80/bo or more.

No, it will not take time. Why would you think production would graduallly fall off? Yes, decline slops are usually gradual as well as increasing slopes. But the change from increase to plateau or increase to decline is seldom, if ever gradual. USA+Saudi+Russia has already plateaued. Their decline is very likely to be sudden, well, it has actually already happened.

However, in the two charts below, I have used your method of stopping the chart just before the Covid induced decline. The charts speak for themselves.

REPLY RON PATTERSON IGNORED 03/28/2021 at 10:26 am

The second chart. The rest of the world is in serious decline.

[Mar 28, 2021] Unless investment increases, I don't expect extraction rates to achieve 2018 levels soon.

Mar 28, 2021 | peakoilbarrel.com

SCHINZY IGNORED 03/28/2021 at 2:26 am

I think it instructive to recall oil and gas investment history. Unregulated oil and gas markets have always yielded boom bust cycles. There was a bust cycle from 1986 to 2000. A boom cycle started in 2001 with investment in oil and gas rising on average 11% per year to $780 billion in 2014 (this was from a Kopits talk in 2014, but the link I have no longer works).

There is a lag between increased or decreased investment and the response in extraction rates. The lag is longer offshore than onshore. For example, in spite of the investment boom from 2001 to 2014, extraction rates were stagnant between 2005 and 2010.

A bust began in 2015 with investment dropping 25% in 2015 and a further 20% in 2016. The drop was more pronounced offshore than onshore. Investment stayed essentially flat through 2019. Extraction rates continued to climb through 2018 but were flat in 2019.

The IEA began warning in 2016 that investment was not sufficient to meet demand in the early 2020s. In their 2019 WEO they stated that $650 to $750 billion was needed annually to attain 106 mb/d in 2030. I am assuming this sum referred to oil AND gas investment. In 2019 oil and gas investment was $483 billion. In 2020 it was $313 billion (close to 2009 levels).

As Dennis noted in response to my comment above, the relationship between a drop in investment and the corresponding drop in supply is not linear. But unless investment increases, I don't expect extraction rates to achieve 2018 levels soon. REPLY SHALLOW SAND IGNORED 03/28/2021 at 6:08 am

Ovi. I appreciate your posts. Thanks.

Schinzy. Look at what the integrated oil companies are forecasting. BP, RDS and TOT are shrinking production. CVX and XOM are greatly reducing CAPEX. So is COP, the largest independent. So is PXD, one of the largest shale players. Of course, these companies can change strategy quickly, likely next year if any do.

For the first time I can recall, the government of the United States is not supportive of it increasing production. Contrary to popular belief, this matters.

To keep a lid on oil prices, on the supply side, either the USA needs to keep adding barrels or some other country that does not benefit as a whole from high oil prices will need to step up. The CAPEX currently isn't budgeted to do that.

Of course, decreased demand due to the continued spikes in COVID cases will continue to put a lid on demand. Hopefully by fall this won't be much of an issue, not for oils sake, but for public health sake.

The other demand side lids I see could be Western EV adoption offsetting developing world oil demand growth. Worried here about both the needed upgrades to the grids, plus the lack of rare earth metals. The other could be another big economic issue. Don't want that, but seems economy issues are also going to be with us given the high debt levels. The stimulus in response to COVID isn't cheap. REPLY SCHINZY IGNORED 03/28/2021 at 7:41 am

All very true Shallow. I suspect these companies are reducing CAPEX because of increasing debt. The more conservative CAPEX spending seems to be helping their share prices. SHALLOW SAND IGNORED 03/28/2021 at 7:55 am

Schinzy.

IHS Markit doesn't see US CAPEX spending at the 2018-19 levels returning until 2024-25. Probably too far out in the future to be accurate. However, it's 2021 forecast is for lower CAPEX in all years since 2010 except for 2020.

I will add another big player to my list above, EOG also lowered CAPEX guidance for 2021 from where it had been pre-pandemic. Will seek to hold production flat in 2021.

[Mar 28, 2021] Looks like the world's three greatest oil producers(The USA, Saudi Arabia, and Russia), have peaked

Mar 28, 2021 | peakoilbarrel.com

OVI IGNORED 03/25/2021 at 5:47 pm

Dennis

Here is the C Plus C chart to to December 2022. In the original chart in the post above, I only took it out to March 2021.

The March STEO report along with the International Energy Statistics are used to make the projection. It projects that world crude production December 2022 will be 81,759 kb/d, 2,735 kb/d lower than November 2018

REPLY RON PATTERSON IGNORED 03/25/2021 at 6:44 pm

Ovi, thanks for a great chart. And even this, 2,735 kb/d below the previous peak, I think is overly optimistic.

I think, at least two of the world's three greatest oil producers have peaked, (The USA, Saudi Arabia, and Russia), have peaked, and the rest of the world has clearly peaked, there is no way we can possibly surpass that 2018 peak. Actually, I think all three have peaked. I was just being conservative.

World less USA, Saudi Arabia, and Russia peaked in 2017. All three peaked, yearly average, in 2019. Of course you can argue that this is just the peak "so far". But I do not believe any of the three will ever surpass their 2019 yearly average peak.

RON PATTERSON IGNORED 03/26/2021 at 8:57 am

Dennis, you wrote: Below I use the trend in the ratio of World C plus C to World petroleum liquids from Jan 2017 to Dec 2019 to estimate World C+C from Jan 2021 to Dec 2022.

Okay, you use past trend lines to estimate future production. Well, I guess there is also how the EIA does it and the IEA does it. I just don't have confidence in that type of analysis.

Above I have charted past World oil production less the USA, Russia, and Saudi Arabia. There is clearly a trend there. Do you think this trend will continue?

World C+C production in 2018 averaged 82,897,000 barrels per day. In 2019 that average was 82,306,000 barrels per day. I have little doubt that future world oil production can come close to those averages. But I would bet my SS check that the 2018 peak will never be surpassed. (I like annual averages but if you like centered 12-month averages, then go with that.)

At any rate here are four possible sources for a surge in World oil production:

1. THE USA
2. Russia
3. Saudi Arabia
4. The World less USA, Russia, and Saudi Arabia

If World oil production is yet to peak, which one, or ones, of these four sources, will it come from? RON PATTERSON IGNORED 03/26/2021 at 12:00 pm

I believe I have seen reports that suggest a plateau near the recent 12 month peak output can be maintained for 5 to 10 years.

No Dennis, you have not seen that. I posted that myself some time ago. Russia stated that they hoped to hold production at about 11.2 million barrels per day for the next four years, 2021 through 2024. I have since lost the link but it was posted right here on this list. However, I think that was wishful thinking on Russia's part. I don't think they will hold that level, ever again.

The drop in World minus KSA, US, and Russia C plus C output since 2018 has mostly been due to a combination of lower oil prices and OPEC reducing output to try to bring oil prices back up,

I am not talking about the drop since 2018, I am talking about the peak and decline before 2018. The peak month in my chart above was November of 2016 at 52,206,000. The peak 12-month average was September of 2017 at 51,161,000 barrels per day. At that point, in September of 2017, the World less USA, Russia, and Saudi produced 63% of all World production. 63% of World oil production peaked in September of 2017.

While World oil production was peaking in 2018, due to increased production by the USA, Saudi, and Russia, the World less these big three was declining to 50,737,000 barrels per day, the average for 2018. A decline of almost half a million barrels per day.

Dennis, regardless of what happens in Canada, Brazil, and Norway over the next 5 to 10 years, the World less the big three peaked in 2016 monthly and 2017 annually. Any increase in World production must come from one or more of the big three. HOLE IN HEAD IGNORED 03/26/2021 at 1:22 pm

Dennis , your post on the last thread .
"I stand by my estimate, in 2020 World C plus C output dropped by 5.5 Mbo/d due to a lack of oil demand and the resulting drop in oil prices from the 2019 annual average, so a 10 Mbo/d increase from the 2020 level (annual average) of C plus C output requires a return to the 2019 average level (roughly 82.3 Mb/d) requiring a 5.6 Mbo/d increase and then a further 4.4 Mbo/d increase in output to reach 87 Mbo/d.

If World demand for C plus C warrants such an increase by 2028, I believe it can be produced, and yes the model accounts for depletion, which has been ongoing since the first barrel of oil was produced. The basis for the estimate is likely World resources of 3400 Gb of C plus C (this includes the 1428 Gb of crude plus condensate that was produced from 1860 to 2020), remaining resources (this includes conventional and unconventional C plus C) are about 1972 Gb (this includes future discoveries and reserve growth).

It is possible less will be produced due to lack of demand, if a rapid transition to non-fossil fuel energy sources occurs, I hope that is the case, but I am skeptical"
Well, 2020 production came in at an average of 75.93 mbpd . Decline rate was 7.5% compared to 2019. How will you achieve additional 10 mbpd by 2028 ? Ron is correct . Igor Sechin boss at Rosneft confirms what Ron has stated , shale party is over , KSA is going to cut domestic consumption by 1mbpd so that it can export that oil . Sorry, Brazil , Norway ,Tom Dick and Harry are in no position to cover this lag in production .In the future decline rates will increase as horizontal wells reach their limits of extraction . You must rethink your models with the new facts . Your statement "If World demand for C plus C warrants such an increase by 2028, I believe it can be produced " does not hold water . Your belief or mine is irrelevant . Geology prevails . RON PATTERSON IGNORED 03/27/2021 at 8:55 am

OPEC has been holding back production since 2017 in order to get oil prices up, how much different nations produce depends on their cost of production relative to price,

I don't see any evidence to support that statement. Average OPEC production in 2018 was only 170,000 barrels per day below the average for 2017. If they were holding back, they weren't doing a very good job of it. I think they were producing flat out all three years, 2016 through 2018.

Average 2016 – 31,701 (Peak)
Average 2017 – 31,507
Average 2018 – 31,336 RON PATTERSON IGNORED 03/27/2021 at 4:49 pm

I remembered incorrectly, OPEC likely started cutting back on output in the middle of 2016 to get oil prices higher,

You remember very incorrectly. OPEC, in the last months of 2016 was emptying their storage tanks in order to produce as much oil as they could. They would set their quotas on the amount produced in November and December of 2016, so they were making heroic attempts to produce every barrel possible in order to get a higher quota. (November 2016 was the OPEC all-time peak. And in my opinion, will remain so forever.)

They started cutting in January of 2017. But by June everyone was cheating and they were all, by July 2017, producing flat out.

Why does OPEC exist?

OPEC was formally constituted in January 1961 by five countries: Saudi Arabia, Iran, Iraq, Kuwait, and Venezuela. They existed then for the sole reason of trying to drive oil prices higher. They would like to do that today but squabbling among members has made them somewhat of a joke. They are a disorganized bunch of buffoons. Yes, they have dramatically cut production during the pandemic. But so has everyone else in the world. The bottom dropped out of demand so everyone cut production trying to save money.

A decline in output for the World has occurred since 2018 because oil prices dropped due to oversupply of oil relative to demand.

Okay, but what about 2017 and 2018? OPEC could not keep their members in line and by June of 2017 everyone was again producing flat out, causing that oversupply. And their cut was a pittance anyway, not enough to make much difference. For most of 2017 and all of 2018, every OPEC member was producing every barrel they could. (With the exception of Iran and Venezuela of course, but that is another story for another thread.)

Just look at the chart Dennis, that is just so damn obvious it cannot be denied.


RON PATTERSON IGNORED 03/27/2021 at 6:04 pm

For OPEC minus Iran, Libya, and Venezuela the centered 12 month average peak was 26759 kbo/d in January 2019.

Okay, you need to update your nations here. Libya is already back, producing at maximum possible capacity for the last 4 months. Venezuela will never be back, not in the next decade anyway, long after peak oil is history. That leaves only Iran. Iran, if sanctions were lifted today, could possibly increase production by approximately 1.6 million barrels per day in the next six months or so. That would not be nearly enough to make up for the natural decline in OPEC, especially Saudi Arabia, since the peak in 2016.

Iran is the only nation on earth that can possibly increase production in any significant amount. So you should only deal with Iran when talking about possible OPEC production increases.

Dennis, OPEC has done nothing but basically tread water since 2005. Why do you think they will now save the world?

(In the chart below 2021 is only two months, January and February.


RON PATTERSON IGNORED 03/27/2021 at 8:42 pm

OPEC does not produce at maximum output, except when fighting for quotas.

Dennis, OPEC is not an oil company, they are a cartel. The only ones that increased when battling for quota were Saudi, the UAE, and Kuwait. The rest just produced flat out all the time. Check the charts.

Yes, they were all producing flat out most of the time. Only in a few instances did they actually cut production. Of course, the pandemic hit everyone. But as you can see by the yearly chart I posted their total share of the market has shrunk dramatically since 2005.

Dennis, OPEC peaked in 2016. Saudi Arabia is in decline. End of story. ALIMBIQUATED IGNORED 03/27/2021 at 7:47 am

Ron,
Good point about past trends lines being a dubious predictor of future trends. This is testable too. In this case three years of past data was used to predict the future.

If there is 40 years of data, you could run the algorithm on 35 three-year data sets and check the accuracy of the prediction. That would give you some idea of how likely the latest prediction is to be accurate.

My guess is that the accuracy is fairly low, but checking would reveal the truth. POLLUX IGNORED 03/26/2021 at 3:30 am

In November, Saudi Arabia's domestic crude stockpiles fell to 17-year low:
"Saudi Arabia's domestic crude stockpiles fell by 1.2 million barrels in November to 143.43 million barrels, the lowest since November 2003." ( source )

This trend continues and in January, stockpiles fell to 137.207 million barrels:
"The country's domestic refinery crude throughput rose to 2.343 million bpd while crude stocks fell to 137.207 million barrels in January." ( source ) HOLE IN HEAD IGNORED 03/26/2021 at 11:19 am

We will apply sanctions and abuse you but please give us your oil .
https://www.rt.com/business/519108-us-import-record-oil-russia/
Also Saudi facility is under drone attack as per Saudi govt .
https://www.spa.gov.sa/viewfullstory.php?lang=en&newsid=2207999#2207999 HOLE IN HEAD IGNORED 03/26/2021 at 2:32 pm

In an article Steven Kopits wrote "In its February Short Term Energy Outlook (STEO), the EIA forecasts this month's world oil consumption at 96.7 million barrels per day (mbpd). The oil supply, however, is much lower, only 93.6 mbpd, with the difference of 3.1 mbpd of necessity being drawn from crude oil and refined product inventories. This is a shortfall of 3.5% "
Is he correct ? if yes ,then are we in trouble ?

[Mar 28, 2021] Unfortunately the paper market (or electronic market) is what most US producers are paid on.

Mar 28, 2021 | peakoilbarrel.com

SHALLOW SAND IGNORED 03/24/2021 at 9:21 pm

Ovi.

Unfortunately the paper market (or electronic market) is what most US producers are paid on.

As I have posted before, we are paid on a monthly average of the daily settles of WTI, less a discount which primarily is due to transportation expenses. Saturday and Sunday are the same price as Friday's close, so we watch the Friday close a little more closely.

After a very difficult 2020, 2021 has been mostly good oil price wise. I thought prices might run a little higher, but COVID just has not subsided worldwide like I had hoped it would by now. Maybe this summer? REPLY OVI IGNORED 03/24/2021 at 9:40 pm

Shallow Sand

Thanks for the info. I hope that WTI stays up for you.

I used to follow a Cdn oil company that sold some of their oil on a daily basis and some a month or two forward, based on the settled price of WTI. I later found out that the CEO was a believer in peak oil and did well with oil on the rise to $147. The company doesn't exist today. POLLUX IGNORED 03/25/2021 at 9:52 am

Four scenarios going forward:

1) Higher output and higher prices
Dennis?

2) Higher output and lower prices
"Brent crude oil prices will average $64 per barrel (b) in the second quarter of 2021 and then fall to less than $60/b through the end of 2022" ( source )
– EIA

3) Lower output and higher prices
Many "Peak Oil:ers"

4) Lower output and lower prices
"Within a few months to a year, the worldwide debt bubble will start to collapse, bringing oil prices down by more than 50%." ( source )
– Gail Tverberg

Schinzy?
"I have long maintained that peak oil is a low price phenomenon, not a high priced phenomenon" ( source ) RON PATTERSON IGNORED 03/25/2021 at 10:40 am

The EIA's latest Monthly Energy Review is out.

They have US C+C production falling 58,000 barrels per day in December, 108,000 bpd in January, and 591,000 bpd in February to 10,364,000 barrels per day. The huge February drop was due, mostly, to bad weather. SCHINZY IGNORED 03/26/2021 at 3:09 am

I have trouble with this scenario given Rystad Energy's investment outlook for 2021: flat with respect to 2020 which was 35% below that of 2019 which only got 2019 extraction rate just shy of 2018. See https://www.rystadenergy.com/newsevents/news/press-releases/drilling-activity-is-set-for-two-consecutive-years-of-growth-but-will-lag-pre-pandemic-levels/

[Mar 28, 2021] China Signs 25-Year Deal With Iran in Challenge to the U.S-

Mar 28, 2021 | www.msn.com

A draft copy of the accord that surfaced on media last year showed plans for long-term supply of Iranian crude to China as well as investment in oil, gas, petrochemical, renewables and nuclear energy infrastructure.

Lured by the prospect of cheaper prices, China has already increased its imports of Iranian oil to around 1 million barrels a day, eroding U.S. leverage as it prepares to enter stalled talks with Tehran to revive a nuclear deal.

The Biden administration has indicated that it's open to reengaging with Iran after then-President Donald Trump abandoned the accord nearly three years ago and reimposed economic sanctions, but the two sides have yet to even agree to meet. Iran exported around 2.5 million barrels of oil a day before American penalties resumed.

Iran's closer integration with China may help shore up its economy against the impact of the U.S. sanctions, while sending a clear signal to the White House of Tehran's intentions. Wang Yi, who arrived in Tehran on Friday, also met with Rouhani to discuss the nuclear deal.

In a televised speech, Rouhani raised the prospect of restrictions being eased before the end of his second and final term as president in early August.

"We're ready for the lifting of sanctions," he said on Saturday. "If obstacles are removed, all or at least some sanctions can be lifted."

[Mar 28, 2021] Iran, China sign strategic long-term cooperation agreement

Mar 28, 2021 | www.politico.com

No additional details of the agreement were revealed as Iran's Foreign Minister Mohammad Javad Zarif and Chinese counterpart Wang Yi took part in a ceremony marking the event.

me title=

The deal marked the first time Iran has signed such a lengthy agreement with a major world power. In 2001, Iran and Russia signed a 10-year cooperation agreement, mainly in the nuclear field, that was lengthened to 20 years through two five-year extensions.

Before the ceremony Saturday, Yi met Iranian President Hassan Rouhani and special Iranian envoy in charge of the deal Ali Larijani.

Saeed Khatibzadeh, spokesman for Iran's Foreign Ministry, on Friday called the agreement "deep, multi-layer and full-fledged."

The deal, which had been discussed since 2016, also supports tourism and cultural exchanges. It comes on the 50th anniversary of the establishment of diplomatic relations between China and Iran.

The two countries have had warm relations and both took part in a joint naval exercise in 2019 with Russia in the northern Indian Ocean.

Reportedly, Iran and China have done some $20 billion in trade annually in recent years. That's down from nearly $52 billion in 2014, however, because of a decline in oil prices and U.S. sanctions imposed in 2018 after then-President Donald Trump pulled the U.S. unilaterally out of a nuclear deal between Iran and world powers, saying it needed to be renegotiated.

Iran has pulled away from restrictions imposed under the deal under those sanctions in order to put pressure on the other signatories -- Germany, France, Britain, Russia and China -- to provide new economic incentives to offset U.S. sanctions.

[Mar 28, 2021] Iran, China sign strategic long-term [25 yr] cooperation agreement

Mar 28, 2021 | peakoilbarrel.com

HICKORY IGNORED 03/28/2021 at 12:29 pm

Thanks Dennis.
It is easy for us to discount the production capacity of Iran, however this could be a mistake.
If China needs oil it will fund production in Iran, regardless of the 'worlds' concern over Iranian nuclear and regional ambitions [very aggressive ambitions that are largely theocratically driven].

This weekend-
'Iran, China sign strategic long-term [25 yr] cooperation agreement
The agreement covers a variety of economic activity from oil and mining to promoting industrial activity in Iran, as well as transportation and agricultural collaboration.'
https://www.politico.com/news/2021/03/27/iran-china-agreement-478236

[Mar 26, 2021] Blinken telling Germany if they go with NS2, there'd be more sanctions coming from Washington to Germany

Mar 26, 2021 | www.unz.com

Rdm , says: March 24, 2021 at 3:26 pm GMT • 11.0 hours ago

After Alaska,

That's what we're seeing in Europe, regarding the NS2.

https://www.rferl.org/a/blinken-warns-germany-possible-sanctions-nord-stream-2/31165231.html

Blinken telling Germany if they go with NS2, there'd be more sanctions coming from Washington to Germany.

Are those Washingtonians brain dead?

No news here in the States about NS2 at all. Nothing, nada. How reliable those MSMs have been in the US?

[Mar 26, 2021] The Biden Administration may impose sanctions on companies that help build North Stream 2, which risks a blowup with Berlin.

Mar 26, 2021 | www.unz.com

Germany is showing signs of an independent Russia policy. The main issue between the United States, Europe, and Russia now is the Nord Stream 2 pipeline, which would carry gas from Russia to Germany. The Biden Administration may impose sanctions on companies that help build it, which risks a blowup with Berlin .

Most Republicans want even sterner measures . Senator Ted Cruz is delaying confirmation of some of President Biden's officials unless he takes action.

Hostility towards Russia is one of the few issues that unite Republicans and Democrats – along with support for citizenship for illegal immigrants , interference in Syria, keeping troops in Afghanistan , and thwarting China . We can't count on Republicans or Democrats to stand up for Americans, but we can count on support for invading the world and inviting the world. This combination of an aggressive foreign policy and indifference towards citizens is why some call the current regime the Globalist American Empire (GAE). It may be based in Washington DC, but it has nothing to do with the historic American nation or its interests.

However, what I call the " American Paradox " may doom this "empire." It is run by people who seem to care nothing for the country; the empire is built on sand.

[Mar 26, 2021] Dow and S P 500 Close at Records as Oil Prices Rise

Mar 26, 2021 | finance.yahoo.com

Teresa Rivas Fri, March 26, 2021, 4:31 PM

Global stocks are higher as a positive session on Wall Street inspires investors. Oil prices rise as the crucial Suez Canal waterway remains blocked.

[Mar 24, 2021] Oil demand 'will surge this summer'- expert

Mar 24, 2021 | finance.yahoo.com

Both OPEC Russia and here in North America, have done a good job of curtailing their output. So with regard to supply, the market is more in balance. Yes, we are in the midst of a strong rally today. But that all comes on the heels of a massive sell-off, a $4 barrel sell-off yesterday.

So the market's in the process of balancing itself out. Keep in mind that we've rallied from about $30 a barrel before the winter to upwards of-- we knocked on the doorstep a couple of weeks ago-- $70 a barrel. So we've had a terrific run over this one season. We're now at a level, 57, 58, the high 50s, low 60s, which, more or less, where the market was trading in 2019, i.e. the year when the economy was strong, no one heard of COVID.

... what the really positive to come out of COVID is the consistently strong demand for diesel fuel. Now diesel fuel is your primary industrial fuel, and that never really took a significant hit. It obviously took a hit at this time last year when everything took a hit, but it was the first in energy market to rebound, and it stayed strong. And we're at very high levels.

... if we are correct, we don't go into another set of COVID lockdowns like last year, that demand certainly should be enough to propel us back above that 70 even with Brent in that, towards that $80 range.

[Mar 22, 2021] Biden sleepwalks into a stagflation nightmare: US economy simply doesn't have the productive capacity to meet the demand created by Biden's stimulus package

Mar 22, 2021 | asiatimes.com

The sub-headline is true, but the headline not necessarily. The USA still is the financial superpower, therefore its fiat currency is the universal fiat currency (Dollar Standard). Stagflation will only happen if the Dollar Standard is to be severely weakened in a very short period of time; otherwise, what will happen is some form of partial reverse-stagflation: low unemployment (officially), low inflation (even to the point of zero inflation or even deflation) and low economic growth.

This situation will go on until the Dollar Standard disappears. After that, the American Empire will quickly and inexorably collapse through a spiral of hyperinflation and economic recession. At this phase, it will probably go all-in with WWIII, with military invasions of Latin American, the Middle East and China, while preparing for a delusional strike-first nuclear attack on Russia. By this time, the American people will be completely hallucinated and fuming with anger in a fascist frenesi against the rest of the world (China in particular), so popular support for a global invasion would not be a problem.

[Mar 21, 2021] The US neurotic dynamic is to escalate blindly until it achieves control

Mar 21, 2021 | www.moonofalabama.org

Oriental Voice , Mar 20 2021 0:35 utc | 76

@Posted by: Grieved | Mar 19 2021 23:05 utc | 55:

...., the US neurotic dynamic is to escalate blindly until it achieves control. This is the dynamic that must be defeated.

Yes that's problem all right, but can you ever defeat that dynamic given that the gorilla owns 10,000 nukes and has no moral qualms whatsoever of using them? Until a near perfect anti-nuke defense system is developed I surmise the world would just have to live with, and get used to, the juvenile antics of King Kong because it has stated time and again it would escalate all the way up to using its nukes, because that's what they are for according to a former Sec. of State.

I'm a pessimist on this issue. I'm afraid we'll just have to endure and live with a wild beast for a while to come.

[Mar 21, 2021] I think that Nord stream II is a turning point. If Germany caves in here, there's little hope to get rid of the leash for it and the whole of Europe.

Mar 21, 2021 | www.moonofalabama.org

xototox , Mar 20 2021 0:34 utc | 75

i've been a reader of moa for quite a few years now, but never contributed to the forum. mostly because after a while i found what i wanted to say anyway, and why pile on?

I really enjoy the civility of the forum, and it's internationality. And of course b's insights. as a German myself I share many points of view with him in matters i have knowledge in, or think that i do.

For example i think that trump sure might be seen as a disaster by many, but it was a gift to Europe, and Germany in particular, because he opened the eyes of many, many people here who for decades thought murrica is our friend, our big brother, who will always protect us from the evil of the world - namely communism, Russia and lately china. a majority of the people here, as well as in the rest of the so called "western world" have been brainwashed for about 7 decades to think that way, even when America committed the most obvious, heinous, horrible crimes against humanity and our civilization as a whole.

there was always a spin, "human rights", "democracy", "free trade" and so on, values that had to be "defended" - when in reality it was always an offensive aggression or even a "pre-emptive strike". people just swallowed what the media fed them and went on with their daily chores.

Trump changed that, suddenly the ugly side of the empire became visible, and i will always be grateful for that. because now it cannot be hidden anymore. it wasn't just the unruly behaviour of a "new rich" and uneducated bully who accidentally became president. politically, the general attitude was always the same, trump only worded it much more obvious, making it harder for politicians and media to spin. that's why our politicians and media (for the most part fed by trans-atlantic "think tanks") hated him almost more than Americans themselves - he made their lies obvious and transparent. if it wasn't so sad, it sometimes was almost funny to see them squirm, having to explain why our friend and protector suddenly became so selfish and hostile.

All of them welcomed of course the new Harris administration, being so progressive, just and friendly again - only to witness a change of paradigm they probably didn't even think trump was capable of, or willing to: i think in later years, this week will mark the "official" beginning of the new cold war era. this behaviour against Russia and china was not a slap, but a punch in the face and will NEVER be forgiven nor forgotten. the only question for europe is: does it finally have the balls to emancipate and stand up against the bully? or will it submit and become a collateral damage of it's downfall? in form of a nuclear wasteland maybe?

I think that Nord stream II is a turning point. If Germany caves in here, there's little hope to get rid of the leash for it and the whole of Europe.

If it stands tall, europe might become a buffer instead of a frontline. knowing and seeing our politicians, i'd say it doesn't look good.

[Mar 19, 2021] Fossil fuels are the basis of industrial civilization. Thier disapperiance portends our extinction as a species. We might as well accept as the fact that as soon as the Western civilization experience Seneca cliff it will be severaly damaged

Mar 19, 2021 | www.moonofalabama.org

norecovery , Mar 19 2021 0:05 utc | 42

One more observation from my seat in the gallery: FOSSIL ENERGY is the basis of industrial civilization, and our complete dependence on it portends our extinction as a species. We might as well accept the fact that we are done.

[Mar 19, 2021] With the Nord Stream project, we see the Gangster mentality of the US imperialism -- Do as I say or else!

Notable quotes:
"... Nord Stream 2 is of vital importance to Germany's energy security. The German public was rather hostile to President Trump and Biden's victory was seen with relief. But when it sees how Biden pursues the same policies, and with a similar tone, it will turn on him ..."
"... Since Washington is now in conflict with a goodly part of the public it sees that creating foreign policy crises and enemies as an excellent course of action to shore up support. Americans are always ready to react against enemies no matter how slender the proof of the wrongdoing ascribed to the enemy. There is never a penalty to pay for lying in the US if you are in the mainstream media or in the political arena. Since the CIA controls much of the European media and their ruling class it would take quite a lot for Europeans to drop their status as vassal states. ..."
Mar 19, 2021 | www.moonofalabama.org

Piotr Berman , Mar 18 2021 19:06 utc | 5

Nord Stream 2 is of vital importance to Germany's energy security. The German public was rather hostile to President Trump and Biden's victory was seen with relief. But when it sees how Biden pursues the same policies, and with a similar tone, it will turn on him . <-- b

However "hostile", Germany contributed to uni-lateral Trumpian sanctions, and so far, North Stream 2 is the only beacon of independence. Take Ukraine: Germany and France form half of Normandy Four, and provided name for Steinmeier formula. Ukraine resolutely resists proceeding with any obligations under that formula. Germany is silent on that and support annual extensions of sanctions, not to mention sanctions on Syria, Venezuela and whatever EU sanctions.

Syria is an interesting example. It could be actually popular among German voters to facilitate reconstruction in that country and return of the refugees to their homeland. Iran and Russia are potentially good customers for German industry. Independence of German banks and other companies from whimsical sanctions from USA would help too.

Seemingly, ingrained masochism is hard to overcome.


karlof1 , Mar 18 2021 19:22 utc | 8

Seej @4--

Thanks for posting Pepe's comments, some of which are in his current article I linked to on the open thread. In my comment related to Pepe's article I noted his excerpt of Chinese academic Jisi and this specific part:

"the Americans are eager to deal with problems before they are ready to improve the relationship."

That observation is consistent with that of an entity that only wants its orders obeyed and seeks no relationship or friendship with any other entity since it sees itself as Top Dog, and #1 in every way. As with the Nord Stream project, we see the Gangster mentality--Do as I say or else!

Not only does the Emperor have no clothes or much of a working memory, he's got erectile disfunction too that's well beyond the ability of Viagra to fix.

psychohistorian , Mar 18 2021 19:38 utc | 9

So here we have Blinken, Winken and Nod providing direction for failing empire

Blinken is obvious
Winken is that behind the scenes, wink, wink, nod, nod (there ain't no class structure here) type VP and
Nod is the new normal as US President.

I am sure they will try to take America to new places, yet to be dreamt of....will the brainwashed of the West follow?

About Germany and Nord Stream II.....To a degree that I am not sure of, Germany is like Japan, a fully owned colony of empire....this may be the time that the Germany nut gets cracked wide open....interesting times indeed.

Where are the details of Blinken telling China how to behave? I can hardly wait for the next act of Blinken, Winken and Nod

Mao Cheng Ji , Mar 18 2021 19:50 utc | 11

"Why, after so many bad words towards it, would China help the U.S. with solving the North Korea problem? It has zero incentive to do so."

This (as well as the Germany/NS2 thing) sounds like a rather naive view. Western headlines are for western internal consumption. And what's happening behind the scene, what incentives are offered and what threats are made in exchange for what specific actions, we simply don't know.

Chris Cosmos , Mar 18 2021 21:43 utc | 29

I notice a lot of accusations that Washington is "stupid" but that's not true. You have to understand how Washington works before you make such statements. The Deep State knows that it can control the minds of most Americans by inventing "truths" without any need to prove anything.

Since Washington is now in conflict with a goodly part of the public it sees that creating foreign policy crises and enemies as an excellent course of action to shore up support. Americans are always ready to react against enemies no matter how slender the proof of the wrongdoing ascribed to the enemy. There is never a penalty to pay for lying in the US if you are in the mainstream media or in the political arena. Since the CIA controls much of the European media and their ruling class it would take quite a lot for Europeans to drop their status as vassal states.

Remember, Washington can throw endless amounts of money around and fund everything from terrorism, crime waves, sexual indiscretions a la Epstein (the CIA had it's own whorehouse which my father pointed out to me decades ago--it was in Roslyn Virginia and it used underage girls and boys to improve its soft-power).

So far, no one has paid a penalty for lying or corrupt practices in Washington if they were "made" men or women (Trump never got that far).

As long as Europe, Japan and some other countries continue to be vassal states the US can and will get away with anything. Nordstream 2 is the issue that may change all that. Once Germany rebels the rest may follow.

mastameta , Mar 18 2021 20:22 utc | 18

germany breaking rank will be first big turn in nato. nordstream is a non negotiable issue for germany. meanwhile the US is not agreement capable. on anything and the vaccine hoarding is a big F U in EU to so called allies. all the pieces are set. just need time to let it all play out. the global south woke to it before the slower europeans can see the world anew.

as for the US china alaska meeting, it does seem to me that the US administration and deep state or whatever you want to call it are not coordinated or fully aligned with each other. the timing of the US sanctions on hk officials seem designed to thwart any possible dialogue. as if some elements are working to ensure the meeting resolves nothing.

the china global times calls this move the US stick that comes down before any negotiation and says it's a continuation of trump era tactics. maybe. I see it more as designed to make the meeting fail instead of designed to achieve anything such as extracting concessions from china. not being agreement capable because it is sabotaged from within.

but at this pt in the crumbling empire it is perhaps foolish to analyze its tactics in terms of means and ends. its only 'rationale' at this pt is to just keep doing what it's doing. sanctions wars threats coercion and moral grandstanding. it only knows it is right and there is nothing else besides.

Bernard F. , Mar 18 2021 22:41 utc | 36

@mina
@piotr berman

About Vlora to be an Alternative to NS2. Just a Fake from Radio France International, paid for by french gov. France is now full play in US hand. Macron want NS2 [and soon NS1..] to be shut down.

Nord Stream 1 is 55 Md.M3/y
Nord Stream 2 too.

110Md.m3/year

The biggest ship to deliver US GNL in Europe is 260.000 m3. 1m3 GNL is 600m3 natural gaz.

It's me or my computer? 3 ship per day? How many ship necessary? 60? 80?
Not an economy, a nightmare.
American capitalism was plunder and is now parasitism.


In order to get energy, Germany need Russia. Nord Stream is a direct tie in order to avoid "reliable" intermediate like Ukraine or Poland.
In order to get everything under control US need [reliable intermediate] to cut the tie between [oil/gas fields] from Middleeast or Russia and Germany, the sole country in Europe with Great industrial/technical capacity.

And good economic links to Eurasien.

Pardon my Englisch, I'm french. And tired

[Mar 12, 2021] When sweet spots will be exhausted in the US shale

At some point geology takes upper hand over technology
Mar 12, 2021 | oilprice.com

... ... ...

On the technical side, drillers have vastly lengthened the horizontal leg of the typical shale well, from slightly over a mile in 2014 to an average of 8,500 feet in early 2019. The ability to do this has come in part from improvements in drilling fluids design to permit entry into longer sections, and better rotary steerable MWD/LWD assemblies that enable more reliable real time drilling data from the bit to ensure they are staying in the sweet spot of the reservoir. Improvements in perforating, frac stage design with 4-D fracking that takes into account the frac's progress over time have also contributed to this increase in productivity.

The amount of sand or proppant pumped per foot of interval has also increased hugely from around a 1,000 pounds per foot-PPF, to between 2,000 and 2,500 PPF. Increasing the amount of proppant ads to the well's cost, but it also hugely increases the permeability of the completion. Permeability is a measure of the flow capacity of the rock. More permeability results in more production for longer periods of time.

High grading of drilling opportunities has been a prime contributor to being able to maintain a lower decline rate that originally supposed in my calculations. What this means is that operators have been focusing on their Tier I acreage and bypassing lower tier opportunities.

When you take this performance and multiply it across the top twenty or so drillers, you can begin to see how shale production manages to hover around the 7.5 mm BOEPD level.

... ... ...

One of the questions that often comes up is what will happen when Tier I acreage is drilled up. Some estimates have been put forward that this might occur within the next decade.

Rystad has challenged those estimates showing an estimate of the longevity of Tier I shale in years at present rates of drilling.

It comes as no surprise the Delaware sub-basin of the larger Permian basin is the king of shale, and operators there will retain a low cost drilling advantage for a number years beyond other plays.

By David Messler for Oilprice.com

[Mar 12, 2021] Looks like US shale oil production do not have much upside even at current prices

Mar 12, 2021 | oilprice.com

Most analysts believe that most public companies will stick to discipline. OPEC+ also seems to have gambled on expectations that U.S. shale will look at higher profits instead of production this time - unlike in any of the previous oil price spikes in recent years - when it decided not to raise production from April, except for small increases for Russia and Kazakhstan.

In view of the recent high prices, JP Morgan now expects U.S. oil production to average 11.36 million bpd in 2021, slightly up from 11.32 million bpd last year.

[Mar 11, 2021] How Oil Could Go To $100 Per Barrel

Mar 11, 2021 | oilprice.com

The EIA sees demand continuing to recover at a good pace to mid-year, with July world oil consumption forecast at 98.2 mbpd (but still about 4 mbpd below 'normal'). This incremental demand is being materially supplied by two sources, Brazil and OPEC. We might accept Brazil's crude oil production growth as given, allowing that the timing might be off by a month or two. The pivotal question is instead OPEC's intentions.

The EIA uses a volume (or demand) driven model, implying that OPEC will passively increase production to meet demand, and thereby keep oil prices low. But why would OPEC do this? If OPEC simply maintained current production levels, the world would be 3.5 mbpd short of supply by mid-year. A shortfall of 3.5 mbpd -- 3.6% of global consumption -- is a lot. It would rapidly drain remaining excess inventories, leaving only oil prices to mediate between supply and demand just as the world economy is showing both strength and momentum as the pandemic ends. In other words, in the coming months consumers will be prepared to compete for the available barrels of oil, and that should push oil prices up sharply.

... ... ...

... now is OPEC's best opportunity to make real money in the short to medium term. They would be fools to let the opportunity slip by.

By Steven Kopits of Princeton Energy Advisors via Zerohedge.com

[Mar 09, 2021] Texas' power 'death spiral' was unavoidable; it is that simple

Mar 09, 2021 | peakoilbarrel.com

JOHN S 03/07/2021 at 6:25 pm An interesting and fact based article on the Texas Power Crisis: https://www.mrt.com/business/oil/article/Texas-power-death-spiral-was-16005919.php

"There is no one party in the electrical power generation chain on which to lay the blame, and we should quit trying"

Power lines are shown Tuesday, Feb. 16, 2021, in Houston. More than 4 million people in Texas still had no power a full day after historic snowfall and single-digit temperatures created a surge of demand for electricity to warm up homes unaccustomed to such extreme lows, buckling the state's power grid and causing widespread blackouts.

In 1882, Thomas Edison formed the Edison Electric Illuminating Co., which brought electric light to Manhattan but most Americans still lit their homes with gas light and candles for another 50 years. Only in 1925 did half of all homes in the U.S. have electric power. It has been many years since the US has been fully electrified, but in 2015, 1 billion people (three times the US population) in the world had no access to electricity. Access to electricity is a key metric to determining a nation's affluence; as late as 2001, the entire county of Afghanistan was virtually without electricity. Afghani GDP was $500 per person in 2019 while the United States GDP was $65,000 per person.

We have come to expect that we should have electric power 100 percent of the time, and when that doesn't happen, then it must be someone else's fault (Oncor, ERCOT, power generators, retail electric providers like Griddy, employees and/or board members of any and all of the above, etc.). There are very few who know how electric power is generated and even fewer who understand the vast number of both mechanical and human factors that must operate seamlessly (and do operate seamlessly 99.9 percent of the time) to provide this modern miracle. We should really consider ourselves quite fortunate to have electricity at all, but of course we, as Americans, are smarter, better looking and more talented than everyone else and expect to have our every wish granted immediately; "Vanity of vanities, and all is vanity" spoke Ecclesiastes. Not a few have observed that this event occurred at the beginning of Lent, forcing involuntary penance on a people who refuse even the slightest voluntary inconveniences.

Within ERCOT, natural gas burned in gas turbines provides about 50 percent of the generating capacity in Texas, with wind/solar at about 30 percent, coal about 15 percent and nuclear about 5 percent. Since natural gas provides such a large percentage of electric power, and in an effort to find the appropriate scapegoat to Texas' woes, we first need to understand what a typical oil and gas production facility contains. A three-phase stream (oil, salt water and natural gas) is produced from the wellhead and flows to a separator, where the gas leaves the top of the separator in the vapor phase and the oil-salt water mixture leaves the bottom of the separator in the liquid phase and goes to a (gas-fired) heater-treater, which applies heat to break the oil-water emulsion and separate the oil from the saltwater. Oil then goes to storage tanks or pipelines, while water is either sent to a disposal well (via electric pump) or trucked off the lease.

Let's examine what really happened during the 221 consecutive hours with temperatures below the freezing point of water (32 degrees Fahrenheit). The natural gas in the vapor phase leaving the separator is saturated with water vapor, and since all the functions listed above occur above ground in steel pipes and vessels, the gas quickly drops in temperature, and the water vapor can freeze in the pipeline creating an ice block (a hydrate). If the gas cannot leave the lease then, unless the gas is flared, the well must be shut in. Even if the gas does not freeze in the line, if the paved roads and dirt lease roads are too hazardous for 18-wheeled truck transports to pick up the oil and water from the lease, then as soon as the on-lease storage is filled, the well must be shut in. Most leases have some level of electric power for pumps, lighting, heat tracing or similar uses, and when the electric provider ceases to provide that power, then any efforts to restore production and unfreeze equipment are hampered. The combination of freezing within on-lease flowlines, hazardous conditions preventing company employees from getting to the lease, lack of crude and water truck hauling, and the loss of electricity results in a complete wellhead shut in.

The graph below illustrates actual field production data from a Reagan County producer who battled all the issues above:

Virtually 100 percent of the gas produced in the Permian Basin must be processed in a gas processing plant for the removal of water, hydrogen sulfide, carbon dioxide and valuable natural gas liquids (NGLs, which are ethane, propane, butanes and heavier), with the remaining molecules consisting almost entirely of methane (called residue gas) delivered into large-diameter pipelines at the plant outlet. As producers struggled to keep wells on, gas processors also struggled as volumes to their plants steadily decreased (making it more difficult to operate), and they faced similar issues of employee safety, in-plant freezes and loss of electricity to key pieces of equipment like NGL pumps (if the NGLs cannot be pipelined from the plant on a continuous basis, the plant is forced to shut down). All plants have a minimum volume of gas required to run the plant, and many plants hit this wall; Navitas' processing complex east of Midland dropped from 750,000 Mcf per day to zero Mcf per day) while Cogent in Reagan County dropped from 460,000 Mcf per day to 40,000 Mcf per day.

Assuming a total loss of wind/solar and a 50 percent loss in coal, natural gas' share of the remaining generating capacity rose to about 80 percent; when wellhead freezes dramatically reduced gas flow to the processing plants, and when plants were having their own freeze issues, electric providers then cut power to these plants, eliminating what little gas supply was left available, effectively creating a "death spiral."

So, irrespective if (a) power generators were properly winterized, or (b) we had more gas-fired powered generation, or (c) Texas was not deregulated, the fuel supply simply was not available, "not even for ready money" (in Oscar Wilde's "The Importance of Being Earnest," Algernon expresses his dismay to the butler regarding why there were no cucumber sandwiches, to which the butler replies "There were no cucumbers in the market this morning, sir, not even for ready money"; after you read this comedy you should read his equally compelling but more somber tale, "The Picture of Dorian Gray").

As gas supply dwindled, and power demand increased, the price of gas "for ready money" jumped from its normal price of $3/MMBtu to $100-$200/MMBtu, and as the price of gas surged, and the demand for power increased while its availability decreased, the price of power also surged from $.03 per kilowatt-hour to $9 per kilowatt-hour. The typical consumer reaction was that there was "price gouging" simply because the price increased; what we witnessed was the classic supply-demand-price dynamic of the free market, which that same consumer enjoys on a regular basis when shopping for virtually any product.

Griddy customers enjoyed the rewards of supply-demand-price when power was plentiful and cheap, but they knew full well that they were susceptible to price spikes; Griddy updated open-market prices every five minutes and sent alerts when the price was increasing or decreasing, so those customers had the tools available on their "smart" phones and could elect to cease or continue to use power at a known cost.

Force majeure is a French term that literally means "greater force" and is related to an act of God, an event for which no party can be held accountable, such as a hurricane or a tornado (or 221 consecutive hours below 32 degrees). Try as we might, there is no one party in the electrical power generation chain on which to lay the blame, and we should quit trying. Will all the entities in the chain expend the money to protect against an event that happens once in a hundred years? Will you expend the money to buy and maintain a gas- or diesel-powered generator and beef up the insulation in your house to protect against an event that happens once in a hundred years? Do you expect the answers to both questions to be the same?

It is very unfortunate that lives were lost as an indirect consequence to the temporary loss of electricity. In another segment of our lives where man and machine interact, let's look at deaths on Texas roadways, which run about 3,500 per year. For the last 20 consecutive years, at least one person has died every single day in a vehicle accident; are we filing lawsuits or calling for the resignation of employees of TxDOT, DPS or vehicle manufacturers? If we were serious about reducing deaths to zero (TxDOT's 2050 goal) would we drop the speed limit to 30 miles per hour on all roadways and post officers every 10 miles to issue mandatory citations? Or would we appeal to taking personal responsibility for safe driving habits every time we turned the key in the ignition?

Switching gears, what should oil and gas producers be prepared for in late March when they are paid for gas delivered in February? Just because natural gas traded for $100-$200/MMBtu for a few days does not mean you will receive that price; it depends on what your gas contract stipulates and whether the plant to which you are connected sold any gas during that period. In an effort to be equitable, gas processors who did sell some high-priced gas could possibly allocate that value to only those producers who actually delivered gas to them during that period, rather than compute an average monthly price and applying that price to all deliveries during February. If your gas processor passes through your share of its electricity bill, you could be in for a shock on high pass-through power costs. You may get inquiries from royalty owners wondering why they are not seeing the effects of $100/MMBtu gas and whether you exercised a fiduciary responsibility to obtain that price.

This is only a partial list; the storm outside is over, but the financial and legal storm could only be beginning.

[Mar 07, 2021] Private shale Firms want to go all in as for production in their small spots, but will they get capital and do they have any sweet spots? by Tsvetana Paraskova

Sweet spots depletion might be a problem for them. U.S. shale production as a whole is unlikely to return to the levels before the pandemic. The high decline rates of shale well are more acure outside of sweet spot. Larger firms which still have sweet spots feel the pressure from investors to produce level of dividends expected in the industry. That excude "all-in" drilling as happned inthe past when Wall Stertt money were abundant and discipline was lacking.
Mar 07, 2021 | oilprice.com

Currently, OPEC itself sees U.S. crude oil production for 2021 at 11.2 million bpd, slightly down from an estimated 11.28 million bpd output for 2020. In its latest Monthly Oil Market Report (MOMR) for February, the cartel actually revised down its 2021 forecast for U.S. oil production by 210,000 bpd and now expects a 70,000-bpd annual decline from 2020, as continued capital expenditure discipline is "expected to weigh on production prospects in 2021."

Larger listed U.S. producers are concerned that some drillers would break promises of output restraint.

"There are going to be bad actors [who pursue] growth for growth's sake," Matthew Gallagher, an executive at Pioneer Natural Resources, told the Financial Times in January.

Pioneer Natural Resources itself will look to limit production growth to an average 5 percent over the long term, CEO Scott Sheffield said on the Q4 earnings call last week. Moreover, Pioneer expects to return up to 75 percent of its annual free cash flow to shareholders after the base dividend is paid, Sheffield noted. This will be returned in the form of variable dividends paid out quarterly the following year, the executive said. Related: Is This The World's Next Big Offshore Oil Region?

While Pioneer and other major listed shale players seem to be heeding investors' calls for higher returns to shareholders, the smaller closely held operators are not promising anything other than chasing higher returns on their investment, which is being generated by more oil production.

[Mar 07, 2021] Offshore Oil Gas Projects Set For Record Recovery by Tsvetana Paraskova

Commitments are not oil...
Mar 07, 2021 | oilprice.com

Offshore oil has already started to show signs of emerging from last year's crisis, as costs have been slashed since the previous downturn of 2015-2016. Deepwater oil breakevens have dropped to below those of U.S. shale supply, making deepwater one of the cheapest new sources of oil supply globally, Rystad Energy said last year.

In its new report this week, the energy research firm expects 592 offshore project commitments between 2021 and 2025, up from 355 projects in the 2016-2020 period and up from the 478 project commitments in the period 2011 to 2015.

Over the next five years, deepwater is set to show the most impressive growth in the number of commitments, with the number of projects rising to 181 from 106 in 2016-2020 and 115 in the five years before that, Rystad Energy has estimated.

"The search for large new fields in deep and remote waters became much more economically viable after dayrates for drilling rigs and offshore supply vessels fell in the wake of the oil price crash in 2014 and 2015. This offers significant support for companies interested in deepwater," said Rajiv Chandrasekhar, energy service analyst at Rystad Energy.

By Tsvetana Paraskova for Oilprice.com

[Mar 07, 2021] Oil Market Even Tighter As 500,000 Bpd Come Offline In Canada - OilPrice.com

Mar 07, 2021 | oilprice.com

Canadian Natural Resources, Suncor Energy, and Syncrude will all idle an upgrader each, taking off 250,000 bpd, 130,000 bpd, and 70,000 bpd, respectively, from total oil sands production.

... The oil sands cut will be temporary but, according to the industry itself, even when the three companies resume operations at their upgraders, there is little upward production growth pressure in Canadian oil sands. It seems emission reduction is a bigger priority for oil sands operators than production growth.

[Mar 06, 2021] Pointless Pain Is What We're Enduring. And All for the Sake of Accepting That Money is Not a Constraint on Our Potential

Mar 06, 2021 | www.nakedcapitalism.com

I worry that people cannot survive this. Real, warm blooded, caring, loving people can be broken by this. And that's what makes me angry. Because this is unnecessary. The money to deliver a decent society exists.

All that we need to make the lives of the vast majority of people in this country is a real understanding of economics, of money, of how it interacts with tax, and how we can use that for the common good.

But no political party seems to get that as yet. And until they do, this unnecessary suffering will continue. And that makes me very angry. Pointless pain is what we're enduring. And all for the sake of accepting that money is not a constraint on our potential, and never will be.


DTK , March 6, 2021 at 8:28 am

Hey Steve K,
Please explain why MMT is a bad joke.
Thank You

dummy , March 6, 2021 at 2:59 pm

Let me have a go.
If prosperity and wealth can be created by printing more money, why there is still poverty in the world?
After all, isn't every country equipped with a central bank that can print as much money as they want?

eg , March 6, 2021 at 5:37 pm

Depends upon what the additional money is used for -- if it's to employ the currently unemployed productively, then everyone is better off.

dummy , March 6, 2021 at 6:59 pm

Real wealth is not denominated in dollars, only in what those dollars can buy. Devaluing the dollar doesn't hurt the wealthy, most of their wealth is in the form of equity and real assets, not dollars.
The average person's wealth is measured mostly in his future labor, how much he is going to earn. He will earn less because the Fed devalues his labor through its manipulation of the dollar. He will see this in the rising cost of living without an increase in his pay. Sure perhaps the value of labor will at some point catch up to the devalued dollar, but in the interim he will earn less and will never catch up to what he would have earned otherwise. It doesn't hurt the wealthy, it hurts the middle class, and will for years to come.

occasional anonymous , March 6, 2021 at 5:43 pm

That isn't what MMT says. You're arguing against a strawman.

eg , March 6, 2021 at 10:14 am

Your macroeconomic ignorance is duly noted, featuring as it does the usual "commodity money" and mercantilist shibboleths.

MMT describes fiat monetary operations which have been in effect since the Nixon shock and the abandonment of Bretton Woods almost 50 years ago . Do catch up.

Louis Fyne , March 6, 2021 at 7:53 am

honest question, wouldn't MMT (in a hypothetical universe run by committed MMTers) in the UK likely will produce vastly different results than MMT in relatively autarkic economics like the USA or Russia?

The UK relies on imports to one degree or another for virtually every physical good necessary for a first-world living standard (food -- even basic foodstuffs like wheat, medicine, spare parts, petrol, apparel, even steel, etc).

While the UK's economy tilts to exporting services education, finance, media, medicinal/technological intellectual property, tourism, etc.

Would a weaker UK pound encourage more service exports? Or merely increase inflation, particularly for the bottom 50%?

honest question.

PlutoniumKun , March 6, 2021 at 8:03 am

Because MMT analysts tend to be mostly US or Australian, the applicability of it to smaller, more open economies has not, I think, had the attention thats needed (although to be fair, Richard Murphy has done quite a lot of writing on this). While the UK is a large economy, its also very open (although increasingly less so, thanks to Brexit). So it clearly has much less room to manoeuvre in terms of monetary or fiscal policy than a more autarkical nation. Its not just with MMT and inflation – things like Keynesian multipliers tend to be lower in more open economies as the benefits of fiscal expansion get exported out. The Labour party under Corbyn did put together some very interesting and well thought through MMT-influenced policies, but of course that all got thrown out with Corbyn.

As Yves has pointed out before, the UK has a particular problem in that it has little spare physical capacity in its economy to take advantage of a weaker currency. In the past, it has been unable to increase output when the pound has been weaker. So a weakening pound is likely to be more inflationary than in many other economies.

I think that in a general sense, MMT makes sense in all economies in a Covid scenario of a massive drop in output thanks to a black swan event. As Murphy points out, you just need to shove the cash into the economy through monetary means and forget about having to repay it. Inflation just isn't a problem in those circumstances, and it has the benefit of maintaining productive capacity within the economy. But in more 'normal' times, MMT needs to be applied with far more care in an economy like the UK than in a US or China or Russia or EU.

Susan the other , March 6, 2021 at 1:16 pm

Kind of wondering here what would happen if all the poor and unemployed/welfare recipients and even the precarious middle class also decided to offshore their money. Why not? Say in every country; say it became a global movement. The neoliberal nightmare should inform us all. Just because a small country doesn't have spare capacity or idle resources is not really a contraindication for MMT. It is more a factor of having an intrinsic imbalance due to decades if not centuries of grift and graft by those in a position to help themselves. And it creates confused politics. As you mentioned above – the Tories in the UK seem to have also usurped the opposition. Well, to my thinking, that is exactly what Trump did. And it is almost a crazy hope of "If you can't beat them, join them." And just exactly where does that leave a functional economy? My first image is a junkyard.

James E Keenan , March 6, 2021 at 9:55 am

Two points:

First, apropos the applicability of Modern Money Theory to relatively open economies like that of the U.K., see the discussion of the prerequisites for monetary sovereignty as outlined by Robert Hockett and Aaron James in their 2020 book, Money for Nothing . In addition to the well-known requirements (nation must issue its own currency; currency not pegged to metal or any other currency; no borrowing in foreign currencies), Hockett and James add others, including "limited trade dependence in essential goods such as food or energy sources, in order to mitigate foreign exchange and inflation risk ." (274)

Second, apropos the applicability of MMT to smaller economies, I am pleased to note that Fanny Pigeaud and Ndongo Samba Sylla's 2018 book, L'Arme Invisible de la Françafrique: Une Histoire du Franc CFA , has at last been published in English as Africa's Last Colonial Currency: The CFA Franc Story . (Your search engine will take you either to the publisher or to an internet behemoth where you can order it.)

Pigeaud and Sylla's book is a history and analysis of the political economy of the CFA zone: the countries of central and west Africa which were French colonies and which continue to use a common currency imposed on them by the French imperialists in 1945.

This book is, in my estimation, the best book we have so far in applying the insights of Modern Money Theory to non-monetarily sovereign economies. You have to love any book that starts out by translating Hyman Minsky's most famous aphorism into French: Tout un chacun peut creér de la monnaie: le problème est de la faire accepter.

HotFlash , March 6, 2021 at 11:42 am

"limited trade dependence in essential goods such as food or energy sources, in order to mitigate foreign exchange and inflation risk ."

Again, we/they have choices based on resource constraints. But, as usual, they are political. Most of these choices seem impossible now, but remember Victory Gardens ? Alas, such things are not looked upon favourably by Big Ag and the supermarket chains, but my depression-era grandparents grew most of their own food for their very large (by our standards) families. Maternal side, farmers -- my mother, born 1923, said that she never even knew there was a depression until she read about it later in high school. Grandpa paid his property taxes by driving snowplow for the county in the winter. Father's side -- my father, born 1922, grew up in a village (5-bedroom two story house built by his father, a shoemaker, and friends/relatives/contractors) on a biggish, maybe 1-2 acre? lot, which was part of a grant to the family for Civil War service. Grandma still had apple, peach, cherry and walnut trees, raspberry and currant bushes when I knew her, and had grown beans, tomatoes, potatoes and all that stuff before the 7 kids got married. Obviously, the kids did a lot of the work, too. Sewing room -- made most of the clothes for family, Dad says the kids' diapers were made of sugar sacks.

IOW, this is not rocket science. We did this sort of thing for millions of years, omitting the last 200 or so, and can very likely do it again. People explored the whole round world, and conquered a lot of it, without electricity or the internal combustion engine. We're not all gonna die!

Unless we as a species continue to act on maximizing shareholder value rather than surviving.

fwe'theewell , March 6, 2021 at 1:01 pm

Michelle Obama, izzat you? Gorgeous designer bootstraps.

The Rev Kev , March 6, 2021 at 5:53 pm

I think that you might be onto something here. I suspect that the lives of our grandchildren as they grow older will resemble the lives of our grandparents from your description. Of course that may mean a lot off decentralization from out of big cities but it can be done – especially if there is no other choice. And it's not like in the US that there is not the land to do this with.

RODGER MITCHELL , March 6, 2021 at 8:21 am

It is an excellent article, with one small exception, the words, "I accept that creating money this way is inflationary."

Contrary to popular wisdom, inflation is not caused by money creation . All inflations are caused by shortages , most often shortages of food or energy.

That includes hyperinflations. Consider, for one, the Zimbabwe hyperinflation. The government took farmland from farmers and gave it to non-farmers. The inevitable food shortages caused inflation. The government's "money-printing" was merely the wrongheaded response to the inflation, not the cause.

In fact, the hyperinflation could have been cured by more money creation, had that money been used to cure the food shortage, by purchasing food from abroad and distributing it, or by teaching the non-farmers how to farm.

In the past year, the U.S. has spent an astounding $4 trillion, and soon it will spend another $2 trillion, Yet, there will be no inflation so long as there are no shortages of food, oil, or labor.

Bottom line: Scarcity, not money creation, causes inflation.

Economists: Revise your economics textbooks.

Gengiskahn , March 6, 2021 at 3:55 pm

How do you define inflation?

DTK , March 6, 2021 at 8:36 am

In the US, as in the UK, planned inequality and (managed) unequal access to the benefits of the money system are two of the most salient activities of our (US) three government branches.

Patrick , March 6, 2021 at 9:02 am

So are ye telling me the reason conservatives don't (for example) want to raise the minimum wage is not because of some economic or monetary reason or law but instead just to keep people in their place, i.e. preserve the status quo? Amazing! And I guess them conservatives that "havenot" go along because of that "relative advantage" thing – they are so fixated on keeping those below in their place that they are blind to the upside of a more democratic and social monetary policy. Well I'll be. Now I git it!

Patrick ,

Patrick , March 6, 2021 at 9:21 am

Adding that yes, "fear of inflation" is an applicable "economic or monetary reason or law" that may explain the conservative position.

Anonapet , March 6, 2021 at 11:42 am

Then the MMT School are conservatives since they'd use taxation to curb inflation (by some undisclosed means that does not curb consumption).

But why should price inflation be a problem so long as:
1) It does not exceed income gains for ALL citizens;
2) the means that produce it do not violate equal protection under the law;
and
3) it is not extreme?

The only reason I can think of, and it's a contemptible one, is that large fiat hoarders* would see their hoards diminish in value in real terms.

*not to disparage those saving for a home, initial capital formation, legitimate liquidity needs, etc.

Adam Eran , March 6, 2021 at 1:50 pm

One point of inflation is to restrain creditors (rhymes with "predators").

Meanwhile, "printing" money does not initiate inflation. Most inflation–even hyperinflation–is "cost push," i.e. related to shortages of goods. In Zimbabwe, the Rhodesian farmers left, and the people to whom Mugabe gave their land were not as productive. Result: a shortage of food requiring imports (balance of payments problem).

In Weimar Germany, the French army invaded the Ruhr, shutting down Germany's industrial heartland, making a shortage of goods. They already had a balance of payments problems with WWI reparations.

Patrick , March 6, 2021 at 1:50 pm

"Then the MMT School are conservative"

In my example, no. The MMT School does not invoke inflation FEAR to deny nurses a meaningful wage raise.

Fear. Of change. Of "others". Of a level playing field? These pesky conservatives.

(For the record I did not excel in Father Brennan's freshman year logic class. And that was fifty years ago!)

Amfortas the hippie , March 6, 2021 at 2:23 pm

https://en.wikipedia.org/wiki/Bond_vigilante

it was always thus.
the real Burkean Conservatives behind it all, who yes want to keep everyone in their place.
as i've lamented many times, it's hard to get a read on who the real Bosses are, since they don't go on TV and brag, generally(various rightwing billionaires in the last 15 years, notwithstanding)
C.Wright Mills and Domhoff are the only taxonomists of that cohort that i'm aware of Diannah Johnstone, perhaps.
Maybe Pepe Escobar when they hide the rum.
otherwise, every attempt i've seen in the last 30 years has had elements of tinfoil and illuminatii/NWO scattered throughout.
I reckon this is by design, at some level.
whatever there exists a demographic cohort of humanity that is exceedingly wealthy, thinks it's in charge and mostly really is and that is truly cosmopolitiain citizens of the world.
their most defining feature is that they pretend real hard not to exist and most of us little people give them no mind, and pretend right along.
This cohort is not monolithic, nor all powerful they each are as prone to tunnel vision and stupidity as any of us but they have better connected steering wheels, and cleaner windshields, and mirrors that work.
One hopes that, like in FDR Times, they will feel threatened enough by the results of their long term policy preferences to allow a few larger crumbs to fall from the table, so as to mollify the ravening hordes .ere those hordes notice who the real Hostis Humani Generis are.
But it looks like they're more likely to double down on the diversionary division of the Bewildered Herd hence, Cancel Seuss! and Sinema's little antoinette dance .and an hundred other mostly unimportant things that happened just yesterday to keep us'n's riled up about the wrong things.

see: https://www.latimes.com/archives/la-xpm-1994-06-16-me-4587-story.html

for an enlightening memento mori of being right here before .Time is, indeed, cyclical, like the Ancients insisted.

Patrick , March 6, 2021 at 6:39 pm

"Maybe Pepe Escobar when they hide the rum". LOL! Needed that.

[Mar 06, 2021] BRAZIL SUMMARY Peak Oil Barrel

Mar 06, 2021 | peakoilbarrel.com

Oil Production

Production jumped in late 2019 but has struggled to maintain a plateau since then as FPSO start-ups have become sparser while the Campos basin decline continued apace.

Drilling rig numbers offshore increased in 2020 in support of the new FPSOs but land drilling virtually disappeared.

Rate of decline in the Campos basin, onshore and for small offshore basins have accelerated decline rates through 2019 and 2020, and all growth is coming from the Santos basin, which seems to be entering middle age with a rising water cut and the first developments reaching exhaustion.


Future Projections

Fitting a Verhulst curves to Santos basin production is virtually impossible as it is in such an early stage of development. An attempted fit resulted in remaining reserves of 22Gb compared to the APB figure of 11 to 12Gb. The estimate is bound to increase as a number of very large FPSOs come on line before 2025. Therefore the projection is based on a bottom up on recent, developing and possible projects that have started up or been announced, using any data for throughput, reserves etc., that is available and otherwise using usual design practice (e.g. typical field size for a given design throughput, FPSO availability, ramp-up times, decline rates, plateau periods).

The Verhulst best fit including annual production through 2019 results in a much thinner tail than from 2017 because recent figures have been much lower than the fit then. 2020 production was not used in the fit but the value prorated from monthly data through September shows the declining trend is continuing. The remaining reserves calculated from the fit is only 2Gb compared to 6 to 7 Gb from APB data. Fitting the curve but constraining the reserves to this numbe produces an unrealistically thick tail. The 2017 gave a better match but more likely there is another round of developments due that would need a separate curve to match. The first three of this are currently under development and their expected additional flow over the next few years matches the prediction from Petrobras – it only shows Petrobras' share of total equivalent production so the line shown has been prorated to total oil.

[Mar 05, 2021] The Feedback Loop Between The Fed The Elite - ZeroHedge

Investing lemmings are lured into energy stocks as a counterbalance to singing bond funds. It would be interesting to see how this will play out.
Mar 05, 2021 | www.zerohedge.com

takeaction 11 hours ago (Edited) remove link

I just closed EVERY position at open except for Energy.

My holds....XOM...MRO...VET....GTE.....OXY.....

And then for the Roll of the dice 2 million shares of CBDL just for the dream.

This Bond s&^t is going to get real ugly....and in my opinion...the inflation play is in Energy.

Crow-Magnon 11 hours ago

all have negative earnings but at least XOM has a decent dividend

Apocalypse2020 7 hours ago

Small oil companies are drowning in FCF right now.

TreeTopSlick 10 hours ago

Long Oil and/or commodity fund

[Mar 04, 2021] The next commodity supercycle

Mar 04, 2021 | finance.yahoo.com

Commodities have seen four supercycles over the past 100 years. The last one peaked in 2008, after 12 years of expansion.

Last month, two of the biggest banks on Wall Street - JPMorgan Chase and Goldman Sachs - joined others predicting a new commodities supercycle as economies reopen and the risks of the pandemic subside.

The expectation is for a long-term boom spanning oil, metals, and agricultural material prices. JPMorgan's head of oil and gas, Christyan Malek, recently offered one of the most bullish forecasts for oil, suggesting international crude prices could rebound to US$100 per barrel.

[Mar 01, 2021] The 13-member Organization of the Petroleum Exporting Countries pumped 24.89 million barrels per day (bpd) in February, the survey found, down 870,000 bpd from January.

Mar 01, 2021 | peakoilbarrel.com

POLLUX IGNORED 03/01/2021 at 9:33 am

OPEC oil output falls in February on Saudi additional cut – survey

The 13-member Organization of the Petroleum Exporting Countries pumped 24.89 million barrels per day (bpd) in February, the survey found, down 870,000 bpd from January.

Riyadh achieved about 850,000 bpd of that reduction in February, the Reuters survey found.

Compliance with pledged cuts in February was 121%, the survey found, up from 103% in January.

[Mar 01, 2021] Art Berman on Twitter

Mar 01, 2021 | twitter.com

In the past decade, capital employed in Exxon's upstream business has risen by a third -- and...production fell 17% & proved reserves by 39%.

"In the past decade, capital employed in Exxon's upstream business has risen by a third -- and...production fell 17% & proved reserves by 39%. This...has trashed Exxon's return on capital." https:// bloomberg.com/opinion/articl es/2021-02-25/exxon-reserves-debooking-of-6-billion-barrels-matters?sref=866aH6XX #OOTT #oilandgas #oil #WTI #CrudeOil #fintwit #OPEC #Commodities

[Feb 28, 2021] Possible end of "plato oil": Increase in countries that shtill have unpapped reserves now is unable to make up for the decline of production of the rest of the world

Feb 28, 2021 | peakoilbarrel.com

The natural annual deline from exiting wells is around 800 kb/d/yr.

Originally from: US December Oil Production Drops – Peak Oil Barrel

RON PATTERSON IGNORED 02/27/2021 at 5:25 pm

Dennis, I must disagree with your assessment. OPEC peaked in 2016. Yes, Iran can come back and increase production by about 1.5 million barrels per day. But that still will not make up for the decline in the rest of OPEC. No need to mention Venezuela, they may come back around 2030 or so, long after the peak has passed.

Russia said they had peaked in early 2020. I see no reason to think they were lying.

That leaves Brazil, Norway, and Canada. They all three may increase production but nothing spectacular. Not nearly enough to make up for the rest of the world in decline. REPLY STEPHEN HREN IGNORED 02/27/2021 at 5:58 pm

I'm inclined to agree with Ron. So much investment deferred because of 2014 and 2020 price crashes. LTO can come back quickly if the price stays consistently high (a big if) but it won't be enough to save the day. Investors are expecting cash from LTO these days, not production increases. I imagine most other countries are just coasting after the turmoil of the last year. Also still plenty of wildcards in the collapse department over the next 5-10 years: Iraq, Nigeria, Libya, etc. WATCHER IGNORED 02/28/2021 at 1:12 am

Factions in the administration are on record as wanting sharply higher oil prices. Seems difficult to see how this would get through the Senate, but it is a green priority. RON PATTERSON IGNORED 02/28/2021 at 8:48 am

Does Occidental know what they are talking about? They are saying that the investors are just not there for a massive increase in production. And they are one of the two largest producers in the Permian Basin.

U.S. Oil Production Has Already Passed Its Peak, Occidental Says Bold Mine
By Kevin Crowley
October 14, 2020, 1:49 PM CDT

America's oil production will never again reach the record 13 million barrels a day set earlier this year, just before the pandemic devastated global demand, according to Occidental Petroleum Corp.

"It's just going to be too difficult to replace the 2 million barrels a day of production that we've lost, and then to further grow beyond that," Chief Executive Officer Vicki Hollub said Wednesday at the Energy Intelligence Forum. "Over the next three to four years there's going to be moderate restoration of production, but not at high growth."

Occidental is one of the biggest producers in the U.S. shale industry, which added wells at such a rate prior to the spread of Covid-19 that the country became the world's top crude producer, overtaking Saudi Arabia and Russia, ushering in an era that President Donald Trump called "American energy dominance."

U.S. oil production is stuck below it's pre-pandemic high
Shale's debt-fueled expansion came to a juddering halt due to lower gasoline demand and oil prices, but also because of Wall Street's increasing reluctance to fund growth at any cost. Shale operators are increasingly prioritizing cash flow and returns to investors over production growth.

Occidental, which vies with Chevron Corp. to be the biggest producer in the Permian Basin, has been forced to throttle back capital spending, lower growth targets and cut its dividend in a bid to save cash during the downturn. Its finances were already severely challenged by the debt taken on through its $37 billion purchase of rival Anadarko Petroleum Corp. last year.

Hollub said global consumption stands at about 94 billion barrels a day, and it will take a Covid-19 vaccine before it returns to 100 million barrels. Due to cutbacks around the world, supply and demand for oil will likely balance again by the end of 2021, she said.

Unlike some of her European peers, Hollub sees strong long-term demand for oil. "I expect we'll get to peak supply before we get to peak demand," she said. HICKORY IGNORED 02/28/2021 at 11:31 am

"Unlike some of her European peers, Hollub sees strong long-term demand for oil. "I expect we'll get to peak supply before we get to peak demand," she said."

Thanks Ron.
I wonder if she is referring to the balance in the USA, or the world.

It will be a horse-race finish for the whole decade- "and here comes Demand up the backstretch " RON PATTERSON IGNORED 02/28/2021 at 11:26 am

Figure this one out. The EIA's AEO2021 In the past they have always given scenarios based on "Low Price" and "High Price". But now it is "Low Supply" and "High Supply".

They are not making a prediction, they are just saying: "Here is what low supply looks like", and "Here is what high supply looks like". Hell, we already knew that.

Anyway, it is all about tight oil. Everything depends on tight oil. Occidental says tight oil has peaked. But the EIA is taking no chances. They are saying in effect: "Here is what it looks like if tight oil has peaked and here is what it looks like if it has not."

REPLY

[Feb 28, 2021] Bank Of America Expects Fastest Oil Price Rise In 30 Years - OilPrice.com

Feb 28, 2021 | oilprice.com

Oil prices are set to rise by the fastest rate since the 1970s over the next three years, Bank of America said in a new report, joining the growing group of analysts forecasting a return of oil to three-digit territory.

The average price of Brent over the next five years, however, will be between $50 and $70 per barrel, according to the bank, as quoted by The National.

[Feb 28, 2021] OPEC+ Faces Calls to Cool Oil Market Frenzy With Extra Barrels

At some point changes in oil price will became qualitative and all this paper oil speculation designed to keep them down will stop working. It might well be that the moment of declining world production is near or already reached.
There is a finite amount of oil in the ground and with the current size of population it will eventually be depleted. The only question is how soon.
Bloomberg, of course, repeats IEA propaganda as the USA need low oil prices to survive as transportation of goods is mainly done by trucks and to keep it global empire from shrinking. So take the information provided with a grain of salt.
The problem for the USA is that shale oil production (which actually mostly produce light fractions; the fact carefully hidden in EIA statistics) is in decline and can't be revived without huge subsidies and the write down of debt.
Feb 28, 2021 | finance.yahoo.com

From trading houses in Geneva to Wall Street banks, much of the oil world agrees that global markets could use some more barrels. The big question is whether OPEC+ will provide enough of them.

A crude glut that piled up during the pandemic is vanishing fast. Global inventories are plunging at the steepest rate in two decades, according to Morgan Stanley. Prices have rallied to pre-virus levels, while U.S. production has taken a hit from freezing storms. Talk swirls of market supercycles, and even the return of $100 oil.

With the need for more supply evident, traders expect the OPEC+ coalition, led by Saudi Arabia and Russia, will agree to increase production when it meets on March 4, reversing some of the output cuts made last year.

But it's unclear if the group will act vigorously enough. Wary of the virus's persisting threat to demand, Saudi Energy Minister Prince Abdulaziz bin Salman has urged fellow producers to remain "extremely cautious."

If the alliance agrees an output hike that falls short of requirements, however, it could trigger a further price surge

... ... ...

Goldman Sachs Group Inc. sees Brent hitting $75 a barrel in the third quarter as a new commodities supercycle beckons , while trading giant Trafigura Group says it's "very bullish" on the months ahead. Socar Trading SA, a unit of Azerbaijan's state oil company, predicts $80 could be reached this summer and triple digits within two years.

"The fear is that in 12 months there will be a shortage" even if OPEC+ revives output, said Socar Chief Trading Officer Hayal Ahmadzada. "It will drive the price very high, very fast."

... ... ...

Prices are still far below the levels most OPEC nations need to cover government spending , and the International Energy Agency -- a leading forecaster -- anticipates a market setback in the second quarter as a seasonal lull briefly causes inventories to accumulate again.

[Feb 25, 2021] This Obscure Energy Treaty Is the Greatest Threat to the Planet You've Never Heard Of -

Feb 25, 2021 | www.nakedcapitalism.com

This Obscure Energy Treaty Is the Greatest Threat to the Planet You've Never Heard Of Posted on February 25, 2021 by Yves Smith

Yves here. An ugly trade treaty that included corporate-profit guaranteeing "investor-state dispute settlement" mechanisms is again getting the bad press it deserves. We mentioned the 1994 Energy Charter Treaty in our 2013-2015 opposition to the TransPacific Partnership and its Atlantic sister, the TransAtlantic Trade and Investment Partnership because it had become notorious in Europe for undermining clean energy initiatives. From a November 2013 post, quoting Public Citizen :

Vattenfal, a Swedish company, is a serial trade pact litigant against Germany. In 2011, Der Spiegel reported on how it was suing for expected €1 billion plus losses due to Germany's program to phase out nuclear power:

According to Handelsblatt, Vattenfall has an advantage in seeking compensation because the company has its headquarters abroad. As a Swedish company, Vattenfall can invoke investment rules under the Energy Charter Treaty (ECT), which protect foreign investors in signatory nations from interference in property rights. That includes, according to the treaty's text, a "fair and equitable treatment" of investors.

The Swedish company has already filed suit once against the German government at the ICSID. In 2009, Vattenfall sued the federal government over stricter environmental regulations on its coal-fired power plant in Hamburg-Moorburg, seeking €1.4 billion plus interest in damages. The parties settled out of court in August 2010.

These treaty terms are designed to erode national sovereignity and establish supra-national mechanisms to make corporate profits senior to national laws. I'm not making that up. Again from that 2013 post:

Word has apparently gotten out even to Congressmen who can normally be lulled to sleep with the invocation of the magic phrase "free trade" that the pending Trans Pacific Partnership is toxic. This proposed deal among 13 Pacific Rim countries (essentially, an "everybody but China" pact), is only peripherally about trade, since trade is already substantially liberalized. Its main aim is to strengthen the rights of intellectual property holders and investors, undermining US sovereignity, allowing drug companies to raise drug prices, interfering with basic operation of the Internet, and gutting labor, banking, and environmental regulations.

Or as Public Citizen put it :

It's not really about "trade", but a system of enforceable global governance that is not designed for modification by those who will live the results.

The only good news about the Energy Charter Treaty, compared to its later versions of investor-state dispute settlement provisions, is that signatories can withdraw. And that might actually happen with the Energy Charter Treaty.

By Fabian Flues, an adviser on trade and investment policy at Berlin-based PowerShift, Cecilia Olivet, project coordinator with the Economic Justice Programme at the Transnational Institute, and Pia Eberhardt, a researcher and campaigner with the Brussels-based campaign group Corporate Europe Observatory. Originally published at openDemocracy

On 4 February the German energy giant RWE announced it was suing the government of the Netherlands . The crime? Proposing to phase out coal from the country's electricity mix. The company, which is Europe's biggest emitter of carbon, is demanding €1.4bn in 'compensation' from the country for loss of potential earnings, because the Dutch government has banned the burning of coal for electricity from 2030.

If this sounds unreasonable, then you might be surprised to learn that this kind of legal action is perfectly normal – and likely to become far more commonplace in the coming years.

RWE is suing under the Energy Charter Treaty (ECT), a little-known international agreement signed without much public debate in 1994. The treaty binds more than 50 countries, and allows foreign investors in the energy sector to sue governments for decisions that might negatively impact their profits – including climate policies. Governments can be forced to pay huge sums in compensation if they lose an ECT case.

On Tuesday, Investigate Europe revealed that the EU, the UK and Switzerland could be forced to pay more than €345bn in ECT lawsuits over climate action in the coming years. This amount, which is more than twice the EU's annual budget, represents the total value of the fossil fuel infrastructure that is protected by the ECT, and was calculated using data gathered by Global Energy Monitor and Change of Oil International.

With ECT-covered assets worth €141bn (or more than €2,000 per citizen), the UK – which in 2019 became the first major economy to pass a net zero emissions law – is the country most vulnerable to future claims.

In 2019 the European Commission called the ECT "outdated" and "no longer sustainable", and more than 450 climate leaders and scientists and 300 lawmakers from across Europe have called on governments to withdraw from the treaty.

But in response, powerful interests have mobilised to not just defend the treaty, but to expand it to new signatory states. These interests include the fossil fuels lobby keen to keep its outsized legal privileges ; lawyers who make millions arguing ECT cases; and the Brussels-based ECT Secretariat, which has close ties to both industries and whose survival depends on the treaty's continuation.

A Bodyguard for Polluters

Supporters of the ECT make a number of controversial claims to prevent countries from leaving the treaty and persuade new countries to join. But their myths and misinformation are easily debunked .

For example, ECT supporters say the treaty attracts foreign investment, including into clean energy. However, there is no clear evidence that ECT-style agreements do this: a recent meta-analysis of 74 studies found that investment agreements' effect on increasing foreign investment "is so small as to be considered zero".

And while ECT supporters claim the treaty protects renewable investments, in reality it predominantly protects and prolongs the fossil-fuel dominated status quo. In recent years only 20% of investments protected by the ECT covered clean energy, compared to 56% for coal, oil and gas.

By protecting the status quo, the ECT acts as a bodyguard for polluters . As the RWE example shows, when a government decides to phase out coal or cease oil and gas operations, fossil fuel companies can demand steep compensation via the ECT. So with no public benefits and clear risks for climate action, why are countries hesitant to leave the treaty? Two more myths are preventing them from taking action.

Firstly, ECT proponents claim that an ongoing process to 'modernise' the treaty will fix its flaws. But modernisation has proceeded at a snail's pace since 2017, and is unlikely to succeed given resistance from powerful ECT members like Japan , whose companies have used the ECT to take legal action against other governments. Leaked reports show that the talks are stalled due to the requirement to take decisions unanimously.

No signatory state has proposed removing its dangerous corporate courts, which take the form of arbitration tribunals run by three private lawyers. No state has proposed a clear exemption for climate action. No ECT member wants to exclude protection of fossil fuels from the modernised treaty any time soon.

In short: the negotiations around ECT 'modernisation' will not bring the treaty in line with global climate commitments.

Secondly, ECT supporters claim that leaving the treaty offers no protection against costly lawsuits. The ECT's sunset clause – which allows investors to sue a country for 20 years after its withdrawal from the treaty – makes a unilateral ECT exit useless, it is claimed.

In practice, however, withdrawing from the ECT significantly reduces countries' risk of being sued and avoids carbon lock-in from new fossil fuel projects. The ECT's sunset clause only applies to investments made before withdrawal, while those made after are no longer protected.

At a time when the majority of new energy investment is still in fossil fuels, not renewables, this is important. The sooner countries leave, the fewer new dirty investments will fall under the ECT and be 'locked-in' by its legal status.

Italy took the necessary step of withdrawing from the ECT in 2016. Going forward, if multiple countries decide to withdraw together – say, the EU bloc, supported by allies such as the UK or Switzerland – they can further weaken the sunset clause. Countries that withdraw could adopt an agreement that excludes claims within their group, before jointly leaving the ECT at the same time. That would make it difficult for investors from those countries to sue others from the group.

This week a European-wide petition has been launched so that citizens can call on their governments to end the ECT madness.

Leaving the outdated, climate-killing ECT is a no-brainer. It is not just good governance, but the logical step for all who take global warming seriously.


The Rev Kev , February 25, 2021 at 3:27 am

Those "investor-state dispute settlement" mechanisms are nuts and I can see a rush for the door if one or two countries pull out of the Energy Charter Treaty. There has to be a point where they realize that the Energy Charter Treaty is not in fact a suicide pact. Good thing that there is not an equivalent in the medical industry or else healthcare companies would be suing nations for giving their citizens vaccines on the grounds that it is robbing those companies of future income from treating them during the present pandemic.

Unknown Unknowns , February 25, 2021 at 5:24 am

"not an equivalent in the medical industry or else healthcare companies would be suing nations for giving their citizens vaccines on the grounds that it is robbing those companies of future income from treating them during the present pandemic"

Are you sure?

They have been given a non-liability clause for side-effects. The EU has ordered more vaccine in spite of not knowing if the vaccines will stop the transfer of the disease. If that doesn't sound like an equivalent, what does?

Yves Smith , February 25, 2021 at 6:30 am

No. that's quite different. The governments under an ISDS type of regime would be required to buy or to compensate for non-purchases.

Here, they are competing with each other to try to get supplies. The liability waivers are in a completely different economic category and result from governments being so eager to get the vaccines that they were released without going through the normal approval process (and the drug companies as a result having an upper hand in bargaining).

Olivier , February 25, 2021 at 9:50 am

It was the governments themselves who enjoined the pharma companies to rush vaccine development and who then also rushed the approval process. Thus in this case (and only in this case) I think that a waiver of liability (maybe with some residual liability for gross negligence) is entirely appropriate.

vlade , February 25, 2021 at 7:14 am

I believe the EU contracts kept at least some liabilities, which was one of the reasons why it took so long to get it.

Dave in Austin , February 25, 2021 at 7:32 am

The ECT mechanism is a reasonable response to a question: "If a company in good faith follows a nation's laws and invests money in a long-term, legal project, who should pay for the stranded costs if the nation decides to change the law to make the project illegal?" This is about who should pay for stranded assets.

Legislators naturally are looking for someone else to pick up the bill and the "someone else" is often a foreign company because domestic companies have to much political power to be messed with and the company shareholders are often local people.

The Canadian gas pipeline to the US gulf coast is an example. More than two billion dollars were invested, the proper permits were gotten and the pipeline was built- all except a five mile stretch now held up in the usual creative American litigation machine. So who should pay for the two billion invested- half of which came from the Alberta provincial government? Alberta has already filed the arbitration claim and I support their position; if a country encourages a legal investment and then changes the rules the country can do it- but the country should pay for the loss.

When American assets are confiscated overseas using the same sort of creative legal reasoning the US investors are rightly up in arms. I'm specifically not including the all-to-common cases of fraud and political payoffs by foreign investors. In the cases Yves cites there are no allegations that the contracts were tainted by fraud.

A well known modern historian has pointed out that if the American abolitionists wanted to end slavery they should have campaigned to do what the British did- buy all the slaves, set them free and compensate the owners for the "taking" of the property. In the 1830s the British spent the money and freed the slaves. In the U.S., on the other hand we had a civil war, more than half a million young men killed- and the cost of the war was five times what it would have cost to purchase and free all the slaves. I use this example because there were clearly both moral and economic issues involved in slavery, just as there are in the fight to limit air pollution and stop climate change.

Not only is there no free lunch, but there is always a fight about who should pay for the lunch.

Susan the other , February 25, 2021 at 11:41 am

This sets the stage to rethink contracts of all kinds. If the Energy Charter Treaty (basically contracts to protect vested interests for profits and against liabilities) is breached by a country simply leaving the organization it makes all those contracts worthless. And it explains why the TPP and the TAP don't have a get-out clause. I think the question of stranded assets is being mishandled too. Especially because we will need fossil fuel for many decades to come. At this point it is a question of what do we sacrifice to protect the atmosphere? It looks like gasoline-cars and maybe home heating fuel. But not electricity. RWE AG is a huge generator and provider of electricity. Asia Pacific as well as the EU. So taking Texas as a good example, what happens to RWE if they are faced with any number of problems and need to generate electricity fast? Their best backup is oil and natural gas. And it's gotta be a no-brainer that they are seriously involved with Nordstream-2, and something similar in eastern Siberia (?), to supply fuel and back-up fuel for their operations. ECT is an old agreement. TPP is a newer one. Neither one of them are looking at the downside to the environment. So they should both be rethought and re-construed. Because, for more accurate consideration, fossil fuels are not so much a stranded asset as an asset that must be carefully conserved to last us through a long transition period.

Michael McK , February 25, 2021 at 12:02 pm

Given that industries spend as much effort lobbying for the environmental disasters our leaders (they paid to get elected) approve I don't think they deserve to earn back the expense of their investments, let alone the theoretical profit that that stupid, immoral investment could have generated
I think this sort of situation shows how important it is for governments to be the investors/owners of critical infrastructure instead of capitalists (paid for by asset taxes, transaction taxes and MMT).
At this point I can think of no wealthy person who's fortune is not built on the misery of our grandchildren (Oh no! It's us, now, not our grandkids at the edge of the abyss) and we need a massive asset tax on top of huge lifestyle changes. An asset free, radically different life is coming soon for us all whether we choose it or not and putting the decision off is only making the looming reality worse..

[Feb 24, 2021] Poland, Ukraine Urge Biden to Do His Best 'to Put an End' to Nord Stream 2 Project

Feb 24, 2021 | www.moonofalabama.org

vk , Feb 22 2021 12:16 utc | 109

Clipping:

Poland, Ukraine Urge Biden to Do His Best 'to Put an End' to Nord Stream 2 Project

"Our calls for vigilance and boldness were heard in the US Congress, which pressed on with measures designed to stop this dangerous, divisive project. We call on US President Joe Biden to use all means at his disposal to prevent the project from completion", the pair added.

They think they have a voice in the US Congress? Should apply for Statehood then.

The ministers suggested that if completed, the project will add to Russia's drive "to try to convince the Ukrainian public that the West doesn't care about its own principles, and ultimately, about the security and prosperity of Ukraine".

But wasn't the critique against socialism from the Soviet space that it was "utopian", i.e. that it put its "principles" (ideology) before economic fundamentals?

--//--

EU must be 'united and determined' on Russia sanctions, says Borrell

90 years old and still has not grown up.

I guess old dogs indeed can't learn new tricks.

snake , Feb 22 2021 22:15 utc | 151

Poland, Ukraine Urge Biden to Do His Best 'to Put an End' to Nord Stream 2 Project
vk @ 109. Congress of the USA to interfere with the completion of Russian-German Nord stream II project because the LNG cartel in USA governed Texas, Lousisana , Oregon want to require every man women and child in Europe to pay monopoly prices for LNG. As I see it failure of Nord Stream II will be extremely dangerous to the survival of the solar and wind renewable energy efforts; its a do it or die situation for dominate energy is the goal of the LNG cartel...

[Feb 20, 2021] The USA is the only large oil producer which consumes more than it produces and the only one of the three that favors lower prices

Feb 20, 2021 | peakoilbarrel.com

SHALLOW SAND IGNORED 02/15/2021 at 8:49 am

There are a few factors at play IMO.

One factor is a change in one of the three large producer's policies. This large producer is also the only producer that consumes more than it produces and therefore the only one of the three that favors lower prices. I'm referring to USA, of course.

USA shale (and to a much lesser extent GOM) growth kept a lid on prices. Where would prices have been 2010-19 without USA adding 7 million BOPD?

USA growth doesn't appear to be headed toward adding 1 million BOPD or more per year in the future. USA companies are all being pressured to pay dividends. To cover dividends, USA companies need much higher prices. USA companies aren't forecasting growth like past years.

For the first time ever, the USA government is not making oil production growth, either domestic or foreign, a priority. I am not making a "political" statement here trying to rile up the left on the board. Just look at oil prices since the USA election on 11/3. Not a coincidence. Not likely USA will be intervening anytime soon in the ME to protect oil supplies. At least not in a big way.

I have no idea how high oil prices will go. I wonder what happens politically in USA with $3 gasoline? $4 ? Are high gasoline prices no longer a political liability? They weren't for Obama in 2012. But USA was drilling like crazy in 2012. Not sure what happens this time if that occurs, given clear desire of Biden Administration to discourage USA oil production growth.

Another factor is the Western European producers have told the market recently in a very straightforward manner that their oil production is past peak. The CEO's of both BP and RDS have stated this. Total is also transitioning away from oil. Equinor also, it changed its name to remove the word oil.

Next, even though total worldwide demand will still be below a record, demand growth from 2020 to 2021 worldwide will be big, much bigger than from 2009 to 2010 after GFC. What did prices do from the depths of GFC to 2011? Compare GFC stimulus to COVID stimulus.

Last, how many paper barrels are traded per physical barrel? With the increase in paper barrels (I would call them more accurately day trader barrels) volatility in the oil market has grown. The price went negative big time one day last April. It was purely a day trader phenomenon.

Just my thoughts. Feel free to disagree. REPLY HICKORY IGNORED 02/15/2021 at 11:28 am

Everyday you can find headlines that point to a huge transition underway in the world energy scene.
For example today-
-Exclusive: Equinor considers more US asset sales in global strategy revamp, and
-Ford bets $29B on leading the 'electric vehicle revolution'

There is a huge scramble underway to adapt to the conditions these big companies now see coming to be over this decade.
In the meantime, I think that oil demand growth will be very strong over the next 18-24 months.
And as the price of gas in the USA goes up in this rebound phase, the great difference in travel cost/mile between plug-in vehicles (like a Ford mustang) and ICE vehicles will become a widely known fact. Ford (and the other manufacturers) all know that now, even if they were slow on the uptake.

This world is going to change rapidly this decade in so many ways. REPLY ALIMBIQUATED IGNORED 02/15/2021 at 11:34 am

I think a general feeling of optimism that there is light at the end of the Covid 19 tunnel is helping as well. REPLY SURVIVALIST IGNORED 02/15/2021 at 12:23 pm

" For the first time ever, the USA government is not making oil production growth, either domestic or foreign, a priority."

Great observation. I recall when GWB2 went to KSA to 'kiss the ring' and ask for more oil production. I wonder how it will play out next time. REPLY HICKORY IGNORED 02/15/2021 at 12:33 pm

"" For the first time ever, the USA government is not making oil production growth, either domestic or foreign, a priority."

Of much greater impact- For the first time ever, the major oil companies are not making oil production growth, either domestic or foreign, a priority. REPLY SHALLOW SAND IGNORED 02/15/2021 at 1:11 pm

Both are happening simultaneously.

Both are making a big impact. REPLY SHALLOW SAND IGNORED 02/15/2021 at 1:12 pm

Trump jumped on KSA when oil prices went up during his admin.

Will Biden? REPLY PAOIL IGNORED 02/15/2021 at 1:57 pm

The Biden administration is under pressure to see oil prices rise. The green agenda of wind, solar and EV's is only cost competitive with fossil fuels in two ways: 1) green subsidies; or 2) higher oil prices. Until high oil prices threaten the economy, the Biden administration will enact policies that gladly see oil prices rise. And with the oil price experience of 2009 to 2014 still relatively fresh in people's minds, the Biden administration is not afraid of $60, $70, or even $90 oil. They are hoping for it. REPLY HICKORY IGNORED 02/15/2021 at 2:13 pm

"$60, $70, or even $90 oil. They are hoping for it."
As are the people working in the oil industry. REPLY STEPHEN HREN IGNORED 02/15/2021 at 4:59 pm

As far as anyone on this board is considered, the higher the price of oil the better. Let's phase out oil production in the US over the next three decades and keep the price high the entire time so the producers make money and people are incentivized to switch to less polluting EVs. It'll be like the TRC for the whole country but heading towards a bottleneck. Auction drilling rights so only the best wells get drilled. Keep restricting drilling in a phased manner, enact a gradually lower cap on the number of wells that can be drilled until it goes to zero in twenty years and then maintain these stripper wells until they are empty. REPLY PAULO IGNORED 02/15/2021 at 6:33 pm

Can you imagine any US party that would actually dare to promote a higher cost for gasoline? Personally, I think there should be a big carbon tax and fuel tax surcharge imposed to fix infrastructure, but whatever.

Confession: I am not anti oil. My son works in the Cdn industry. I just think people drive more than they should and that energy should be priced higher. Win win. LLOYD IGNORED 02/16/2021 at 3:55 pm

So $90 oil is good for:
-Saudi
-Democrats
-Shallow
-Tesla
-Renewables

But not for:
-Rednecks with huge vehicles

The election calculus gets tricky here. REPLY ALIMBIQUATED IGNORED 02/16/2021 at 4:09 am

PAOIL-
I disagree that high oil prices are needed to make green energy competitive, because oil is already very expensive energy, which is why it is rarely used to generate electricity. Wind and solar compete against coal, nuclear and gas, not oil.

Oil shines as a way to store energy in a moving vehicle and power internal combustion engines. As such, it really competes with batteries, not with the rest of the energy market at all. And batteries still have a tiny impact on oil markets.

So higher oil prices might be useful for the EVs, but not particularly useful for wind and solar. But in reality, the EV market is suffering from chronic battery shortages as manufacturers struggle to build factories fast enough to meet 20% or more annual demand growth. The oil price really isn't an issue, and raising oil prices wouldn't help.

If Biden's goal was to make EVs more competitive, the government has an easy way to raise oil prices, which is to raise taxes at the pump. This would be more or less neutral to the oil price from the producer point of view. It would just encourage exports and discourage imports, improving America's balance of payments. But it hasn't worked in Europe, where taxes are over 60% of the price at the pump. The most effective way to promote EVs is subsidizing the purchase price of the vehicle. That has been very effective.

Hoping that the American consumer will keep oil demand up internationally no longer makes sense, as America's relative economic importance has been falling since 1945. I'm not sure what the previous administration was trying to accomplish by talking down the price. REPLY JEFF IGNORED 02/16/2021 at 5:13 am

"But it hasn't worked in Europe, where taxes are over 60% of the price at the pump. "

So average fuel economy in Europe and US is the same? REPLY EULENSPIEGEL IGNORED 02/16/2021 at 8:47 am

I have driven a Toyota Corolla on an 4 week US trip.

With an engine for the US market – you can't buy this modell in Europe. It was very steady going – and thirsty. At least for european thinking, we used 7-8 litres / 100 km by mostly driving country roads in cruise control at the given speed (didn't wanted to deal with US police). Slow for my feeling, I'm driving faster in Germany.

And use only round about 6 litres with a car of similar size, which is a bit faster than this Corolla – with this lazy slow driving I would use below 5 litres with my car (and get a lot of flashing).

So there is a difference in fuel economy. ALIMBIQUATED IGNORED 02/16/2021 at 5:55 pm

Jeff –
That was a little unclear on my part. I meant high gasoline prices haven't gotten people to buy, EVs, but direct subsidies seem to work.

It's also worth mentioning that $120 oil didn't really dent consumption much, and certainly didn't inspire many to buy EVs.

In my opinion liquid fuel is cheap. I mean I think that consumers aren't willing to make significant changes in behavior even if prices increase significantly. S IGNORED 02/17/2021 at 3:05 am

Alimbiquated, as an European in a well-to-do country, the matter of car buying is somewhat more complicated than just gasoline price. E.g. fully electric car availibily, their price, distances that need to be travelled (range anxiety in other words) are still important. Hybrid cars are also rather expensive. Here it seems that these two car groups are selling better and better, public charging points are increasing etc so we will see what happens. As I have a full electric car I got relatively cheaply (still a bit of ouch ) I think I will not get a petroleum or diesel car ever J HOUSMAN IGNORED 02/18/2021 at 4:08 pm

"The green agenda of wind, solar and EV's is only cost competitive with fossil fuels in two way" Three ways, actually. The third is when we finally start to realize the actual cost of destroying the environment by burning fossil fuels REPLY MATT MUSHALIK IGNORED 02/15/2021 at 10:01 pm

Global crude oil may have peaked 2018-19 before Covid

https://pbs.twimg.com/media/EsHyv1FVQAIDRAd?format=jpg

If ever we come out of the Covid tunnel, there could be surprises ahead REPLY POLLUX IGNORED 02/15/2021 at 5:30 am

Strike threatens shutdown at Norway's giant Johan Sverdrup offshore oilfield

A dozen workers that are members of the Safe union are threatening to down tools at the Mongstad terminal from midnight on Monday if talks with the industry body aimed at breaking an impasse over a 2020 wage settlement with Equinor fail.

Other fields that could be impacted include Kvitebjorn, Visund, Byrding, Fram and Valemon, with gas output exports from the Troll area also in danger of being hit. REPLY MATT MUSHALIK IGNORED 02/15/2021 at 8:05 am

With an excursion to Gabon and Azerbaijan

15/2/2021
Exxon-Mobil's refinery closure in Australia: peak oil context
https://crudeoilpeak.info/exxon-mobils-refinery-closure-in-australia-peak-oil-context REPLY TULSAGEO IGNORED 02/15/2021 at 9:37 am

An interesting scenario showing what happens when demand outstrips supply due to lack of investment is playing out right now in Oklahoma and Texas. There has been a lack of investment in the region last year due to the drop in prices, and in Oklahoma, the slowing of investment has been happening for a few years. The massive cold snap that descended on the region made spot prices (not the futures price you can look up on Bloomberg etc) rise from $2 an MMBTU, to $5, to $9, to $300, to $600, all in the course of a week. It is currently higher. The cold weather has caused shut ins of wells, and processing plants. You have a situation where demand is increasing but supply cannot keep up. I know this is a micro problem that will resolve itself as temperatures increase, in the coming weeks, but this could be an example of what oil prices might see in the near future. There has been a lack of investment for years in large projects, if demand rebounds quickly as vaccine roll out continues, we will not be able to turn back on new production fast enough to keep prices from running higher, resulting in some temporary ridiculous price spikes. REPLY SHALLOW SAND IGNORED 02/15/2021 at 10:31 am

I saw this resulted in a lot of wells that have been shut in for 5-10 years being reactivated. REPLY GREENBUB IGNORED 02/15/2021 at 8:25 pm

Shallow, are you affected by the cold snap or power outages? REPLY SHALLOW SAND IGNORED 02/16/2021 at 12:41 am

Yes. We have about 10% frozen off. Our pumpers decided what to drain and shut in, and what to keep on. They are real pros. You can't find better.

Our people are the key. We owe them bigtime. They have been out there in this stuff keeping the rest from freezing.

We will be good soon, temps will come up.

Keep in mind, with one exception, our pumpers are 50+ years old.

Are there millennials that are going to keep the strippers going 24/7/365?

Takes special people. REPLY STEPHEN HREN IGNORED 02/16/2021 at 4:33 pm

No. I work in construction biz. 90% of twenty somethings can't work five minutes without looking at their phones. They are useless. All my buddies have the same complaint. REPLY OVI IGNORED 02/15/2021 at 9:49 pm

An interesting clip from this article:
"This isn't a consensus view yet but it's quickly coming. Two heavyweights in the past week have stepped up and called out the problem.

The first was Goldman Sach's Jeff Currie, who called the bull market in the early 2000s.

"I want to be long oil and hang on for the ride," Currie said in an interview with S&P Global Platts on Feb. 5, warning "there is a lot of upside here."

"Is it back to $150/b? I don't know as it is a macro repricing we are talking about and everything needs to reprice."

The other is JPMorgan and Marko Kolanovic, who said Friday that oil and commodities appear to be entering a supercycle.

"We believe that the new commodity upswing, and in particular oil up cycle, has started," the JPMorgan analysts said in their note. "The tide on yields and inflation is turning."

"We believe that the last supercycle peaked in 2008 (after 12 years of expansion), bottomed in 2020 (after a 12-year contraction) and that we likely entered an upswing phase of a new commodity supercycle."

https://www.forexlive.com/news/!/what-an-incredible-turnaround-for-oil-prices-20210215 REPLY RON PATTERSON IGNORED 02/16/2021 at 2:31 pm

WTI hit $60 today. How come high oil prices seem to be doing nothing for the shale business.

Anyone? Anyone? Bueller? Dennis? 😉

REPLY STEPHEN HREN IGNORED 02/16/2021 at 4:34 pm

They're too busy spending all their earnings REPLY OVI IGNORED 02/16/2021 at 6:45 pm

Drillers Trying New Pricing Structure

Shale driller bases rig lease costs on well performance

Rigs are typically rented out at a daily rate for a period of a few months, which has meant less money for oilfield service providers as drilling becomes quicker and more efficient. So Helmerich & Payne Inc. is touting a new pricing model based on overall well performance, and almost a third of its U.S. rigs are now being leased on that basis, CEO John Lindsay said Wednesday on an earnings call.

In the Permian Basin of West Texas and New Mexico, home to the busiest shale patch in North America, operators are now drilling the same number of wells with 180 rigs as they were with 300 rigs a year ago, according to industry data provider Lium.

https://www.worldoil.com/news/2021/2/16/shale-driller-bases-rig-lease-costs-on-well-performance REPLY RON PATTERSON IGNORED 02/16/2021 at 8:45 pm

Yeah okay. That's all great. But what I was looking at was oil production. It's going down, not up. With these prices oil production should be increasing, not decling. Why is that? After all, that's really all that matters.

[Feb 20, 2021] The USA is the only large oil producer which consumes more than it produces and the only one of the three that favors lower prices

Feb 20, 2021 | peakoilbarrel.com

SHALLOW SAND IGNORED 02/15/2021 at 8:49 am

There are a few factors at play IMO.

One factor is a change in one of the three large producer's policies. This large producer is also the only producer that consumes more than it produces and therefore the only one of the three that favors lower prices. I'm referring to USA, of course.

USA shale (and to a much lesser extent GOM) growth kept a lid on prices. Where would prices have been 2010-19 without USA adding 7 million BOPD?

USA growth doesn't appear to be headed toward adding 1 million BOPD or more per year in the future. USA companies are all being pressured to pay dividends. To cover dividends, USA companies need much higher prices. USA companies aren't forecasting growth like past years.

For the first time ever, the USA government is not making oil production growth, either domestic or foreign, a priority. I am not making a "political" statement here trying to rile up the left on the board. Just look at oil prices since the USA election on 11/3. Not a coincidence. Not likely USA will be intervening anytime soon in the ME to protect oil supplies. At least not in a big way.

I have no idea how high oil prices will go. I wonder what happens politically in USA with $3 gasoline? $4 ? Are high gasoline prices no longer a political liability? They weren't for Obama in 2012. But USA was drilling like crazy in 2012. Not sure what happens this time if that occurs, given clear desire of Biden Administration to discourage USA oil production growth.

Another factor is the Western European producers have told the market recently in a very straightforward manner that their oil production is past peak. The CEO's of both BP and RDS have stated this. Total is also transitioning away from oil. Equinor also, it changed its name to remove the word oil.

Next, even though total worldwide demand will still be below a record, demand growth from 2020 to 2021 worldwide will be big, much bigger than from 2009 to 2010 after GFC. What did prices do from the depths of GFC to 2011? Compare GFC stimulus to COVID stimulus.

Last, how many paper barrels are traded per physical barrel? With the increase in paper barrels (I would call them more accurately day trader barrels) volatility in the oil market has grown. The price went negative big time one day last April. It was purely a day trader phenomenon.

Just my thoughts. Feel free to disagree. REPLY HICKORY IGNORED 02/15/2021 at 11:28 am

Everyday you can find headlines that point to a huge transition underway in the world energy scene.
For example today-
-Exclusive: Equinor considers more US asset sales in global strategy revamp, and
-Ford bets $29B on leading the 'electric vehicle revolution'

There is a huge scramble underway to adapt to the conditions these big companies now see coming to be over this decade.
In the meantime, I think that oil demand growth will be very strong over the next 18-24 months.
And as the price of gas in the USA goes up in this rebound phase, the great difference in travel cost/mile between plug-in vehicles (like a Ford mustang) and ICE vehicles will become a widely known fact. Ford (and the other manufacturers) all know that now, even if they were slow on the uptake.

This world is going to change rapidly this decade in so many ways. REPLY ALIMBIQUATED IGNORED 02/15/2021 at 11:34 am

I think a general feeling of optimism that there is light at the end of the Covid 19 tunnel is helping as well. REPLY SURVIVALIST IGNORED 02/15/2021 at 12:23 pm

" For the first time ever, the USA government is not making oil production growth, either domestic or foreign, a priority."

Great observation. I recall when GWB2 went to KSA to 'kiss the ring' and ask for more oil production. I wonder how it will play out next time. REPLY HICKORY IGNORED 02/15/2021 at 12:33 pm

"" For the first time ever, the USA government is not making oil production growth, either domestic or foreign, a priority."

Of much greater impact- For the first time ever, the major oil companies are not making oil production growth, either domestic or foreign, a priority. REPLY SHALLOW SAND IGNORED 02/15/2021 at 1:11 pm

Both are happening simultaneously.

Both are making a big impact. REPLY SHALLOW SAND IGNORED 02/15/2021 at 1:12 pm

Trump jumped on KSA when oil prices went up during his admin.

Will Biden? REPLY PAOIL IGNORED 02/15/2021 at 1:57 pm

The Biden administration is under pressure to see oil prices rise. The green agenda of wind, solar and EV's is only cost competitive with fossil fuels in two ways: 1) green subsidies; or 2) higher oil prices. Until high oil prices threaten the economy, the Biden administration will enact policies that gladly see oil prices rise. And with the oil price experience of 2009 to 2014 still relatively fresh in people's minds, the Biden administration is not afraid of $60, $70, or even $90 oil. They are hoping for it. REPLY HICKORY IGNORED 02/15/2021 at 2:13 pm

"$60, $70, or even $90 oil. They are hoping for it."
As are the people working in the oil industry. REPLY STEPHEN HREN IGNORED 02/15/2021 at 4:59 pm

As far as anyone on this board is considered, the higher the price of oil the better. Let's phase out oil production in the US over the next three decades and keep the price high the entire time so the producers make money and people are incentivized to switch to less polluting EVs. It'll be like the TRC for the whole country but heading towards a bottleneck. Auction drilling rights so only the best wells get drilled. Keep restricting drilling in a phased manner, enact a gradually lower cap on the number of wells that can be drilled until it goes to zero in twenty years and then maintain these stripper wells until they are empty. REPLY PAULO IGNORED 02/15/2021 at 6:33 pm

Can you imagine any US party that would actually dare to promote a higher cost for gasoline? Personally, I think there should be a big carbon tax and fuel tax surcharge imposed to fix infrastructure, but whatever.

Confession: I am not anti oil. My son works in the Cdn industry. I just think people drive more than they should and that energy should be priced higher. Win win. LLOYD IGNORED 02/16/2021 at 3:55 pm

So $90 oil is good for:
-Saudi
-Democrats
-Shallow
-Tesla
-Renewables

But not for:
-Rednecks with huge vehicles

The election calculus gets tricky here. REPLY ALIMBIQUATED IGNORED 02/16/2021 at 4:09 am

PAOIL-
I disagree that high oil prices are needed to make green energy competitive, because oil is already very expensive energy, which is why it is rarely used to generate electricity. Wind and solar compete against coal, nuclear and gas, not oil.

Oil shines as a way to store energy in a moving vehicle and power internal combustion engines. As such, it really competes with batteries, not with the rest of the energy market at all. And batteries still have a tiny impact on oil markets.

So higher oil prices might be useful for the EVs, but not particularly useful for wind and solar. But in reality, the EV market is suffering from chronic battery shortages as manufacturers struggle to build factories fast enough to meet 20% or more annual demand growth. The oil price really isn't an issue, and raising oil prices wouldn't help.

If Biden's goal was to make EVs more competitive, the government has an easy way to raise oil prices, which is to raise taxes at the pump. This would be more or less neutral to the oil price from the producer point of view. It would just encourage exports and discourage imports, improving America's balance of payments. But it hasn't worked in Europe, where taxes are over 60% of the price at the pump. The most effective way to promote EVs is subsidizing the purchase price of the vehicle. That has been very effective.

Hoping that the American consumer will keep oil demand up internationally no longer makes sense, as America's relative economic importance has been falling since 1945. I'm not sure what the previous administration was trying to accomplish by talking down the price. REPLY JEFF IGNORED 02/16/2021 at 5:13 am

"But it hasn't worked in Europe, where taxes are over 60% of the price at the pump. "

So average fuel economy in Europe and US is the same? REPLY EULENSPIEGEL IGNORED 02/16/2021 at 8:47 am

I have driven a Toyota Corolla on an 4 week US trip.

With an engine for the US market – you can't buy this modell in Europe. It was very steady going – and thirsty. At least for european thinking, we used 7-8 litres / 100 km by mostly driving country roads in cruise control at the given speed (didn't wanted to deal with US police). Slow for my feeling, I'm driving faster in Germany.

And use only round about 6 litres with a car of similar size, which is a bit faster than this Corolla – with this lazy slow driving I would use below 5 litres with my car (and get a lot of flashing).

So there is a difference in fuel economy. ALIMBIQUATED IGNORED 02/16/2021 at 5:55 pm

Jeff –
That was a little unclear on my part. I meant high gasoline prices haven't gotten people to buy, EVs, but direct subsidies seem to work.

It's also worth mentioning that $120 oil didn't really dent consumption much, and certainly didn't inspire many to buy EVs.

In my opinion liquid fuel is cheap. I mean I think that consumers aren't willing to make significant changes in behavior even if prices increase significantly. S IGNORED 02/17/2021 at 3:05 am

Alimbiquated, as an European in a well-to-do country, the matter of car buying is somewhat more complicated than just gasoline price. E.g. fully electric car availibily, their price, distances that need to be travelled (range anxiety in other words) are still important. Hybrid cars are also rather expensive. Here it seems that these two car groups are selling better and better, public charging points are increasing etc so we will see what happens. As I have a full electric car I got relatively cheaply (still a bit of ouch ) I think I will not get a petroleum or diesel car ever J HOUSMAN IGNORED 02/18/2021 at 4:08 pm

"The green agenda of wind, solar and EV's is only cost competitive with fossil fuels in two way" Three ways, actually. The third is when we finally start to realize the actual cost of destroying the environment by burning fossil fuels REPLY MATT MUSHALIK IGNORED 02/15/2021 at 10:01 pm

Global crude oil may have peaked 2018-19 before Covid

https://pbs.twimg.com/media/EsHyv1FVQAIDRAd?format=jpg

If ever we come out of the Covid tunnel, there could be surprises ahead REPLY POLLUX IGNORED 02/15/2021 at 5:30 am

Strike threatens shutdown at Norway's giant Johan Sverdrup offshore oilfield

A dozen workers that are members of the Safe union are threatening to down tools at the Mongstad terminal from midnight on Monday if talks with the industry body aimed at breaking an impasse over a 2020 wage settlement with Equinor fail.

Other fields that could be impacted include Kvitebjorn, Visund, Byrding, Fram and Valemon, with gas output exports from the Troll area also in danger of being hit. REPLY MATT MUSHALIK IGNORED 02/15/2021 at 8:05 am

With an excursion to Gabon and Azerbaijan

15/2/2021
Exxon-Mobil's refinery closure in Australia: peak oil context
https://crudeoilpeak.info/exxon-mobils-refinery-closure-in-australia-peak-oil-context REPLY TULSAGEO IGNORED 02/15/2021 at 9:37 am

An interesting scenario showing what happens when demand outstrips supply due to lack of investment is playing out right now in Oklahoma and Texas. There has been a lack of investment in the region last year due to the drop in prices, and in Oklahoma, the slowing of investment has been happening for a few years. The massive cold snap that descended on the region made spot prices (not the futures price you can look up on Bloomberg etc) rise from $2 an MMBTU, to $5, to $9, to $300, to $600, all in the course of a week. It is currently higher. The cold weather has caused shut ins of wells, and processing plants. You have a situation where demand is increasing but supply cannot keep up. I know this is a micro problem that will resolve itself as temperatures increase, in the coming weeks, but this could be an example of what oil prices might see in the near future. There has been a lack of investment for years in large projects, if demand rebounds quickly as vaccine roll out continues, we will not be able to turn back on new production fast enough to keep prices from running higher, resulting in some temporary ridiculous price spikes. REPLY SHALLOW SAND IGNORED 02/15/2021 at 10:31 am

I saw this resulted in a lot of wells that have been shut in for 5-10 years being reactivated. REPLY GREENBUB IGNORED 02/15/2021 at 8:25 pm

Shallow, are you affected by the cold snap or power outages? REPLY SHALLOW SAND IGNORED 02/16/2021 at 12:41 am

Yes. We have about 10% frozen off. Our pumpers decided what to drain and shut in, and what to keep on. They are real pros. You can't find better.

Our people are the key. We owe them bigtime. They have been out there in this stuff keeping the rest from freezing.

We will be good soon, temps will come up.

Keep in mind, with one exception, our pumpers are 50+ years old.

Are there millennials that are going to keep the strippers going 24/7/365?

Takes special people. REPLY STEPHEN HREN IGNORED 02/16/2021 at 4:33 pm

No. I work in construction biz. 90% of twenty somethings can't work five minutes without looking at their phones. They are useless. All my buddies have the same complaint. REPLY OVI IGNORED 02/15/2021 at 9:49 pm

An interesting clip from this article:
"This isn't a consensus view yet but it's quickly coming. Two heavyweights in the past week have stepped up and called out the problem.

The first was Goldman Sach's Jeff Currie, who called the bull market in the early 2000s.

"I want to be long oil and hang on for the ride," Currie said in an interview with S&P Global Platts on Feb. 5, warning "there is a lot of upside here."

"Is it back to $150/b? I don't know as it is a macro repricing we are talking about and everything needs to reprice."

The other is JPMorgan and Marko Kolanovic, who said Friday that oil and commodities appear to be entering a supercycle.

"We believe that the new commodity upswing, and in particular oil up cycle, has started," the JPMorgan analysts said in their note. "The tide on yields and inflation is turning."

"We believe that the last supercycle peaked in 2008 (after 12 years of expansion), bottomed in 2020 (after a 12-year contraction) and that we likely entered an upswing phase of a new commodity supercycle."

https://www.forexlive.com/news/!/what-an-incredible-turnaround-for-oil-prices-20210215 REPLY RON PATTERSON IGNORED 02/16/2021 at 2:31 pm

WTI hit $60 today. How come high oil prices seem to be doing nothing for the shale business.

Anyone? Anyone? Bueller? Dennis? 😉

REPLY STEPHEN HREN IGNORED 02/16/2021 at 4:34 pm

They're too busy spending all their earnings REPLY OVI IGNORED 02/16/2021 at 6:45 pm

Drillers Trying New Pricing Structure

Shale driller bases rig lease costs on well performance

Rigs are typically rented out at a daily rate for a period of a few months, which has meant less money for oilfield service providers as drilling becomes quicker and more efficient. So Helmerich & Payne Inc. is touting a new pricing model based on overall well performance, and almost a third of its U.S. rigs are now being leased on that basis, CEO John Lindsay said Wednesday on an earnings call.

In the Permian Basin of West Texas and New Mexico, home to the busiest shale patch in North America, operators are now drilling the same number of wells with 180 rigs as they were with 300 rigs a year ago, according to industry data provider Lium.

https://www.worldoil.com/news/2021/2/16/shale-driller-bases-rig-lease-costs-on-well-performance REPLY RON PATTERSON IGNORED 02/16/2021 at 8:45 pm

Yeah okay. That's all great. But what I was looking at was oil production. It's going down, not up. With these prices oil production should be increasing, not decling. Why is that? After all, that's really all that matters.

[Feb 20, 2021] Did the USA eneterd that stage of permanet decline of oil production?

Feb 20, 2021 | peakoilbarrel.com

OVI IGNORED 02/16/2021 at 10:19 pm

Good to hear from you Ron.

In ShaleProfile published today, the Permian is showing a slight bump up in production. It may have hit bottom. The latest STEO is showing US production dropping till June and July before beginning to increase. Looks like many more LTO wells have to be put on line before the decline from all of the current wells can be offset. OVI IGNORED 02/16/2021 at 6:36 pm

U.S. oil output plunges as Arctic air freezes Permian shale fields

(Bloomberg) –U.S. oil production has plunged by more than 2 million barrels a day as the coldest weather in 30 years brings havoc to key producing states that rarely have to deal with frigid Arctic blasts.

Oil traders and company executives, who asked not to be identified, lifted their forecasts for supply losses from an earlier estimate on Monday of 1.5 million to 1.7 million barrels. They said the losses were particularly large in the Permian Basin, the most prolific U.S. oil region, which straddles West Texas and southeast New Mexico. Output cuts were also significant in the Eagle Ford, in southern Texas, and the Anadarko basin in Oklahoma.

Two million barrels would be the equivalent of about 18% of overall U.S. crude production, based on the most recent government data.

Wonder if this drop will show up as a drop in US inventories on Feb 24. While production is down, so is driving.

https://www.worldoil.com/news/2021/2/16/us-oil-output-plunges-as-arctic-air-freezes-permian-shale-fields WATCHER IGNORED 02/17/2021 at 2:30 am

Reminder back in the day in the Bakken they had to equip their onsite huge storage of fracking water with heaters, because NoDak is cold. One suspects the Permian is not equipped with that and widespread frozen pipe damage can be expected. HOLE IN HEAD IGNORED 02/18/2021 at 8:31 am

From the Blog of Mike Shellman , TSHTF in Texas . He says about 3.5 million barrels will go off line and for how long don't know .
https://www.oilystuffblog.com/single-post/update-from-texas?postId=602d1a9d98be8f0017126cd1 HHH IGNORED 02/18/2021 at 10:28 pm

There is a lot of reasons to be bullish on oil at the moment. There is one problem lurking over next 4-5 months though. Treasury will shrink the TGA by about 1 trillion USD. Most assume this will be bullish for most things other than the dollar. But as this cash gets pushed into the economy/markets. Banks are forced to hold more collateral, mainly T bills. Short end of treasury yield curve is without a doubt going negative as banks have to have collateral to except all this cash. Likely another collateral shortage in the making (repo blowup) Fed would likely have to cut QE purchases to get yields back into positive territory. Which is no different than hiking interest rates on an economy with a massive debt load that can't handle higher rates.

Most of the US government debt is on short end of the curve. Therefore most of the debt will have a negative yield. This would likely end the reflation narrative/ inflation narrative we currently have. It's likely dollar bullish because the collateral underpinning everything just went negative yield. And if it turns out to be highly dollar bearish. Well lookout oil prices would be well beyond the moon.

[Feb 20, 2021] Russia Oil Output Below OPEC+ Quota

Feb 20, 2021 | peakoilbarrel.com

POLLUX IGNORED 02/17/2021 at 1:39 pm

Russia Oil Output Below OPEC+ Quota Amid Cold Siberian Weather
The OPEC+ member pumped 1.38 million tons a day of crude and condensate on average from Feb. 1 to 15, according to two people with knowledge of production data, who spoke on condition of anonymity. That equates to a daily rate of 10.115 million barrels, about 44,000 barrels lower than January's level.

Rosneft oil production to decline as it parts with legacy assets
Russia's Rosneft is braced for a decline in oil production this year despite a gradual removal of output restrictions that have been imposed on the company by the Kremlin under its commitments to members of the Opec+ alliance.

Speaking on a conference call on Friday, Rosneft first vice president Eric Liron said the oil giant expects annual output of oil and condensate to fall by 5% in 2021.

In 2020, Rosneft reported an 11% annual decline in oil and condensate production to 4.1 million barrels per day and a 6% drop in gas output to 63 billion cubic metres.

[Feb 10, 2021] Hedge funds bet on oil's 'big comeback' after pandemic hobbles producers By Reuters

Feb 10, 2021 | www.investing.com

By Maiya Keidan and Rod Nickel

TORONTO (Reuters) - Hedge funds are turning bullish on oil once again, betting the pandemic and investors' environmental focus has severely damaged companies' ability to ramp up production.

Such limitations on supply would push prices to multi-year highs and keep them there for two years or more, several hedge funds said.

The view is a reversal for hedge funds, which shorted the oil sector in the lead-up to global shutdowns, landing energy focused hedge funds gains of 26.8% in 2020, according to data from eVestment. By virtue of their fast-moving strategies, hedge funds are quick to spot new trends.

... Tawil predicted prices of $70 to $80 a barrel for Brent by the end of 2021 and is investing long independent oil and gas producers.

... ... ...

Global crude and condensate production was down 8% in December from February 2020, prior to the pandemic's spread accelerating, according to Rystad Energy.

North America's output was down 9.5% and Europe's production declined just 1% over the same time period.

U.S. sanctions against Venezuela and declining oilfields in Mexico have kept oil output from Latin America sluggish.

DarthSlack Ars Praefectus et Subscriptor REPLY FEB 8, 2021 2:57 PM Jamjen831 wrote: peachpuff wrote: Barcode scanners and flashlight apps... who installs these? Phones come with these features already baked in.

I assume some of it is just old stuff people just re-download without thinking. Android hasn't always had a built in flashlight app (and am I crazy in that the early ones required root?). And I'm pretty sure that's the same with QR readers. I hadn't realized that Google Lens was a QR scanner until fairly recently.

Count me in that boat. I just checked my phone and sure enough, Barcode Scanner was there. I'm guessing it's from 3-4 phones ago and just came along for the ride as Play autoloaded my apps on the new phones because I haven't used it in ages and ages. daggar Ars Tribunus Militum REPLY FEB 8, 2021 2:57 PM

Jamjen831 wrote: peachpuff wrote: Barcode scanners and flashlight apps... who installs these? Phones come with these features already baked in.

I assume some of it is just old stuff people just re-download without thinking. Android hasn't always had a built in flashlight app (and am I crazy in that the early ones required root?). And I'm pretty sure that's the same with QR readers. I hadn't realized that Google Lens was a QR scanner until fairly recently.

It's more likely that it's stuff that gets re-downloaded without user interaction. When you set up a new Android, the phone will often re-download all the apps from the old phone. Unless you're going through to curate those apps, your 2021 new phone might be getting something that's gone through a succession of auto-downloads since the mid 2010's. everythingallatonce Smack-Fu Master, in training REPLY FEB 8, 2021 2:57 PM

peachpuff wrote: Barcode scanners and flashlight apps... who installs these? Phones come with these features already baked in.
I can't really speak for the barcode scanner, but given that a lot of Android phones are incapable of being updated there is a decent chance a lot of people with much older phones actually have to install a flashlight app.

Google really needs to do something regarding the malware problem. I'm not going to pretend to know the answer, but for a company that made $15.23 billion in earnings last quarter and owns Project Zero you'd think they'd be able to protect a platform they have complete control over. Jamjen831 Ars Scholae Palatinae et Subscriptor REPLY FEB 8, 2021 3:02 PM Dr.Bananas wrote: peachpuff wrote: Barcode scanners and flashlight apps... who installs these? Phones come with these features already baked in.
Not all phones. I haven't had an Android phone with a stock barcode scanner ever. Samsung Galaxy Ace, Galaxy Nexus, Moto G, Nexus 5X, Nokia 3 and my current Sony XZ2 Compact all came without one. It should be part of the default camera app, but sadly that's not always the case.

As mentioned above, Google Lens is the defacto QR Scanner (it's part of the camera app). Do those phones have Lens? I've been on Nexus\Pixel for a long time so not too sure how Google has pushed that. Xavin Ars Legatus Legionis et Subscriptor REPLY FEB 8, 2021 3:03 PM

marsilies wrote: So I use an app called "Barcode Scanner" that's not the malware app. However, the recent reviews blast it for adware, which I haven't noticed. I think having the exact same name has caused some people to post negative reviews on the wrong app:
https://play.google.com/store/apps/deta ... nt.android
That's correct, it's clean, people are just confused by the same names. The one with the malware was always a sad copy of the ZXing Team one you linked.

Jamjen831 wrote: show nested quotes

As mentioned above, Google Lens is the defacto QR Scanner (it's part of the camera app). Do those phones have Lens? I've been on Nexus\Pixel for a long time so not too sure how Google has pushed that.
You need an internet connection for Lens to scan barcodes. Batmanuel Ars Tribunus Militum REPLY FEB 8, 2021 3:12 PM Ancan wrote: I've got a Galaxy S8+ and if there's a built in barcode scanner I must admit I haven't found out in the years I've had it.

It's built into Bixby Vision. Jeff S Ars Praefectus et Subscriptor REPLY FEB 8, 2021 3:16 PM

CrookedKnight wrote: show nested quotes

And how many users know they can use an app called "Lens" to scan barcodes?

Does Lens give you technical info about the type of a barcode (aka the Symbology)? Granted, most people don't have a need to know or care, but I have a job doing work with retail POS equipment, including hand and flatbed scanners. For my job, it's SUPER helpful sometimes to have a barcode scanner app that can tell me what type of barcode is being scanned - because sometimes scanners will scan all the barcodes, *except* this one type of barcode, and then I gotta find out what kind of barcode it is, so that I can enable that symbology for the scanner in question (or provide instructions to my customers on how they enable it for their POS).

Or, I can scan the barcode to get the underlying text in the barcode, to compare with our app's logs, to make sure it's scanning correctly (e.g. not getting truncated or anything like that).

That's why I have ZXing Team barcode scanner on my phone and recommend it to co-workers.

  1. AreWeThereYeti Ars Praefectus et Subscriptor REPLY FEB 8, 2021 3:16 PM Jamjen831 wrote: show nested quotes

    I assume some of it is just old stuff people just re-download without thinking. Android hasn't always had a built in flashlight app (and am I crazy in that the early ones required root?). And I'm pretty sure that's the same with QR readers. I hadn't realized that Google Lens was a QR scanner until fairly recently.

    It isn't just old people, as you admitted yourself practically everyone doesn't understand all the things their apps can do, especially when that changes over time. A big part of that problem is the appalling fact that most apps, even the most widely used and professionally developed, have basically no documentation, and no way of finding out what their features actually are.

    Developers have this fantasy in their heads that they don't document the programs because it's really hard to keep the documentation in-sync with a changing app, but the real reason is just a pervasive problem in development culture caused by the race to get things onto the market, and the convenient lie that developers tell themselves that their apps are "self documenting", as if everyone has the time or desire to play "app scientist" and experiment with the app endlessly to find out all its hidden, unobvious features.

    @dmccarty: Yeah, the "update or not" decision is tricky for apps. What I do, is turn off update only for apps that I have no desire for updates too and which shouldn't be doing any internet activity or only activity to a defined, trusted spot. Any other kind of app, especially ones that might be subjected to varying network input from undefined sources, gets updates. Up +21 ( +22 / -1 ) Down 3906 posts | registered 9/15/2009

  2. MikeSafari Wise, Aged Ars Veteran REPLY FEB 8, 2021 3:17 PM peachpuff wrote: Barcode scanners and flashlight apps... who installs these? Phones come with these features already baked in.

    I unfortunately didn't have a choice. I bought a Nokia 6.1 a couple of years ago and installed the official Google Camera app, which has a built-in barcode/QR code reader, but when Nokia pushed the Android 10 update, it broke the camera app completely. And Nokia's default camera app does *not* read barcodes or QR codes for some reason. So to read them, I had to install a third-party app.

    Not super thrilled anyway, but thankfully it was not this one.

marsilies Ars Praefectus et Subscriptor REPLY FEB 8, 2021 3:20 PM Jamjen831 wrote: show nested quotes

As mentioned above, Google Lens is the defacto QR Scanner (it's part of the camera app). Do those phones have Lens? I've been on Nexus\Pixel for a long time so not too sure how Google has pushed that.
Lens looks like it was initially exclusive to the Pixel 2, and slowly expanded until it became its own Android app in June 2018:
https://en.wikipedia.org/wiki/Google_Lens

So all the phones listed peachpuff came without it, and you'd probably have to have an Android phone released in the last 2 1/2 years to even have it pre-installed.

Then, as others have noted, one would have to know that Lens can scan barcodes, and if you have had Android phones for a while, the initial setup and migration may install their old barcode scanner app anyway.

[Feb 10, 2021] Short summary of Saudi Arabia

Feb 10, 2021 | peakoilbarrel.com

POLLUX IGNORED 02/09/2021 at 6:03 am

Short summary of Saudi Arabia

The economy is in bad shape:

"Saudi Arabia projected its 2020 budget deficit will soar to around $79 billion,
Riyadh has posted a budget deficit every year since the last oil price rout in 2014, prompting the petro-state to borrow heavily and draw from its reserves to plug the shortfall."
https://www.france24.com/en/live-news/20201215-saudi-says-2020-budget-deficit-will-surge-to-79-bn-amid-pandemic

Oil rig count is falling fast:

https://pbs.twimg.com/media/EsmaAwkXEAg91D7?format=jpg&name=large

Saudi crude stocks fell to 143 mb in November 2020 (17-year low) from over 300 mb in 2015:

https://www.hellenicshippingnews.com/rising-saudi-crude-exports-leaves-domestic-stocks-at-17-year-low/

The few drilling rigs is (probably) located in Ghawar:

"Further work programs on fields such as Khursaniyah, and legacy assets like Khurais and Abqaiq that need workovers and rehabilitation, are being delayed, the source said, whereas at Aramco's low-cost giant fields such as Ghawar -- the world's largest -- production is increasing.

"There isn't a place in Ghawar that doesn't have a drill, it is very dense. They're beating the hell out of it.""

and contractors are not being paid in time:

"Aramco's tighter spending has resulted in several international contractor companies working on pipeline and offshore projects not getting paid for several months, three sources told S&P Global Platts. The payments are set to be delayed further, with Aramco not intending to make any payments to these companies until 2021, a source added."
https://www.hellenicshippingnews.com/feature-saudi-aramco-faces-tough-2021-as-rivals-race-for-oil-capacity/

Oil production was cut by 1 mb/d this month and is currently just over 8 mb/d, not far from Euan Mearns forecast in 2007:
http://theoildrum.com/node/9321#comment-904645

Population has grown from 20 million in 2000 to 35 million in 2021:
https://www.worldometers.info/world-population/saudi-arabia-population/

Groundwater is falling fast:

"Groundwater resources of Saudi Arabia are being depleted at a very fast rate," declared the UN Food and Agriculture Organisation as far back as 2008. "Most water withdrawn comes from fossil deep aquifers, and some predictions suggest that these resources may not last more than about 25 years." Saudi Arabia leads the world in the volume of desalinated water it produces, and now operates 31 desalination plants. Desalinated water, as distinct from naturally occurring fresh water, makes up 50% of water consumed in Saudi Arabia. The remaining 50% is pulled from groundwater."
https://www.theguardian.com/cities/2019/aug/06/oil-built-saudi-arabia-will-a-lack-of-water-destroy-it

So, what is done to solve the problem?

"According to Bin Salman, who is also the chairman of the Neom company board of directors, construction of The Line will start in the first quarter of 2021.
The 100-mile-long (170 kilometres) mega-city will consist of connected communities – which it calls "city modules" – and link the Red Sea coast with the north-west of Saudi Arabia.
In a statement, The Line's developers said its communities will be "cognitive" and powered by AI, which will "continuously be learning predictive ways to make life easier"."
https://www.dezeen.com/2021/01/13/line-saudi-arabia-170-kilometres-long-city-neom/

What could possibly go wrong? REPLY HOLE IN HEAD IGNORED 02/09/2021 at 6:54 am

Pollux , thanks for the info and update . What could possibly go wrong ? Answer 1 ;: More days for some princes to spend at the Ritz Carlton . Answer 2 ; Heads roll for MBS and company . :-0 REPLY POLLUX IGNORED 02/09/2021 at 7:51 am

The situation is not better in Kuwait:

Economy is in bad shape:

"Source says government has transferred the last of its performing assets to wealth fund in exchange for cash.
Years of lower oil prices have forced the Kuwaiti government to burn through its cash reserves while a festering political standoff has prevented it from borrowing.
"It's a very immediate crisis now, not a long-term one like it was before," said Nawaf Alabduljader, a business management professor at Kuwait University."
https://www.arabianbusiness.com/politics-economics/458217-kuwait-facing-immediate-crisis-as-it-seeks-cash-to-plug-deficit

And oil projects are getting canceled:

"KOC's Board of Directors has decided to cancel the heavy crude project that involves 11 oil wells although it has been awarded recently," the report said without naming the company that had won that contract.
It said KOC and other local oil firms intend to freeze more projects in line with instructions by the Kuwait Petroleum Corporation to slash capital expenditure "
https://www.hellenicshippingnews.com/projects-kuwait-scraps-400mln-oil-project-report/

REPLY HOLE IN HEAD IGNORED 02/09/2021 at 8:06 am

Pollux , do you have any info on Ghawar ? As they say " As goes Ghawar ,so goes the world " . REPLY POLLUX IGNORED 02/09/2021 at 8:28 am

True, or as Matthew Simmons wrote in "Twilight in the Desert": "Ghawar is the king of Saudi oilfields. There is no "crown prince" waiting to assume the throne. It is the same in an oil basin as it is in chess: Once the king has fallen, the game is over."

Sorry, no new info on Ghawar but the situation was pretty bad in north Ghawar over twelve years ago so it is probably not better now: "If the area with remaining oil were an island, it would be time to look for a boat."
http://satelliteoerthedesert.blogspot.com/2008/06/north-ghawar-updated.html REPLY HOLE IN HEAD IGNORED 02/09/2021 at 1:35 pm

Just a query for some old TOD carry overs . There use to be "Memmel" who use to post a lot on KSA and stuff . Any info on him . Tks Pollux for your response . We are in agreement . REPLY WEEKENDPEAK IGNORED 02/09/2021 at 4:44 pm

I loved that post on TOD on Ghawar by Joules.

Has anyone ever done an update on it – that would be fascinating. When I look at google earth I see lots of dots but I can't tell injection wells from extraction wells so I have frankly no clue what I am looking at REPLY OVI IGNORED 02/09/2021 at 5:15 pm

HH

The latest data that was published on Ghawar came from the Aramco IPO. They included a table which listed their primary oil fields along with their production. The following statement was included:

The Ghawar field has accounted for more than half of the total cumulative crude oil production in the Kingdom but still maintained MSC of 3.800 million barrels of crude oil per day as at 31 December 2018.

In a presentation given by Nawaf Obaid in Nov 2006, the following statement was made: Without "maintain potential" drilling to make up for production, Saudi oil fields would have a natural decline rate of a hypothetical 8%. As Saudi Aramco has an extensive drilling program with a budget running in the billions of dollars, this decline is mitigated to a number close to 2%.

This raises the question of whether with today's reduced income, can Aramco maintain its extensive drilling program to reduce the natural decline rate to 2%.

REPLY JEAN-FRANÇOIS FLEURY IGNORED 02/09/2021 at 6:47 pm

Thank you for the analysis. That's very important to know for European oil supply. Do you consider to do the same with Norvegian production?

[Feb 02, 2021] Drilled Uncompleted Wells Won't Save U.S. Oil Production by Art Berman

Notable quotes:
"... U.S. oil production has fallen more than 2 million barrels per day since March 2020. It will fall much lower. ..."
"... EIA's forecast is impossible. It does not account for the low level of drilling and for the high decline rates of U.S. wells. It seems more likely that production will drop by at least another million barrels per day below October's level later in 2021. ..."
Feb 02, 2021 | www.artberman.com

U.S. oil production has fallen more than 2 million barrels per day since March 2020. It will fall much lower.

Output has fallen from almost 13 mmb/d in late 2019 to below 10.5 mmb/d in October 2020 (Figure 1). EIA forecasts an increase in November to 11.0 mmb/d and then an average level of about 11.1 mmb/d for the rest of 2021.

... ... ...

EIA Forecast is Impossible

EIA's forecast is impossible. It does not account for the low level of drilling and for the high decline rates of U.S. wells. It seems more likely that production will drop by at least another million barrels per day below October's level later in 2021.

... ... ...

What About DUCs?

Many reasonably expect that DUCs (drilled uncompleted wells) provide a solution to the lag between drilling and production. There are, after all, about 5,800 DUCs in the main U.S. tight oil plays. These are already drilled and could be converted into producing wells for the cost of completion which is about half the total well cost.

Most DUCs, however, are uncompleted for a reason namely, that their owners don't believe that their performance will be as good as wells that they chose to complete instead.

... It doesn't matter whether wells are newly drilled and completed or DUCs -- there are simply too few wells being added to maintain present levels of production.

... ... ...

It is unlikely that the tight oil business will recover from the effect of Covid-19 and lower oil prices. Markets will continue to send higher price signals until rig counts recover to the 800 or so rigs needed to support EIA's 11 mmb/d forecast.

The public and many investors have the peculiar belief that the world will be just fine without oil. The world will be fine. It has survived meteor impacts and mass extinctions but humans are more fragile. Higher oil prices are the last thing the global economy needs right now.

Javier JANUARY 17, 2021 AT 11:56 AM REPLY

Art, I couldn't agree more. Commodities are rising and oil price is set to rise, in the midst of a global economic crisis. A perfect storm is brewing and no amount of money printing can fix that. If things take a turn for the worst the economic crisis could be followed by a monetary crisis. Energy per capita and standard of living are going down for the majority no matter what.

That could easily add a social crisis whose first signs we are all seeing. Peter Turchin predicted the increase in social instability 10 years ago in Nature Vol 46, 4 February 2010, pg 608.

The pandemic was just a catalyst for what was already brewing. We are living in interesting times.

[Feb 02, 2021] The natural decline rate of Ghawar was 8% per annum but continuous drilling reduced that to 2%.

Notable quotes:
"... "There isn't a place in Ghawar that doesn't have a drill, it is very dense. They're beating the hell out of it." ..."
"... Around 2005, speculation was that Ghawar was producing somewhere between 5 Mb/d and 5.5 Mb/d. To get to 3.8 Mb/d by 2018, implies a roughly 2% annual decline rate. This turns out to be consistent with what some SA spokesperson said around 2005. Something along the lines of "The natural decline rate of Ghawar was 8% per annum but continuous drilling reduced that to 2%." ..."
Feb 02, 2021 | peakoilbarrel.com

POLLUX 01/20/2021 at 8:32 am

https://www.spglobal.com/platts/en/market-insights/latest-news/oil/012021-feature-saudi-aramco-faces-tough-2021-as-rivals-race-for-oil-capacity

Further work programs on fields such as Khursaniyah, and legacy assets like Khurais and Abqaiq that need workovers and rehabilitation, are being delayed, the source said, whereas at Aramco's low-cost giant fields such as Ghawar -- the world's largest -- production is increasing.

"There isn't a place in Ghawar that doesn't have a drill, it is very dense. They're beating the hell out of it."

OVI 01/20/2021 at 4:53 pm

Pollux,

When Saudi Aramco went public, this statement was in their IPO.

"The Company believes that the Ghawar field is the largest oil field in the world in terms of conventional proved reserves, totaling 58.32 billion barrels of oil equivalent as at 31 December 2018 for the Concession term, including 48.25 billion barrels of liquids reserves.

The Kingdom's original reserves of the Ghawar field increased from 19.0 billion barrels of crude oil in 1951G, when production began at the field, to 127.7 billion barrels of crude oil in 2018.

The Ghawar field has accounted for more than half of the total cumulative crude oil production in the Kingdom but still maintained MSC of 3.800 million barrels of crude oil per day as at 31 December 2018."

Around 2005, speculation was that Ghawar was producing somewhere between 5 Mb/d and 5.5 Mb/d. To get to 3.8 Mb/d by 2018, implies a roughly 2% annual decline rate. This turns out to be consistent with what some SA spokesperson said around 2005. Something along the lines of "The natural decline rate of Ghawar was 8% per annum but continuous drilling reduced that to 2%."

[Jan 27, 2021] PACE decided to pass a non-binding resolution of more sanctions against Russia for the Navalny fiasco while Frau Merkel (and her likely successor) remains clear that Nord Stream II must be finished

Jan 27, 2021 | consortiumnews.com

Jeff Harrison , January 26, 2021 at 02:13

Incisive and grim. As Mr. Putin observed, Presidents come and go but the policy stays the same. But wait! I think there's more

WRT Iran. Iran recently announced that their sales of oil had increased substantially, without, of course identifying how much or with whom. If they are doing these transactions in national currencies, there's nothing other than piracy that the US can do, making the US more dependent on our vassals to carry our water here. But

In other news, the EU has decided to stop supporting Guido. If some of the OAS vassals get the idea that they, too, can stand on at least their two knees, maybe Mr. Maduro can get a bit more of a break. The US is sure to be wroth.

PACE decided to pass a non-binding resolution of more sanctions against Russia for the Navalny fiasco while Frau Merkel (and her likely successor) remains clear that Nord Stream II must be finished. The German FM pointed out that they could face serious court battles since the Pipeline consortium which includes other EU countries has all the permits they require.

The results are in aaaaannnnnddd – thanx to Covid, for the first time in history China had more Direct Foreign Investment (DFI) than the US. The US better hope that doesn't keep up ..

[Jan 26, 2021] When guys like Michael Saylor put a half a billion into bitcoin they have done their homework. Seems to me a scam is an operation containing a lot of lies

Jan 26, 2021 | www.moonofalabama.org

uncle tungsten , Jan 26 2021 1:11 utc | 172

c1ue #118
I actually talked about this with Kuppy last week.

He considers HFT a problem but not crippling; he says they cost him $10K to $25K a day but apparently this isn't enough to deter his hedge fund activities. He said that up to 70% of trading volume activity in any stock is HFT (!).
As for scam: well - the value of the front running exists only so long as the herd is in the market. Every single market crash - whether bitcoin or the stock market or whatever - sees the vast majority of players exit (or bankrupt). At that point, the trading volumes and numbers of people participating plummet dramatically.
How valuable do you think RH's model is then?

Sounds to me that HFT is a scam in itself. Am I to believe that algorithms trading against each other repetitively at high speed is anything other than machine driven gambling on one algorithm's interpretation of the behaviour of another algorithm, mostly outside of the human buy and sell in the market place. Are the humans just strapped on for the ride through a cabal of trading companies?


psychohistorian , Jan 26 2021 1:29 utc | 173

@ uncle t # 168 who wrote
"
I was looking back at some earlier reports to gain an insight into the means by which the USA gave the game away and the means that might restore its place in the economic world. It has allowed itself to be completely captive to global private finance AND ownership of the keys to its salvation. If it does not nationalize its key industries then it can rest assured of its doom.
"

I continue to posit that the key industry that needs to be "nationalized/made totally sovereign" is finance. If humanity can follow China's lead, the motivations in the other industries will revert to doing what is right, rather than what is profitable.


In regards to your HFT comment in # 172, you have calling HFT a scam correct. It is programmed/manufactured theft under the guise of AI.

Thanks for your comments.

uncle tungsten , Jan 26 2021 1:32 utc | 174
arby #110
When guys like Michael Saylor put a half a billion into bitcoin they have done their homework. Seems to me a scam is an operation containing a lot of lies. I don't see how bitcoin falls into that category.

As far as a Ponzi scheme I also do not see the connection. It is nothing like a Ponzi. There are no promises of big returns or large dividends.


When people follow 'guys like Michael Saylor [and see him] put a half a billion into bitcoin they [think] have done their homework [and follow like fish chasing a lure] THEN they have been sucked into a ponzi scheme where the lure is a fast buck if they follow the (smart?) leader. Then the smart leader progressively sells out at a sweet peak and the chumps watch it dip for a month or two. Unless of course there are lots of paid journalists and bloggers and facebook praise singers pumping the lure of the endless profit of bitcoin.

Sounds like rumours of gold in them thar hills.

There are a large number of lies (or exaggeration?) in bitcoin and all spun within a sheath of mystery and complexity and even 'mining' to smear some credible lipstick on the scheme.

There is a sucker born every minute and they invest in BS and love a veneer of mystique and bitcoin falls squarely into the category of lies and scams and fancy imaginings and the lure that suckers are forever chasing. Yes, people buy and sell and some make a profit - same as any ponzi scheme.

While the BS is pumped the ponzi is inflated.

[Jan 26, 2021] USA domestic petroleum liquids production is scheduled to drop to 5 million bbl / day by july.

Jan 26, 2021 | www.moonofalabama.org

Dr. George W Oprisko , Jan 26 2021 0:44 utc | 170

How will the USA regain its advantage in this world?

It will not.....

USA domestic petroleum liquids production is scheduled to drop to 5 million bbl / day by july. Shale is loss making at prices less than $80 / bbl. Investors/banks have wised up. $$$ has dried up. There are no greater fools with $$ to burn... Drop in production ~ 45% / annum exponential declining function.

US corporate governance favors quick returns via share buybacks stock kiting schemes instead of product development. Boeing / GE / Lockheed / and other Fortune 500 firms not hiring engineers, not developing new products. Experienced engineers going to China for work or retiring. Shortly, US will not have enough petroleum geologists, mining engineers, software engineers, hardware engineers, electrical engineers, civil engineers, chemical engineers, etc to run it's industries.

Lawyers, political scientists, historians, economists... can't do the math.... are useless....

INDY

[Jan 20, 2021] The USA doesn't pay for oil or gas. It takes over the mining company, demands the project be funded by local or national borrowing from USA banks with sovereign guarantees, sells the product to a separate US company that pays peanuts to the miner and then onsells for a major markup (transfer pricing). Its called modern day stealing of other countries resources.

Jan 20, 2021 | www.moonofalabama.org

uncle tungsten , Jan 20 2021 21:02 utc | 70

dh #45

@42 I'm sure Maduro would take dollars.....or gold. Of course buying Venezuelan oil from an evil brutal socialist dictator would be a major climb down.

The USA doesn't pay for oil or gas. It takes over the mining company, demands the project be funded by local or national borrowing from USA banks with sovereign guarantees, sells the product to a separate US company that pays peanuts to the miner and then onsells for a major markup (transfer pricing). Its called modern day stealing of other countries resources.

Look at the report on keystone that you cited at #39 where

The Canadian province that invested $1.1 billion of taxpayers' money in the controversial Keystone XL project is now considering the sale of pipe and materials to try to recoup some funds.

"If the project ends, there would be assets that could be sold, such as enormous quantities of pipe," Alberta Premier Jason Kenney said in a press conference Monday.

Meanwhile the directors and shareholders got their fat checks and dividends from the municipal loan funds ;)

The USA will not pay in gold until it is on its knees - it simply will not pay. See how the USA 'bought' Tik Tok: blatant extortion/theft. The same as was done to Japan's high tech in the 60's 70's or whenever. Thieves.

[Jan 20, 2021] Policy to stop Nord Stream 2 will continue under Biden

Jan 20, 2021 | www.moonofalabama.org

karlof1 , Jan 20 2021 0:23 utc | 59

Policy to stop Nord Stream 2 will continue under Biden, although here we're told Biden will extend New START Treaty by the same person, Biden's nominee for Secretary of State, Antony Blinken. Defense nominee Austin was also covered in this article where we can see he reads from the same playbook as those who went before him. So it seems like continuity of its dystopic imperial policy will be what we see from the Outlaw US Empire, although we'll soon see if that also applies to Trump's Farewell boast that he was proud not to have started any "new" wars.

[Jan 20, 2021] There is nothing new in that German policy, for example it supported the building of pipelines from the USSR over President Reagan objections. Which does not mean that it wasn't enemy of the USSR - its destruction was the key for taking control of Eastern Europe and turning it into Germany's Latin America

Jan 20, 2021 | www.moonofalabama.org

uncle tungsten , Jan 20 2021 21:02 utc | 70

dh #45

@42 I'm sure Maduro would take dollars.....or gold. Of course buying Venezuelan oil from an evil brutal socialist dictator would be a major climb down.

The USA doesn't pay for oil or gas. It takes over the mining company, demands the project be funded by local or national borrowing from USA banks with sovereign guarantees, sells the product to a separate US company that pays peanuts to the miner and then onsells for a major markup (transfer pricing). Its called modern day stealing of other countries resources.

Look at the report on keystone that you cited at #39 where

The Canadian province that invested $1.1 billion of taxpayers' money in the controversial Keystone XL project is now considering the sale of pipe and materials to try to recoup some funds.

"If the project ends, there would be assets that could be sold, such as enormous quantities of pipe," Alberta Premier Jason Kenney said in a press conference Monday.

Meanwhile the directors and shareholders got their fat checks and dividends from the municipal loan funds ;)

The USA will not pay in gold until it is on its knees - it simply will not pay. See how the USA 'bought' Tik Tok: blatant extortion/theft. The same as was done to Japan's high tech in the 60's 70's or whenever. Thieves.


Phil Espin , Jan 20 2021 20:51 utc | 66

Hi b, Jim Kunstler has an interesting piece this week on the impact of EROI on the US recovery or lack thereof in the US shake sector. Just not enough cheap energy to get their economy going. Will Germany hold up against Trumps last minute sanctions against Nordstream if Biden maintains them? If Germany doesn't won't that put Germany in the same over expensive boat as US and lead to economic stagnation? Especially if all Russia's cheap energy ends up in China, which it almost certainly will.

Norwegian , Jan 20 2021 21:27 utc | 85
@Passer by | Jan 20 2021 21:22 utc | 82

Well since the qualifier was "In the EU" it can no longer be the UK, even if that is where russophobia has its home.

Passer by , Jan 20 2021 21:32 utc | 89
Posted by: Norwegian | Jan 20 2021 21:27 utc | 85

It is a thousand years old affair.

"Why do the USA, UK and Europe so hate Russia? How it is that Western antipathy, once thought due to anti-Communism, could be so easily revived over a crisis in distant Ukraine, against a Russia no longer communist? Why does the West accuse Russia of empire-building, when 15 states once part of the defunct Warsaw Pact are now part of NATO, and NATO troops now flank the Russian border? These are only some of the questions Creating Russophobia iinvestigates. Mettan begins by showing the strength of the prejudice against Russia through the Western response to a series of events: the Uberlingen mid-air collision, the Beslan hostage- taking, the Ossetia War, the Sochi Olympics and the crisis in Ukraine. He then delves into the historical, religious, ideological and geopolitical roots of the detestation of Russia in various European nations over thirteen centuries since Charlemagne competed with Byzantium for the title of heir to the Roman Empire. Mettan examines the geopolitical machinations expressed in those times through the medium of religion, leading to the great Christian schism between Germanic Rome and Byzantium and the European Crusades against Russian Orthodoxy. This history of taboos, prejudices and propaganda directed against the Orthodox Church provides the mythic foundations that shaped Western disdain for contemporary Russia. From the religious and imperial rivalry created by Charlemagne and the papacy to the genesis of French, English, German and then American Russophobia, the West has been engaged in more or less violent hostilities against Russia for a thousand years. Contemporary Russophobia is manufactured through the construction of an anti-Russian discourse in the media and the diplomatic world, and the fabrication and demonization of The Bad Guy, now personified by Vladimir Putin. Both feature in the meta-narrative, the mythical framework of the ferocious Russian bear ruled with a rod of iron by a vicious president. A synthetic reading of all these elements is presented in the light of recent events and in particular of the Ukrainian crisis and the recent American elections, showing how all the resources of the West's soft power have been mobilized to impose the tale of bad Russia dreaming of global conquest. "By hating Russia, one hurts oneself. Swiss journalist Guy Mettan pieces together the reasons of detestation of the Kremlin and of a rhetoric that goes back to Napoleonic times despite the long list of aggressions perpetrated in the meantime by the West. And he explains why pushing Moscow toward Asia is a very serious error." -Panorama, Italy "Like Saddam Hussein's mythical weapons of massive destruction in 2003, Peter the Great's fake will has been used to justify the aggressions and invasions that the Europeans, and now the Americans, still carry out against Russia." -Liberation, France

https://www.goodreads.com/book/show/34237648-creating-russophobia

Laguerre , Jan 20 2021 21:47 utc | 95

"Not at all, the center of russophobia will now be Germany. In is not a surprise that Russia recently declared that the center of russophobia in the EU are now France and Germany."

Hmm, perhaps.

Passer by , Jan 20 2021 21:57 utc | 97

Posted by: Laguerre | Jan 20 2021 21:47 utc | 95

The recent ban of the Hockey Tournament in Belarus, as well as the whole Belarus Maidan thing was driven mainly from Europe.

European institutions are russophobic too, with the EU Parliament being the most.

The new green parties in Europe are more russophobic than even some of the old parties.

FrancisPike , Jan 20 2021 21:58 utc | 98

Nord Stream 2 will be completed contrary to the opinions of four to five commenters on here. This is Germany & Russia that you are talking about. Sanctions did not stop the Crimean bridge. It makes no economic sense to deny European/West Asian (Russian produced) Liquid natural gas in order to subsidise 'transit fees' to Ukraine. The U.S.Congress' sanctions here are untenible, but don't expect Germany & Russia to publish how they will do it until completion.

karlof1 , Jan 20 2021 22:03 utc | 100

Reuters gleeful that Gazprom announced the possibility Nord Stream 2 won't be completed due to "political pressure." But such a warning is part of all standard potential risks announcements accompanying any prospectus--a fact Reuters ignored--which in this case is for the issuance of Eurobonds, although I question the judgement in making them dollar denominated.

Passer by , Jan 20 2021 22:07 utc | 103

@ FrancisPike | Jan 20 2021 21:58 utc | 98

Its not contrary to my opinion, but you appear to be young and naive person. There is nothing new in that German policy, for example it supported the building of pipelines from the USSR over President Reagan objections. Which does not mean that it wasn't enemy of the USSR - its destruction was the key for taking control of Eastern Europe and turning it into Germany's Latin America.

Someone can hate you and may want to make money at the same time too. But as soon as there is weakness, they will pounce on you and stab you in the back.

As for the pipeline, it will remain under a puppet russian government. No loss there too.

What the EU wants is to subdue Russia and later dismember it, taking hold of the population and natural resources.

In the mean time, there is nothing wrong with making some money too. As the EU worships a good living too.

[Jan 19, 2021] US expands sanctions against Nord Stream 2 gas pipeline, targeting ships Russian firms working on vital pan-European projec

Jan 19, 2021 | www.rt.com

46 Follow RT on RT Outgoing US President Donald Trump has delivered his "parting gift" to the Moscow-led Nord Stream 2 gas pipeline, with newly announced sanctions targeting a pipe-laying vessel and companies involved in the multinational project.

The specialist ship concerned, named, 'Fortuna,' and oil tanker 'Maksim Gorky', as well as two Russian firms, KVT-Rus and Rustanker, were blacklisted on Tuesday under CAATSA (Countering America's Adversaries Through Sanctions Act) as part of Washington's economic war on Moscow. The same legislation had been previously used by the US to target numerous Russian officials and enterprises.

Russian energy giant Gazprom warned its investors earlier on Tuesday that Nord Stream 2 could be suspended or even canceled if more US restrictions are introduced.

ALSO ON RT.COM Gazprom warns investors that Nord Stream 2 could be canceled as Trump announces more US sanctions in 'parting gift'

However, Moscow has assured its partners that it intends to complete the project despite "harsh pressure on the part of Washington," according to Kremlin press secretary Dmitry Peskov. Reacting to the new package of sanctions on Tuesday, Peskov called them "unlawful."

Meanwhile, the EU said it is in no rush to join the Washington-led sanction war on Nord Stream 2. EU foreign affairs chief, Josep Borrell, said that the bloc is not going to resist the construction of the project.

"Because we're talking about a private project, we can't hamper the operations of those companies if the German government agrees to it," Borrell said Tuesday.

Nord Stream 2 is an offshore gas pipeline, linking Russia and Germany with aim of providing cheaper energy to Central European customers. Under the agreement between Moscow and Berlin, it was to be launched in mid-2020, but the construction has been delayed due to strong opposition from Washington.

ALSO ON RT.COM One more European firm caves to US pressure on Nord Stream 2 project – media

The US, which is hoping to sell its Liquified Natural Gas (LNG) to Europe, has hit the project with several rounds of sanctions over scarcely credible claims that it could undermine European energy security. Critics say the real intent is to force EU members to buy from American companies.

Think your friends would be interested? Share this story!

46 Follow RT on RT Trends:

Fatback33 4 hours ago 19 Jan, 2021 11:20 AM

The group that owns Washington makes the foreign policy. That policy is not for the benefit of the people.
DukeLeo Fatback33 1 hour ago 19 Jan, 2021 02:06 PM
That is correct. The private banks and corporations in the US are very upset about Nord Stream - 2, as they want Europe to buy US gas at double price. Washington thus introduces additional political gangsterism in the shape of new unilateral sanctions which have no merit in international law.
noremedy 4 hours ago 19 Jan, 2021 11:22 AM
Is the U.S. so stupid that they do not realize that they are isolating themselves? Russia has developed SPFS, China CIPS, together with Iran, China and Russia are further developing a payment transfer system. Once in place and functioning this system will replace the western SWIFT system for international payment transfers. It will be the death knell for the US dollar. 327 million Americans are no match for the rest of the billions of the world's population. The next decade will see the total debasement of the US monetary system and the fall from power of the decaying and crumbling in every way U.S.A.
Hanonymouse noremedy 2 hours ago 19 Jan, 2021 01:37 PM
They don't care. They have the most advanced military in the world. Might makes right, even today.
Shelbouy 3 hours ago 19 Jan, 2021 12:25 PM
Russia currently supplies over 50% of the natural gas consumed by The EU. Germany and Italy are the largest importers of Russian natural gas. What is the issue of sanctions stemming from and why are the Americans doing this? A no brainer question I suppose. It's to make more money than the other supplier, and exert political pressure and demand obedience from its lackey. Germany.
David R. Evans Shelbouy 2 hours ago 19 Jan, 2021 01:58 PM
Russia and Iran challenge perpetual US wars for Israel's Oded Yinon Plan. Washington is Israel-controlled territory.
Jewel Gyn 4 hours ago 19 Jan, 2021 11:34 AM
Sanctions work both ways. With the outgoing Trump administration desperately laying mines for Biden, we await how sleepy Joe is going to mend strayed ties with EU.
Count_Cash 4 hours ago 19 Jan, 2021 11:20 AM
The US mafia state continues with the same practices. The dog is barking but the caravan is going. The counter productiveness of sanctions always shows through in the end! I am sure with active efforts of Germany and Russia against US mafia oppression that a blowback will be felt by the US over time!
Dachaguy 4 hours ago 19 Jan, 2021 11:24 AM
This is an act of war against Germany. NATO should respond and act against the aggressor, America.
xyz47 Dachaguy 42 minutes ago 19 Jan, 2021 03:20 PM
NATO is run by the US...
lovethy Dachaguy 2 hours ago 19 Jan, 2021 01:04 PM
NATO has no separate existence. It's the USA's arm of aggression, suppression and domination. Germany after WWII is an occupied country of USA. Thousand of armed personnel stationed in Germany enforcing that occupation.
Chaz Dadkhah 3 hours ago 19 Jan, 2021 12:19 PM
Further proof that Trump is no friend of Russia and is in a rush to punish them while he still has power. If it was the swamp telling him to do that, like his supporters suggest, then they would have waited till their man Biden came in to power in less than 24 hours to do it. Wake up!
Mac Kio 3 hours ago 19 Jan, 2021 12:34 PM
USA hates fair competition. USA ignores all WTO rules.
Russkiy09 2 hours ago 19 Jan, 2021 01:33 PM
By whining and not completing in the face of US, Russia is losing credibility. They should not have delayed to mobilize the pipe laying vessel and other equipment for one whole year. They should have mobilized in three months and finished by now. Same happens when Jewtin does not shoot down Zio air force bombing Syria everyday. But best option should have been to tell European vassals that "if you can, take our gas. But we will charge the highest amount and sell as much as we want, exclude Russophobic Baltic countries and Poland and neo-vassal Ukraine. Pay us not in your ponzi paper money but real goods and services or precious metals or other commodities or our own currency Ruble." I so wish I could be the President of Russia. Russians deserve to be as wealthy as the Swiss or SIngapore etc., not what they are getting. Their leaders should stand up for their interest. And stop empowering the greedy merchantalist Chinese and brotherhood Erdogan.
BlackIntel 1 hour ago 19 Jan, 2021 02:27 PM
America i captured by private interest; this project threatens American private companies hence the government is forced to protect capitalism. This is illegal
Ohhho 3 hours ago 19 Jan, 2021 12:15 PM
That project was a mistake from the start: Russia should distance itself from the Evil empire, EU included! Stop wasting time and resources on trying to please the haters and keeping them more competitive with cheaper Russian natural gas: focus on real partners and potential allies elsewhere!
butterfly123 2 hours ago 19 Jan, 2021 01:58 PM
I have said it before that part of the problem is at the door of the policy-makers and politicians in Russia. Pipeline project didn't spring up in the minds of politicians in Russia one morning, presumably. There should have been foresight, detailed planning, and opportunity creation for firms in Russia to acquire the skill-set and resources to advance this project. Not doing so has come to bite Russia hard and painful. Lessons learnt I hope Mr President!
jakro 4 hours ago 19 Jan, 2021 11:37 AM
Good news. The swamp is getting deeper and bigger.
hermaflorissen 4 hours ago 19 Jan, 2021 11:49 AM
Trump finally severed my expectations for the past 4 years. He should indeed perish.
ariadnatheo 1 hour ago 19 Jan, 2021 03:06 PM
That is one Trump measure that will not be overturned by the Senile One. They will need to amplify the RussiaRussiaRussia barking and scratching to divert attention from their dealings with China
Neville52 2 hours ago 19 Jan, 2021 02:01 PM
Its time the other nations of the world turned their backs on the US. Its too risky if you are an international corporation to suddenly have large portions of your income cancelled due to some crazy politician in the US
5th Eye 2 hours ago 19 Jan, 2021 02:03 PM
From empire to the collapse of empire, US follows UK to the letters. Soon it will be irrelevant. The only thing that remains for UK is the language. Probably hotdog for the US.
VonnDuff1 1 hour ago 19 Jan, 2021 02:10 PM
The USA Congress and its corrupt foreign policy dictates work to the detriment of Europe and Russia, while providing no tangible benefits to US states or citizens. So globalist demands wrapped in the stars & stripes, should be laughed at, by all freedom loving nations.

[Jan 15, 2021] I'm not deep in the mechanics of this, but I've always assumed that the need for continual growth, after an economy could and should have turned steady-state, is a disease that can be laid squarely at the door of compound interest

Jan 15, 2021 | www.moonofalabama.org

psychohistorian , Jan 15 2021 5:07 utc | 69

@ Grieved | Jan 14 2021 23:05 utc | 47 who wrote
"
I'm not deep in the mechanics of this, but I've always assumed that the need for continual growth, after an economy could and should have turned steady-state, is a disease that can be laid squarely at the door of compound interest.
"
@ karlof1 | Jan 15 2021 0:39 utc | 57 who wrote
"
Yes, compound interest is part of that problem, but so is an expanding population or a shrinking resource base. Yes, we face all three of those problems and are certainly in an Overshoot situation few genuinely appreciate.
"

I think humanity needs a frontier more than growth. We need to keep chasing our ignorance.

We lack the common will to regulate our social interactions at a structural level that guarantees some level of equality and justice. Having the will I believe we have the ability.

[Jan 04, 2021] Byron Wien Releases 10 Surprises For 2021- MMT, Trump TV, A -Return To Normal- By Memorial Day

Jan 04, 2021 | www.zerohedge.com
  1. The economy develops momentum on its own because of pent-up demand, and depressed hospitality and airline stocks become strong performers . Fiscal and monetary policy remain historically accommodative. Nominal economic growth for the full year exceeds 6% and the unemployment rate falls to 5%. We begin the longest economic cycle in history, surpassing the cycle that lasted from 2010 to 2020.

  2. The Federal Reserve and the Treasury openly embrace Modern Monetary Theory as their accommodative policies continue. As long as growth exceeds the rate of inflation, deficits don't seem to matter. Because inflation increases modestly, gold rallies and cryptocurrencies gain more respect during the year.

  3. Even as energy company executives cut estimates for long-term growth, near-term opportunities are increasing. The return to "normal" increases both industrial activity and mobility, and the price of West Texas Intermediate oil rises to $65/bbl. Rig counts increase and energy high yield bonds rally soundly. Energy stocks are among the best performers in 2021.

  4. The equity market broadens out. Stocks beyond health care and technology participate in the rise in prices. "Risk on" is not without risk and the market corrects almost 20% in the first half, but the S&P 500 trades at 4,500 later in the year. Cyclicals lead defensives, small caps beat large caps and the "K" shaped equity market recovery unwinds. Big cap tech is the source of liquidity, and the stocks are laggards for the year.

  5. The surge in economic growth causes the 10-year Treasury yield to rise to 2%. The yield curve steepens, but a concomitant increase in inflation keeps real rates near zero. The Fed wants the strength in housing and autos to continue. As a result, it extends the duration of bond purchases in order to prevent higher rates at the long end of the curve from choking off credit to consumers and businesses.

  6. The slide in the dollar turns around. The post-vaccine strength of the U.S. economy and financial markets attracts investors disenchanted with the rising debt and slower growth of Europe and Japan. Treasurys maintain a positive yield and the carry trade continues.

[Jan 02, 2021] Maidan, Navalny, Kastellorizo -- The Chaos Strategy by Dimitris Konstantakopoulos

Notable quotes:
"... Imagine for a while that Pompeo and Netanyahu were able to ignite the huge conflict with Iran which they have been trying to do for years. The wider Middle East would become a land of ruins, and on top of that we would have also the corona crisis. It would be the end for the Chinese project One belt One road and a very promising beginning for Trump’s programme of “decoupling” from China. The same could happen if we go to a Greek-Turkish war, the most probable result of which is enormous destruction in both states and also in Cyprus. Given the destructive capacity of the Greek and Turkish weapons and the impossibility of destroying them by a surprise first strike, the two countries, if they go to war, risk going back two or three hundred years. A conflict around Iran, or between Greece and Turkey would also put enormous pressure on Russia. ..."
"... Spreading Chaos is another way of staging world war when you cannot use ‘normal’, ‘frontal’ methods of war. The policy of Trump and his allies contributes greatly to preparing for world war by attacking the very institutions of bourgeois democracy, any kind of national or international rule, by attacking the very principles of Logic, Logos and Science, necessary in order to transform human societies into herds of wild animals, in a sui generis repetition of the Nazi experiment. ..."
"... The way to get Greece and Turkey to war is by sending them ‘false signals’, either encouraging and supporting them, or implying a threat from the other country. Somebody was able to persuade Ankara to down the Russian jet in 2015, which was a case of extreme miscalculation. It is easier to make a miscalculation regarding Greece and Turkey, and there is an enormity of contradictory signals emanating from the US and Israel towards the two capitals. ..."
"... PS. The above article provides a possible explanation of the present Greek-Turkish crisis. A second explanation is that big oil multinationals want to provoke a crisis in order to exploit the hydrocarbons of the region, but we have no serious indications that big reserves really exist and are exploitable economically. A third explanation, not mutually excluded from what we have analyzed, is that third forces are trying to provoke a war in order to overthrow Erdogan and also have all the other consequences we described. ..."
Sep 17, 2020 | www.defenddemocracy.press

Twenty years ago, I was covering the Munich Security Forum as a journalist and I took an interview from Brent Scawcroft, National Security Adviser for President Bush (the father). I believe he was one of the men who played a huge role in pushing Boris Yeltsin to the crisis which culminated into the bombing of the Russian parliament in October 1993, thus opening the way to the biggest looting in the history of mankind, the so-called Russian privatisations. I asked Scawcroft what the US policy towards Russia and China should be . He answered: “We need to have better relations with Moscow and Beijing, than they can have between themselves”.

The way for the Empire to dominate in the Eastern Mediterranean, imposing its pax or pushing for war, is by having better relations with Athens and Ankara than they can have between themselves. Now they don’t have any at all.

Maidan Square, Kiev, 2014

The plane carrying the three EU Foreign Ministers, the French, the German and the Polish, had just taken off from Kiev when the agreement they had negotiated for a peaceful, negotiated settlement of the Ukrainian crisis collapsed and the carnage began in the Ukrainian capital. This was followed by the civil war and the unimaginable destruction of European-Russian relations.

The Ukrainian coup was a huge blow to Russia and the Ukraine, which is now in an extremely miserable state, a harbinger of Nazi militias and mafia groups, but also, indirectly, to Europe, which, destroying its relations with Russia at the behest of the Americans, is not only ridiculed, but has deprived itself of the possibility of an independent policy, an achievement which it is now going to ‘complete’ with the Navalny affair, if it leads to the cancelling of the strategic pipeline project NordStream II.

‘Fuck the EU’ was not only a phrase from Neocon Assistant Secretary of State Nuland to Ambassador Pyatt (then in Kiev, now in Athens); it was in reality one of the main purposes of the Maidan operation, that is the inauguration chapter of the new Cold War. Some weeks ago, Mike Pompeo repeated the Nuland coup, by using his influence on the Greek FM Dendias and on the Egyptian dictator Sissi to blow up the moratorium between Greece and Turkey the German chancellor Merkel had negotiated. ‘Fuck Germany and its moratoriums’!

The Coming War

The destruction of the Ukraine, Ukrainian-Russian and European-Russian relations was a very big step in the direction of preparing for world war against Russia and China. This is the central plan that defines many of the individual crises and episodes around the globe; and if one does not understand this, one cannot understand anything. As for Trump’s friendship with Russia, we are afraid that it is of no more value than Hitler’s friendship with Stalin or the Ribbentrop-Molotov pact.

The war with China and Russia is the main project of the extremist, radical wing of the Western capitalist establishment. But such a war cannot happen easily and it will not take a frontal form as WWI and WWII, because of the existence of nuclear weapons. But it will take all other possible forms.

Imagine for a while that Pompeo and Netanyahu were able to ignite the huge conflict with Iran which they have been trying to do for years. The wider Middle East would become a land of ruins, and on top of that we would have also the corona crisis. It would be the end for the Chinese project One belt One road and a very promising beginning for Trump’s programme of “decoupling” from China. The same could happen if we go to a Greek-Turkish war, the most probable result of which is enormous destruction in both states and also in Cyprus. Given the destructive capacity of the Greek and Turkish weapons and the impossibility of destroying them by a surprise first strike, the two countries, if they go to war, risk going back two or three hundred years. A conflict around Iran, or between Greece and Turkey would also put enormous pressure on Russia.

Spreading Chaos is another way of staging world war when you cannot use ‘normal’, ‘frontal’ methods of war. The policy of Trump and his allies contributes greatly to preparing for world war by attacking the very institutions of bourgeois democracy, any kind of national or international rule, by attacking the very principles of Logic, Logos and Science, necessary in order to transform human societies into herds of wild animals, in a sui generis repetition of the Nazi experiment.

You cannot wage war on Russia or China by any form of ‘liberal capitalism’. To wage such a huge war you need a totalitarian regime in the West, and this is the real programme, the historic mission of Trump, Pompeo, Thiel, Netanyahu etc.

The way to get Greece and Turkey to war is by sending them ‘false signals’, either encouraging and supporting them, or implying a threat from the other country. Somebody was able to persuade Ankara to down the Russian jet in 2015, which was a case of extreme miscalculation. It is easier to make a miscalculation regarding Greece and Turkey, and there is an enormity of contradictory signals emanating from the US and Israel towards the two capitals.

For example, a very strange article in the Foreign Affairs magazine states that the red line behind which Ankara will not be permitted to go is south of Crete. This red light is indirectly a green light for Turkey to go to the east or south-east of Crete. If Turkey sends its ships there the Greek government will be under tremendous pressure from both public opinion and the Armed Forces to react. This is not something Foreign Affairs can ignore, making us wonder if in fact some people want a war between Greece and Turkey to overthrow Erdogan, to weaken Turkey for decades, to attack Chinese projects and the EU. We could multiply such examples, including Trump’s encouragement of Erdogan. Insofar as the Turkish President does not want to go to a full rupture with the West, he is better prepared to accept as genuine any encouraging signals from Washington. But they can be a trap, as happened for example with Milosevich or Sadam.

Russia, NATO and a Greek-Turkish war

The other day a friend told me that a conflict between Greece and Turkey would only harm NATO: only the Russians would benefit, so it could not happen.

I replied that he was wrong. ‘If you are preparing for a world war, you do not even care so much about NATO. Instead you have to tear down all the institutions of bourgoies society and of the liberal capitalist order, including the EU, maybe even NATO itself, because they are not really made for such a war. They are certainly made to contain Russia, but not to play Russian roulette with the very existence of the world. A world war will not be decided by a Senate, no matter how oligarchic it will be. For such decisions you need Nero, Caligula, Heliogabalus. Such are Trump, Bolsonaro, Pompeo, Netanyahu and those behind them.

They would certainly prefer a Russia-Turkey conflict and have already tried to provoke it. But it is not easy.

A conflict with Greece is their second best alternative, because Greece has the means to destroy Turkey by destroying itself. A war between the two countries will destroy them and would set them back 200 or 300 years.

It is doubtful, after all, that Russia would benefit from such a development, even if it would be a blow to NATO. First, because Moscow would see the destruction of Hellenism, the main strategic ally of Russia in the Mediterranean for a thousand years. Governments and regimes can change, but losing a nation is another matter.

Second, Moscow will likely see, as a result of a war, a pro-Western dictatorship set up in Ankara. Having contributed to the destruction of a historic country like Greece, Turkey would not have the slightest future. It would be considered the outcast of all civilised nations, like Germany after World War II.

And of course, the big victims of the war will be China, with the One Belt, One Road plans and Europe itself.

This is the Chaos Strategy. It remains to be seen whether her opponents also have a strategy or not.

PS. The above article provides a possible explanation of the present Greek-Turkish crisis. A second explanation is that big oil multinationals want to provoke a crisis in order to exploit the hydrocarbons of the region, but we have no serious indications that big reserves really exist and are exploitable economically. A third explanation, not mutually excluded from what we have analyzed, is that third forces are trying to provoke a war in order to overthrow Erdogan and also have all the other consequences we described.

Also read

International consequences of a Greek – Turkish war. A way to avert it

[Jan 01, 2021] Military And Political Trends Of 2020 That Will Shape 2021 - ZeroHedge

Jan 01, 2021 | www.zerohedge.com

The past year began with the assassination of the Iranian military genius General Qasem Soleimani by the United States, and it ended with the murder of the prominent scholar Mohsen Fakhrizadeh by the Israelis. In early January, Iran, expecting another aggressive action from the West, accidently shot down a Ukrainian civil aircraft that had inexplicably altered its course over Tehran without request nor authorization. Around the same time, Turkey confirmed the deployment of its military in Libya, beginning a new phase of confrontation in the region, and Egypt responding with airstrikes and additional shows of force. The situation in Yemen developed rapidly: taking advantage of the Sunni coalition's moral weakness, Ansar Allah achieved significant progress in forcing the Saudis out of the country in many regions. The state of warfare in northwestern Syria has significantly changed, transforming into the formal delineation of zones of influence of Turkey and the Russian-Iranian-Syrian coalition. This happened amid, and largely due to the weakening of U.S. influence in the region. Ankara is steadily increasing its military presence in the areas under its responsibility and along the contact line. It has taken measures to deter groups linked to Al-Qaeda and other radicals. As a result, the situation in the region is stabilizing, which has allowed Turkey to increasingly exert control over most of Greater Idlib.

ISIS cells remain active in the eastern and southern Syrian regions. Particular processes are taking place in Quneitra and Daraa provinces, where Russian peace initiatives were inconclusive by virtue of the direct destructive influence of Israel in these areas of Syria. In turn, the assassination of Qasem Soleimaniin resulted in a sharp increase in the targeting of American personnel, military and civil infrastructure in Iraq. The U.S. Army was forced to regroup its forces, effectively abandoning a number of its military installations and concentrating available forces at key bases. At the same time, Washington flatly rejected demands from Baghdad for a complete withdrawal of U.S. troops and promised to respond with full-fledged sanctions if Iraq continued to raise this issue. Afghanistan remains stable in its instability. Disturbing news comes from Latin America. Confrontation between China and India flared this year, resulting in sporadic border clashes. This situation seems far from over, as both countries have reinforced their military posture along the disputed border. The aggressive actions of the Trump administration against China deepen global crises, which has become obvious not only to specialists but also to the general public. The relationship between the collective West and the Russian Federation was re-enshrined in "the Cold War state", which seems to have been resurrected once again.

The turbulence of the first quarter of 2020 was overshadowed by a new socio-political process – the corona-crisis, the framework of which integrates various phenomena from the Sars-Cov2 epidemic itself and the subsequent exacerbation of the global economic crisis. The disclosure of substantial social differences that have accumulated in modern capitalist society, lead to a series of incessant protests across the globe. The year 2020 was accompanied by fierce clashes between protesters professing various causes and law enforcement forces in numerous countries. Although on the surface these societal clashes with the state appear disassociated, many share related root causes. A growing, immense wealth inequality, corruption of government at all levels, a lack of any meaningful input into political decision making, and the unmasking of massive censorship via big tech corporations and the main stream media all played a part in igniting societal unrest.

In late 2019 and early 2020 there was little reason for optimistic projections for the near future. However, hardly anyone could anticipate the number of crisis events and developments that had taken place during this year. These phenomena affected every region of the world to some extent.

Nevertheless, Middle East has remained the main source of instability, due to being an arena where global and regional power interests intertwine and clash. The most important line of confrontation is between US and Israel-led forces on the one hand, and Iran and its so called Axis of Resistance. The opposing sides have been locked in an endless spiral of mutual accusations, sanctions, military incidents, and proxy wars, and recently even crossed the threshold into a limited exchange of strikes due to the worsening state of regional confrontation. Russia and Turkey, the latter of which has been distancing itself from Washington due to growing disagreements with "NATO partners" and changes in global trends, also play an important role in the region without directly entering into the confrontation between pro-Israel forces and Iran.

As in the recent years, Syria and Iraq remain the greatest hot-spots. The destruction of ISIS as a terrorist state and the apparent killing of its leader Abu Bakr al-Baghdadi did not end its existence as a terror group. Many ISIS cells and supporting elements actively use regional instability as a chance to preserve the Khalifate's legacy. They remain active mainly along the Syria-Iraq border, and along the eastern bank of the Euphrates in Syria. Camps for the temporary displaced and for the families and relatives of ISIS militants on the territory controlled by the Syrian Democratic Forces (SDF) in north-eastern Syria are also breeding grounds for terrorist ideology. Remarkably, these regions are also where there is direct presence of US forces, or, as in the case of SDF camps, presence of forces supported by the US.

The fertile soil for radicalism also consists of the inability to reach a comprehensive diplomatic solution that would end the Syrian conflict in a way acceptable to all parties. Washington is not interesting in stabilizing Syria because even should Assad leave, it would strengthen the Damascus government that would naturally be allied to Russia and Iran. Opposing Iran and supporting Israel became the cornerstone of US policy during the Trump administration. Consequently, Washington is supporting separatist sentiments of the Kurdish SDF leadership and even allowed it to participate in the plunder of Syrian oil wells in US coalition zone of control in which US firms linked to the Pentagon and US intelligence services are participating. US intelligence also aids Israel in its information and psychological warfare operations, as well as military strikes aimed at undermining Syria and Iranian forces located in the country. In spite of propaganda victories, in practice Israeli efforts had limited success in 2020 as Iran continued to strengthen its positions and military capabilities on its ally's territory. Iran's success in establishing and supporting a land corridor linking Lebanon, Syria, Iraq, and Iraq, plays an important role. Constant expansion of Iran's military presence and infrastructure near the town of al-Bukamal, on the border of Iraq and Syria, demonstrates the importance of the project to Tehran. Tel-Aviv claims that Iran is using that corridor to equip pro-Iranian forces in southern Syria and Lebanon with modern weapons.

about:blank

about:blank

me title=

The Palestinian question is also an important one for Israel's leadership and its lobby in Washington. The highly touted "deal of the century" turned out to be no more than an offer for the Palestinians to abandon their struggle for statehood. As expected, this initiative did not lead to a breakthrough in Israeli-Palestinian relations. Rather the opposite, it gave an additional stimulus to Palestinian resistance to the demands that were being imposed. At the same time, Trump administration scored a diplomatic success by forcing the UAE and Bahrain to normalize their relations with Israel, and Saudi Arabia to make its collaboration with Israel public. That was a historic victory for US-Israel policy in the Middle East. Public rapprochement of Arab monarchies and Israel strengthened the positions of Iran as the only country which not only declares itself as Palestine's and Islamic world's defender, but actually puts words into practice. Saudi Arabia's leadership will particularly suffer in terms of loss of popularity among its own population, already damaged by the failed war in Yemen and intensifying confrontation with UAE, both of which are already using their neighbor's weakness to lay a claim to leadership on the Arabian Peninsula.

The list of actors strengthening their positions in the Red Sea includes Russia. In late 2020 it became known that Russia reached an agreement with Sudan on establishing a naval support facility which has every possibility to become a full-blown naval base. This foothold will enable the Russian Navy to increase its presence on key maritime energy supply routes on the Red Sea itself and in the area between Aden and Oman straits. For Russia, which has not had naval infrastructure in that region since USSR's break-up, it is a significant diplomatic breakthrough. For its part. Sudan's leadership apparently views Russia's military presence as a security factor allowing it to balance potential harmful measures by the West.

During all of 2020, Moscow and Beijing continued collaboration on projects in Africa, gradually pushing out traditional post-colonial powers in several key areas. The presence of Russian military specialists in the Central African Republic where they assist the central government in strengthening its forces, escalation of local conflicts, and ensuring the security of Russian economic sectors, is now a universally known fact. Russian diplomacy and specialists are also active in Libya, where UAE and Egypt which support Field Marshal Khaftar, and Turkey which supports the Tripoli government, are clashing. Under the cover of declarations calling for peace and stability, foreign actors are busily carving up Libya's energy resources. For Egypt there's also the crucial matter of fighting terrorism and the presence of groups affiliated with Muslim Brotherhood which Cairo sees as a direct threat to national security.

The Sahel and the vicinity of Lake Chad remain areas where terror groups with links to al-Qaeda and ISIS remain highly active. France's limited military mission in the Sahara-Sahel region has been failure and could not ensure sufficient support for regional forces in order to stabilize the situation. ISIS and Boko-Haram continue to spread chaos in the border areas between Niger, Nigeria, Cameroun, and Chad. In spite of all the efforts by the region's governments, terrorists continue to control sizable territories and represent a significant threat to regional security. The renewed conflict in Ethiopia is a separate problem, in which the federal government was drawn into a civil war against the National Front for the Liberation of Tigray controlling that province. The ethno-feudal conflict between federal and regional elites threatens to destabilize the entire country if it continues.

The explosive situation in Africa shows that post-colonial European powers and the "Global Policeman" which dominated that continent for decades were not interested in addressing the continent's actual problem. Foreign actors were mainly focused on extracting resources and ensuring the interests of a narrow group of politicians and entities affiliated with foreign capitals. Now they are forced to compete with the informal China-Russia bloc which will use a different approach that may be a described as follows: Strengthening of regional stability to protect investments in economic projects. Thus it is no surprise that influential actors are gradually losing to new but more constructive forces.

Tensions within European countries have been on the rise during the past several years, due to both the crisis of the contemporary economic paradigm and to specific regional problems such as the migration crises and the failure of multiculturalism policies, with subsequent radicalization of society.

Unpleasant surprises included several countries' health care and social protection networks' inability to cope with the large number of COVID-19 patients. Entire systems of governance in a number of European countries proved incapable of coping with rapidly developing crises. This is true particularly for countries of southern Europe, such as Italy, Spain, Portugal, and Greece. Among eastern European countries, Hungary's and Romania's economies were particularly badly affected. At the same time, Poland's state institutions and economy showed considerable resilience in the face of crisis. While the Federal Republic of Germany suffered considerable economic damage in the second quarter of 2020, Merkel's government used the situation to inject huge sums of liquidity into the economy, enhanced Germany's position within Europe, and moreover Germany's health care and social protection institutions proved capable and sufficiently resilient.

Coronavirus and subsequent social developments led to the emergence of the so-called "Macron Doctrine" which amounts to an argument that EU must obtain strategic sovereignty. This is consistent with the aims of a significant portion of German national elites. Nevertheless, Berlin officially criticized Macron's statements and has shown willingness to enter into a strategic partnership with Biden Administration's United States as a junior partner. However, even FRG's current leadership understands the dangers of lack of strategic sovereignty in an era of America's decline as the world policeman. Against the backdrop of a global economic crisis, US-EU relations are ineluctably drifting from a state of partnership to one of competition or even rivalry. In general, the first half of 2020 demonstrated the vital necessity of further development of European institutions.

The second half of 2020 was marked by fierce mass protests in Germany, France, Great Britain, and other European countries. The level of violence employed by both the protesters and law enforcement was unprecedented and is not comparable to the level of violence seen during protests in Russia, Belarus, and even Kirgizstan. Mainstream media did their best to depreciate and conceal the scale of what was happening. If the situation continues to develop in the same vein, there is every chance that in the future, a reality that can be described as a digital concentration camp may form in Europe.

World media, for its part, paid particular attention to the situation in Belarus, where protests have entered their fourth month following the August 9, 2020 presidential elections. Belarusian protests have been characterized by their direction from outside the country and choreographed nature. The command center of protest activities is officially located in Poland. This fact is in and of itself unprecedented in Europe's contemporary history. Even during Ukraine's Euromaidan, external forces formally refused to act as puppetmasters.

Belarus' genuinely existing socio-economic problems have led to a rift within society that is now divided into two irreconcilable camps: proponents of reforms vs. adherents of the current government. Law enforcement forces which are recruited from among President Lukashenko's supporters, have acted forcefully and occasionally harshly. Still, the number of casualties is far lower than, for example, in protests in France or United States.

Ukraine itself, where Western-backed "democratic forces" have already won, remains the main point of instability in Eastern Europe. The Zelenskiy administration came to power under slogans about the need to end the conflict in eastern Ukraine and rebuild the country. In practice, the new government continued to pursue the policy aimed at maintaining military tension in the region in the interests of its external sponsors and personal enrichment.

For the United States, 2020 turned out to be a watershed year for both domestic and foreign policy. Events of this year were a reflection of Trump Administration's protectionist foreign policy and a national-oriented approach in domestic and economic policy, which ensured an intense clash with the majority of Washington Establishment acting in the interests of global capital.

In addition to the unresolved traditional problems, America's problems were made worse by two crises, COVID-19 spread and BLM movement protests. They ensured America's problems reached a state of critical mass.

One can and should have a critical attitude toward President Trump's actions, but one should not doubt the sincerity of his efforts to turn the slogan Make America Great Again into reality. One should likewise not doubt that his successor will adhere to other values. Whether it's Black Lives Matter or Make Global Moneymen Even Stronger, or Russia Must Be Destroyed, or something even more exotic, it will not change the fact America we've known in the last half century died in 2020. A telling sign of its death throes is the use of "orange revolution" technologies developed against inconvenient political regimes. This demonstrated that currently the United States is ruled not by national elites but by global investors to whom the interests of ordinary Americans are alien.

This puts the terrifying consequences of COVID-19 in a new light. The disease has struck the most vulnerable layers of US society. According to official statistics, United States has had about 20 million cases and over 330,000 deaths. The vast majority are low-income inhabitants of mega-cities. At the same time, the wealthiest Americans have greatly increased their wealth by exploiting the unfolding crisis for their own personal benefit. The level of polarization of US society has assumed frightening proportions. Conservatives against liberals, blacks against whites, LGBT against traditionalists, everything that used to be within the realm of public debate and peaceful protest has devolved into direct, often violent, clashes. One can observe unprecedented levels of aggression and violence from all sides.

In foreign policy, United States continued to undermine the international security system based on international treaties. There are now signs that one of the last legal bastions of international security, the New START treaty, is under attack. US international behavior has prompted criticism from NATO allies. There are growing differences of opinion on political matters with France and economic ones with Germany. The dialogue with Eastern Mediterranean's most powerful military actor Turkey periodically showed a sharp clash of interests.

Against that backdrop, United States spent 2020 continuously increasing its military presence in Eastern Europe and the Black Sea basin. Additional US forces and assets were deployed in direct proximity to Russia's borders. The number of offensive military exercises under US leadership or with US participation has considerably increased.

In the Arctic, the United States is acting as a spoiler, unhappy with the current state of affairs. It aims to extend its control over natural resources in the region, establish permanent presence in other countries' exclusive economic zones (EEZ) through the use of the so-called "freedom of navigation operations" (FONOPs), and continue to encircle Russia with ballistic missile defense (BMD) sites and platforms.

In view of the urgent and evident US preparations to be able to fight and prevail in a war against a nuclear adversary, by defeating the adversary's nuclear arsenal through the combination of precision non-nuclear strikes, Arctic becomes a key region in this military planning. The 2020 sortie by a force of US Navy BMD-capable AEGIS destroyers into the Barents Sea, the first such mission since the end of the Cold War over two decades ago, shows the interest United States has in projecting BMD capabilities into regions north of Russia's coastline, where they might be able to effect boost-phase interceptions of Russian ballistic missiles that would be launched in retaliatory strikes against the United States. US operational planning for the Arctic in all likelihood resembles that for South China Sea, with only a few corrections for climate.

In Latin America, the year of 2020 was marked by the intensification Washington efforts aimed at undermining the political regimes that it considered to be in the opposition to the existing world order.

Venezuela remained one of the main points of the US foreign policy agenda. During the entire year, the government of Nicolas Maduro was experiencing an increasing sanction, political and clandestine pressure. In May, Venezuelan security forces even neutralized a group of US mercenaries that sneaked into the country to stage the coup in the interests of the Washington-controlled opposition and its public leader Juan Guaido. However, despite the recognition of Guaido as the president of Venezuela by the US and its allies, regime-change attempts, and the deep economic crisis, the Maduro government survived.

This case demonstrated that the decisive leadership together having the support of a notable part of the population and working links with alternative global centers of power could allow any country to resist to globalists' attacks. The US leadership itself claims that instead of surrendering, Venezuela turned itself into a foothold of its geopolitical opponents: China, Russia, Iran and even Hezbollah. While this evaluation of the current situation in Venezuela is at least partly a propaganda exaggeration to demonize the 'anti-democratic regime' of Maduro, it highlights parts of the really existing situation.

The turbulence in Bolivia ended in a similar manner, when the right wing government that gained power as a result of the coup in 2019 demonstrated its inability to rule the country and lost power in 2020. The expelled president, Evo Morales, returned to the country and the Movement for Socialism secured their dominant position in Bolivia thanks to the wide-scale support from the indigenous population. Nonetheless, it is unlikely that these developments in Venezuela and Bolivia would allow to reverse the general trend towards the destabilization in South America.

The regional economic and social turbulence is strengthened by the high level of organized crime and the developing global crisis that sharpened the existing contradictions among key global and regional players. This creates conditions for the intensification of existing conflicts. For example, the peace process between the FARC and the federal government is on the brink of the collapse in Colombia. Local sources and media accuse the government and affiliated militias of detentions and killings of leaders of local communities and former FARC members in violation of the existing peace agreement. This violence undermine the fragile peace process and sets conditions for the resumption of the armed struggle by FARC and its supporters. Mexico remains the hub for illegal migration, drug and weapon trafficking just on the border with the United States. Large parts of the country are in the state of chaos and are in fact controlled by violent drug cartels and their mercenaries. Brazil is in the permanent state of political and economic crisis amid the rise of street crime.

These negative tendencies affect almost all states of the region. The deepening global economic crisis and the coronavirus panic add oil to the flame of instability.

Countries of South America are not the only one suffering from the crisis. It also shapes relations between global powers. Outcomes of the ongoing coronavirus outbreak and the global economic crisis contributed to the hardening of the standoff between the United States and China.

Washington and Beijing have insoluble contradictions. The main of them is that China has been slowly but steadily winning the race for the economic and technological dominance simultaneously boosting own military capabilities to defend the victory in the case of a military escalation. The sanction, tariff and diplomatic pressure campaign launched by the White House on China since the very start of the Trump Presidency is a result of the understanding of these contradictions by the Trump administration and its efforts to guarantee the leading US position in the face of the global economic recession. The US posture towards the South China Sea issues, the political situation in Hong Kong, human rights issues in Xinjiang, the unprecedented weapon sales to Taiwan, the support of the militarization of Japan and many other questions is a part of the ongoing standoff. Summing up, Washington has been seeking to isolate China through a network of local military alliances and contain its economic expansion through sanction, propaganda and clandestine operations.

The contradictions between Beijing and Washington regarding North Korea and its nuclear and ballistic missile programs are a part of the same chain of events. Despite the public rhetoric, the United States is not interested in the full settlement of the Korea conflict. Such a scenario that may include the reunion of the North and South will remove the formal justification of the US military buildup. This is why the White House opted to not fulfill its part of the deal with the North once again assuring the North Korean leadership that its decision to develop its nuclear and missile programs and further.

Statements of Chinese diplomats and top official demonstrate that Beijing fully understands the position of Washington. At the same time, China has proven that it is not going to abandon its policies aimed at gaining the position of the main leading power in the post-unipolar world. Therefore, the conflict between the sides will continue escalating in the coming years regardless the administration in the White House and the composition of the Senate and Congress. Joe Biden and forces behind his rigged victory in the presidential election will likely turn back from Trump's national-oriented economic policy and 'normalize' relations with China once again reconsidering Russia as Enemy #1. This will not help to remove the insoluble contradictions with China and reverse the trend towards the confrontation. However, the Biden administration with help from mainstream media will likely succeed in hiding this fact from the public by fueling the time-honored anti-Russian hysteria.

As to Russia itself, it ended the year of 2020 in its ordinary manner for the recent years: successful and relatively successful foreign policy actions amid the complicated economic, social and political situation inside the country. The sanction pressure, coronavirus-related restrictions and the global economic crisis slowed down the Russian economy and contributed to the dissatisfaction of the population with internal economic and social policies of the government. The crisis was also used by external actors that carried out a series of provocations and propaganda campaigns aimed at undermining the stability in the country ahead of the legislative election scheduled for September 2021. The trend on the increase of sanction pressure, including tapering large infrastructure projects like the Nord Stream 2, and expansion of public and clandestine destabilization efforts inside Russia was visible during the entire year and will likely increase in 2021. In the event of success, these efforts will not only reverse Russian foreign policy achievements of the previous years, but could also put in danger the existence of the Russian statehood in the current format.

Among the important foreign policy developments of 2020 underreported by mainstream media is the agreement on the creation of a Russian naval facility on the coast of the Red Sea in Sudan. If this project is fully implemented, this will contribute to the rapid growth of Russian influence in Africa. Russian naval forces will also be able to increase their presence in the Red Sea and in the area between the Gulf of Aden and the Gulf of Oman. Both of these areas are the core of the current maritime energy supply routes. The new base will also serve as a foothold of Russia in the case of a standoff with naval forces of NATO member states that actively use their military infrastructure in Djibouti to project power in the region. It is expected that the United States (regardless of the administration in the White House) will try to prevent the Russian expansion in the region at any cost. For an active foreign policy of Russia, the creation of the naval facility in Sudan surpasses all public and clandestine actions in Libya in recent years. From the point of view of protecting Russian national interests in the Global Oceans, this step is even more important than the creation of the permanent air and naval bases in Syria.

As well as its counterparts in Washington and Beijing, Moscow contributes notable efforts to the modernization of its military capabilities, with special attention to the strategic nuclear forces and hypersonic weapons. The Russians see their ability to inflict unacceptable damage on a potential enemy among the key factors preventing a full-scale military aggression against them from NATO. The United Sates, China and Russia are in fact now involved in the hypersonic weapon race that also includes the development of means and measures to counter a potential strike with hypersonic weapons.

The new war in Nagorno-Karabakh became an important factor shaping the balance of power in the South Caucasus. The Turkish-Azerbaijani bloc achieved a sweeping victory over Armenian forces and only the involvement of the Russian diplomacy the further deployment of the peacekeepers allowed to put an end to the violence and rescue the vestiges of the self-proclaimed Armenian Republic of Artsakh. Russia successfully played a role of mediator and officially established a military presence on the sovereign territory of Azerbaijan for the next 5 years. The new Karabakh war also gave an additional impulse in the Turkish-Azerbaijani economic and military cooperation, while the pro-Western regime in Armenia that expectedly led the Armenian nation to the tragedy is balancing on the brink of collapse.

The Central Asia traditionally remained one of the areas of instability around the world with the permanent threat of militancy and humanitarian crisis. Nonetheless, despite forecasts of some analysis, the year of 2020 did not become the year of the creation of ISIS' Caliphate 2.0 in the region. An important role in preventing this was played by the Taliban that additionally to securing its military victories over the US-led coalition and the US-backed Kabul government, was fiercely fighting ISIS cells appearing in Afghanistan. The Taliban, which controls a large part of Afghanistan, was also legalized on the international scene by direct talks with the United States. The role of the Taliban will grow and further with the reduction of the US military presence.

While some media already branded the year of 2020 as one of the worst in the modern history, there are no indications that the year of 2021 will be any brighter or the global crises and regional instability will magically disappear by themselves. Instead, most likely 2020 was just a prelude for the upcoming global shocks and the acute standoff for markets and resources in the environment of censorship, legalized total surveillance, violations of human rights under 'democratic' and 'social' slogans' and proxy wars.

The instability in Europe will likely be fueled by the increasing cultural-civilizational conflict and the new wave of newcomers that have acute ideological and cultural differences with the European civilization. The influx of newcomers is expected due to demographic factors and the complicated security, social situation in the Middle East and Africa. Europe will likely try to deal with the influx of newcomers by introducing new movement and border restrictions under the brand of fighting coronavirus. Nonetheless, the expected growth of the migration pressure will likely contribute to the negative tendencies that could blow up Europe from inside.

The collapse of the international security system, including key treaties limiting the development and deployment of strategic weapons, indicates that the new detente on the global scene will remain an improbable scenario. Instead, the world will likely move further towards the escalation scenario as at least a part of the current global leadership considers a large war a useful tool to overcome the economic crisis and capture new markets. Russia, with its large territories, rich resources, a relatively low population, seems to be a worthwhile target. At the same time, China will likely exploit the escalating conflict between Moscow and the US-led bloc to even further increase its global positions. In these conditions, many will depend on the new global order and main alliances within it that are appearing from the collapsing unipolar system. The United States has already lost its unconditional dominant role on the international scene, but the so-called multipolar world order has not appeared yet. The format of this new multipolar world will likely have a critical impact on the further developments around the globe and positions of key players involved in the never-ending Big Game.

* * *

DEAR FRIENDS. IF YOU LIKE THIS TYPE OF CONTENT, SUPPORT SOUTHFRONT WORK: PayPal: [email protected] , http://southfront.org/donate/ or via: https://www.patreon.com/southfront , BTC: 3Gbs4rjcVUtQd8p3CiFUCxPLZwRqurezRZ, BCH ABC: qpf2cphc5dkuclkqur7lhj2yuqq9pk3hmukle77vhq, ETH: 0x9f4cda013e354b8fc285bf4b9a60460cee7f7ea9 10,271 14

[Dec 05, 2020] Poland slaps huge fine on Russian gas pipeline that doesn't even cross its borders -- RT Business News

Dec 05, 2020 | www.rt.com

Poland slaps huge fine on Russian gas pipeline that doesn't even cross its borders 7 Oct, 2020 11:06 Get short URL Poland slaps huge fine on Russian gas pipeline that doesn't even cross its borders © Gazprom / Nord Stream 2 45 Follow RT on RT Poland's antitrust watchdog UOKiK said on Wednesday it has imposed a 29 billion-zloty ($7.6 billion) fine on Russia's Gazprom over the Nord Stream 2 gas pipeline, designed to boost gas supplies to the EU.

According to the regulator, the direct pipeline from Russia to Germany impedes competition on European Union energy markets and "violates the interests of consumers." The fine amounts to 10 percent of Gazprom's annual revenues – the maximum allowed penalty. Other companies participating in the construction of Nord Stream 2 have been fined $100 million. UOKiK gave Gazprom and its partners 30 days to terminate financing agreements and "restore" competition.

"The construction of Nord Stream 2 is a clear violation of market regulations," UOKiK head Tomasz Chróstny said in Warsaw on Wednesday, as cited by Bloomberg. Gas prices for consumers must be "the result of fair competition, and, once Nord Stream 2 is operational, it's likely that gas prices will increase and there'll be a risk of interruption to supplies," he said.

ALSO ON RT.COM Full stream ahead! Denmark removes final hurdle for Russian gas pipeline to Europe

Warsaw has long been opposing the expansion of the gas link directly connecting Russia with Germany, Europe's biggest market for the fuel, arguing it would deepen Europe's dependence on Russian energy. Meanwhile, many European nations have stressed that they want to diversify their energy sources, and Nord Stream 2 could be one of the ways to achieve that.

In 2019, Poland's President Andrzej Duda met US President Donald Trump to discuss the possibility of halting the implementation of the Nord Stream 2 project. Warsaw also inked several contracts with American companies to replace Russian supplies. The intention was to make Poland the future center for the re-export of US liquefied natural gas (LNG) in the region, according to US Ambassador to Poland Georgette Mosbacher.

ALSO ON RT.COM Washington & Warsaw make pact to obstruct Russia's Nord Stream 2 gas pipeline

The US administration has repeatedly criticized the Nord Stream 2 project, aiming to derail it in order to boost sales of American LNG to Europe.

The construction of the project's two pipelines, which will extend from the Russian coast to Germany and on to other European countries through the Baltic Sea, is nearing completion. It will have the capacity to deliver 55 billion cubic meters of gas per year, and Berlin has insisted it will help Germany meet its growing energy demand as it phases out coal and nuclear power.

[Nov 28, 2020] Deplorables, or Expendables

Notable quotes:
"... The Expendables: How the Middle Class got Screwed by Globalization ..."
"... The Innovation Illusion ..."
"... The Expendables ..."
"... Napoleon Linarthatos is a writer based in New York. ..."
Nov 28, 2020 | www.theamericanconservative.com

Home / Articles / Economy / Deplorables, Or Expendables? ECONOMY Deplorables, Or Expendables?

Rubin offers some valuable, albeit well-known, critiques of globalized trade, but doesn't go far beyond that. (By momente/Shutterstock)

NOVEMBER 26, 2020

|

12:01 AM

NAPOLEON LINARTHATOS

Back in 2013 a group of Apple employees decided to sue the global behemoth. Every day, after they were clocking out, they were required to go through a corporate screening where their personal belongings were examined. It was a process required and administered by Apple. But Apple did not want to pay its employees for the time it had required them to spend. It could be anywhere from 40 to 80 hours a year that an employee spent going through that process. What made Apple so confident in brazenly nickel-and-diming its geniuses?

Jeff Rubin, author of The Expendables: How the Middle Class got Screwed by Globalization , has an answer to the above question that is easily deduced from the subtitle of his book. The socio-economic arrangements produced by globalization have made labor the most flexible and plentiful resource in the economic process. The pressure on the middle class, and all that falls below it, has been so persistent and powerful, that now " only 37 percent of Americans believe their children will be better off financially than they themselves are. Only 24 percent in Canada or Australia feel the same. And in France, that figure dips to only 9 percent." And "[i]n the mid-1980s it would have taken a typical middle-income family with two children less than seven years of income to save up to buy a home; it now takes more than ten years. At the same time, housing expenditures that accounted for a quarter of most middle-class household incomes in the 1990s now account for a third ."

https://lockerdome.com/lad/13045197114175078?pubid=ld-dfp-ad-13045197114175078-0&pubo=https%3A%2F%2Fwww.theamericanconservative.com&rid=www.nakedcapitalism.com&width=838

The story of globalization is engraved in the " shuttered factories across North America, the boarded-up main streets, the empty union halls." Rubin does admit that there are benefits accrued from globalization, billions have been lifted up out of poverty in what was previously known as the third world, wealth has been created, certain efficiencies have been achieved. The question for someone in the western world is how much more of a price he's willing to pay to keep the whole thing going on, especially as we have entered a phase of diminishing returns for almost all involved.

As Joel Kotkin has written, "[e]ven in Asia, there are signs of social collapse. According to a recent survey by the Korea Institute for Health and Social Affairs, half of all Korean households have experienced some form of family crisis, many involving debt, job loss, or issues relating to child or elder care." And "[i]n "classless" China, a massive class of migrant workers -- over 280 million -- inhabit a netherworld of substandard housing, unsteady work, and miserable environmental conditions, all after leaving their offspring behind in villages. These new serfs vastly outnumber the Westernized, highly educated Chinese whom most Westerners encounter. " "Rather than replicating the middle-class growth of post–World War II America and Europe, notes researcher Nan Chen, 'China appears to have skipped that stage altogether and headed straight for a model of extraordinary productivity but disproportionately distributed wealth like the contemporary United States.'"

Although Rubin concedes to the globalist side higher GDP growth, even that does not seem to be so true for the western world in the last couple decades. Per Nicholas Eberstadt, in "Our Miserable 21st Century," "[b]etween late 2000 and late 2007, per capita GDP growth averaged less than 1.5 percent per annum." "With postwar, pre-21st-century rates for the years 2000–2016, per capita GDP in America would be more than 20 percent higher than it is today."

Stagnation seems to be a more apt characterization of the situation we are in. Fredrik Erixon in his superb The Innovation Illusion , argues that "[p]roductivity growth is going south, and has been doing so for several decades." "Between 1995 and 2009, Europe's labor productivity grew by just 1 percent annually." Noting that "[t]he four factors that have made Western capitalism dull and hidebound are gray capital, corporate managerialism, globalization, and complex regulation."

me title=

https://imasdk.googleapis.com/js/core/bridge3.426.0_en.html#goog_1789765618 Ad ends in 15s

Contrary to popular belief, globalization has functioned as a substitute for innovation and growth. With globalization on the march, the western ruling class could continue to indulge in its most preferred activities, regulation and taxation, in an environment where both of these political addictions appeared sustainable. Non-western elites could perpetuate their authoritarian regimes, garnering growth and legitimacy, from the access to the western markets. Their copy-and-paste method of "innovation" from western firms would fit well with an indigenous business class composed of mostly insiders and ex-regime apparatchiks.

There are plenty of criticisms that can be laid at the feet of globalization. The issue with Rubin's book is that is does not advance very much beyond some timeworn condemnations of it. One gets the sense that the value of this book is merely in its audacity to question the conventional wisdom on the issue at hand. Rubin, who is somewhat sympathetic to Donald Trump, seems to be much closer to someone like Bernie Sanders, especially an earlier version of Sanders that dared to talk about the debilitating effects of immigration on the working class.

Like Sanders, Rubin starts to get blurry as he goes from the condemnation phase to the programmatic offers available. What exactly would be his tariffs policy, how far he would go? What would be the tradeoffs of this policy? Where we could demarcate a reasonable fair environment for the worker and industry and where we would start to create another type of a stagnation trap for the whole economy? All these would be important questions for Rubin to grapple with and would give to his criticisms more gravitas.

It would have also been of value if he had dealt more deeply with the policies of the Trump administration. On the one hand, the Trump administration cracked down on illegal and legal immigration. It also started to use tariffs and other trade measures as a way to boost industry and employment. On the other hand, it reduced personal and corporate taxes and it deregulated to the utmost degree possible. It was a kind of 'walled' laisser-faire that seemed to work until Covid-19 hit. Real household income in the U.S. increased $4,379 in 2019 over 2018. It was "more income growth in one year than in the 8 years of Obama-Biden." And during Trump's time, the lowest paid workers started not to just be making gains, but making gains faster than the wealthy. "Low-wage workers are getting bigger raises than bosses" ran a CBS News headline .

Rubin seems to view tax cuts and deregulation as another giveaway to large corporations. But these large corporations are just fine with high taxation, since they have a choice as to when and where they get taxed. Regulation is also more of a tool than a burden for them. It's a very expedient means for eliminating competitors and competition, a useful barrier to entry for any upstart innovator that would upend the industry they are in. Besides, if high taxation and regulation were a kind of antidote to globalization, then France would be in a much better shape than it appears to be. But France seems to be doing worse than anybody else. In the aforementioned poll about if their "children will be better off financially than they themselves are" France was at the bottom in the group of countries that Rubin cited. The recent events with the yellow-vests movement indicate a very deep dissatisfaction and pessimism of its middle and working class.

Moreover, there does not seem to be much hostility or even much contention between government bureaucracies and the upper echelons of the corporate world. Something that Rubin's politics and economics would necessitate. And cultural and political like-mindedness between government bureaucracies and the managerial class of large corporations is not just limited to the mutual embrace of woke politics. It seems that there is a cross pollination of a much broader set of ideas and habits between bureaucrats and the managerial class. For instance, Erixon notes that "[c]orporate managers shy away from uncertainty but turn companies into bureaucratic entities free from entrepreneurial habits. They strive to make capitalism predictable." Striving for predictability is a very bureaucratic state of mind.

In Rubin's book, missed trends like that make his perspective to feel a bit dated. There is still valuable information in The Expendables . Rubin does know a lot about international trade deals. For instance, a point that is often ignored in the press about international trade agreements is that "[i]f you're designated a "developing" country, you get to protect your own industries with tariffs that are a multiple of those that developed economies are allowed to use to protect their workers." A rule that China exploits to the utmost.

Meanwhile, Apple, after its apparent lawsuit loss on the case with its employees in California, now seems committed to another fight with the expendables of another locale. The Washington Post reported that "Apple lobbyists are trying to weaken a bill aimed at preventing forced labor in China, according to two congressional staffers familiar with the matter, highlighting the clash between its business imperatives and its official stance on human rights." "The bill aims to end the use of forced Uighur labor in the Xinjiang region of China ." The war against the expendables never ends.

Napoleon Linarthatos is a writer based in New York.

[Nov 11, 2020] With or Without - Kunstler

Nov 11, 2020 | kunstler.com

Oil production, which stood just under 13 million barrels-a-day at its peak November, 2019, is down over 2 million barrels a day now, and will be sinking to about 7 million barrels-a-day in 2021, which is far short of what we use. Shale oil is a bust. It costs too much to get out of the ground and the companies that put their mojo into shale can't make any money at it, and can't pay off their loans, and won't get new loans to continue operations. So, the whole industry is going to shit. Oil is what has supported the US economy for a hundred years, and it's over. Our attempt to compensate for that quandary by borrowing more and more money at every level is also drawing to a close. It will break the bond markets, the dollar, and the banks. This is the essence of the long emergency and we're entering the heart of the storm now.

[Nov 07, 2020] Tramp role in Syria and Iraq

Nov 07, 2020 | www.moonofalabama.org

Jackrabbit , Nov 7 2020 15:08 utc | 56

RSH's warning that Trump could still start a war should be taken very seriously. Trump has vowed that he will never allow Iran to have a nuclear weapon. Will he leave office without ENSURING that they cannot?

Israel Warns Of Coming War With Iran If Biden Wins As Trump Calls

I don't think for a minute think that Zionist Biden will do anything to upset Israel. But the election of Biden is a convenient excuse for Trump to start a war (probably based on a false flag of some sort) that Biden (or Kamala-Hillary) will "inherit".

!!


Don Bacon , Nov 7 2020 15:14 utc | 57

@ pnyx #43
. . .on Biden. Just think of the warmongering role he played for the Iraq war. The Neocons would have an easier time with Biden than with Tronald
Yes. Biden is a Clintonite, Trump was anti-Clinton.
The US war in Iraq - Operation Iraqi Freedom - with its death, destruction and displacement has been rightly called the worst US foreign policy move ever.
The Clintons started it, and then promoted it with Biden's assistance as Chair of the Senate Foreign Relations Committee.
President Clinton signed the Iraq Liberation Act into law on October 31, 1998.
On December 16, 1998, President Bill Clinton announces he has ordered air strikes against Iraq because it refused to cooperate with United Nations (U.N.) weapons inspectors.
David , Nov 7 2020 15:35 utc | 66

Trump's foreign policies were remarkably different? How? He assassinated an Iranian general, which nearly had the US enter into a hot war with Iran, bombed Syria twice, put additional sanctions on Iran, Venezuela, Russia and the DPRK. Trump's State Department has successfully enacted regime change in Zimbabwe, Sudan, El Salvador, Chile, Honduras, Bolivia (Mike Pompeo congratulating Luis Arce on his win -- very suspicious), and is trying regime change in Hong Kong, Belarus, Venezuela, Nicaragua, Iran, Eritrea, and Zimbabwe again, and as of late, Nigeria.

You could argue that Trump wants Iran to be somewhat stronger so he can sell more weapons to his MIC buddies and profit that way, therefore he pulled out of the Iran nuclear deal, and the weapons import/export sanctions on Iran expired. But that's a different and more brash method of managing Empire. It's different from Biden's "strategic de-escalation" policy with Iran via the Iran nuclear deal, but not that one that necessarily yields better results for Iran in the long term.

dave , Nov 7 2020 15:35 utc | 67

Calm down folks, the elected officials in the US have been puppets of the elite for the entire history of the country.
The problem we're facing is within the elite community and far above any government's control.

They didn't legalize drone striking "terrorists" any where on the globe by accident.
This means the elite are terrified of the fact that the internet and Trump both have exposed them for the morally bankrupt, greedy, mass murdering psychopaths they truly are.

The accidental presidency of Trump made them realize that their useful idiots(elected officials) where more idiots than useful and that they had to use the state sponsored monopolies in the press as well as their privately controlled publicly funded covert community to steer the narrative away from actual reality into their alternative commoditized version of reality.

Trump was never trying to defend America from the elite for the common man. He was trying to exploit the elite who had rejected him and his father for decades as well as cash in on their predicament in order to pay off his debts and start his own reality TV network.

I agree Trump was useful and informative but in the end he, like us is just along for the ride.

Don't do anything rash and don't for one second think a regime change in America is a rare occurrence. Remember the Kennedy's ?

The only way to win is to not become one of the elite's useful idiots by lashing out against another citizen. Poor and middle class only get the illusion they help decide policy.
The policy is decided and auctioned off within the billionaire funded think tanks and sent to the useful idiots in DC to be rubber stamped in order to trick you into thinking the legislative branch is legitimate. These people could f*ck up a two car parade and prove it over and over again.

Stay sane folks, the motives haven't changed in centuries and the elite are far more scared of us than they are the other elite's because they all know they're all cowards.

David , Nov 7 2020 15:37 utc | 69

In addition, considering Trump was supposedly a Russian puppet, Congress under his admin passed a bill which allowed the US to arm Ukraine against Russia even more.

GeorgeV , Nov 7 2020 15:39 utc | 70

Wonderful and thought provoking analysis of current political affairs b. However I would like to add that Biden and Trump are the products of political trends that have deep roots in modern US and world political affairs that have been ongoing for some 100 years or more. Biden and Trump did not occur in a vacuum. Both are products of the two world wars that were fought in the last century. More recently, the US since 1940 and continuing to the present day, has been actively preparing or fighting a major war somewhere on this planet. This development has in turn created a vast military and civilian bureaucracy that constantly needs to be fed a diet of real or imagined threats in order to survive.

[Nov 06, 2020] Did the Iraq War Cause the Great Recession?'

Highly recommended!
Iran war might be too much for the US economy
Apr 07, 2013 | marknesop.wordpress.com

Moscow Exile ,

April 7, 2013 at 12:46 am
Western hypocrisy revealed 10 years after the event in today's Independent: "Tony Blair and Iraq: The damning evidence" . And they go on and on about those wicked, evil Russians and their tyrannical leader causing death and destruction Syria by their "support" of the Assad government whilst the West arms the "freedom fighters" there.

[Nov 06, 2020] USA Hegemony and Decline

Mar 01, 2010 | www.eurasia-rivista.org

Issue 3/2010 of the review of Geopolitics "Eurasia", entitled USA: HEGEMONY AND DECLINE , has been released. This 288-page volume contains 24 articles about the USA, a still-hegemonic power in decline, on the scene of the transition from unipolarism to the new multipolarist order. Here follows a list and a short synthesis of each article.

Tiberio Graziani, USA, Turkey and the crisis of the western system

After history put an end to the unipolar moment, the western system led by USA seems to have entered an irreversible crisis. The economic and financial downfall and the loss of a secure pillar of the western geopolitical scene like Turkey mark the end of the US driving force. The USA, today, have to take an epochal decision: either shelving the project of world supremacy, which means sharing decision-making regarding international politics and economics with other global actors, or insist on their supremacy plan and even risk their survival as nation. One or the other will be motivated by the relationships that will be built, on the middle and long term, between the lobbies which are conditioning American foreign policy and by the evolution of the multipolarist process.

T. Graziani is managing editor of "Eurasia".

Fabio Falchi, The mirror of knowledge. Giorgio Colli and Eurasianism

This essay aims to show, also through a short exposition of Giorgio Colli's theoretical philosophy, not only that he has the merit, thanks to his talent of "pondering philologist", to have caught the deep relation between mysticism and logic in the "Greek knowledge", but above all that the way he is interpreting the thought of the "pre-Socratic" – an interpretation characterized by several and meaningful references to the Indian philosophy – is extremely important for the Eurasianism, if it's true that "Eurasia" is in the first place a "spiritual concept". In this perspective, it's not important that Colli cannot be defined an "Eurasiatist" or the fact that probably he himself had refused to define himself this way. What matters is the path pointed out by his philosophical speech, so that it's possible to leave behind obsolete and "incapacitating" dichotomies.

F. Falchi is a contributor to "Eurasia".

Phil Kelly, Geopolitics of the United States

The scope of this essay is to identify the different and typical elements of the traditional US geopolitics. In its path is reflected on the most relevant spatial characteristics in order to delineate the traditional aspects of North American geopolitics, rather than focusing on current international affairs; in spite of this, it comes to conclusion with some observations about the present American and global geopolitics.

P. Kelly is teaching at the University of Emporia (Texas, USA) and member of the Scientific Committee of "Eurasia".

Daniele Scalea, How an "empire" has risen (and how it will crumble soon)

Today's United States, in origin, were an united group of colonies of a small underdeveloped island; nevertheless, in a few centuries, they have become the first and the only world superpower. In this essay are retraced the geopolitical and strategic reasons that led to the rise of the original thirteen colonies, to their independence and expansion in North America; the rise of the USA and their informal empire are analyzed and how the passage from isolationism to hegemonism, that was not ineluctable, is leading them to lose it.

D. Scalea is editor of "Eurasia".

F. William Engdahl, The USA's geopolitical position today

At the end of the first decade of the 21th century it's time to locate the United States in the political, economic and above all geopolitical world context. It's clear to every impartial observer that the emerging giant, proclaimed in 1941 by Henry Luce, "the Time-Life" publisher, as the dawn of the "American Century", is today, in 2010, a nation and a power whose foundations themselves crumble. In this short essay are analyzed the particular nature of this disintegration and its implications.

F.W. Engdahl is associate director of "Global Research" and member of the Scientific Committee of "Eurasia".

Fabio Mini, Projects and debts

The Americans are no more able to recognize their deficiencies and vulnerabilities: they act as if they still controlled the entire world, when in reality they have lost great part of their autonomy relating to multinationals which control the economy and to national or transnational bodies they are indebted to. To the debt financing must be added the political debts, acquired to nations which are not secure thanks to the US politics of force: Iraq, Afghanistan, Israel, Palestine, Somalia, Rwanda and even Europe. This essay explains how power is the destroying drug of the USA, and how the "New American Century" has come to an end before coming to life.

F. Mini is a retired Lieutenant General of the Italian Army, he led the KFOR and the NATO's Command Allied Forces Southern Europe".

Eleonora Peruccacci, The evolution of USA-Russia relationships after the downfall of the bipolar system

The idea – to which Keohane already drew attention – that power is now based on the influence of ideas, on using cleverly skills like persuasion and cooptation, on the ability to manipulate mass communication as well, rather than on the traditional attributes of military force and wealth, is useful for the analysis of this essay, in which it is tried to comprehend how, after the end of the bipolar system, the relationships between the two ex world superpowers, USA and Russia, developed and changed, going through the stages of 4 treaties on nuclear disarmament.

E. Peruccacci, MA in International Relations, contributes to "Eurasia".

Spartaco Alfredo Puttini, China, the sea and the United States: the Sino-American naval antagonism

The development of a modern military fleet in the People's Republic of China has given rise to serious concerns in Washington and adds an element of tension to their relations. On the horizon beckons the danger of a naval antagonism between the two giants that could represent one of the more serious and meaningful elements for the international order of the 21th century. In this essay is talked about the Chinese willingness to develop marine force, about the stages of the fleet modernization, about the importance that Sino-American naval antagonism can assume in the near future.

S.A. Puttini, MA in History.

Chiara Felli, A miracle for Obama's "new beginning"

Israeli-American relations seem to be at a crossroads again: new negotiations in order to achieve the much desired peace in Near East hold the balance of power. In Washington, the atmosphere is tense, in contemplation of twelve months of negotiations the danger of a possible immediate bankruptcy outcome is reduced but concerns about the current state of the international comparison raise. Will the USA be finally able to play on their strong position as influential mediators? Does Israeli regional isolation risk worsening following the blind pursuit of nationalistic strategies? Are we really close to the "great compromise" and to the calm after a decade-long storm?

C. Felli, MA in International relations, contributes to "Eurasia".

Francesco Brunello Zanitti, American Neoconservatism and Israeli Neo-revisionism: a comparison

The G.W Bush Jr. Presidency has been strongly influenced by a political movement, commonly known as Neoconservatism, which started at the beginning of the '60s and was already significant during the Ronald Reagan Presidency. The neoconservatives have inspired in particular the recent North American politics in the Near East. The last decade, concerning Israeli politics, has been characterized by the strengthening of the right-wing party, the Likud, which, since its origins, has been not prone to any form of compromise with the Arab world. This essay offers a comparison between American Neoconservatism and Israeli Neo-revisionism, identifying various similarities.

F.Brunello Zanitti, MA in History of society and contemporary culture.

Julien Mercille, The fight against drugs in Afghanistan: a critical interpretation

This article offers a critical interpretation of the "fight against drugs" waged by the United States in Afghanistan since 2001, in contrast to the conventional view proposed by some of the most representative authors. While the conventional interpretation takes for granted that the US are leading a fight in Afghanistan against drugs in order to reduce their consumption in the West and to weaken the Taliban, who are closely linked to narcotics traffic, in this article it's argued that in fact there are few signs from Washington of a real and concrete struggle against drugs . The rhetoric of the fight against drugs is largely motivated by the need to justify military intervention in Afghanistan and the fight against insurgent groups opposing to American hegemony in the region, rather than by a genuine concern about drugs themselves.

J. Mercille is Professor at the National University of Ireland.

Matías Magnasco, Geopolitics of the United States in the Southern Cone

The South American region is nowadays a geostrategic scenario of great importance and will grow in importance in the future because of the race for raw materials (oil, gas and drinking-water) and the rise of Brazil as a regional and world power. South America must look with concern to US withdrawal from those difficult regions, such as Iraq and Afghanistan, and from those where Russia and China have virtually overcome their influence, because this reopens the possibility of looking back at their "backyard" and their "mare nostrum" ( the Caribbean Sea).

M. Magnasco is Director of the Argentine Centre of International Studies.

Jean-Claude Paye, The euro crisis and the transatlantic market

The offensive against the euro, implemented by the financial markets during the months of April and May 2010, is not simply an episode in the economic war between the two continents. It is indeed the symptom of a geopolitical change.

The American initiative aimed to weaken the EU was led with the participation of European institutions themselves, that sacrificed euro in order to recover the Greek debt. This convergence confirms the choice of both protagonists which was already made to integrate the EU into a great future transatlantic market.

J.-C. Paye is a sociologist and essayist.

Ivan Marino, "Nabucco" versus "South Stream"

The US-backed Nabucco pipeline is a choice which sprang from political and economic reasons, and, in substance, aims to avoid the Russian territory and consequently to contrast the interests of Moscow; but the choice of "Nabucco" may be dangerous for the same energy safety of European Union.

Italy's choice of supporting the "South Stream" has a strategic and objective value. The essay evaluates the strategic importance of this option on the long-term in the dialogue between EU and Russia.

I. Marino coordinates the Observatory on the Constitutional Political System of the Russian Federation.

Fabrizio Di Ernesto, US and NATO bases in Europe

More than 60 years after the end of World War II, Europe struggles to regain its political and military autonomy. This is mainly due to the forced occupation set on by USA through NATO, the military alliance started in 1949 and that with the passing of time has become the real armed wing of the Pentagon. During the years of the Cold War Washington justified this presence with the need of defending its interests against possible attacks of the Red Army and of the Warsaw Pact. Now that this pretext is becoming ever more anachronistic, the White House continues to support the need for this forced militarization hiding behind the scarecrow represented by Islamic terrorism. This presence also leads to various problems, summarized in this essay.

F. Di Ernesto is a journalist and essayist.

Stefano Vernole, The strange story of the "International Money Orders"

According to some sources, during the first months of 1992 the U.S. government developed a sophisticated financial-economics operation, using US taxpayers' funds, for secret aims. The money, nominally allocated for a "humanitarian" operation in Bosnia and Herzegovina, would have been mainly used to finance Bill Clinton's election campaign and to pay debts acquired by the Saudi financier Adnan Kashoggi to the procurement office of the JNA (Yugoslav People's Army), but later it was put back in circulation to be used in the most various financial-economics operations.

S. Vernole is editor of "Eurasia".

Tomislav Sunic, In Yaweh we trust: the "divine" US foreign policy

The North American aspiration to "guarantee the democracy in the world " is above all originated by the biblical message. Whatever many European critics of US may say, US military interventions have never had as their sole purpose economic imperialism, rather the desire to spread the U.S. democracy all over the world. Anyone who dares to defy the US military, incurs the risk of being declared out of humankind, or at least of being branded as terrorist. Once someone is declared a terrorist or out of the human race, it's possible to dispose of a person or of a nation at one's pleasure. The ideological element in the history of US foreign policy is described in this essay, a revised version of a chapter, named after it, of the book Homo Americanus: Child of the Postmodern Age (2007).

T. Sunic was Croatian diplomat and University Professor in the USA.

Kees van der Pijl, Transatlantic ideology and neoliberal capitalism

In this essay we deal with three issues: the first concerns the origins of western ideology, an ideology marked by possessive individualism, free enterprise and intensive nature exploitation and that, with zeal of protestant missionary, claims universal validity for these principles. After that, we observe how neo-liberalism has emerged as the most radical western ideology and allowed capitalism to become a machine scam into which the world economy of the last thirty years has been drawn and that just now has suffered a setback.

Finally, some lines of development are drawn, through which Ukraine, and perhaps Russia, Belarus, Kazakhstan and others, could break with the present strategy of slavish adaptation to the neoliberal economy, which has damaged them so much, and stop to absorb the western ideology so different from their traditions, to implement a common strategy that combines their unique experience with the form of a multinational State and with elements of planned economy, whose strengths and weaknesses they know better than anybody else.

K. van der Pijl is Professor at the University of Sussex.

Paolo Bargiacchi, Is international law really law? A critique to John Bolton's negationism

In the US the (minority) idea that the international law does not exist and the (most common) one that customary international rules only bind States that accept them find a common root in the improper comparison between International context (and International law) and internal context (Internal law). This comparison, in turn, is direct consequence of the Austinian positivism, that, not catching the autonomy of the political and juridical international context compared to the domestic one, mistakenly uses logics, methodologies and categories of internal law to analyze the international law. An example of this modus procedendi comes from J. Bolton, who wonders if "Is There Really "Law" in International Affairs?" and concludes that "International law is not law". In this essay a general-theoretical and empirical critique of his thesis is developed.

P. Bargiacchi is Professor at the University Kore of Enna.

Alessandro Lattanzio, US nuclear forces

U.S. strategic forces, that since 1990 are no longer the backbone of US Army, a role now appertaining to the force projection (aircraft carrier, airborne troops and marine divisions, tactical air force) have undergone a significant downsizing in quality and above all quantities. But this reduction has been sold successfully at the table of international negotiations about nuclear disarmament. With the recent ratification of the START II Treaty, US strategic forces are kept on 500 ICBMs single-warheads, 14 SSBNs each carrying 24 SLBMs, and finally 96 strategic bombers. The budget deficit, the cost of Iraq and Afghanistan wars, the priorities for other programs, including the so-called theatre ballistic missile (THAAD), and the US financial-economic crisis will probably stop the last modernization programs of the U.S. strategic arsenal.

A. Lattanzio is editor of "Eurasia".

Claudio Mutti, Pietro Nenni against the Atlantic Pact

Interjecting into the parliamentary debate in accordance to the Italian democracy rules for enter the NATO, the secretary of the PSI (Italian Socialist Party) pointed put how the inclusion of Italy among the countries bordering the Atlantic was a violation of the basic elements of geography and history. He also contested the political justifications of this accession: partnering with the American superpower, Italy, which "compared to the US is like San Marino compared to Europe", instead of securing her independence would have further reduced her sovereignty, already harshly limited by the international treaties imposed by the winners of the Second World War.

C. Mutti is editor of "Eurasia".

Erika Morucci, 1991-2003: rehearsal of a superpower

In the twenty years since the first Gulf War to the present, different administrations came one after the other at the White House, giving different directions to American foreign policy. Apart from that, these were crucial years of a new historical course, that after the Cold War has opened up a reality whose facets were hidden for a long time and was fed by the iron curtain that divided the world. For the US widened its perspectives: they behaved as if they knew they can reach for primacy, pushing it to the manic search for global power. The multipolarity on the international scene has strongly emerged with the presence of other actors, including Russian, Chinese, European, and so the perspective is now to defend their lead and not lead the world.

E. Morucci, MA in International Relations.

Antonio Grego, Interview with Robert Pelo

Roberto Pelo is the director of the Moscow office of Italian Institute for Foreign Trade (ICE) and coordinator of the ICE office-network in Russia, Armenia, Belarus and Turkmenistan.

Antonio Grego, Interview with Livio Filippo Colasanto

Livio Filippo Colasanto is the first Director-General of RusEnergosbyt-Enel.

[Nov 02, 2020] Variant Perception Macro Chief Discusses The Reinflation Trade And Looming 'Commodity Supercycle' -

Nov 02, 2020 | www.zerohedge.com

Variant Perception Macro Chief Discusses The Reinflation Trade And Looming 'Commodity Supercycle' by Tyler Durden Sun, 11/01/2020 - 14:30 Twitter Facebook Reddit Email Print

For weeks now, we've been been pointing to expectations that a Joe Biden victory, accompanied by a Democratic sweep of the Senate, could accelerate a "reflation" trade , as the world witnesses the shift toward fiscal policy in the form of massive fiscal stimulus supplant QE as the preferred vehicle for the central bank carrying out its monetary policy objectives.

This fusion between fiscal and monetary policy is an inevitable consequence of the Fed's shouldering the burden of promoting economic "equality", or at least combating "inequality" - a laughably ironic objective for the Fed, which has done more than any other single entity in blowing the equity asset bubble that's driven economic inequality in the US back to levels last seen during the Gilded Age.

Well, after having MMT pioneer Stephanie Kelton, best known as the go-to economic policy advisor for AOC and Bernie Sanders, on the show, MacroVoices this week followed up with an individual who has examined the potential blowback caused by this historic policy shift.

This week, MV host Erik Townsend interviewed Tian Yang, the head of macro at Variant Perception, an established research shop that frequently produces opinion columns in the financial press. During this week's interview, Yang outlines the findings from a slide deck that was provided free by MacroVoices to all members (membership is free)

After the historic drubbing endured by crude in the US earlier this year, Yang is among a group of strategists who have been warning about the reflationary blowback that the Fed is risking now that it has explicitly decided to allow inflation to run hot.

Yang outlines some of these concepts in the interview, which we have excerpted below:

* * *

Erik: And where do you see the inflation story coming into this?

Central Banks Must 'Play Their Part'

Tian : So I think we need to think about inflation both from a structural point of view and a cyclical point of view. So the thing to say is cyclically, when unemployment rates are still quite high, when there's still capacity in the economy, you don't expect to see kind of immediate pickup in core inflation. Headline could tick up a little bit when commodity prices industrial commodity, so forth, initiate pickup, so on the cyclical front, there's not necessarily as much inflation pressure right now.

https://lockerdome.com/lad/13084989113709670?pubid=ld-dfp-ad-13084989113709670-0&pubo=https%3A%2F%2Fwww.zerohedge.com&rid=www.zerohedge.com&width=890

But structurally, we've seen some truly seismic shifts in the kind of policy landscape and the structure of the economy actually just this year. When you see governments and developed market governments around the world start to run giant fiscal deficits funded by central banks, that's obviously a very dramatic shift away from independent central banking and the focus on inflation.

This is very much going back to the old Keynesian kind of playbook of essentially, fiscal led growth and at the same time, we've seen the US Federal Reserve do a number of quite dramatic shifts this year. Firstly, moving to average inflation targeting is obviously quite a big mission that they don't really know where the NAIRU (Non-accelerating inflation rate of unemployment) is, they don't really care what the NAIRU is, they are just going to run the economy and let it run hot.

And such a policy is also pretty timing consistent because it's not well defined, what's the period over which we're targeting average inflation. The incentive will always be as inflation picks up for policymakers to just run their heart because it's easier to kind of keep the party going.

So, both fiscal and monetary policy are starting to become a lot more expansionary and loose. And the historical precedents for this kind of price action would probably go back to World War 2 with a fair-trade record, that essentially meant fiscal deficits would be very large. But there was a moral imperative for the central banks to finance the government deficits, and that ended up creating a lot of inflation.

And this time around, the moral imperative is that the central bank's got to play their part with the pandemic. And going into the future, the central bank probably has to play their part was addressing inequality, climate change, or any of these big issues that essentially justifies why central banks should finance government deficits.

So that's quite dramatic policy shift, the other thing that's happened is that the Fed is now proactively kind of destroying the quality of its balance sheet. So again, as extreme, we could go back to when we were on the gold standard, if you look at central bank balance sheet, most currencies backed by gold, right.

So $1 is an asset for us but for the central bank $1 is a liability so previously they backed it on the asset side of their balance sheet with gold. Obviously, over time we abandoned the gold standard, so forth, the quality of assets on the central bank's balance sheet is getting worse and worse. And obviously, this year, the fact that they started buying corporate bonds, the fact that, they're willing to take on fallen angels, hide your debt and take on more credit risk is just another reflection of just the weakening central bank balance sheets.

It's not necessarily a immediate concern, but it lays the foundations for people to kind of increase inflation expectations and to really worry about what the value of the dollar is. And so when you have these kind of structural shifts in policy coming together in a couple ways to make a kind of deterioration in central bank balance sheets and government balance sheets. That's typically been the recipe for inflation expectations to become unhinged.

From A Lake To An Ocean

Erik: Tian, I love the picture on page five where you're talking about lake and ocean regimes of inflation. Needless to say, you're not talking about a necessarily a really calm easy day out on the ocean, but maybe a stormy day.

Now I want to go back to what you said because it seems to me that the game is very different this time around in that you drew an analogy to, okay, after World War 2 we move to a whole lot of deficit spending, which should be inflationary. The thing is, after World War 2 we were still, as you said, on a gold standard. And the big inflation didn't really get unleashed until we came after the gold standard with the breakdown of Bretton Woods in 1971.

Now, this time around, we're going to have I think the same if not a greater shift to a public policy emphasis on major spending programs with a lot of deficit spending. But we're already in a pure fiat environment, so nobody's pretending there's a constraint on how much money you can print in order to finance government spending.

I would think that means that the inflation is certainly not delayed by 20 years the way it was after World War 2, but is it immediate? Or is there still a lag of several years before that inflation really hits the system in terms of consumer price inflation after those pre generated factors like deficit spending kick in? How long does it take before we really see the inflation start to get away?

Tian: Yeah, I mean, that's a great question. I guess it's a little bit like when they think about how people go bankrupt, right, it happens very slowly and or all at once. I think this is kind of the analogy we're kind of drawing here because we're talking about a shift in inflation expectations, which is obviously predicated on just the general belief in the system.

These things are obviously inherently fairly hard to predict but what we can do is kind of position for when it already makes sense. So when markets are already not pricing in much inflation risk premiums and also as the economy cyclically picks up, those things are going to help just drive a more normal reflation cycle.

So right now, if you position for that, then when the tail comes through and potentially more inflation picks up later, you're kind of on the right side of it. In terms of the mechanism it could, as you say, potentially happen quickly or you could take a few years. I mean, if we're in this kind of 1960 style environment then what you need to do is go along for the excess capacity in the economy to be used up first, and then have inflation pick up.

And then you will need that to feed into shifting hecs inflation expectations higher, and then you should move into more of a wage price spiral. Then when people think inflation is going higher, they're going to demand higher wages and that's what really kicks off the more uncontrolled inflation right now.

Arguably right now for a lot of people, you know say live in the United States, the actual cost of living inflation is actually already been a lot higher than what CPI would be saying if you look at shadow stats, inflation and these kind of different projections. They would say inflation has be running a 4-5% annually for the past 20 years, if you get rid of a lot of the hedonic adjustments and so forth. And arguably, it's actually this mismatch between what official CPI says and what people feel is their true cost of living. That gap is also fueling a lot of the populism and the kind of general discontent that we have been seeing in society and, by the way, this isn't a new, it's just quite rare that we see it in developed markets.

If you take emerging market economies like Argentina or these places that have been known to have huge inflation's, this is typically what happens. The population doesn't believe in the CPI, they think their real cost of living is going up a lot higher, so when it comes to wage negotiations, they demand CPI plus 5-10%.

No more '60/40'?

Erik: Tian, let's talk about how this translates for portfolios, it sounds like we're very much in agreement that inflation is coming, but it's kind of hard to know exactly when and how it shows up. Probably when it does show up, it shows up in a big way, you don't want to be caught by surprise, but you don't know that it's happening right away. So what do you do in terms of your portfolio in order to be ready for that?

NEVER MISS THE NEWS THAT MATTERS MOST

ZEROHEDGE DIRECTLY TO YOUR INBOX

Receive a daily recap featuring a curated list of must-read stories.

Tian: Yeah, well that's kind of the million-dollar question at the moment isn't it? So the first thing to know is, I think I mentioned briefly at the start, clearly more traditional portfolio construction, the kind of 60/40 or the heavy allocation to fixed income, it's naturally kind of getting to the end of the road. I think most people recognize that as yields bump up against the zero bound, the ability for your fixed income portion to really offer a diversified impact or a hedge to equity risk is going to diminish.

So, going forward, what's very interesting about commodities is that one of the unique properties of commodities is typically when commodity volatility is high commodity prices actually tend to go up a lot. And this is quite different to equities because normally for equities only when equities are crashing that volatility picks up, whereas for commodities, the volatility tends to be to the upside. Now, the thing to say about commodities is that one of the big reasons why it tends to be very high volatility is that there tends to be quite prolonged periods of demand and supply mismatches for the industry. Just because typically supply responses can take a long time if you're going to build a new mine, or drill a new well, or build a new plant, it could sometimes you could take up to three to five years. Obviously, if it's like the super-efficient shell well, maybe it takes one year to get to get it going.

But for a lot of commodity sites if you're going to build a refinery or build a chemical plant or things like that, it's going to be three to five years. And because of that very delay supply response it is where you end up with this prolonged period of demand supply mismatches. And so that that's kind of what we're starting to see right now, where for a lot of commodity sectors are more capital scarce.

This being a prolonged period of a lack of investment, a lack of capex, and so these are sectors that we would expect to have quite explosive upside as the as the economy recovers and as demand comes back. So I think in the slide deck there's a section on page 15 where I mentioned the capital cycle. So, I think this is a very interesting framework to actually think about when we're trying to decide where to invest in.

So for the capital cycle I think that the best thing that I've read that's really inspired us on this was some pieces written by Marathon Asset Management. And it was basically collated together in a book called "Capital Returns: Investing Through the Capital Cycle", and the book was put together by Edward Chancellor. And so the basic idea is that, if there's a lot of money flowing to a particular industry or sector, then that inflow of money will cause a lot more competition within that industry which drives down returns and then as returns fall very low then nobody in the industry can make a profit.

Listen to the rest of the interview below:

[Nov 02, 2020] Oil investments are drying up as crude demand falters

In reality only passenger feet and commercial aviation consumption are highly elastic. Other pasts oil consumption, including consumption by military and commercial tracking are much less elastic.
And Amazon consumption partially compesates for drop is passenger car traffic :-)
In general oil consumption is a proxy of economic activity. As economic activity is resorting the same will happen with oil consumption.
Nov 02, 2020 | www.rt.com

Thirty-five percent: this is the size of the spending cuts oil and gas companies are likely to have made this year in response to the effects that the coronavirus pandemic is having on demand, according to the International Energy Agency. And this is just the spending slump in upstream oil and gas. This is just part of a wider trend of investment cuts in the energy industry, according to the IEA, which earlier this month published an update of its World Energy Investment report, first released in late spring.

At the time, some thought we were seeing the worst of the pandemic. They were, apparently, wrong.

ALSO ON RT.COM Oil prices hit 4-month low over fear new coronavirus lockdowns will crush demand

Demand for oil has certainly improved in some parts of the world, notably in Asia, where governments have been more successful in containing the spread of the coronavirus than their counterparts in Europe and North and South America. But even in China – the world's oil demand recovery driver –the rebound is slowing down. After all, even though its domestic demand may be improving, if regional and global demand is stalling, this will have a negative effect on China as well.

READ MORE OPEC in trouble as oil outlook worsens OPEC in trouble as oil outlook worsens

According to the IEA, the impact that the pandemic is having on investments in the oil industry will continue to be felt for years to come. This is hardly surprising: the agency noted a 45-percent cut in investments by US shale oil companies this year, combined with a 50-percent jump in financing costs .

The number of active drilling rigs in the US may be rising, suggesting the beginning of a recovery, but the total was still down 564 rigs on the year as of last week, so that recovery will take a while.

Meanwhile, fuel stock updates from the Energy Information Administration are offering mixed signals: last week, for instance, saw a major drawdown in distillate fuel stocks, which should be good news suggesting demand for distillates is improving. The problem is that it is likely that this improvement is a temporary occurrence rather than a trend. Air travel is still greatly constrained, and the chances of any change in the status quo are slim.

Uncertainty: this is the keyword for not just the oil industry but for all others affected by the pandemic to such a grave extent as to force changes in business models. Europe's Big Oil majors are doing just that with their push into renewables and plan to greatly reduce the contribution of their core business to overall earnings. USmajors are sticking with oil, and they may well have a good reason to do it.

There has been a lot of government and activist talk about a green recovery from the pandemic crisis. But the pandemic is still raging, and not only is it not abating, but it is gathering strength. This would mean more money needed for stimulus measures. This, in turn, would mean less money to spend on renewables, because despite the celebrated cost declines in solar and wind, financial and regulatory support from governments remains essential for their increased deployment.

ALSO ON RT.COM Central Bank of Russia does not rule out another pandemic wave & $25 oil price

The future remains marred in uncertainty that extends to the possibility of a rebound in oil investments. According to some, such as BP, we are already past peak oil demand, so that would mean less investment in oil production growth globally. Others, such as OPEC producers, hope things will sooner or later return to normal, and the world's appetite for more oil will continue to grow for at least a few more years before plateauing. And yet even OPEC is preparing for a worst-case scenario.

The extended cartel OPEC+ is considering a delay in the next relaxation of oil production cuts, from January 2021 to April, in response to the latest trends in Covid-19 infections. One thing seems relatively clear, however. The longer the surge in new infections continues, the longer it would take the industry to return on the path of recovery and growth.

This article was originally published on Oilprice.com

[Oct 24, 2020] The blockage of Nordstream 2 is about The Dark Heart of Europe not Russia

Oct 24, 2020 | www.unz.com

A123 , says: October 23, 2020 at 3:35 pm GMT

@MLK

Take Nord Stream II. If Trump hadn't taken the oath, it would have been up and running years ago. Would that it were so that this was a gift to Russia and Germany, but it's much worse than that. Why isn't anyone else curious as to who got what in return?

The blockage of Nordstream 2 is about The Dark Heart of Europe not Russia...

This is one of Putin's few serious errors. He would be much better off pushing gas projects that flowed east...

PEACE

AriusArmenian , says: October 23, 2020 at 4:47 pm GMT

Europe is a glove on the US hand and is easily led around by its nose by the CIA and MI6 that infest the MSM and run one false flag after another.

Politicians in the EU are mediocre creatures that crave the dollars stuffed into their pockets by the US. They are enjoying the ride while it lasts until they go down with the US.

[Oct 23, 2020] Oil Production Cuts Could Be Extended- Putin -

Oct 23, 2020 | www.zerohedge.com

Submitted by OilPrice.com

Russia does not rule out the possibility that OPEC+ could extend its current 7.7 million barrels per day of production cuts into next year, according to Russian President Vladimir Putin .

The comments could be merely jawboning to a market that is desperately seeking reassurances that oil production will not ramp up too quickly beyond demand. But Russia has in the past been reluctant to keep up its end of the oil production cuts, so any mention that it is even thinking about a slower tapering of the cuts is noteworthy.

In fact, Russia had failed to bring its own oil production down to the level it agreed to for most of the period of cuts in 2019 and early 2020.

Russia also was the spark that ignited the oil price war between it and Saudi Arabia-and by default the United States, when it refused to agree to additional cuts using the argument that as OPEC decreases its production, it opens the door for U.S. producers to increase theirs.

Vladimir Putin has had several discussions with Saudi Arabia and the United States on the state of the oil markets. "We believe there is no need to change anything in our agreements," Putin said. "We will watch how the market is recovery. The consumption is on the rise."

Putin added, however, that they did not "rule out" the possibility that OPEC+ could keep the current production cuts instead of removing them at the pace it had initially agreed upon.

But Putin didn't stop there. "If need be, maybe, we can take other decisions on further reductions. But we don't see such a necessity now," Putin said, intimating that more cuts were at least possible.

Russia's willingness to even consider additional cuts or waiting longer to ease the cuts than planned will be viewed positively by the markets, which has been struggling to break out of a rut where oil prices have traded in a relatively tight band for months.

[Oct 22, 2020] Goldman Expects A Structural Bull Market For Commodities In 2021, Sees Gold Hitting $2300 -

Oct 22, 2020 | www.zerohedge.com

A weaker U.S. dollar, rising inflation risks and demand driven by additional fiscal and monetary stimulus from major central banks will spur a bull market for commodities in 2021, Goldman's chief commodity strategist Jeffrey Currie said on Thursday, also predicting that "all commodity markets are in, or moving toward, a deficit with inventories drawing in all but cocoa, coffee and iron ore."

The bank, which notes that markets are increasingly concerned about the return of inflation, forecast a return of 28% over a 12-month period on the S&P/Goldman Sachs Commodity Index (GSCI), with a 17.9% return for precious metals, 42.6% for energy, 5.5% for industrial metals and a negative return of 0.8% for agriculture.

A key catalyst for the bank's bullish call is that "nearly all commodity markets are in, or moving toward, a deficit with inventories drawing in all but cocoa, coffee and iron ore."

As Currie adds, "such broad-based deficits are usually only seen late in the business cycle, underscoring the unique environment markets are in. Given that inventories are drawing this early in the cycle, we see a structural bull market for commodities emerging in 2021." In the strategist's view, the bull market will be driven by three major themes:

  1. structural under-investment in the old economy,
  2. policy driven demand and
  3. macro tailwinds from a weakening dollar and rising inflation risks. "These drivers remain consistent with the bank's bullish views from the start of this year, and have now been intensified by COVID-19 disruption and the subsequent global policy response."

Some more thoughts from Currie on the tightening in commodity markets:

Commodity markets have been mostly range bound since this summer, in our view caught between a longer-term bullish outlook for 2021 and near-term concerns around the timing of a vaccine amid rising COVID cases across Europe and the US Midwest (see Exhibit 4). However, it is important to emphasize that nearly all commodity markets are in, or moving toward, a global deficit with inventories drawing in all but cocoa, coffee and iron ore. Such broad-based deficits are usually only seen late in the business cycle,underscoring the unique environment markets are in.

As global demand remains tepid for consumer-related commodities like oil, the deficits further underscore how significant the drop in supply has been and how the supply response function has changed. For oil, the sharp drop in capex is now having an impact on non-OPEC decline rates, with capital markets refusing to fund shale drilling, only debt rollovers. In metals, we have seen a sharp drop in maintenance capex and supply disruptions dragging into 2021. This suggests that even if demand falters in coming weeks as winter exacerbates COVID-19, markets will likely continue to rebalance, barring an outright collapse in demand. In our view, base metals and agriculture have more near-term upside than oil, with smaller inventories to move through before prices begin to rise.

Goldman then shows the following chart which reveals the growing deficit across key commodities, as well as the key macro catalysts for higher commodity prices in coming months:

about:blank

about:blank

me title=

Hedging that even if demand falters in coming weeks as winter exacerbates COVID-19, Goldman still expect markets will continue to rebalance, "barring an outright collapse in demand." Goldman takes a more contained view on energy saying that while inventories of oil remain high, "upside in energy prices will likely come after winter." However, non-energy commodities face immediate upside as balances have tightened ahead of expectations, driven by large Chinese demand and adverse weather shocks, according to the Goldman strategist.

Focusing on Gold, Currie said that expansionary fiscal and monetary policies in developed market economies continue to drive interest rates lower and create demand for hedging the tail risks of inflation, lifting demand for precious metals. As a result, Goldman forecasts gold prices at an average of $1,836 per ounce in 2020 and $2,300 per ounce in 2021, and expects silver prices to be at around $22 per ounce in 2020 and $30 per ounce next year .

Non-energy commodities could see an "immediate upside" as the market balances tighten ahead of expectations on strong demand from China and weather-driven risks, the Goldman Sachs analysts said.

The bank maintained a "neutral" view on commodities in the near term and "overweight" in the medium term.

[Oct 19, 2020] A joke circulating Russia internets today

Oct 19, 2020 | www.moonofalabama.org

BG , Oct 17 2020 20:24 utc | 46

A joke circulating Russia internets today:

"German Foreign Minister Heiko Maas:

"North Stream 2 will be built 100%!"

A journalist asks:

"But what about Navalny?"

Maas replies:

"Well, unfortunately Navalny doesn't produce 55 billion cbm of natural gas per year..."

___

[Oct 19, 2020] The USA had more than doubled its oil imports from Russia last year and is now the world's second largest importer of Russian heavy oil

Notable quotes:
"... "Maas added that Germany takes decisions related to its energy policy and energy supply 'here in Europe', saying that Berlin accepts ' the fact that the US had more than doubled its oil imports from Russia last year and is now the world's second largest importer of Russian heavy oil .'" [My Emphasis] ..."
Oct 19, 2020 | www.moonofalabama.org

karlof1 , Oct 17 2020 17:50 utc | 14

Heavy oil is needed for the chemical industry (as opposed to transport). The three biggest producers of heavy oil are Iran, Venezuella and Russia.

The US produces mostly light oil, thus it needs to import the heavy oil. Since the US sanctioned Iran and Venezuella, the only significant option remaining is Russia. It would be ironic if they are buying iranian oil sold to Russia.

winston2 , Oct 17 2020 18:09 utc | 20

karlof1 , Oct 17 2020 17:50 utc | 14

It appears Lavrov's saying we'll just ignore the EU and its major components for awhile got quick results as Germany's FM just announced "Nord Stream 2 will be completed" ; but he also said this:

"Maas added that Germany takes decisions related to its energy policy and energy supply 'here in Europe', saying that Berlin accepts ' the fact that the US had more than doubled its oil imports from Russia last year and is now the world's second largest importer of Russian heavy oil .'" [My Emphasis]

Now isn't that the interesting bit of news!! The greatest fracking nation on the planet needs to import heavy oil (likely Iranian, unlikely Venezuelan) from its #1 adversary. As for the end game, I've written many times what I see as the goal and don't see any need to add more.

Passer by , Oct 17 2020 17:58 utc | 16

[Oct 16, 2020] Jacques Chirac President of France told Jr Bush if the United States finds WMDs in Iraq you put them there.

Oct 16, 2020 | www.theamericanconservative.com


WilliamRD
12 hours ago

Jacques Chirac President of France told Jr Bush if the United States finds WMDs in Iraq you put them there. The CIA and MI6 knew Iraq had no WMDs because Tariq Aziz Saddam's long time number 2 was a CIA asset. Back in the 1980s Aziz was a regular on the Washington cocktail party circuit and a frequent guest on CNNs Crossfire with Pat Buchanan, Robert Novak vs Tom Braden and Michael Kinsley. Finally Dick Armey Republican and House Majority leader was going to vote against authorizing the war in the fall of 2002. Cheney goes up to Capitol Hill pulls Armey into the Vice Presidents office in the Capitol and tells him that Iraq is close to having suitcase nukes and has very close ties to Osama bin Laden. Both lies of course.

On one occasion when Jr Bush was talking to Chirac he told him that the war on terror is Biblical prophecy. Needless to say Chirac was stunned. Yes the Republican establishment lied the country into one of the biggest foreign policy blunders in our history. Almost as bad as Woodrow Wilson taking us into World war 1 which led to the rise Bolshevik revolution and Nazi Germany

ekaneti WilliamRD 2 hours ago • edited

Vietnam was a bigger lie and worse than Iraq

WilliamRD ekaneti an hour ago

Vietnam was bad for sure and had a much larger death count, but the region or the domino theory never materialized. The Middle East has been in chaos ever since our invasion and occupation of Iraq

[Oct 14, 2020] European Oil Companies Will Not Tolerate Poland's Attempt To Cancel Nord Stream 2 -

Oct 14, 2020 | www.zerohedge.com

European Oil Companies Will Not Tolerate Poland's Attempt To Cancel Nord Stream 2 by Tyler Durden Wed, 10/14/2020 - 06:10 Twitter Facebook Reddit Email Print

Authored by Paul Antonopoulos via InfoBrics.org,

By handing out a €6.5 billion fine against Gazprom, Warsaw has obviously and massively miscalculated because it did not only antagonize the Russian energy company as was intended, but also European partners of the Nord Stream 2 pipeline project , which the Polish government obviously had not considered.

Even leaders within the European Union were shocked at the huge fine that Poland is attempting to impose against Nord Stream 2.

It may very well be that the Polish Office of Competition and Consumer Protection (UOKiK) has lost itself when deciding on the price of the fine against Gazprom. But regardless of that, UOKiK has apparently also exceeded its jurisdiction . As the Düsseldorf-based energy supplier Uniper reports, the existing agreements on Nord Stream 2 have nothing to do with a joint venture, which is why the Polish laws on merger controls do not apply to them. The initial plans were to finance the construction of the Nord Stream 2 pipeline through the establishment of a joint venture. For this, however, the companies involved should have received a permit in all the countries in which they operate, as well as from Poland, the only EU state that blocked this decision. The decision for it not to be a joint venture was made without further ado so as not to waste time or money in a dispute with Polish authorities.

The pipeline partners designed an alternative financing model for Nord Stream 2 and instead of joining Nord Stream 2 AG (Company) as a co-partner, the European energy companies are participating in the project as lenders so that Polish antitrust laws do not apply to them. However, Gazprom, the majority shareholder of Nord Stream 2 AG, has given its European partners shares in the company as a mortgage for the financing provided. If the loans from the Russian side are not paid, the European corporations automatically become the owners of Nord Stream 2 AG. Referring to this fact, the Polish antitrust authorities have declared the European partner companies to be quasi-shareholders in the pipeline project.

With this UOKiK also justifies the exorbitant fine against Gazprom and the fines of around €55 million against Uniper (German), Wintershall (German), Engie (French), OMV (Austrian) and Shell (English-Dutch). Neither Gazprom nor Nord Stream 2 are financially at risk at the moment and the Russian group has already announced that it will take the fine to court.

Poland is of course now aware that their attempts to fine the Nord Stream 2 project will amount to nothing. The aim of the Polish government is not so much to force a large sum of money from Gazprom in the long term, but rather to bury the pipeline project entirely. And this is the part where Warsaw has grossly miscalculated, not only European reactions, but Russian determination.

The goal to cancel Nord Stream 2 also explains why Polish authorities published their decision last week. Relations between the EU and Russia are extra strained because of the Navalny case and the situation in Belarus. France and Germany are working on new sanctions against Russia for the Navalny case and continue to apply pressure against Belarus.

Another question is how effective these measures will be. Sanctions have long degenerated into ambiguity as it is the usual way the West deals with Moscow. Russia has learnt how to adjust their economy accordingly, meaning that sanctions have turned into a farce. The West is regularly expanding its blacklists of sanctioned companies and private individuals, but there has been no significant effect. Political forces with a keen interest in the failure of Nord Stream 2 are plentiful in the West and they are currently advancing the Navalny case in the hope that it will cut the EU from Russia more strongly or permanently. This will not occur as Europe desperately needs Russian energy, which is why Nord Stream 2 is such a critical project for all involved.

https://lockerdome.com/lad/13084989113709670?pubid=ld-dfp-ad-13084989113709670-0&pubo=https%3A%2F%2Fwww.zerohedge.com&rid=www.zerohedge.com&width=890

Poland plays the main role in trying to cancel Nord Stream 2 and the decision by UOKiK is just another push to finally get Europe to abandon the pipeline project. According to a joint declaration by France and Germany, measures are currently being prepared for those alleged to be responsible in the Navalny case and their participation in the so-called Novichok program.

NEVER MISS THE NEWS THAT MATTERS MOST

ZEROHEDGE DIRECTLY TO YOUR INBOX

Receive a daily recap featuring a curated list of must-read stories.

Despite these measures, Western Europe is bringing its energy project which is important for its own future out of the danger zone, while Poland is attracting even more displeasure from EU giants through its own operation. A penalty against Gazprom may be a Russian problem, but fines against leading corporations from Germany, France, the Netherlands, Great Britain and Austria are guaranteed to leave many of Europe's biggest capitalist angered. The effort Warsaw is making to thwart Nord Stream 2 is visibly turning opposite to what they expected as there is little doubt the Nord Stream 2 project will come to fruition and completion.

me name=


[Oct 11, 2020] MARK CHAPMAN

Oct 11, 2020 | thenewkremlinstooge.wordpress.com

October 10, 2020 at 3:30 am

Yes, I straightaway notified John Helmer to see if he is aware of these developments, and he says they are incorporated in this story, which I am just now reading myself (early morning on the MAYNE QUEEN for 'frontline workers' such as I).

http://johnhelmer.net/i-am-russia-navalny-story-collapses-in-self-contradiction/

Like Reply


JENNIFER HOR October 10, 2020 at 11:39 am

The French must be envious: while they have to tolerate Pavlensky with his arson stunts and sinister blackmailing of their politicians, the Germans only have to put up with Navalny who can't stop shooting his mouth off in a different direction every time he opens it. Although the day must be fast approaching when Berlin might wish Navalny silenced forever before he embarrasses his hosts even more. The irony would certainly be rich and furthermore, whatever transpires next against Navalny could parallel what happened to the Skripals in 2018. The difference is that Navalny may be walking into a trap with all eyes (and mouth) open. He will have only himself to blame if his hosts decide to get rid of him permanently.

ET AL October 10, 2020 at 11:17 am

Playing the devil's advocate, it could be that the bottle(s) were exfiltrated in another manner which in itself raises other questions.

But I would like to know the serial number of the bottle(s). That way they could be traced to whom the producers sold them to, so a) we can check whether in fact the hotel did purchase them whether directly or by an intermediary store, or not; b) whether they were bought elsewhere, i.e. the brand was noted at the hotel (during the recorded video 'discovery' performance) .

MARK CHAPMAN October 10, 2020 at 7:20 pm

I think you mean lot number.

MARK CHAPMAN October 10, 2020 at 2:48 pm

It kind of sounds like they are lawyering up, or getting legal advice about what Pevchikh's actions and movements prove. And so far, they're correct – a picture of her apparently buying a bottle of water or some other beverage from a machine proves nothing. She could have bought something entirely different, or just been standing in front of the machine. She also could have drunk the water on the plane and left the bottle there; that's quite true as well.

However, what do we have on their side? Video allegedly taken at the hotel in which they are seen bagging up empty water bottles. They must have been quote sure that was the piece of evidence they were looking for, since they took nothing else. And then what? There's no chain of custody, and nobody who was not there has any idea what happened to these bottles, or whether the ones allegedly delivered to the Bundeswehr or whoever are the same bottles allegedly taken from the hotel. There must have been no end of opportunities to open the bags – which are not proper custody envelopes, simply zip-loc bags which can be opened or closed any number of times without any indication that this has happened – and tamper with the contents. Nobody from Team Navalny other than The Bullshitter himself went into a coma or even showed any symptoms although they allegedly handled evidence which was liberally dusted with a weapons-grade nerve agent, and wore no personal protective equipment (PPE) other than rubber gloves. Detective Nick Bailey, who allegedly spent weeks in the hospital after touching a doorknob allegedly contaminated with the same nerve agent although he was wearing leather gloves, proved that gloves are no defense against Novichok.

Mind you, this latest iteration was apparently specially engineered to be slow-acting. So perhaps in a couple of weeks Pevchikh and/or Alburov will fall over jerking and drooling in the middle of a sentence. We'll just have to wait and see.


[Oct 11, 2020] The USA found new allies in gas war

Oct 11, 2020 | thenewkremlinstooge.wordpress.com

MOSCOW EXILE October 10, 2020 at 6:28 am

RT
В МИД России назвали "Новичок" западным брендом
14:44

The Russian Foreign Ministry has called "Novichok" a Western brand
The chemical warfare agent called Novichok is a "purely Western brand" that has been synthesized and is present in Western countries in about 140 variants, Russia does not have it. This has been announced by the Russian Ministry of Foreign Affairs.

"We officially confirm that all chemical weapons in Russia were destroyed under the strictest international control. This time-consuming process was completed on September 27, 2017″, the foreign ministry has said in a statement.

They recalled that on October 11, 2017, the General Director of the OPCW's technical secretariat certified the final destruction of chemical weapons in the Russian Federation.

"As for the chemical warfare agent called "Novichok" in the West, its structure and mass spectrum were first presented in 1998 in the spectral database of the American Standards Institute (NIST 98). It is indicative that information on this substance came there from the research centre of the US Department of Defense", the ministry has stressed.

The ministry has added that subsequently, on the basis of this compound, a whole family of toxic chemicals had been formed that did not fall under the control of the CWC.

"They worked with it along with the Americans in no less than 20 Western countries". the statement says.

The Ministry of Foreign Affairs has noted that the studies of Aleksei Navalny's biomaterials conducted in Omsk did not reveal the presence of traces of his poisoning with a chemical warfare agent.

"And the Charité doctors did not find them either. But the German military found them. Almost a week later", the department has said.

Earlier, the OPCW said that its experts had confirmed the presence of toxic substances in the samples of urine and blood taken from Navalny. According to the report, a substance had been found in his body, similar in characteristics to Novichok, but not on the list of prohibited chemicals.

The Russian diplomatic department has noted that this story has continued according to a pre-planned scenario, and promised to provide a chronology of "behind-the-scene manipulations of the main characters of this performance."

Note:

In 1997, the United States ratified the United Nations International Chemical Weapons Convention treaty. By participating in the treaty, the United States agreed to destroy its stockpile of aging chemical weapons -- principally mustard agent and nerve agents -- by April 29, 2007. However, the final destruction deadline was extended to April 29, 2012, at the Eleventh Session of the Conference of the States Parties to the Chemical Weapons Convention at The Hague on December 8, 2006 -- source .

The primary remaining chemical weapon storage facilities in the U.S. are Pueblo Chemical Depot in Colorado and Blue Grass Army Depot in Kentucky. These two facilities hold 10.25% of the U.S. 1997 declared stockpile and destruction operations are under the Program Executive Office, Assembled Chemical Weapons Alternatives. Other non-stockpile agents (usually test kits) or old buried munitions are occasionally found and are sometimes destroyed in place. Pueblo and Blue Grass are constructing pilot plans to test novel methods of disposal. The U.S. also uses mobile treatment systems to treat chemical test samples and individual shells without requiring transport from the artillery ranges and abandoned munitions depots where they are occasionally found. The destruction facility for Pueblo began disposal operations in March 2015. Completion at Pueblo is expected in 2019. Blue Grass is expected to complete operation by 2021 -- source .

MOSCOW EXILE October 10, 2020 at 6:42 am

Same story in Sputnik:

Moscow: Berlin Must Explain Situation With Navalny Under European Convention on Mutual Legal Aid
11:13 GMT 10.10.2020(updated 13:14 GMT 10.10.2020)

According to the ministry, the structure and mass spectrum of "Novichok," which is claimed to have been behind the poisoning of former double agent Sergei Skripal and opposition figure Alexey Navalny, were first revealed in the mass spectral database of the American Institute of Standards in 1998 (NIST 98).

And further:

The OPCW said on Tuesday that a substance similar to nerve agent Novichok, but not included on the lists of banned chemicals, had been found in Navalny's system. The German government believes the OPCW's statement actually confirmed the opposition activist's poisoning with a Novichok group substance but admits that the substance in question is not formally banned.

Russia has also said that the German Foreign Minister's address to lawmakers on the "Navalny case" shows that Moscow is still subject to propaganda attacks.

"As for Heiko Maas' thesis that Russia's claims against Germany and the OPCW are absurd, such remarks are outrageous and do not stand up to any criticism. All we want is to get legal, technical and organizational assistance both in the bilateral Russian-German format and via the OPCW in the interests of conducting a comprehensive, objective and unbiased investigation of all the circumstances of the incident that occurred with Alexey Navalny," the ministry said.

German Foreign Minister Heiko Maas said earlier that Berlin will discuss with its OPCW and EU partners a general reaction to the incident with Navalny, adding that the EU may "very quickly" impose sanctions against those people who they believe are involved in the development of chemical weapons in Russia.

Russian Foreign Ministry's spokeswoman, Maria Zakharova, said earlier this week that the incident with Russian opposition figure Navalny was used just as a pretext for introducing sanctions against Russia that had long been in the works.

MARK CHAPMAN October 10, 2020 at 7:18 pm

But, as I probably need not mention again, the provocation has served its purpose already. The German Foreign Minister, who was once quite bellicose on the USA's bullying ways and, if not a friend of Russia, was at least telling America "You are not the boss of us" on the issue of energy projects with Russian partners, is now fighting with Russia and saying things that cannot be taken back. All thanks to that otherwise-useless grifter, the German-Russian relationship has suffered a serious blow. Merkel, the eternal pragmatist, will not be around forever and I would not be surprised at all to see her declining health take her out of politics altogether by the end of 2021, if she does not suffer a medical event which kills her. She is not a well woman. With her gone, the Atlanticists in the German government – who still constitute a significant influence – could well prevail, and dump Germany right back into Uncle Sam's lap. At the very best, in such an eventuality, Nord Stream II would be allowed to complete but the Germans would demand so much control over it that it would be just as if Washington was running it.

Time to complete it is not unlimited.


[Oct 07, 2020] Germany, France UK to propose sanctions on Russia over alleged poisoning of opposition figure Navalny -- RT Russia Former Soviet Union

Oct 07, 2020 | www.rt.com

Germany, France and the UK will push for EU sanctions on Russian individuals over the alleged poisoning of Kremlin critic Alexey Navalny, saying they see no other "credible explanation" for the incident than Moscow's involvement.

The proposals will target "individuals deemed responsible for this crime and breach of international norms" as well as "an entity involved in the Novichok program," the French and German foreign ministries said in a joint statement on Wednesday.

"No credible explanation has been provided by Russia so far. In this context, we consider that there is no other plausible explanation for Mr Navalny's poisoning than a Russian involvement and responsibility," the statement reads. Berlin and Paris said they will share their proposals for sanctions with their EU partners shortly.

ALSO ON RT.COM UK says 'we haven't yet attributed' Navalny's alleged poisoning to Kremlin, but Moscow must 'ANSWER'

Later, British Foreign Secretary Dominic Raab added that the UK stands "side by side" with France and Germany, declaring that evidence against Moscow is "undeniable."

Navalny fell sick on a flight from the Siberian city of Tomsk to Moscow on August 20, forcing the plane to perform an emergency landing. The anti-corruption activist was put into an induced coma at a hospital in the city of Omsk and two days later was transferred to the prestigious Charité clinic in Berlin at the request of his family.

The German medics who treated Navalny said that their tests revealed that he had been poisoned with a substance from the Novichok group of nerve agents.

The Organization for the Prohibition of Chemical Weapons (OPCW) has also studied the samples provided by Berlin, confirming the presence of a toxic substance from the Novichok group in Navalny's blood and urine.

This contradicts the statements made by the Russian medics from Omsk, who insisted that they had discovered no traces of any known poison in the activist's system at the time of his admission to hospital.

ALSO ON RT.COM OPCW says it found traces of Novichok-class substance in blood & urine samples of Russian opposition figure Alexey Navalny

Navalny, who has since emerged from coma and been discharged from hospital, said that he blames Vladimir Putin for making an attempt on his life.

Moscow has repeatedly denied any involvement in Navalny's alleged poisoning and has accused Berlin of failing to provide samples that would prove the use of the nerve agent.

'Novichok' became a household name after the chemical poisoning of double agent Sergei Skripal and his daughter in the UK city of Salisbury in 2018. Western powers were also quick to blame Moscow in that instance, slapping sanctions on Russia, before offering any solid evidence of the country's involvement.

Think your friends would be interested? Share this story! 16

[Oct 05, 2020] Russian subsides for Easter Europe are now much less then in the past

Oct 05, 2020 | www.moonofalabama.org

Kooshy , Oct 4 2020 19:41 utc | 36

Before the fall of USSR most Eastern Europe USSR dependencies energy and security was subsidized by Russians /USSR. After the fall of USSR most so called independent Eastern European former Soviet allies are reviving their energy from Russia but subsidized by EU/US in form of loans and capital investments and their security is total subsidized by US/NATO. This was understood as such and cleverly corrected by the Russians

[Sep 29, 2020] The USA can probably be energy independent but it requires $4 or higher price at the pump

Sep 29, 2020 | www.unz.com

JoaoAlfaiate , says: September 29, 2020 at 3:37 pm GMT

Trump said "I like being energy independent, don't you? I'm sure that most of you noticed when you go to fill up your tank in your car, oftentimes it's below two dollars "

But energy "independence" has got little to do with price at the pump. The marginal barrel sets the price. If the world price for crude goes to $100/barrel, West Texas Intermediate is going to the same level and gasoline will rise to $4.00.

Oil is at $40/barrel because the Gulf producers and Saudi Arabia want to insure a long term market for their one export product while making a lot of high cost production unsustainable and alternate energy sources less attractive.

[Sep 29, 2020] This is a threat? Washington is considering closing its embassy in Iraq

Sep 29, 2020 | thenewkremlinstooge.wordpress.com

PATIENT OBSERVER September 28, 2020 at 4:33 am

This is a threat?

https://www.rt.com/usa/501883-iraq-embassy-baghdad-closure-attacks/

Washington is considering closing its embassy in Iraq, nine months after the US killing of an Iranian general on Iraqi soil led to protests over what Baghdad called a "violation" of its sovereignty, according to reports.

Multiple media outlets, including the Wall Street Journal, the Washington Post and Sky News, reported on Sunday that US officials told their Iraqi counterparts that Washington will shut down its operations unless there is an end to rocket attacks on the embassy, which is located in the heavily-fortified Green Zone in Baghdad.

Sounds more like a possible victory for Iraq and its people. I suspect that there is much more to the story and the US is pre-emptively seeking a face-saving exit excuse if it were to come to that.

However, it would be extremely unlikely for the US to abandon the embassy given that it serves as the headquarters for numerous nefarious operations in Iraq and Iran

ET AL September 28, 2020 at 6:11 am

The claim that I have read is that this is in response to the USA's assassination of General Solemani in Lebanon. More precisely the i-Ranian strategy is not per se to cause American casualties but carry out sustained attacks via proxies on American interest in i-Rack, i.e. psychological pressure, cost etc. the ultimate goal being the USA leaving i-Rack as a suitable price for the assassination.I

I've also read (Vinyard the Saker?)that the USA has so far closed some of its smaller and less defensible outposts but concentrated what remains in fewer better defended bases. The USA does not want to leave i-Rack militarily and will hang on until it is out of options. The US embassy leaving i-Rack will not be good enough for i-Ran, but maybe this is the beginning of some kind of behind the scenes bargaining, though this is hard to believe considering the US is still pushing for a gulf coalition (WAR!) against i-Ran as well as polically neutralizing any potential spoiler countries. Also the embassay was built at quite a significant cost $750 billion.* So, you are right PO, this is bluff by the big puff Plumpeo.

i-Rack has also being trying to get rid of American military presence even though they have bought F-16IQs from Washington but the latter is using the same figleaf excuse as in Syria that they are 'fighting terrorists.'

* https://www.businessinsider.com/750-million-united-states-embassy-iraq-baghdad-2013-3

ET AL September 28, 2020 at 6:18 am

$750 million. Duh!

JRKRIDEAU September 28, 2020 at 6:47 am

$750 million. Duh
Given standard US contracting over-runs I was willg to believe "billions". The surprising thing is that it got built.

MARK CHAPMAN September 28, 2020 at 3:12 pm

The USA will never abandon its crown jewel in Iraq, and it would make little practical difference anyway, as it lies entirely within the American 'Green Zone', and they will surely not abandon that.

"But the location of the compound is well known in Baghdad anyway, where for several years it has been marked by large construction cranes and all-night work lights easily visible from the embattled neighborhoods across the river. It is reasonable to assume that insurgents will soon sit in the privacy of rooms overlooking the site, and use cell phones or radios to adjust the rocket and mortar fire of their companions. Meanwhile, however, they seem to have held off, lobbing most of their ordnance elsewhere into the Green Zone, as if reluctant to slow the completion of such an enticing target."

https://www.vanityfair.com/news/2007/11/langewiesche200711

The Baghdad Embassy is the USA's most-expensive embassy in the world, and it costs far more to run it each year than the cost of building it, in excess of a Billion dollars a year. What America might do, and what Iraq does fear, is send its diplomats home for awhile, and use it as an excuse to open a military operation in Iraq against what it terms Iran-aligned militias.

[Sep 28, 2020] May Non-OPEC Oil Production drops to 2013 levels by Ovi

Images deleted: see the original for images
Sep 28, 2020 | peakoilbarrel.com

A post by Ovi on peakoilbarrel

Below are a number of oil (C + C ) production charts for Non-OPEC countries created from data provided by the EIA's International Energy Statistics and updated to May 2020. Information from other sources such as the OPEC and country specific sites is used to provide a short term outlook for future output and direction.

Non-OPEC production dropped slowly from a high of 52,638 kb/d in December 2019 to 52,396 kb/d in March 2020. In April that changed when we saw the first big drop in output from the Non-OPEC countries associated with Covid and with the drop in world oil prices. May output collapsed to 45,340 kb/d, which is close to the production level in September 2013.

The projection to September (red square) was made using the September STEO report. It projects that after the low of 45,350 kb/d in May, production will increase by close to 3,500 kb/d to just under 49,000 kb/d in September.

Above are listed the worldʼs 15th largest Non-OPEC producers. They produced 83.6% of the Non-OPEC output in May. On a YoY basis, Non-OPEC production was down by 5,011 kb/d. On a MoM basis, production was down by 5,282 kb/d. World oil production was down by 11,418 kb/d, MoM and 10,318 kb/d YoY.

May saw a drop in output to 2,765 kb/d but rebounded in June to 3,013 kb/d according to this source . Maintenance and extensive turnarounds planned between September and November could shave around 200,000 b/d from Brazil's output.

The EIA shows Canadian production was down in May by 658 kb/d by 248 kb/d to 3,694 kb/d. The CER data is higher because it includes NGPLs in their estimates and is close to 6% of total output.

Canadian oil exports by rail to the US fell from a high of 411,991 b/d in February to a new low of 48,820 kb/d in June.

April 156,242 kb/d May 58,048 kb/d June 48,820 kb/d

At the same time, according to this source , "The Trans Mountain pipeline carried a record-breaking amount of oil to British Columbia from Alberta in August, despite persistent price and demand woes gripping the energy sector as the COVID-19 pandemic drags on".

"We have been full every day during the COVID period. Demand for the pipeline has not softened at all," he told The Globe and Mail in an interview Tuesday.

Chinaʼs production peaked in June-15 at 4,408 kb/d and has been in a steady decline up to September 2018 where it reached an output low of 3,694 kb/d. According to this source, Chinaʼs August production increased by 2.6% over last August. Output increased by 59 kb/d to 3,899 kb/d (Red square). However August's output is still slightly lower than the June 2019 output of 3,918 kb/d even though Chinese oil companies have increased their spending to reduce the decline rate.

Kazakhstan production hit a new output high in February, 1,976 kb/d. For May, production dropped by 203 kb/d to 1,738 kb/d. OPEC expects their output to drop by an average 15 kb/d this year.

Mexicoʼs production decreased in May by 85 kb/d to 1,686 kb/d, according to the EIA. Data from Pemex shows that production dropped to 1,647 kb/d in July (red square). Under the OPEC + Declaration of Cooperation, Mexico committed to reduce output by 100 kb/d in May. Their target was almost met.

The EIA reported that Norway's May production was 1,775 kb/d, a decrease of 14 kb/d from April.

According to the Norwegian Petroleum Directorate, "average daily liquids production in July was: 1 739 000 barrels of oil, 296 000 barrels of NGL and 27 000 barrels of condensate. (Red lines)

On 29 April 2020, the Government decided to implement a cut in Norwegian oil production. The production figures for oil in July include this cut of 134 000 barrels per day in the second half of 2020."

In other words, if Norway hadn't made their commitment to reduce production, May's oil output would have been (1,739 + 134) 1,873 kb/d. This output level would have been very close to some earlier highs.

According to the Russian Ministry of energy, Russian production increased by 479 kb/d in August to 9,860 kb/d. July was revised up by 11 kb/d from 9,371 kb/d to 9,382 kb/d.

UKʼs production decreased by 63 kb/d in May to 1,004 kb/d. According to OPEC, crude production is expected to increase to 1,010 kb/d in June (Red square).

June's production rebounded from May's low by adding 420 kb/d according to the the EIA's August report. May's output was revised up by 15 kb/d in the EIA's September report.

US and Permian oil rigs decreased by 1 to 179 and 121 respectively in the week of September 18. As a percentage, Permian oil rigs represented 67.5% of the total for the week of Aug 21.

According to the September DPR, the 121 rigs operating in the Permian in September will be sufficient to raise production in September by 42 kb/d to 4,150 kb/d.

While WTI has remained close to $40/bbbl, there has been essentially no change in drilling activity since the week of July 17 in the US. There were 180 oil rigs in operation that week vs 179 for the week of September 18.

These five countries complete the list of Non-OPEC countries with annual production between 500 kb/d and 1,000 kb/d. All five are in overall decline. Their combined May production was 3,263 kb/d down 232 kb/d from April's output of 3,495 kb/d. Azerbaijan, Indonesia and India appear to be in a slow steady decline phase. Columbia's production began to drop in March as Brent prices began to drop.

According to Colombia's minister of energy, Maria Fernanda Suarez, ANH president Armando Zamora said if Brent oil prices hit around $35 a barrel national oil output could average around 850,000 barrels a day, down from a previous forecast of 900,000 barrels.

Guyana is a new oil producing country that started production in December 2019. According to this s ource , production was supposed to reach 120 kb/d by June. However gas re-injection issues have delayed its planned production rise. Output in June is expected to be close to 80 kb/d (red square). This new source for oil will offset some of the decline in other countries, which currently is close to 400 kb/d/yr.

NON OPEC W/O US PRODUCTION

This chart shows that oil production in Non-OPEC countries has only increased by 541 kb/d from December 2014 t0 December 2019. It is an indication that these countries as a whole are approaching an output plateau. April is the first month in which the large production drop associated with CV-19 and the plunge in oil prices shows up in this chart. In May 0utput from these countries dropped by 3,293 kb/d to 35,348 kb/d.

Using information from the September STEO, output from the Non OPEC countries W/O the US, is expected to rebound to 37,054 kb/d in September (red square). Looking further out to October 2021, output is predicted to reach 39,692 kb/d. (Blue graph). Note that the October 2021 high is currently expected to be 143 kb/d lower than the December 2019 peak. The 143 kb/d difference is probably well within the margin of error in making these projections.

World Oil Production

World oil production in May decreased by 11,417 kb/d to 71,374 kb/d. This chart also projects world production out to October 2020. It uses the September STEO along with the International Energy Statistics to make the projection. It projects that world production will recover by close to 5,000 kb/d in October 20202 to 76,019 kb/d.

This chart presents world oil production without the US. Note that the November 2016 peak is two years prior to all the worldʼs peak shown in the previous chart. May production was 61,372 kb/d, a decrease of 9,429 kb/d from April.

Using the STEO and the EIA international Energy Statistics, output for September is projected to be 63,768 kb/d, an increase of 2,396 kb/d higher than May.

[Sep 28, 2020] Washington's Hybrid War On Russian Energy Targets Germany, Belarus, And Bulgaria -

Sep 28, 2020 | www.zerohedge.com

Washington's Hybrid War On Russian Energy Targets Germany, Belarus, And Bulgaria


by Tyler Durden Sun, 09/27/2020 - 08:10 Twitter Facebook Reddit Email Print

Authored by Andrew Korybko via OneWorld.press,

The US is ruthlessly waging an intense Hybrid War on Russian energy interests in Europe by targeting the Eurasian Great Power's relevant projects in Germany, Belarus, and Bulgaria, banking on the fact that even the partial success of this strategy would greatly advance the scenario of an externally provoked "decoupling" between Moscow and Washington's transatlantic allies.

The Newest Front In The New Cold War

The New Cold War is heating up in Europe after the US intensified its Hybrid War on Russian interests there over the past two months. This proxy conflict is being simultaneously waged in Germany, Belarus, and Bulgaria, all three of which are key transit states for Russian energy exports to the continent, which enable it to maintain at least some influence there even during the worst of times. The US, however, wants to greatly advance the scenario of an externally provoked "decoupling" between Moscow and Washington's transatlantic allies which would allow America to reassert its unipolar hegemony there even if this campaign is only partially successful. This article aims to explore the broad contours of the US' contemporary Hybrid War strategy on Russian energy in Europe, pointing out how recent events in those three previously mentioned transit states are all part of this larger plan.

Germany

From north to south, the first and largest of these targets is Germany, which is nowadays treating Russian anti-corruption blogger Navalny. The author accurately predicted in late August that "intense pressure might be put upon the authorities by domestic politicians and their American patrons to politicize the final leg of Nord Stream II's construction by potentially delaying it as 'punishment to Putin'", which is exactly what's happening after Berlin signaled that it might rethink its commitment to this energy project. America isn't all to blame, however, since Germany ultimately takes responsibility for its provocative statements to this effect. Dmitri Trenin, Director of the Carnegie Moscow Center, published a thought-provoking piece titled " Russian-German Relations: Back To The Future " about how bilateral relations will drastically change in the aftermath of this incident. It's concise and well worth the read for those who are interested in this topic.

Belarus

The next Hybrid War target is Belarus , which the author has been tracking for half a decade already. After failing to convince Lukashenko to break off ties with Russia after this summer's Wagner incident, a Color Revolution was then hatched to overthrow him so that his replacements can turn the country into another Ukraine insofar as it relates to holding Russian energy exports to Europe hostage. The end goal is to increase the costs of Russian resources so that the US' own become more competitive by comparison. Ultimately, it's planned that Russian pipelines will be phased out in the worst-case scenario, though this would happen gradually since Europe can't immediately replace such imports with American and other ones. "Losing" Belarus, whether on its own or together with Nord Stream II, would deal a heavy blow to Russia's geopolitical interests. Countries like Germany wouldn't have a need to maintain cordial relations with it, thus facilitating a possible "decoupling".

Bulgaria

about:blank

about:blank

me title=

That's where Bulgaria could become the proverbial "icing on the cake". Turkish Stream is expected to transit through this Balkan country en route to Europe, but the latest anti-government protests there threaten to topple the government, leading to worries that its replacement might either politicize or suspend this project. Azerbaijan's TANAP and the Eastern Mediterranean's GRISCY pipelines might help Southeastern Europe compensate for the loss of Russian resources, though the latter has yet to be constructed and is only in the planning stages right now. Nevertheless, eliminating Turkish Stream from the energy equation (or at the very least hamstringing the project prior to replacing/scrapping it) would deal a death blow to Russia's already very limited Balkan influence. Russia would then be practically pushed out of the region, becoming nothing more than a distant cultural-historical memory with close to no remaining political influence to speak of.

Economic Warfare

The overarching goal connecting these three Hybrid War fronts isn't just to weaken Russia's energy interests, but to replace its current role with American and other industry competitors. The US-backed and Polish-led " Three Seas Initiative " is vying to become a serious player in the strategic Central & Eastern European space, and it can achieve a lot of its ambitions through the construction of new LNG and oil terminals for facilitating America's plans. In addition, artificially increasing the costs of Russian energy imports through political means related to these Hybrid Wars could also reduce Russia's revenue from these sources, which presently account for 40% of its budget . Considering that Russia's in the midst of a systemic economic transition away from its disproportionate budgetary dependence on energy, this could hit Moscow where it hurts at a sensitive time.

The Ball's In Berlin's Court

The linchpin of Russia's defensive strategy is Germany, without whose support all of Moscow's energy plans stand zero chance of succeeding. If Germany submits to the US on one, some, or all three of these Hybrid War fronts in contravention of its natural economic interests, then it'll be much easier for America to provoke a comprehensive "decoupling" between Russia and Europe. It's only energy geopolitics that allows for both sides to maintain some sense of cooperation despite the US-encouraged sanctions regime against Russia after its reunification with Crimea and thus provides an opportunity for improving their relations sometime in the future. Sabotaging Russia's energy interests there would thus doom any realistic prospects for a rapprochement between them, but the ball's in Berlin's court since it has the chance to say no to the US and ensure that the German-Russian Strategic Partnership upholds Europe's strategic autonomy across the present century.

NEVER MISS THE NEWS THAT MATTERS MOST

ZEROHEDGE DIRECTLY TO YOUR INBOX

Receive a daily recap featuring a curated list of must-read stories.

Concluding Thoughts

For as much as cautiously optimistic as many in the Alt-Media Community might be that the US' Hybrid War on Russian energy in Europe will fail, the facts paint a much more sobering picture which suggests that at least one of these plots will succeed. Should that happen, then the era of energy geopolitics laying the foundation for Russian-European relations will soon draw to a close, thereby facilitating the US' hoped-for "decoupling" between them, causing budgetary difficulties for Moscow at the moment when it can least afford to experience such, and pushing the Eurasian Great Power's strategic attention even further towards Asia. The last-mentioned consequence will put more pressure on Russia to perfect its "balancing" act between China and India , which could potentially be a double-edged sword that makes it more relevant in Asian geopolitical affairs but also means that one wrong move might seriously complicate its 21st-century grand strategy .

Vegetius , 4 hours ago

If you look at the three countries mentioned Belarus will likely be absorbed by Russia sooner rather than later. The push for this is underway looking at meetings taking place. For Bulgaria the US is far away and has no power to stop the Turks. It is the Turks the Bulgarians fear, with a lot of reasons, their surest way of keeping out of the Turks clutches is to look to Russia for support. Unfortunately the USA has an appalling track record of betraying countries, ask Libya.

The Germans have no choice but take the Russian gas, economically, socially and for strategic reasons. The truly big fear for the US is a German/Russian bloc. German and Russian technology with unrivaled resources. That is the future super power if they are pushed together, something that is very likely if we see a major economic contraction in the next few years.

Mustahattu , 4 hours ago

The US fear of an Eurasian alliance. The US fear Europe will create a Silicon Valley of the future. The US fear the Euro will replace the dollar as a reserve currency. The US fear Russia will become a superpower. The US fear China. There's a lot to fear yankee dear...cos it's all gonna happen.

Hope Copy , 1 hour ago

RUSSIA is content with 45 and 25nm as it can be hardened.. 14 and especially 7nm is so that the **** will wear out..

Ace006 , 2 hours ago

Instead of fretting about how this or that country or bloc will become a/an _________ superpower the US could focus on regaining its former pre-eminence.

It's a crazy thought, I know, but

  1. moving a massive amount of industrial capacity to China and fueling the rise of a communist country just might have been a bad idea and
  2. thrashing about in the international arena like a rutting rhinoceros at huge expense makes us look foolish and, in the case of Syria, petty and vindictive.

Repairing the damage from the former and stopping the hemorrhage of money and reputation respectively would be a far better objective than playing Frankenstein in Libya, Afghanistan, Iraq, Syria, Ukraine, Georgia, Serbia, Iran, Poland, N. Korea, and Venezuela, inter alia . Mexico is a failed state right on our border that contributes mightily to our immigration, cultural, and political problems. But, no, the puffed up, prancing morons who make US policy can summon the imagination to figure out how to help our very own neighbors deal with their hideous problems. No. Let's engage in regime change and "nation building" in Afghanistan, Iraq, Syria, Libya, Ukraine, and Belarus.

The words of the great Marcus Aurelius are on point: "Within ten days thou wilt seem a god to those to whom thou art now a beast and an ape, if thou wilt return to thy principles and the worship of reason."

Herodotus , 1 hour ago

Bulgaria must return to the protection of the Ottoman Empire.

yerfej , 4 hours ago

Easy solution, end NATO. Just have all US forces told to leave the EU and let them determine their own destiny. Then do the same with US forces in the ME, Japan, Korea, etc. EVERYONE would be better off, including US taxpayers which get nothing out of the useless overseas deployment of resources which could be better spent at home.

yojimbo , 3 hours ago

5% budget deficit, 5% military spending. Leave the world, drop 4.5% of the spending and either save money, or build infrastructure. It's so simple, I am disappointed Trump doesn't at least state it. I get he is limited by the system, and can't be a Cincinnatus, even if he wanted to, but he has his First Amendment.. though I grant him a personal fear of being Kennedied!

Bac Si , 2 hours ago

Howdy Yerfej. It sounds like you are all for Isolationism.

But Isolationism means different things to different people. Pre WW2, Isolationism in the US meant selling our products to hostile countries. In the case of Japan, oil to help them kill Chinese people. In the case of Germany and Italy, food and vehicles to help them conquer all of Europe.

Considering the ridiculous education that the US gives its children, it's no wonder that most Americans don't know much about history (I say that in general terms, not to you specifically). Henry Ford senior not only received the 'Grand Cross of the German Eagle' from Adolf Hitler in 1938, he also received a 'Congressional Medal' from the US Congress shortly after WW2 – and for the same reason. Selling trucks to help the war effort.

Even after Pearl Harbor, there were politically powerful Isolationists that did not want the US to get involved in WW2. Why? Because a lot of money was at stake. It still is. These same people will continue to argue for Isolationism even after we are attacked.

Two months AFTER Pearl Harbor, FDR made a speech that included this:

"Those Americans who believed that we could live under the illusion of isolationism wanted the American eagle to imitate the tactics of the ostrich. Now, many of those same people, afraid that we may be sticking our necks out, want our national bird to be turned into a turtle. But we prefer to retain the eagle as it is – flying high and striking hard. I know that I speak for the mass of the American people when I say that we reject the turtle policy and will continue increasingly the policy of carrying the war to the enemy in distant lands and distant waters – as far away as possible from our own home grounds." – FDR

This radical change in our foreign policy has never been explained or even referred to in US history books. Powerful economic forces will always love the idea of "Open Trade Isolationism". But if Isolationism is ever suddenly defined by not doing business with any hostile government – those powerful forces will go ballistic. They will strongly lobby against 'Economic Warfare'. In other words, they will always want to make lots of money by selling their products to hostile governments, no matter how many people die.

Want a great example?

Right after Loral Corporation CEO Bernard L. Schwartz donated a million dollars to the DNC, President Clinton authorized the release of ballistic missile technology to China so Loral could get their satellites into space fast and at low cost. Those same missiles, and their nuclear warheads, are now pointed at the US.

The argument has always been that if we trade with hostile governments, they will grow to like us. Does anyone out there believe that if the UK and France gave pre WW2 Germany an extra $20 billion in trade, Germany wouldn't have started WW2? Anyone with a brain would tell you that Germany would have put those resources into their military (like China has been doing) and WW2 would have started earlier.

Yerfej, if we brought back the Cold War organization called the Coordinating Committee for Multilateral Export Controls (COCOM), I would be all for Isolationism. President Clinton got rid of it in his first year, and Western weapons technology has been threatening us ever since.

BaNNeD oN THe RuN , 5 hours ago

You have to love the dynamic duo of "lie, cheat and steal" Pompeo and his "mob boss" Trump. There is absolutely no subtlety in their obvious shakedown tactics.

PrivetHedge , 4 hours ago

The mob had far more honor, and better morals.

PrivetHedge , 4 hours ago

Washington's transatlantic allies...

Hahahah, occupied vassals.
Washington has cost Germany a massive slice of GDP.

you_do , 4 hours ago

Yankee has plenty of problems at home.

Rest of the world can decide their own energy policy.

They do not suffer from the 'Russia' propaganda.

geno-econ , 5 hours ago

Let Russia, the lowest cost energy producer win energy competition in Europe as China, the lowest cost manufacturing producer is winning in America. Only difference is retailers, shippers, assembly part importers such as auto, electronics and appliance makers are making a profit and consumer gets lower prices. We should let others decide for themselves and stop meddling----only result will be a bloody nose

you_do , 4 hours ago

Yankee has plenty of problems at home.

Rest of the world can decide their own energy policy.

They do not suffer from the 'Russia' propaganda.

geno-econ , 5 hours ago

Let Russia, the lowest cost energy producer win energy competition in Europe as China, the lowest cost manufacturing producer is winning in America. Only difference is retailers, shippers, assembly part importers such as auto, electronics and appliance makers are making a profit and consumer gets lower prices. We should let others decide for themselves and stop meddling----only result will be a bloody nose

free-energy , 4 hours ago

Notice how everything the US does around the world is a WAR. War on Energy, War on Drugs, War on Birth Control, War War War... America will fall after 2020 if nothing changes for the better. Every year the world grows more and more tired of the US bs and moves further away from it. Its so bad that they choose to deal with a communist country over us.

You reap what you've sowed.

Bobby Farrell Can Dance , 3 hours ago

The Anglo American parasite pirate gangsters keep barking on about Russia bad, China bad, but I look around and I see nothing but these trouble makers waging war on anything they cannot control. The US and UK are devil nations. They will deserve all the rot they have coming their way.

Unknown User , 5 hours ago

Trump wants a trade balance with all major economies like Germany and China. If they don't buy from us, he will have to raise tariffs. In case of Germany, they need nothing from us so he wants them to buy US LNG. Merkel's position is that "there is a cheap Russian gas", while Trump is telling her "no there isn't one".

Pumpinfe , 4 hours ago

So trump loves to deep throat Russia but give Germany a hard time to Nordstream 2? Wake up fanboys, your hero is a ******. I got so much money invested in gazprom. LNG is junk and gazprom (Russian owned) is gona crush LNG and trump and his idiot following can't do a damn thing. You trump idiots will believe anything. Let me enlighten you...gazprom is the lowest cost producer of natural gas in the world...go look at the difference between gazprom and LNG and then you will realize that orange dump is an idiot along with his army of empty heads. Oh and if you think China and Russia are not friendly, go look up the Power of Siberia pipeline. That will give you a good sense of the relationship between Russia and China. America is rotting from the inside and Russia and China are eating their popcorn watching it happen.

Dabooda , 3 hours ago

I don't see Trump deep-throating anyone but Netanyahu. Sans gratuitous insults, your comment about Gazprom is spot on

Lokiban , 5 hours ago

I doubt Merkel will give in. She would commit political suicide if she did that. She knows Navalny is a US effort to stop Nordstream 2.
What is the alternative? Buying gas from the US or US-controlled oilfields in Iraq and Syria? Putin might have a say in that.

Lokiban , 5 hours ago

I doubt Merkel will give in. She would commit political suicide if she did that. She knows Navalny is a US effort to stop Nordstream 2.
What is the alternative? Buying gas from the US or US-controlled oilfields in Iraq and Syria? Putin might have a say in that.

thurstjo63 , 3 hours ago

The main fault in Mr Korybko's thinking is that he believes that European countries will not just shoot themselves in the foot but in the head to appease the US. At a european and local level, those who wanted Nord Stream 2 to be suspended or killed have failed. The costs are way too high. For that we can thank, perversely, the agreements associated with protecting investments from political decisions pushed by the US itself!!! Given that there is no proof of Navalny being poisoned, Germany knows that there is no way that they could hope to win their case for stopping Nord Stream 2 in a tribunal with persons capable of rational thought. That is why they made the deal to buy some US liquified gas for a couple of billion dollars. Because that is the cheapest way of extricating themselves from this situation. Otherwise, they are looking at orders of magnitude more compensation to russian and european firms for stopping the pipeline.

As for Belarus, barring Lukashenko doing something profoundly stupid like reacting violently to protests, that ship has already sailed. Protests are smaller every week and mainly on the weekend as now the "opposition" has been publishing people's profiles accusing them of collaborating with the government without any proof, leading to innocent people and their families to be threatened. There will be a transition from Lukashenko over the next couple of years but you can be sure that the present "opposition" given their desire to break away from Russia will not be part of the group that comes to power in the future since their base of support diminishes every week.

Finally Bulgaria already shot themselves in the foot when they backed out of South Stream and had major problems securing energy resources to meet its needs during the intervening period. Radev as any politician wanting to stay in office knows, if he doesn't go through with connecting Turk Stream to the rest of Europe that he might as well resign. So unless the US has compromising information on him that can force him from office or the Radev's administration doesn't control the US attempts to create the conditions for a colour revolution in Bulgaria, it is definitely not going to happen.

I'm sorry but Mr. Korybko is wrong on all counts!

Savvy , 4 hours ago

When the US backed Georgia's violent incursion into S Ossetia it took Russia one day to send them back.

Russians are slow to saddle but ride fast.

Joiningupthedots , 2 hours ago

That was with the remnants of the old Soviet Army too.

The new Russian Army is an entirely different beast in both organisation, training, experience and equipment.

This guy has his finger on the pulse;

http://thesaker.is/the-world-has-gone-absolutely-insane/

JeanTrejean , 5 hours ago

Are the USA really at war with Russia...and EU?

Decoupling Russia from EU, is re-enforcing the Eurasia bloc...where is the future of the world.

Russia belongs to Europa...not the USA.

BaNNeD oN THe RuN , 4 hours ago

Geographically Europe and Asia are one continent. It was "European exceptionalism" (the precursor to American Exceptionalism) that divided it as an ethno-cultural construct.

researchfix , 5 hours ago

Cancelling NS2 will chase the German industry into Russia. Cheap energy, moderate wages, Eurasian market at the front steps.

The sheep and their ex working places and Mutti will stay in Germany.

Bobby Farrell Can Dance , 3 hours ago

Do Germans want to be slaves of these abject Brits and Americans? Pffffft....gas from Russia is a NO BRAINER.

Only British and Americans rats do not like that idea. How un-selfish then, it is for these jealous, insecure morons to dictate to Germany how she should trade. That's called outright meddling. These imperialists are like entitled Karens, they think the world owes them favours at the snap of a finger.

Sandmann , 4 hours ago

Nordstream 2 has an add-on leg to UK. Germany is largest gas importer on earth and cannot run its industry without gas imports from Russia. LNG is simply too expensive unless US taxpayers subsidise it.

If US wants to destabilise Europe it will reap the consequences. Southern Europe depends on gas from North Africa - Portugal generates electricity from Maghreb Pipeline to Spain from Algeria via Morocco. Erdogan hopes to put Turkey in position of supplying gas to Europe.

Germany will not abandon Nordstream 2 but might abandon USA first.

Max21c , 3 hours ago

The US is ruthlessly waging an intense Hybrid War on Russian energy interests in Europe by targeting the Eurasian Great Power's relevant projects in Germany, Belarus, and Bulgaria, banking on the fact that even the partial success of this strategy would greatly advance the scenario of an externally provoked "decoupling" between Moscow and Washington's transatlantic allies.

It's a petty game and when it fails then the Washingtonians credibility and legitimacy just further erodes. The EU needs the energy supplies and the Russian Federation has the supplies. It's all just short term & small gain silliness by a pack of freaks in Washington DC and their freaks in the CIA, Thunk Tank freaks and freaks in the foreign policy establishment. It's just more of the Carnival sideshow/freakshow put on by Washingtonians. As usual if it's a Washingtonian (post Cold War) policy then there's little or no substance behind it and you can be sure it hasn't be thought through thoroughly and it'll eventually turn and boomerang back on the circus people in Washington, Ivy League circus people, and JudeoWASP elite circus people, CIA circus clowns and circus clowns in the Thunk Tonks and elites Fareign Poolicy ***-tablishment.

John Hansen , 3 hours ago

If all it takes is a Navaly hoax to cause this Europe isn't really worth dealing with.

propaganda_reaper , 3 hours ago

Once upon a time, a revolution occurred in a country through which passed a gas pipeline. The bad guys were vanquished. And the very good foreign guys who helped the local good guys defeat the tyrant said: "We got the same stuff, but liquid."

Any similarity with fictitious events or characters was purely coincidental.

_ConanTheLibertarian_ , 4 hours ago

Germany needs the gaz.

https://www.politico.eu/article/why-germany-cant-say-no-to-nord-stream/

Obamanism666 , 49 minutes ago

Remember the Gas to Europe still flows through the Ukraine. Russia just needs to reduce the gas Pressure and blame the Ukraine and Europe goes cold and Dark.

German People will beg for Nordstream 2 to be switched on.

lucitanian , 31 minutes ago

That's not the way Russia works. But it's the kind of blackmail that the US uses. And that's why Russia is a more dependable partner for Europe for energy.

Hope Copy , 1 hour ago

This **** goes right back to the 'DeepState' pseudo-revolution that got the Nicky-the-weak killed ,because he financed his railroads and wanted to be rich as hell as he perceived the ENGLISH monarchy to be, with a parliamentary DUMA that he could over rule if need be. I have looked 'DeepState' right in the eyes when I was young and dumb and was told that I would never go to their masion.. Nicky had family enemies. and the Czech fighting force was never going to save him.. Stalin was also double-crossed, but was well informed.. it was in his sector if one reads and believes. Cunning fox Stalin was, always playing those under him to do his bidding.. and that lesson has been well learned by a couple of the world's leaders in this day-in-age...

Herodotus , 1 hour ago

German manufacturing costs must be driven higher to take the heat off of the UK as they emerge from the EU and attempt to become competitive.

novictim , 1 hour ago

When "War" is actually not war but trade policy and financial incentives then you know you are engaged in dangerous bloviations and hyperbole.

When the shooting starts, then you can talk of War.

SuperareDolo , 2 hours ago

Russia might not want to fight these attempts to isolate it from the western economy. The collateral damage will be that much less, once Babylon the great finally falls.

LoveTruth , 2 hours ago

And US claims to be a "Fair Player," caring for freedom and democracy, while twisting arms and supporting corrupted officials.

IronForge , 3 hours ago

PetroUSD, MIC, Colonial Control of Vassals. World Domination Play by the Hegemony.

Just like the Policies of NATO: Russians Out, Germans Down, Anglo-American-ZioMasons and Vatican_Vassals In.

Policies were like this - Sponsored by Anglo-ZioMasons from Pre-WWI, continued through WWII and the First Cold War, and onwards after the Collapse of the SUN and the ensuing NeoCon Wolfowitz Doctrine and PNAC7/Bush-Cheney PetroUSD Plans.

The Hegemony Control MENA Energy Producers. The IRQ-KWT War were mishandled; and KSA demanded for the USA to Smite IRQ. The Initial War and Occupation prompted Hussein to opt the EUR for Petroleum, which Brought about the End of Hussein through the 9-11/PNAC7 Long War.

LBY opted for the Au-Dinar for Petroleum; and were Fail-Stated. IRN and RUS remain the only Major Energy Producers not Controlled by the Hegemony.

IRN were Sanctioned since removing the Shackles of Hegemonic Occupancy via Shah Par Levi; and attempts for Energy Diversification via Nuclear means raised suspicions of Nuclear Weapons Development - prompting for heavier Sanctions and 5thColumn Regime Change Operations by the Hegemony. IRN circumvented Sanctions in part by selling their Petroleum via Major Currencies and Barter. Though many Countries have reduced or maintained their purchase of IRN Petroleum via Sanctions Protocols, CHN are involved in Purchasing IRN's Output.

RUS, another Target of Ruin, Plunder, and Occupational Exploitation by the Hegemony, were Too Large a Country with Standing Armed Forces for Direct Military Invasion by the Hegemony. After the Collapse of the SUN, The Harvard/Chicago led Economic Reforms ended in Plunder - which prompted the Selection and Rise of Putin, who drove out the Plunderers. The Hegemony continue their Geopolitical War of Influence Peddling around RUS while attempting Soft War NATO Membership Recruitment and Regime Change Coups within RUS, Ex-SUN Nation-States, and Trading Partners.

RUS have endured, became Militarily mightier, have become the Major Energy Producer for North/Western Europe and CHN. In addition to the Production, RUS now have begun Trading Petroleum+NatGas outside of the PetroUSD Exchange Mechanism, opting for Customer Currencies or RUB.

RUS and IRN are expected to be Key Providers of the PetroCNY-Au Exchange Mechanism.

The Hegemony and MENA Vassals can't Compete in Combined Petroleum+NatGas Volume and Price; and DEU - by Directly Importing from RUS - will most likely become more Independent from the Hegemon.

CHN, RUS, and DEU - Major Energy, Industrial, Natural Resource, and Military Powers Decoupling from the Influences of the Hegemony, with IND Slowly coming to their Own (IND are simply Too Large to remain Vassals to the Hegemon; and Vassal GBR did so much to Oppress them in the past).

Funny that the Anglo-American-ZioMasons and VAT have brought each of these 3 Powers to Ruin and Occupation in the Past 2 Centuries.

The Ironies being Played Out are that:

1) GBR Lost their Prime Colonies - America/USA, IND, and now Trade City Colony HKG - by their Oppressive and Exploitative Occupancy; and

2) USA, after Fighting Wars for Independence from such Occupations by GBR - Once Becoming a Major Military Power, Followed in the Anglo-ZioMason Tradition of Geopolitical Conquest and Control to the Scale of pursing not only in World Domination - but in Absolute Global Rule.

Maghreb2 , 2 hours ago

Problem is demographic shift . The previous modern system dominated by Zio-Masonry was GNP and GDP where currencies were measured against global output and floated against gold and each other. Now with high inflation and demographic decline knocking out the economy is easier leading to fights between zones of influence. Petro Ruble, Euro or dollar. Dangerous commodities like kilos of heroin, trafficked humans or weapons. Zio-Masonic system has fallen to gangsterism. Hybrid Warfare is the kind of thing we saw in Afghanistan or 80s Columbia . Militarized Russian mafia vs NATO backed militarized police forces.

Once the population reaches a certain age and consumption drops there isn't much to fight over besides social control systems of the young minority. Color revolutions in Central Europe are really only effecting the long term economy of the young . Hope would be Left wing Radicals stood up to the system and aligned with right wing groups to eliminate masonic and Zionist factions and take back the command and control systems before the continet is shut down permanently.

Precision strikes and hunting down their descendents . Easy to find because Hitler and Stalin had their ancestors massacred for loyalty to Rothschild. They won't bite the hands that feed.The Vatican vassal systems was built on knowing that a Zionist is Zionist and Masons is a Mason. They are cults simply teaching them the correct way to behave can avert these political problems.

In terms of Belarus and Russia they should consider the fact the birth rate rate rose after the Soviet collapse and exodus west means many of them shouldn't have even been born in Rothschilds plan. In their " system " economic planning starts at birth because color revolutions effect long term bond issuances they control.

Stalin and Hitler both knew this and used money linked to raw marterials and goods to beat the British gold standard system. If you knew what the Western Central banks were worth you would kill people for using their money.

[Sep 27, 2020] Looks like Washington is simply playing for time

Sep 27, 2020 | www.unz.com

Beckow , says: September 27, 2020 at 12:39 am GMT

@vot tak – Russia could stop transit through Ukraine tomorrow and switch to LNG and existing underwater pipelines. The fact that they have not done it and signed a limited 5-year deal for 2020-2024 suggests that either Russia doesn't want to do it or it is a political concession to its customers (Germany)

You are right that NS2 theatre by Washington is simply playing for time – they know that they can't really prevail. But it is larger than that: their whole strategy is to delay and postpone. They are trying to delay the inevitable or are hoping for a miracle. But strategically they have lost. Water flows downstream, it is only a question of how fast.

TG , says: September 26, 2020 at 3:01 pm GMT

A very interesting post. I might quibble with some of the finer points, but yes, the world has gone stark raving bonkers.

The Russians are NOT ten feet tall, and the Americans – for all of the idiocy of the ruling elites – still have many strengths, and no matter how badly employed, these strengths will not disappear in a day. Russia might yet get pulled down, if they are unlucky or the elites are corrupted by money.

But there is one difference between the Americans and the Russians that, long term, may be the single biggest factor: more than hypersonic missiles or all of that. It's that, for now at least, the Russian elites can learn from experience, and the Americans, can not (or will not, but same thing).

Consider: after the Soviet Union fell, Russian forces got their tails whipped by the Chechens. The Russians rethought their approach, and in a rematch Russia scored not just a military victory, but an enduring strategic victory: they accomplished their policy goals! A goal that was not just spreading chaos and instability! When was the last time the United States did something like that? Maybe Korea in the 1950's.

Realist , says: September 26, 2020 at 3:09 pm GMT
@Ann Nonny Mouse

I'm waiting impatiently for the collapse of the US dollar, hope to live to see it.

Me too the price of gold will go through the roof.

The Spirit of Enoch Powell , says: September 26, 2020 at 3:13 pm GMT
@Mustapha Mond

The Taliban in Afghanistan and the 'rag-tag' North Vietnamese who successfully fought the Vietnam War might disagree with you .

You can't really use those examples as a way of finalising the inferiority of the Western armed forces vis-à-vis Russia as the latter also did not manage to defeat the Afghans and would likely have been made a mincemeat of by the VC as well.

Russia's performance in Chechnya was also not that great considering the power differential.

[Sep 26, 2020] I see that the German Parliament has NOT TAKEN its red pills these days and is reluctant to swallow the BS.

Notable quotes:
"... On rules based disorder and the capitulation of Merkel and her BND lapdogs to the 'hate Russia' fulminations of the UKUSA morons. I see that the German Parliament has NOT TAKEN its red pills these days and is reluctant to swallow the BS. ..."
Sep 26, 2020 | www.moonofalabama.org

uncle tungsten , Sep 22 2020 22:53 utc | 36

On rules based disorder and the capitulation of Merkel and her BND lapdogs to the 'hate Russia' fulminations of the UKUSA morons. I see that the German Parliament has NOT TAKEN its red pills these days and is reluctant to swallow the BS. It would be satisfying to see the collective wisdom of the Parliament to exceed that of the BND. But then that is a low bar.

[Sep 24, 2020] Washington using Navalny situation as excuse to block Russian-German Nord Stream 2 gas pipeline, Russian intelligence chief says by Jonny Tickle

Notable quotes:
"... Discussion about ending Nord Stream 2 resumed last month, when EU politicians debated further sanctions, following the suspected poisoning of Navalny. Naryshkin believes that the US is using the accusations of poisoning as a pretext to sell more LNG to Europe. On Thursday, MEPs demanded that Germany cancel construction of the pipeline. ..."
Sep 22, 2020 | www.rt.com

The US is working hard to keep the spotlight on the case of Alexey Navalny as a way to help block construction of the Nord Stream 2 pipeline, according to Sergey Naryshkin, head of Russia's Foreign Intelligence Service (the SVR).

Naryshkin believes that Washington wants to block Nord Stream 2 so it can prevent Moscow from efficiently providing gas to the continent, thereby increasing demand for American liquefied natural gas (LNG) in other European states. As things stand, Russia delivers a large percentage of the continent's gas, and the pipeline would connect the country's gas supply directly to Germany, under the Baltic Sea. The project is more than 90 percent complete.

READ MORE: German FM links Nord Stream 2 to Navalny, threatens sanctions as Moscow accuses Berlin of dragging feet on alleged poisoning probe

"It is extremely important for Washington to end this project," Naryshkin said, explaining that the alleged poisoning of opposition figure Navalny has become an excuse to stop Nord Stream 2's construction.

The United States has long been opposed to the project, somewhat incredibly claiming that it would "undermine Europe's overall energy security and stability," but many believe that Washington's true motivations are economic.

Discussion about ending Nord Stream 2 resumed last month, when EU politicians debated further sanctions, following the suspected poisoning of Navalny. Naryshkin believes that the US is using the accusations of poisoning as a pretext to sell more LNG to Europe. On Thursday, MEPs demanded that Germany cancel construction of the pipeline.

Despite US pressure, Naryshkin has expressed hope that the EU will rely on common sense before the "cold winter" and likened the proposed halting of Nord Stream 2 to "cutting off the nose to spite the face."

Late last month, Russian anti-corruption activist Navalny was hospitalized in the Siberian city of Omsk after he became ill on a flight from Tomsk to Moscow. Two days later, after a request from his family and associates, he was flown to Berlin for treatment at that city's Charité clinic. Following tests, German authorities announced that Navalny was poisoned with a substance from the Novichok group of nerve agents. After the diagnosis, Heiko Maas, the German Foreign Minister, told Berlin tabloid Bild that he hopes "the Russians don't force [the Germans] to change [their] stance on Nord Stream 2."

US aims for gas domination in Europe, Ukrainian MP says. Nord Stream 2 is 1st target, then existing European pipeline system

Like this story? Share it with a friend!

[Sep 19, 2020] Who organized this provocation? Is this a part of gas war?

Were Khodorkovsky or Browder among people involved? To what extent Trump administration and MI6 were involved? Looks more and more line a bad replay of Skripals poisoning
Notable quotes:
"... Germans and "the whole world", to quote Pompeo, know the truth: Russians simply deny the truth, and the more they deny, the more truthful the accusations appear. And the elephant in the room: Why isn't the poisoned by "Novichok" bullshitting bastard of a US agent dead? And the answer given by the Germans, that is ironic in the extreme: because Russian doctors saved his life in Omsk. ..."
"... There are undeniable advantages to accusations for which no substantiation is offered – as we saw with the Skripals, you can await public comment, identify where you went wrong from scornful rejections of the narrative, and then modify it so that it makes more sense. ..."
"... I hope Germany offers residency to the Navalnys, and that they accept. Russia can't really refuse to let him back in, he's a citizen. But as long as he is there he will cause trouble, and he'll be recharged with all the PR he has received from this latest caper. ..."
"... But it is suggested that Russia is bargaining for his return; the story also expands on Lavrov's recent statements, and introduces a villain in the woodpile I would not have personally suspected: Poland. ..."
"... I recall Lavrov querying the other day Pevchikh's presence in Germany, her refusal to be interviewed by investigators in Omsk and how come she managed to fly to Germany with Navalny? He also said that other supporters of Navalny had also turned up in Germany. ..."
"... I lay a pound to a pinch of shit that Pevchikh is a British agent. ..."
"... Looking good for almost a corpse. COVID-19, a flu virus, is a deadly killer, and Novichok, a deadly nerve agent, is not a killer. ..."
"... Dances with Bears: THE PEVCHIKH PLOT – NAVALNY BOTTLE, LONDON WITNESS FLEE THE SCENE OF THE CRIME, BERLIN TOO http://johnhelmer.net/the-pevchikh-plot-navalny-bottle-london-witness-flee-the-scene-of-the-crime-berlin-too/ ..."
"... I reckon Khordokovsky has a hand in this. He has the same moral compass as dead Berezovsky. None. And he has refused to stick to agreements (keep out of politics). If the British or someone else get fingered for this cunning plan , would they serve him up on a silver platter? Almost certainly so. ..."
"... We certainly did well to focus on Maria Pevchikh as soon as we discovered that in addition to being the one who evaded questioning by Russian authorities by flying out to Germany, she also had British residency. She certainly has become a "person of interest" and could well be the major individual in the plot to incapacitate Navalny and use him to pressure Germany over NSII and Russia over the Belarus unrest. ..."
"... It is still unknown whether Pevchikh is a British citizen. I think she is and probably must be, in fact, for if she is only a visa holder or an applicant for UK citizenship, she could be told by the Home Office to go take a hike if it is proven that she was instrumental in the poisoning plot. ..."
"... Ask Pevchikh! Only she is now probably undergoing debriefing in London at UK Secret Intelligence Services HQ, 85 Albert Embankment. ..."
"... There was considerable risk involved in the deception. I doubt that Navalny went into the deception willingly. There was a very real risk that he could have suffered some brain damage going into the first coma and that's sure to compromise his health in the long term in other ways. ..."
"... More likely it seems a lot of the deception was planned behind Navalny's back and people were waiting for an opportunity to carry it out. It may have been planned years ago for someone else and then switched to Navalny once he was in the Omsk hospital. Julia Navalnaya may have been pushed into demanding that Navalny be transferred to Berlin and while the Omsk hospital doctors were stabilising him for the transfer, the deception then started going into action in Germany. ..."
"... Lavrov smelt a rat several days ago -- last week, I'm sure -- when he stated that suspicions had been aroused by one of Navalny's gang refusing to answer investigators' questions in Omsk and then scarpering off to Germany. ..."
"... I'm quite sure the FSB already knew of Pevchikh's comings and goings between London and Moscow (over 60 flights there and back I read somewhere) and her activities with the Navalny organization. ..."
"... if Washington thinks it can actually halt Nord Stream II – with the understanding that the Russians would probably give up after such a stinging second rebuke – then the sky is the limit, and they will scornfully reject any other solution. The one who stands to get hurt the most is Europe. But I don't think they realize it. ..."
Sep 19, 2020 | thenewkremlinstooge.wordpress.com

MOSCOWEXILE September 14, 2020 at 11:07 pm

Russian librag Vedomosti reports NYT:

NYT сообщила о планах Навального вернуться в Россию
15 сентября 2020

NYT has announced Navalney's to return to Russia
15 September 2020

Founder of the Anti-Corruption Foundation, Alexei Navalny, who is undergoing treatment in Germany, has discussed his poisoning with the German prosecutor and announced that he plans to return to Russia, The New York Times has reported, citing a source in the German security forces.

According to the source, Navalny is fully aware of his condition, of what happened and where he is. In a conversation with the prosecutor, he refused that his case be jointly investigated by Germany and Russia. Navalny said he planned to return to Russia immediately after his recovery and continue his mission, the newspaper notes.

https://vedomosti-ru.turbopages.org/vedomosti.ru/s/society/news/2020/09/15/839918-o-planah-navalnogo?utm_source=yxnews&utm_medium=mobile

Mission accomplished.

I notice that the Navalny fake story has gone off the radar in the Western MSM.

Now there just remain the lies and innuendos fixed in the minds of the sheeple.

Only an investigation by the Germans.

No investigation by the Russians.

Germans and "the whole world", to quote Pompeo, know the truth: Russians simply deny the truth, and the more they deny, the more truthful the accusations appear. And the elephant in the room: Why isn't the poisoned by "Novichok" bullshitting bastard of a US agent dead? And the answer given by the Germans, that is ironic in the extreme: because Russian doctors saved his life in Omsk.

Other elephants lurking in the shadows:

Why hadn't everyone who had been in contact with the piece of shit, including fellow passengers on the Tomsk-Moscow flight died?

Where were the hazmat-suit-wearing specialists that should have detoxified the aeroplane on board of which the Bullshitter threw a wobbler?

So many elephants, all ignored.

Total fabrication.

When the liar returns here, how about arresting him for breach of his bail conditions?

Not technically but absolutely legally he was not allowed to leave the country.

How about arresting him for perverting the course of justice? You can get life for doing that in the UK!

He refuses to allow the Russian state to investigate his case but he and his controllers and supporters maintain that the Russian state attempted to murder him with the most deadly nerve agent known to man -- but it didn't work.

ET AL September 15, 2020 at 1:32 am

Jesus has Risen!

And on the plus side he can sell expensive 'blessed' trinkets to his hamsters help subsidize his interesting lifestyle. Think holy relics, think Medjigorje, Lourdes etc.

MARK CHAPMAN September 15, 2020 at 8:58 am

Having survived Novichok poisoning, is he now immune?

MOSCOWEXILE September 15, 2020 at 4:16 am

A long read:

VESTI RU

Навальный, "Новичок" и "белая коробка"
13 сентября 2020

Navalny, "Novichok" and the "White Box"
13 September 2020

Why is not a single Berlin doctor ready to personally confirm the announced poisoning of Navalny?

A Russian patient is recovering in the "White Box" of the Charité hospital. During the three weeks of Navalny's stay within these walls, no one shouted at the doctors that they were murderers, no one demanded from them hourly reports on the patient's state of health. At the beginning of the week, the hospital's press service informs the press that the personal guest of the Federal Chancellor has been withdrawn from an artificial coma and is reacting to other people. A couple of days later, "Spiegel" magazine publishes encouraging information: "More progress has been made. If his health continues to improve, Navalny will begin to receive more visitors". According to "Bellingcat" and "Der Spiegel", Navalny can already speak and can probably recall the events that happened before he lost consciousness on an aeroplane flying from Tomsk to Moscow.

In general, the latest Charité press releases are in clear contradiction to the horror that the German press had been gathering all week. The already poisoned underpants have been forgotten, the newspaper "Die Zeit" returns the reader to a famous photograph: morning in a café at the Tomsk airport, a passenger for the flight to Moscow flight peers into a cup that he has raised in order to drink out of it. In it,, according to a "Die " source, is not just a chemical warfare agent from the "Novichok" group: in there is a "Novichok" on steroids.

"Before this assassination attempt, the world did not know about this poison, which is said to be even more deadly and dangerous than all known substances from the Novichok group. Scientists found corresponding traces on the Navalny's hands and on the neck of a bottle from which he had drunk. This "modified Novichok" allegedly acts more slowly than previous versions. The Germans assume that one of the FSB agents monitoring Navalny, or an undercover agent, added drops of poison to his tea or applied a substance to the surface of a cup. Navalny was supposed to die on board the aircraft", writes "Die Zeit".

Everything is just fine and dandy here: for example, about agents who had to perform the necessary manipulations with a super-poison in a crowded place. A remarkable and suddenly appeared bottle -- no bottle was seen in Omsk at all. The story goes on about the fact that, apart from tea, Navalny did not drink anything. It turns out that those accompanying the blogger took the bottle out of the plane, hid it, and then transported it to Germany and handed it to Bundeswehr chemists Concealing evidence is pure criminality. But the most interesting thing is the super-"Novichok".

After the poisoning of the Skripals in Salisbury (let us recount the usual version of events that happened there), about 50 more people sought medical help. Houses were taken apart, pets were destroyed. But here no one except Navalny was hurt: neither the people at Tomsk airport, nor the fellow travellers with whom he, having the terrible poison in his hands, took a selfie on a bus, nor the passengers on board the aircraft, and he also touched things there. Symptoms of poisoning should have appeared amongst the passengers, but they did not. This should raise questions from the authors of the serious newspaper "Die Zeit", but it does not. A weapon of mass destruction by any reasoning, but the longer the German press examines the Navalny case, the more mediaeval and grotesque it becomes. And it works -- you can see it even from the reaction of quite moderate politicians.

Already a week and a half ago, Merkel announced the results of a toxicological examination, allegedly carried out in a secret laboratory of the Bundeswehr (yes, Navalny was poisoned), opponents of the Nord Stream 2 gas pipeline have intensified their onslaught against the federal government in order to stop the construction, they say, this is the only way to punish Russia. At the head of the column are the party leaders of the Greens and those associates of Merkel who are friendly with Washington and have plans for higher party or administrative posts after the Chancellor leaves.

These voices were at least heard. In an evening talk show on ZDF, German Foreign Minister Heiko Maas made it clear that the shutdown of Nord Stream 2 could be one response.

"We cannot say that since the sanctions do not work, then there is no need to introduce any. Sometimes we have to put up with the risk of the consequences, thereby saying that we do not want to live in a world without rules", Maas said.

Now Herr Maas, along with many members of the government and administration and the Chancellor, lives in a world of very strange rules. Merkel's press secretary Seibert reiterated that Germany will interact with Russia exclusively at the site of the Organization for the Prohibition of Chemical Weapons (OPCW), where all the documents allegedly have already been sent.

The OPCW Technical Secretariat informed our permanent representative, Alexander Shulgin, that Berlin had only sent a notification about Navalny's poisoning, a sheet of A4 paper, but there is still nothing that the experts could work on. But the Germans had to formulate a response to the proposal of the Russian Prosecutor General's Office on exchange of information: any information about the state of Navalny can be transferred to Russia only with his permission.

This was the case in 2004. The Charité clinic then diagnosed the presidential candidate of the Ukraine Viktor Yushchenko with dioxin poisoning -- no one ever saw documentary evidence. Yushchenko then for 4 years, while he was of interest he was to the public, promised to show everything, but he never did.

This trick can be repeated again, the main thing is to find the answer to an urgent task: to inflate the level of confrontation between Russia and Germany, and therefore the entire West, in order to force the Russian authorities to be as cautious as possible in their domestic and foreign policy, for example, in the Belarusian direction.

However, the fact that Nord Stream 2, for which the German federal government was ready to support unto death, suddenly became an instrument of blackmail -- admit the poisoning, otherwise we can close it down -- openly outraged German business and regional elites.

"It seems that the verdict has already been given -- there are demands that construction of the pipeline be stopped. I strongly oppose such measures", said Michael Kretschmer, Prime Minister of Saxony.

"We have had absolutely trusting cooperation with Russia in the energy sector for 50 years. And even in the most difficult political times, which were probably even more difficult during the Cold War, we managed to maintain this trust", emphasized Michael Harms, executive director of Eastern Committee of the German economy.

Even a true transatlantist, the president of the Munich Security Conference Wolfgang Ischinger, stood up for Nord Stream 2 (and Denmark had joined the renewed US incitement against it the day before).

Political games will not pass themselves of as force majeure. Investors will go to the German government for their money. Here you need to think ten times, because along with the demands of multibillion-dollar compensation, there will definitely be asked unpleasant questions about the reasons that made the German authorities abandon a project that was profitable to all sides. So you can go to Navalny's analyses. In a normal court, bureaucratic excuses will not work. And, by the way, in Germany there are politician-lawyers who can professionally draw up a claim and conduct a case.

"I want to investigate this. One of the developers of Novichok is in the US. It is known that many special services have this poison. Of course, the Russian have it as well, but if Putin did it, then why give Navalny to Germany? So that we can establish all this here? A crime must have some logic", says Bundestag deputy Gregor Gizi.

The logic that we now see is somehow not German. One gets the impression that the compassion and humanism of the German politician, brought up on the lessons of the past, are now being tried out by smart and cynical people who know how to competently fabricate, substitute and cover their tracks. And not too far away, we already had Britain.

At the end of May 2003, the BBC released material that Prime Minister Blair and his cabinet had made a decision to enter the war in Iraq based on falsified intelligence. The person who passed on this information to reporters was David Kelly, a leading chemical weapons specialist at the British Department of Defence. His speech at the parliamentary hearings threatened the prime minister, the military and the secret services with big problems, Hiwever, on July 18, 2003, Kelly was found dead in the woods near his home. Suicide, the investigation stated, but in 2007, a group of parliamentarians conducted an unofficial investigation -- there were no legal consequences, but now all British people know that Kelly was murdered in cold blood.

In 2015, Blair was forced to admit that he lied to citizens about Iraq, and escaped trial only because no one wanted to get involved with it. Nevertheless, Blair has gone down in history with this lie. And history is important to remember in order to do it right. Russian Foreign Minister Sergei Lavrov calls on the Germans to leave emotions and turn on their brains.

"I hope that these absurd actions will be stopped and Germany, at least for the sake of the reputation of German punctuality, will fulfill its obligations under the agreement with the Russian Federation. Moreover, they are demanding an investigation from us, but it turns out that all those who accompanied Navalny are slowly moving to Germany too. this is very unpleasant and leads to serious thoughts. Therefore, it is in the interests of our German colleagues to protect their reputation and provide all the necessary information that would somehow shed light on their so far absolutely unfounded accusations", Lavrov said.

Another proposal has gone from Moscow to Berlin: to send a Russian investigation team to Germany in order to jointly study the circumstances of the case, the victim of which is a Russian citizen. So far, there is no reason to believe that Berlin will respond with consent.

Some German politicians and almost all the SMS likes to moralize against Russia, periodically recalling the Stalinist repressions and the GULAG. But now Germany itself behaves like an investigator during interrogation in the dungeons of the NKVD. Confession is the queen of proof.*

https://yandex.ru/turbo/vesti.ru/s/article/2457559?promo=navbar&utm_referrer=https%3A%2F%2Fzen.yandex.com%2F%3Ffrom%3Dspecial&utm_source=YandexZenSpecial

Yeah, we got a confession in the end!

That's all the bastards demand of Russia: Confess and then we'll be pals.

*Признание -- царица доказательств

"Confession is the Queen of proof."

From Latin: Сonfessio regina probationum est)

Roman legal principle of criminal procedural law.

Слава России!

MARK CHAPMAN September 15, 2020 at 10:04 am

There are undeniable advantages to accusations for which no substantiation is offered – as we saw with the Skripals, you can await public comment, identify where you went wrong from scornful rejections of the narrative, and then modify it so that it makes more sense.

In this case, people wonder why such a potent nerve agent did not fell Navalny instantly like a poleaxed ox, before he ever left the terminal, instead of 40 minutes or so into the flight. Ahhh but this, we later learn, was a specially-modified Novichok, engineered to be slow-acting. Just what you want in a nerve agent. Hint – no, it isn't. Just like you don't want it specially engineered to be 'persistent', like that chemical-warfare expert tit for Bellingcat claimed was the reason the poison daubed on Skripal's doorknob did not wash away in the rain and was still deadly weeks afterward. You want a nerve agent to quickly and efficiently kill enemy troops caught in the open and unprotected, and then as quickly degrade and disperse so your own forces can move in and occupy the objective. The last thing you want is it hanging about for weeks, or being 'slow-acting' so those troops can come in and wax your ass and then later fall down dead. One of the first casualties of these silly stories must be that the agent is 'military grade'. The military would say, if you want to use that useless shite, spread it yourself – we want nothing to do with it.

MOSCOWEXILE September 15, 2020 at 4:46 am

Just appeared, posted from Charité -- Bullshitter with statuesque wife and kiddie acolytes:

https://www.instagram.com/p/CFJwV0Dly0Z/embed/captioned/?cr=1&v=12&wp=822&rd=https%3A%2F%2Fthenewkremlinstooge.wordpress.com&rp=%2F2020%2F07%2F31%2Fthe-ceaseless-lies-of-eva-bartlett-or-the-partisan-scrubbing-of-western-consciousness%2F#%7B%22ci%22%3A0%2C%22os%22%3A3146.465000000717%7D

Another bungled FSB wet job!

MOSCOWEXILE September 15, 2020 at 4:56 am

It reads:

navalny Hi, this is Navalny. I miss you all 😍. I still can hardly do anything, but yesterday I was able to breathe on my own all day. Generally myself. I did not use any outside help, not even the simplest valve in my throat. I liked it very much. An amazing, underestimated by many thing. Would totally recommend.

What, no tracheotomy scar?

Why aren't you dead, you wanker?

Thinking about thanking the Omsk doctors who "saved your life" after you had taken a dose of salts in the aircraft shithouse?

MARK CHAPMAN September 15, 2020 at 10:07 am

"I still can hardly do anything "

I'm still waiting for the difference to become evident. Navalny does perhaps less than any man in Russia who enjoys such a leisurely lifestyle.

MOSCOWEXILE September 15, 2020 at 10:05 am

I take it that the kiddie Navalnyites in the above Instagram are all Russian citizens and part of the Bullshitter's entourage that turned up in Berlin, hot on the heels of their comatose hero.

So how did they get the documentation that enabled them to leave the Mafia State and enter Germany, the coronavirus shamdemic notwithstanding?

Are they all guests of Frau Kanzelerin Merkel?

MARK CHAPMAN September 15, 2020 at 10:34 am

I thought they were the Bullshitter's kids.

MOSCOWEXILE September 15, 2020 at 10:49 am

Yes, they are his children. Navalnaya clearly got permission for their son to travel to Germany. His daughter has flown in from the USA.

However, the question still remains as regards those Navalnyites who rolled up in Germany following their leader's private flight there: how did they get the appropriate documentation to do so at such short notice, not to mention Pevchikh, who flew with the comatose Navalny to Berlin -- and then vanished?.

Seibert was asked about this and said he knew nothing about her.

MARK CHAPMAN September 15, 2020 at 11:22 am

Ah, yes; that's a good point. I just assumed the hamsters were blathering from a distance, as in Russia. I did not realize some of them had turned up in Germany, except for the mysterious Masha.

I hope Germany offers residency to the Navalnys, and that they accept. Russia can't really refuse to let him back in, he's a citizen. But as long as he is there he will cause trouble, and he'll be recharged with all the PR he has received from this latest caper.

But it is suggested that Russia is bargaining for his return; the story also expands on Lavrov's recent statements, and introduces a villain in the woodpile I would not have personally suspected: Poland.

https://www.stalkerzone.org/lavrov-offered-merkel-a-choice-between-russia-navalny/

MOSCOWEXILE September 15, 2020 at 11:54 am

And get this:

Does he want to end his political ambitions? Top Eurocrat Borrell calls for Navalny's name to be attached to EU 'Magnitsky List'

https://www.rt.com/russia/500766-borrell-navalny-sanctions-russia/

MOSCOWEXILE September 15, 2020 at 12:03 pm

I recall Lavrov querying the other day Pevchikh's presence in Germany, her refusal to be interviewed by investigators in Omsk and how come she managed to fly to Germany with Navalny? He also said that other supporters of Navalny had also turned up in Germany.

I lay a pound to a pinch of shit that Pevchikh is a British agent.

MOSCOWEXILE September 16, 2020 at 11:35 am

Note how the monitor in the Navalny Instagram above has been censored.

It's because, they say, it displays personal data about Putin's intended Novichok victim, such as body temperature, pulse, blood pressure etc.

Wouldn't like the world to know that there is nothing wrong with him, would they?

Source:

Эксперт объяснил ретушь прикроватного экрана на фото Навального
15 сентября 2020

An expert has explained the retouching of the bedside monitor in the Navalny photo
15 September 2020

https://vz-ru.turbopages.org/vz.ru/s/news/2020/9/15/1060574.html?promo=navbar&utm_referrer=https%3A%2F%2Fzen.yandex.com

MARK CHAPMAN September 16, 2020 at 12:26 pm

Too late to get smart now.

MOSCOWEXILE September 16, 2020 at 10:51 pm

NAVALNY: HIDDEN AND OVERT SIGNALS
Stalker Zone
September 16, 2020

Staged???

Why on earth should one think that?

MOSCOWEXILE September 16, 2020 at 10:54 pm

Comment to the above C/Z article:

anymouse • 8 hours ago

Looking good for almost a corpse. COVID-19, a flu virus, is a deadly killer, and Novichok, a deadly nerve agent, is not a killer.

ET AL September 15, 2020 at 11:36 am

Dances with Bears: THE PEVCHIKH PLOT – NAVALNY BOTTLE, LONDON WITNESS FLEE THE SCENE OF THE CRIME, BERLIN TOO
http://johnhelmer.net/the-pevchikh-plot-navalny-bottle-london-witness-flee-the-scene-of-the-crime-berlin-too/

British and other international toxicological experts say that without technical reporting by the laboratory of the spectrometric composition of the chemical, and without identifying the compound by the international naming protocol there is no evidence at all;..

the US Army had recently manufactured its own Novichok types: "A230, A232 and A234 A232 has a CAS number of 2308498-31-7. A230 and A234 have no known CAS numbers."
####

A lot more at the link.

ET AL September 15, 2020 at 11:40 am

I reckon Khordokovsky has a hand in this. He has the same moral compass as dead Berezovsky. None. And he has refused to stick to agreements (keep out of politics). If the British or someone else get fingered for this cunning plan , would they serve him up on a silver platter? Almost certainly so.

MARK CHAPMAN September 15, 2020 at 3:29 pm

Helmer always delivers. It looks very much as if the Germans have stepped in the shit.

JEN September 15, 2020 at 7:10 pm

We certainly did well to focus on Maria Pevchikh as soon as we discovered that in addition to being the one who evaded questioning by Russian authorities by flying out to Germany, she also had British residency. She certainly has become a "person of interest" and could well be the major individual in the plot to incapacitate Navalny and use him to pressure Germany over NSII and Russia over the Belarus unrest.

MARK CHAPMAN September 15, 2020 at 7:17 pm

Agreed; she does indeed look to have played a far bigger part in the operation than she lets on.

MOSCOWEXILE September 15, 2020 at 9:44 pm

It is still unknown whether Pevchikh is a British citizen. I think she is and probably must be, in fact, for if she is only a visa holder or an applicant for UK citizenship, she could be told by the Home Office to go take a hike if it is proven that she was instrumental in the poisoning plot.

When Berezovsky got cocky in the UK after a judge there had prevented his being forced to leave Misty Albion because Berzovsky had persuaded him that were he to return to Mordor, he would face an unfair trial and his life would be in danger -- the erstwhile "Godfather of the Kremlin" had arrived in the with a 6-month visitor's visa -- he started bragging to the "Guardian" that he was organizing with his chums still in the Evil Empire the overthrow of the tyrant Putin.

The Home Secretary at the time was none other than "Jack" Straw -- another odious pile of ordure -- who promptly summonsed Berezovsky to the Home Office for an official bollocking. He was told that if, while resident in the UK, he continued to engage himself with the overthrow of a foreign head of state, he was out.

Be that as it may, I am quite sure he was working with British state security, as was his once favoured acolyte Litvinenko.

Litvinenko was poisoned. Berezovsky committed suicide -- they say.

Like

MOSCOWEXILE September 15, 2020 at 1:32 pm

Россия задала ЕС девять вопросов об обвинениях в ситуации с Навальным

Постоянное представительство России при Евросоюзе указало на ключевые нестыковки в версии об отравлении Алексея Навального
15 сентября 2020

Russia has asked the EU nine questions about accusations in the situation with Navalny

The Permanent Representative of Russia to the European Union has pointed out the key inconsistencies in the version about the poisoning of Alexei Navalny
15 September 2020

https://yandex.ru/turbo/tass.ru/s/politika/9466401?sign=80f97b564d197b55161b94400f4ff187026d184af0581f365926a5271a89189a%3A1600204510&utm_source=yxnews&utm_medium=mobile&trbsrc=neo-news

In the eighth question, Russian diplomats drew attention to a bottle of water, on which, according to Germany, traces of poison had been found: "Not a single surveillance camera recorded how Navalny drank from a similar bottle at the Tomsk airport [before departure]. from this bottle earlier or on board the plane, how did this bottle get to Berlin? "

Ask Pevchikh! Only she is now probably undergoing debriefing in London at UK Secret Intelligence Services HQ, 85 Albert Embankment.

PATIENT OBSERVER September 15, 2020 at 4:41 pm

Navalny, if indeed he was close to death, must now realize he was set up by one of his own benefactors. What would be his next move? Going back to Russia would make the most sense as the Russians may actually protect him from another show-assassination and he would have freedom to prance around to his heart's content.

MARK CHAPMAN September 15, 2020 at 6:54 pm

I don't believe he was ever 'close to death', rather that he was an active part of the deception. He is a grifting idiot who puffs up like a toad upon being flattered. He could never win power in Russia legitimately, as he is mostly a figure of contempt in Russia save for the perennially-discontented children of the liberal elite and the few Americaphiles who don't know enough to keep their heads down. I believe he played his role by taking something that would nauseate him but not seriously hurt him, rolling about and screaming, and that the introduction of the phony 'poison bottle' was with his full knowledge. I wish Russia would just disown him and tell the Germans they can have him.

However, I could be wrong. We will know from the tone of his remarks when he feels he is strong enough to once again assume his president-in-waiting role, and starts spouting off about what happened to him. He is the most likely candidate to be selected to get the water-bottle narrative back on track, so if he comes out with an explanation for how he drank from the bottle somewhere there were no surveillance cameras, and noticed a sketchy-looking guy in a leather jacket and a "Vote For Putin!" T-shirt standing nearby just before he drank, it will be a pretty good indication that he is as full of shit as ever.

JEN September 15, 2020 at 10:53 pm

There was considerable risk involved in the deception. I doubt that Navalny went into the deception willingly. There was a very real risk that he could have suffered some brain damage going into the first coma and that's sure to compromise his health in the long term in other ways.

More likely it seems a lot of the deception was planned behind Navalny's back and people were waiting for an opportunity to carry it out. It may have been planned years ago for someone else and then switched to Navalny once he was in the Omsk hospital. Julia Navalnaya may have been pushed into demanding that Navalny be transferred to Berlin and while the Omsk hospital doctors were stabilising him for the transfer, the deception then started going into action in Germany.

MOSCOWEXILE September 15, 2020 at 11:18 pm

Lavrov smelt a rat several days ago -- last week, I'm sure -- when he stated that suspicions had been aroused by one of Navalny's gang refusing to answer investigators' questions in Omsk and then scarpering off to Germany.

I'm quite sure the FSB already knew of Pevchikh's comings and goings between London and Moscow (over 60 flights there and back I read somewhere) and her activities with the Navalny organization.

Perhaps they allowed Navalny to leave for Germany -- with Pevchikh flying out with him, I may add -- because they knew what was afoot and would later expose the Germans for liars, or if not that, then for their falling to a sucker punch off the British secret service.

They certainly allowed Pevchikh to leave Russia: she didn't sneak on board Navalny's private flight.

Just Pevchikh, note, not Navalnaya, who is not a British agent, I'm sure.

MARK CHAPMAN September 16, 2020 at 8:49 am

Certainly possible – as I say, we will know more from his blabber once he starts giving interviews, which he lives to do. His tone will have changed considerably if he believes his erstwhile chums in politics intended to martyr him. Otherwise I read his expressed desire to return at once to Russia as simply remaining in character – the selfless hero risking all for freedom and democracy.

I wonder how he will thank the doctors in Omsk for saving his life, as it is generally acknowledged they did. He cannot go into transports of admiration for their professional skills, because they claimed to have found no trace of poisoning in his samples. He faces the choice, then, of simply passing over it without mention, or accusing the people who saved his life of 'being part of the machine'. Doing either will certainly not increase his popularity in Russia. And it makes no difference at all how popular he is in the west – something the west seemingly cannot be taught.

Like

MOSCOWEXILE September 16, 2020 at 4:41 am

Die Zeit сообщила о предложении США от ФРГ по "Северному потоку -- 2"
RT на русском, 16 сентября 2020

Die Zeit announced the proposal of the USA from Germany for the "Nord Stream – 2
RT in Russian, September 16, 2020

The German government has offered the United States a deal in exchange for Washington's waiver of sanctions against Nord Stream 2.

This is reported by the newspaper Die Zeit, citing sources

It is noted that Berlin has expressed its readiness to invest up to € 1 billion in the construction of two terminals in Germany for receiving liquefied natural gas from the United States.

"In response, the United States will allow the unhindered completion and operation of Nord Stream 2", TASS quotes the text of a letter from German Finance Minister Olaf Scholz, which was sent on August 7 to the head of the US Treasury, Stephen Mnuchin.

In early August, US senators sent a letter to the operator of the German port of Sassnitz calling for an end to work to support the construction of Nord Stream 2.

https://russian-rt-com.turbopages.org/russian.rt.com/s/business/news/783868-predlozhenie-frg-ssha?utm_source=yxnews&utm_medium=mobile

PAULR September 16, 2020 at 5:07 am

This would suggest that the Germans are not planning to cancel North Stream 2 themselves in response to the Navalny case.

MOSCOWEXILE September 16, 2020 at 5:57 am

The USA won't like the offer. Zero-Win for them -- always.

Americans have to be winners -- expect to be winners: it's their birthright and what made America great. To be a loser is un-American.

In my experience, the worst thing ever for many US citizens is to be accused of being a "loser".

PATIENT OBSERVER September 16, 2020 at 9:05 am

Very true about the term "loser" being a harsh insult for Americans. The "loser" tag starts to be applied to kids in early grade school and only intensifies from that point. The glorification of success (defined by the level of conspicuous consumption) further sharpens the divide between losers and winners. Our "feel-good" stories are often about individuals who were able to transform themselves from "losers" to "winners". American culture is one-dimensional in that way.

PATIENT OBSERVER September 16, 2020 at 5:12 pm

Building an LNG terminal is one thing, buying US LNG is another thing. In addition, I believe that Russia could provide LNG to Germany as well and likely at a substantially lower price.

The US may settle for this gesture as it does hold the door open, however slightly, for future developments to be leveraged by the US to force Germany to reduce or stop gas purchases from Russia. Having the terminal in place could make a future change in suppliers more feasible and faster but nevertheless representing an economic disaster for Germany. Lets call it step 1 in Plan B.

MARK CHAPMAN September 16, 2020 at 10:49 pm

I'm pretty sure the Americans will not take this offer, but will instead – correctly – interpret it as weakness and increase their pressure.

ET AL September 16, 2020 at 11:56 pm

On the other hand any diplomatic/economic success plays well in this presidential erection year. So a) is it worth it?; b) can they reverse the decision the day after? I assume they can have their cake and eat it as Brussels is mostly spineless. Borrell can squeal about Russia, but that's because he can do f/k all about the USA's behavior, being spokeshole and all

MARK CHAPMAN September 17, 2020 at 8:51 am

That's what people seem not to get – the decision would not ever be 'reversible' once Nord Stream II is complete. That pipeline quad alone can carry all of Europe's gas supply that it receives from Russia. None through Ukraine, not a whiff, if that is Moscow's will, although the Russians have agreed to transit token amounts, which the Ukrainians say are not enough to make the system's continued operation viable – without the large volumes they are accustomed to handling, they will have to progressively begin shutting down, bypassing and dismantling sections they can no longer afford to maintain.

So long as the pipeline's future remains in doubt, Uncle Sam can sell the philosophical possibility of supplying Europe with large volumes of cheap LNG via tankers, made desirable – although it will cost a little more, no getting around that – for political reasons. Once Nord Stream II is complete, the reality of a reliable supply of cheap pipeline gas would have to be countered with a concrete offer from the USA; this many cubic meters times this many Euros. Any housewife can do a cost-benefit analysis at that level. Do you want to pay more for American gas just because it comes from America? Well, let me think about it – what are the benefits? Well, it comes from America! What, you mean, that's it? There would be no possibility the Americans would use their status as a major energy supplier as leverage to bring about economic or political changes in Europe that they desired, would there? Well I can't guarantee that.

You know what? I'm okay with Russian gas, thanks just the same. Maybe I'll use the money I save to buy a Ford – how's that?

MARK CHAPMAN September 16, 2020 at 9:20 am

Pathetic. After declaring forcefully that American extraterritorial sanctions are illegal – which, technically, they are, only America has a right to threaten to limit European trade in America if it wishes; although that, too is illegal under WTO rules – Germany is now cowering and trying to 'make a deal'. With Trump, in case anyone missed that, whose 'Art of the Deal' consists of destroying the opponent until he is happy to have escaped with his life, and will never publicly complain about a 'deal' which came out very much to his disadvantage. Put another way, offering America a 'deal' only highlights that you believe you are in a weak position, are looking for mercy, and are ripe for the plucking. Germany was already planning to build the heaviest concentration of LNG terminals in Europe; a far better strategy would have been to threaten to cancel them all if Uncle Sam did not back off. The Americans are certainly smart enough to figure out – in about 2.5 seconds – that more LNG terminals means diddly when Russia can also supply LNG far cheaper than the USA because it has teensy transport costs by comparison, being much closer. Two more LNG terminals buys America precisely zero advantage, but the willingness to 'deal' reveals vulnerability. The only American response to rolling on your back to expose your belly is to step on your head.

I swear, it is hard to recognize Germany as the country which once frightened the world.

A Trump counter-offer might be a commitment from Germany to buy X amount of American LNG at a locked-in price, said amount to be sufficient that extra Nord Stream capacity would not be utilized. It depends on whether the Americans really think they can actually stop Nord Stream II, because even that would ultimately be a loser strategy. Unless a term far into the future were specified, the Americans know that once the pipeline is finished, their product is no longer competitive and cannot ever be unless it is unprofitable to themselves. They could satisfy themselves with gutting the Germans for a year or two (if they accepted), but it would be short-term satisfaction at best. Might be enough to win Trump the election, though.

But if Washington thinks it can actually halt Nord Stream II – with the understanding that the Russians would probably give up after such a stinging second rebuke – then the sky is the limit, and they will scornfully reject any other solution. The one who stands to get hurt the most is Europe. But I don't think they realize it.

MOSCOWEXILE September 16, 2020 at 8:31 am

WHY IS IT SO DIFFICULT TO KILL THE "OPPOSITION" TORCH-BEARER NAVALNY?
Stalker Zone
September 15, 2020

CORTES September 17, 2020 at 12:41 am

The Borgias are history. Well, obviously, they ARE history. But now they have been relegated to the Second Division/Championship (football joke) of Poisoners by Sergei Lavrov and his chef de cuisine:

Voici le mindfuck (pardon my French):

https://thesaker.is/us-deputy-secretary-of-state-was-afraid-to-eat-russian-soup-navalny-and-swift-ruslan-ostashko/

Contains a smidgeon of addled Navalny. Delish!

https://c0.pubmine.com/sf/0.0.3/html/safeframe.html REPORT THIS AD

MOSCOWEXILE September 17, 2020 at 12:53 am

Oh look! The Navalnyites have shown a video, shot in Tomsk, of Navalny drinking from the allegedly poisoned water bottle that earlier nobody had seen or made mention of before it turned up in Berlin and was sent to the Bundeswehr lab.

Recall that his loud-mouth spokeswoman had from the very start insisted that Navalny had been poisoned by laced-with-poison tea that he had drunk at Tomsk airport.

Change of story line -- as persistently happened in the Skripal fake.

Video Showing Water Bottle That 'Poisoned' Alexei Navalny Shared by His Team
17 September, 2020: 10:17

https://sputniknews.com/russia/202009171080484058-navalny-was-poisoned-by-water-bottle-in-his-hotel-room-his-team-claims/

MOSCOWEXILE September 17, 2020 at 12:56 am

That Sputnik headline should read, I think, "shared with his team".

And if that is the case, why didn't his team also start howling and screaming and rolling around on the deck some time later on board the Tomsk-Moscow flight?

MOSCOW EXILE September 17, 2020 at 3:15 am

gazeta.ru

Соратники Навального сообщили, что забрали бутылки из номера в Томске
17.09.2020 | 10:57

Navalny's companions have reported that they took bottles from a hotel room in Tomsk

Alexei Navalny's companions have said that a bottle of mineral water, on which German experts had allegedly found traces of poison from the Novichok group, had been brought from a hotel room in Tomsk.

On an Instagram, they have posted a video in which, according to them, an hour after news of Navalny's deteriorating condition, they examine the room and seize all the items which he had been able to touch.

On August 20, the aeroplane in which Navalny was flying urgently landed in Omsk, from where the blogger was taken to hospital. On August 21, doctors announced that the main diagnosis was metabolic disorders.

At the moment, Navalny is in Germany, where he has been taken out of an artificial coma. German doctors announced that he had been poisoned with substances from the Novichok group, but did not provide any relevant evidence.

So why didn't the Navalny hamsters, who dutifully sought out the poison bottle and most certainly handled it, throw wobblers as did Navalny when performing what he thought were the effects of nerve agent poisoning?

And whom did the hamsters hand the bottle to -- Navalnaya or Pevchikh? And who handled the bottle after its arrival in Berlin and before the obliging Bundeswehr said it had been dosed with the most lethal nerve agent (weapons grade) known to man?

Why isn't there a trail of stiffs from Tomsk to Berlin and beyond?

Who's going to believe this shite?

"Why, the whole world knows it's true!" will Imperial Plenipotentiary Pompeus Fattus Arsus surely say.

MOSCOW EXILE September 17, 2020 at 3:36 am

One of the developers of Novichok, Leonid Rink, commented on reports that a bottle in the Tomsk hotel where Alexei Navalny had stayed could [have been] Novichok [contaminated] .

"This is a situation where no one would have been allowed to touch the bottle -- you would have died if you had done so. If this had really been the case, then there would have basically been a deceased person, and everyone who had carried this bottle without gloves and protection would also have died", he told RIA Novosti.

Ah, but . . . Rink is forgetting that it was a special, delayed action Novichok made to take effect on "Putin's Fiercest Critic" when he was on board the Tomsk-Moscow flight.

Rink's an old Soviet has-been and knows nothing about the latest developments in diabolical weaponry that issues forth from secret Orc laboratories.

Эксперт прокомментировал сообщения о бутылке с "Новичком"
12:27

Expert comments on statements about the bottle with "Novichok"
12:27

CORTES September 17, 2020 at 6:20 am

Maybe the cunning developers have produced a Novichok variant safe to those who have sinned but fatal (or liable, at least, to provoke a severe tummy upset, occasionally) to the purest of heart?

JENNIFER HOR September 17, 2020 at 12:43 pm

I like this idea of the special edition of Novichok with the delayed kick. Maybe we could call it Brawndo and speculate that the poison only goes into action when it does because the added electrolytes take time to work to release the poison.

MOSCOWEXILE September 17, 2020 at 7:56 am

kp.ru

Alexei Navalny's team immediately after his departure from Tomsk airport, went to the hotel room in that city where he had spent the night, and packed all the items (including water bottles) so as to deliver them for analysis (of course, not in Russia). A video about this was posted on the oppositionist's Instagram.

Everything in this story is beautiful. Navalny's supporters were collecting "evidence" on a case that had not yet happened -- but it was already supposed to have happened? Together with them, there went a lawyer to the hotel -- he was also at the ready. But why were none of the "trackers" hurt if on the "evidence", as is said, they found traces of the "Novichok" military poison? And how did the "people of Navalny" end up in a room where cleaning up should have been done after the guest's departure? There are other questions as well. Some of them "KP" asked FSB reserve general Alexander Mikhailov .

MARK CHAPMAN September 17, 2020 at 9:06 am

And the person shown handling the bottle is wearing gloves – they made sure to show that. But as others have pointed out, this was well before anyone knew 'an attempt had been made on the Opposition Leader's life'. What, all Lyosha's shit was still in his hotel room, towels on the floor, the next day, after he checked out? Pretty crappy service in those Russian hotels. He didn't even leave Russia for several days, and the first suggestions he had been poisoned came from his 'press agent', who claimed he had been poisoned with tea at the airport.

Skripals II.

Like

MOSCOWEXILE September 17, 2020 at 7:26 am

Навального выдвинули на Нобелевскую премию мира

Navalny nominated for the Nobel Peace Prize

Russian opposition leader Alexei Navalny has been nominated for the Nobel Peace Prize. Sergei Yerofeyev, a professor at Rutgers University in New Jersey, USA, has spoken about this.

According to Yerofeyev, Navalny has been nominated for the prize by "a number of professors from recognized universities who deal with Russia". He did not give specific names, but noted that there are "great people" amongst the scientists who have nominated Navalny.

A professor of any university in the world can nominate a candidate for the Nobel Peace Prize: there are no specific requirements for a candidate. In addition, members of national governments and parliaments, heads of state and some other categories of persons can nominate candidates.

The oppositionist will have to fight for the main prize of the planet with venerable rivals.

This is, first of all, US President Donald Trump, who was nominated by Christian Tubring-Jedde, a member of the Norwegian parliament from the far-right Libertarian Progress Party. As the MP said in an interview with Fox News, Donald Trump should be awarded for his role in concluding an agreement on the full normalization of relations between Israel and the UAE.

And why not? O'Bummer was awarded the peace prize, wasn't he?

Same story in Yukie news:

Navalny nominated for Nobel Peace Prize

Navalny nominated for Nobel Peace Prize – Kyiv Post

MOSCOWEXILE September 17, 2020 at 7:42 am

I wonder how the Kiev Post evaluates Navalny's position on the Crimea?

The status of the Crimea is a problem that a new democratic Russia will inherit from its former government. The Russian position on this problem will be determined by the recognition of the right of the citizens of the Crimea to determine their own destiny -- Navalny 20!8

TIMOTHY HAGIOS September 17, 2020 at 8:26 am

I say give it to him. Let him join the prestigious ranks of Obama, the OPCW, the EU.

I also propose starting a Nobel War Prize, to be awarded to whatever individual or organization is responsible for the highest body count in a given year. Although that may be redundant, considering that it would probably be given to the same people as the Peace Prize.

MARK CHAPMAN September 17, 2020 at 9:13 am

Ha, ha!! And it all descends into farce, again. Navalny has arrived – he has gone global, beyond his wildest dreams. The nothing from Wherever He Is From who could not even break 5% in presidential election polling is now a major star, glittering in the western firmament. As Saint Lily Tomlin once remarked, no matter how cynical you get, you can never keep up.

All the west is going to be able to get out of this is the satisfaction of showing its ass to the neo-Soviets, the way it does when it re-names the street the Russian Embassy is – or was – located on after some prominent Russian dissident. Beavis and Butthead level, at best.

MOSCOWEXILE September 18, 2020 at 9:17 am

On Navalny, a Russian blogger writes:

That's it! This is a farewell article. A real goodbye to the topic. More precisely, parting with Navalny as a topic. His political role has been played to the end. And even lethal doses of Novichok have not caused a mass movement. Furgal's arrest caused an explosion of civil consciousness in Khabarovsk. The poisoning of Navalny, sending him abroad, the discovery of Novichok, official accusations from Germany did not cause any rally, no procession, no movement. No excitement in civic consciousness has occurred and will never happen.

[Sep 18, 2020] Saudi Prince Abdulaziz Warns Oil Short Sellers- -We Will Never Leave This Market Unattended

Paper oil sellers essentially dictate prices to real producers. So they are looting producers. That's hurt the process of replacement of old wells with new ones (and shale oil well live just several years, with only first two the most procductive) and as "paper oil" is Wall Street fiction, and at some point paper oil market might collapse and oil prices go to stratosphere.
Sep 18, 2020 | www.zerohedge.com

As the price of oil begins to falter, Saudi Arabia has stepped up its rhetoric, even going as far as to warn short sellers not to bet against the price of the commodity.

Saudi Energy Minister Prince Abdulaziz bin Salman gave "clear hints" on Thursday that there could be a change of direction in production policy forthcoming as the price of oil continues its slide, according to Bloomberg .

He said Thursday: "We will never leave this market unattended. I want the guys in the trading floors to be as jumpy as possible. I'm going to make sure whoever gambles on this market will be ouching like hell."

At the same time, Brent was falling below $40 per barrel and the market continues to show signs of waning demand. OPEC and its allies said they would be "proactive and preemptive" in addressing the diminishing price, recommending "participating counties take further necessary measures".

Abdulaziz started a meeting on Thursday with what Bloomberg called a "forceful condemnation" of members who are pumping out too much supply. His ire may have been directed to UAE Energy Minister Suhail al Mazrouei, who attended the meeting. The UAE has been "one of the worst quota breakers" in OPEC+, only making 10% of its pledged cuts for August.

Abdulaziz said: "Using tactics to over-produce and hide non-compliance have been tried many times in the past, and always end in failure. They achieve nothing and bring harm to our reputation and credibility."

"Attempts to outsmart the market will not succeed and are counterproductive when we have the eyes, and the technology, of the world upon us," Prince Abdulaziz continued.

UAE was overproducing by about 520,000 barrels per day in August and the country will try to make additional cuts in October and November to make up for past month shortcomings.

https://lockerdome.com/lad/13084989113709670?pubid=ld-dfp-ad-13084989113709670-0&pubo=https%3A%2F%2Fwww.zerohedge.com&rid=www.zerohedge.com&width=890

Countries like Iraq and Nigeria have implemented more than 100% of their required cuts, helping give OPEC and Abdulaziz credibility.

NEVER MISS THE NEWS THAT MATTERS MOST

ZEROHEDGE DIRECTLY TO YOUR INBOX

Receive a daily recap featuring a curated list of must-read stories.

Harry Tchilinguirian, head of commodities strategy at BNP Paribas SA, concluded: "You have to hand it to Prince Abdulaziz. Since he became Saudi oil minister, the kingdom has kept OPEC+ in line through his diplomatic and compelling powers of influence."


y_arrow Fabelhaft , 3 hours ago

If that were true, the energy world would be a lot better off. Producers want to contract; consumers, probably even China, like the market price. For it can be manipulated easier by consumers than by suppliers; because consumers control the intl banks and capitalist rules. Unless China is kept from the market table , then it might accept contracting. Tough racket, this sanctioning stuff is getting to be, eh?

[Sep 18, 2020] Continued German Support for Nord Stream 2 Completion -- Towards a Shift in Russia-Germany Relations by Stephen Lendman

Sep 17, 2020 | www.globalresearch.ca

https://apis.google.com/u/0/se/0/_/+1/fastbutton?usegapi=1&size=medium&count=true&origin=https%3A%2F%2Fwww.globalresearch.ca&url=https%3A%2F%2Fwww.globalresearch.ca%2Fcontinued-german-support-nord-stream-2-completion%2F5724195&gsrc=3p&jsh=m%3B%2F_%2Fscs%2Fapps-static%2F_%2Fjs%2Fk%3Doz.gapi.en.myOGgYJo9ys.O%2Fam%3DwQE%2Fd%3D1%2Fct%3Dzgms%2Frs%3DAGLTcCMR2Cg_3Iqxcgmos-E9G6cjWQG_Kw%2Fm%3D__features__#_methods=onPlusOne%2C_ready%2C_close%2C_open%2C_resizeMe%2C_renderstart%2Concircled%2Cdrefresh%2Cerefresh&id=I0_1600401164093&_gfid=I0_1600401164093&parent=https%3A%2F%2Fwww.globalresearch.ca&pfname=&rpctoken=21838589 1

Construction of Russia's Nord Stream 2 gas pipeline to Germany is about 94% completed.

The project is all about supplying Germany and other European countries with readily available low-cost Russian natural gas -- around 30% cheaper than US liquified natural gas (LNG).

Both right wings of the US one-party state want the pipeline halted to benefit US producers at Russia's expense.

US sanctions on the project breach international law, Germany's Angela Merkel earlier saying "(w)e oppose extraterritorial sanctions (W)e don't accept" them.

"We haven't backed down (on wanting Nord Stream 2 completed) nor do we intend to back down."

Last December, German Foreign Minister Heiko Mass said "European energy policy is decided in Europe, not the United States. We reject any outside interventions and extraterritorial sanctions."

Did the novichok poisoning of Putin critic Alexey Navalny hoax change things?

During a September 24 – 25 summit of EU leaders, the future of Nord Stream 2 will be discussed. Ahead of the summit, Merkel's government offered to invest around one billion euros (about $1.2 billion) in construction of two terminals in Germany for US LNG.

According to the German broadsheet Die Zeit, by letter to Trump regime Treasury Secretary Mnunchin in August, German Vice Chancellor and Finance Minister Olaf Scholz said the following:

"In exchange (for Berlin's proposed LNG investment), the US will allow unobstructed finalization and use of Nord Stream 2," adding:

"(E)xisting legal options for (challenging US) sanctions (on firms involved in the project) have not been exhausted yet."

The broadsheet added that Scholz first expressed Berlin's proposal verbally, confirming it by letter. Proposed German LNG terminals would be built in Brunsbuttel and Wilhelmshaven. Berlin's proposal also included a gas transit contract for Ukraine and financing of a terminal for Poland's use of US LNG.

Following the Navalny false flag, opinion on completing Nord Stream 2 in Germany is divided. Merkel still supports the project as evidenced by her government's offer to build two terminals for US LNG in exchange for dropping sanctions on the pipeline by the US.

Orchestrated Events Responsible for Alexey Navalny's Illness?

Last June, US Senate hardliners proposed legislation to expand Nord Stream 2 related sanctions.

It targets all nations and enterprises involved in the project, including underwriting, insurance and reinsurance companies.

At the time, Gazprom CEO Alexey Miller said Russia will complete construction of the project on its own -- expected to be operational in January or shortly thereafter. Last month, German Foreign Minister Heiko Mass expressed "displeasure" to Pompeo about US sanctions on the project. Last week, Polish government spokesman Piotr Muller was quoted saying the following:

"Poland has from the very beginning emphasized that European solidarity (on Nord Stream 2) should be unambiguous."

"Therefore, if such a need is expressed by the German side, Poland is open to the idea of using the infrastructure which it is building for its own energy security."

His remark followed German media reports that Merkel said a decision by her government on Nord Stream 2 has not been made in light of the Navalny incident. German officials supporting the project stressed that the country will be the main beneficiary of its completion economically, environmentally and strategically. Construction on the proposed 800 – 950 km Baltic Pipe gas pipeline from Norwegian North Sea waters to Poland hasn't begun.

If completed in October 2022 as proposed, it'll be able to deliver about 10 billion cubic meters of natural gas annually -- less than 20% of Nord Stream 2's 55 billion annual cubic meter capacity.

Berlin earlier was skeptical about the project because of environmental concerns. Days earlier, Polish energy expert Jakub Wiech called it "pointless" to compare Baltic Pipe to Nord Stream 2, given the latter project's far greater capacity and ability to provide gas to other Western European countries. A day after the Navalny incident last month, Merkel said Nord Stream 2 will be completed regardless of threatened new US sanctions on firms involved in the project.

Separately on Wednesday, Putin spokesman Dmitry Peskov said Nord Stream 2's completion should not be raised in discussing the Navalny incident.

"It should stop being mentioned in the context of any politicization."

"This is a commercial project that is absolutely in line with the interests of both Russia and European Union countries, and primarily Germany."

No evidence links Russia to Navalny's illness. Whatever caused it wasn't from a novichok nerve agent, the deadliest know substance able to kill exposed individuals in minutes. Over three weeks after falling ill, Navalny is very much alive, recuperating in a Berlin hospital, and able to be ambulatory for short periods.

A Final Comment

On September 14, CNBC reported the following:

"Experts say Berlin is unlikely to (abandon Nord Stream 2 that's) over 94% completed after almost a decade's construction, involv(ing) major German and European companies, and is necessary for the region's current and future energy needs," adding:

"In this case, economic and commercial interests could trump political pressure" against Russia.

Chief eurozone economist Carsten Brzeski said he doesn't see "Germany pulling out of the project Many (in the country) are still in favor of it."

CNBC noted that

"Germany has been reluctant to link the fate of its involvement with Nord Stream 2 to the Navalny incident so far, and (FM Heiko) Maas conceded that stopping the building of the pipeline would hurt not only Russia but German and European firms."

"(O)ver 100 companies from 12 European countries" are involved in the project about half of them from Germany."

*

Note to readers: please click the share buttons below. Forward this article to your email lists. Crosspost on your blog site, internet forums. etc.

Award-winning author Stephen Lendman lives in Chicago. He can be reached at [email protected] . He is a Research Associate of the Centre for Research on Globalization (CRG)

His new book as editor and contributor is titled "Flashpoint in Ukraine: US Drive for Hegemony Risks WW III."

http://www.claritypress.com/LendmanIII.html

Visit his blog site at sjlendman.blogspot.com .

Featured image is from Asia Times

The original source of this article is Global Research Copyright © Stephen Lendman , Global Research, 2020

Comment on Global Research Articles on our Facebook page

Become a Member of Global Research

[Sep 17, 2020] Lies in the Navalny case

Was it BZ toxin again: Lavrov- Swiss lab says 'BZ toxin' used in Salisbury, not produced in Russia, was in US & UK service
Notable quotes:
"... German Chancellor Angela Merkel personally announced at a press conference last week that a chemical weapons laboratory of the Bundeswehr (Armed Forces) had proved "beyond doubt" that Navalny was the victim of an attack using the Novichok nerve agent. She called on the Russian government to answer "very serious questions." ..."
"... At a special session of the Parliamentary Control Committee, which meets in secret, representatives of the German government and the secret services left no doubt, according to media reports, that the poisoning of Navalny had been carried out by Russian state authorities, with the approval of the Russian leadership. The poison was said to be a variant of the warfare agent -- one even more dangerous than that used in the Skripal case in Britain. It purportedly could enter the body simply through inhalation, and its production and use required skills possessed only by a state actor. ..."
"... Excerpt of an article by Peter Schwarz published by wsws.org ..."
Sep 10, 2020 | www.defenddemocracy.press

The relationship between Germany and Russia has reached its lowest point since Berlin supported the pro-Western coup in Ukraine six years ago and Russia subsequently annexed the Crimean Peninsula.

The German government is openly accusing the Russian state of poisoning opposition politician Alexei Navalny, who is currently in Berlin's Charité Clinic. He reportedly awoke from a coma on Monday.

German Chancellor Angela Merkel personally announced at a press conference last week that a chemical weapons laboratory of the Bundeswehr (Armed Forces) had proved "beyond doubt" that Navalny was the victim of an attack using the Novichok nerve agent. She called on the Russian government to answer "very serious questions."

At a special session of the Parliamentary Control Committee, which meets in secret, representatives of the German government and the secret services left no doubt, according to media reports, that the poisoning of Navalny had been carried out by Russian state authorities, with the approval of the Russian leadership. The poison was said to be a variant of the warfare agent -- one even more dangerous than that used in the Skripal case in Britain. It purportedly could enter the body simply through inhalation, and its production and use required skills possessed only by a state actor.

Germany and the European Union are threatening Russia with sanctions. The German government has even questioned the completion of the almost finished Nord Stream 2 natural gas pipeline, which it had categorically defended against pressure from the US and several Eastern European states.

The German media has gone into propaganda mode, repeating the accusations against Russian President Vladimir Putin with a thousand variations. Seventy-nine years after Hitler's invasion of the Soviet Union, which claimed more than 25 million lives, German journalists and politicians, in editorials, commentaries and on talk shows, speak with the arrogance of people who are already planning the next military campaign against Moscow.

Anyone who expresses doubts or contradicts the official narrative is branded a "conspiracy theorist." This is what happened to Left Party parliamentarian Sevim Dagdelen, among others, on Sunday evening's "Anne Will" talk show. The Christian Democratic Union (CDU) foreign policy expert Norbert Röttgen, the head of the Munich Security Conference Wolfang Ischinger and former Green Party Environment Minister Jürgen Trittin sought to outstrip one another in their accusations against the Russian government. When Dagdelen gently pointed out that, so far, no evidence whatsoever has been presented identifying the perpetrators, she was accused of "playing games of confusion" and "encouraging unspeakable conspiracy theories."

Read also: Russian Defense Minister held talks with Iran's Chief of Staff

The Russian government denies any responsibility in the Navalny case. It questions whether Navalny was poisoned at all and has called on the German government to "show its cards" and present evidence. Berlin, according to Moscow, is bluffing for dirty political reasons.

Contradictory and implausible

Evidence of the involvement of the Russian state is as contradictory as it is implausible.

For example, the German authorities have so far published no information or handed evidence to Russian investigators identifying the chemical with which Navalny was poisoned. Novichok is merely a generic term for several families of warfare agents.

No explanation has been given as to why no one else showed signs of poisoning from a nerve agent that is fatal even in the tiniest amounts, if touched or inhaled. Navalny had had contact with numerous people between the time he boarded the airplane on which he fainted, his entering the clinic in Omsk where he was first treated, and his transfer to the Charité hospital in Berlin.

This is only one of many unexplained anomalies in the German government's official story. Career diplomat Frank Elbe, who headed the office of German Foreign Minister Hans-Dietrich Genscher for five years and negotiated the Convention on the Prohibition of Chemical Weapons as head of the German delegation in Geneva from 1983 to 1986, wrote on Facebook on Friday: "I am surprised that the Federal Ministry of Defence concludes that the nerve agent Novichok was used against Navalny."

Novichok, he wrote, belongs "to the group of super-toxic lethal substances that cause immediate death." It made no sense, he argued, to modify a nerve poison that was supposed to kill instantly in such a way that it did not kill, but left traces behind allowing its identification as a nerve agent.

There was something strange about this case, Elbe said. "Either the perpetrators -- whoever they might be -- had a political interest in pointing to the use of nerve gas, or foreign laboratories were jumping to conclusions that are in line with the current general negative attitude towards Russia."

The assertion that only state actors can handle Novichok is also demonstrably false. The poison was sold in the 1990s for small sums of money to Western secret services and economic criminals, and the latter made use of it. For example, in 1995, the Russian banker Ivan Kiwelidi and his secretary were poisoned with it. The chemist Leonid Rink confessed at the time in court that he had sold quantities to criminals sufficient to kill hundreds of people. Since the binary poisons are very stable, they can last for decades.

Read also: UK psyops bigwig pushed plan to 'mine Sevastopol Bay' during 2014 Crimea crisis – leaked documents

The Navalny case is not the reason, but the pretext for a new stage in the escalation of German great power politics and militarism. The media hysteria over Navalny is reminiscent of the Ukrainian crisis of 2014, when the German press glorified a coup d'état carried out by armed fascist militias as a "democratic revolution."

Social Democrat Frank-Walter Steinmeier, then foreign minister and now German president, personally travelled to Kiev to persuade the pro-Russian president, Viktor Yanukovych, to resign.

He also met with the fascist politician Oleh Tyahnybok, whose Swoboda Party glorifies Nazi collaborators from World War II. Yanukovych's successor, Petro Poroshenko, one of the country's richest oligarchs, was even more corrupt than his predecessor. He terrorised his opponents with fascist militias, such as the infamous Azov regiment. But he brought Ukraine into NATO's sphere of influence, which was the real purpose of the coup.

In the weeks before the Ukrainian coup, leading German politicians (including then-President Joachim Gauck and Steinmeier) had announced a far-reaching reorientation of German foreign policy. The country was too big "to comment on world politics from the sidelines," they declared. Germany had to defend its global interests, including by military means.

NATO marched steadily eastward into Eastern Europe, breaking the agreements made at the time of German reunification in 1990. For the first time since 1945, German soldiers today patrol the border with Russia. With Ukraine's shift into the Western camp, Belarus is the only remaining buffer country between Russia and NATO.

Berlin now sees the protests against the Belarusian dictator Alexander Lukashenko as an opportunity to remove this hurdle as well. Unlike in Ukraine, where anti-Russian nationalists exerted considerable influence, especially in the west of the country, such forces are weaker in Belarus, where the majority speaks Russian. The working class is playing a greater role in the resistance to the Lukashenko regime than it did in Ukraine. But Berlin is making targeted efforts to steer the movement in a pro-Western direction. Forces that appeal for Western support, such as the presidential candidate Svetlana Tikhanovskaya, are being promoted.

Read also: Europe - "Green" Alliance with Russia or experimental field for genetic Monsters? Dispute over Nord Stream 2

The dispute over the construction of the Nord Stream 2 pipeline, whose discontinuation is being demanded by more and more German politicians, must also be seen in this context. It was a strategic project from the very beginning.

The natural gas pipeline, which will double the capacity of Nord Stream 1, which began operations in 2011, will make Germany independent of the pipelines that run through Ukraine, Poland and Belarus. These countries not only earn transit fees from the pipelines but have also used then as a political lever.

With a total capacity of 110 billion cubic metres per year, Nord Stream 1 and 2 together would carry almost all of Germany's annual gas imports. However, the gas is also to be transported from the German Baltic Sea coast to other countries.

In addition to Russia's Gazprom, German, Austrian, French and Dutch energy companies are participating in the financing of the project, which will cost almost €10 billion. The chairman of the board of directors is former German Chancellor Gerhard Schröder (Social Democratic Party), who is a friend of President Putin.

Nord Stream 2 is meeting with fierce opposition in Eastern Europe and the US. These countries fear a strategic alliance between Berlin and Moscow. In December of last year, the US Congress passed a law imposing severe sanctions on companies involved in the construction of the pipeline -- an unprecedented move against nominal allies. The nearly completed construction came to a standstill because the company operating the special ship for laying the pipes withdrew. Berlin and Moscow protested vehemently against the US sanctions and agreed to continue construction with Russian ships, which, however, will not be available until next year at the earliest.

Excerpt of an article by Peter Schwarz published by wsws.org

[Sep 17, 2020] 'No evidence'- EU Parliament using Navalny's alleged poisoning to push for sanctions halt Nord Stream project German MEP

Germany in the past played important role is promoting Yushchenko's Poisoning false flag. Nothing new here.
If we ask "que bono?". it clearly looks like the USA ears protrude from the whole German part of Navalny poisoning saga.
Sep 17, 2020 | www.rt.com

That's according to Maximilian Krah, a member of the European Parliament from the Alternative for Germany (AfD) party. The "obscure" case involving the alleged poisoning of Navalny has been used by the EU establishment to launch another round of Moscow-bashing, he says.

The lawmaker explained that his fellow MEPs had not, in fact, seen a single piece of evidence suggesting the Russian government might have had a hand in what happened to Navalny.

We don't have the evidence... none of the members of parliament who today voted in favor of sanctions has seen any evidence.

Krah said it was "unrealistic" to expect that Navalny's case would not be politicized, arguing that it was "absolutely clear" it was being used to push an anti-Moscow agenda.

On Thursday morning, the EU Parliament passed a resolution calling on member states to "isolate Russia in international forums," to "halt the Nord Stream 2 project" and to prioritize the approval of another round of sanctions against Moscow.

The MEP also expressed skepticism about the prospects of the broader public ever getting to see any evidence linking the opposition figure's sudden illness to Russian foul play.

"Evidence will only get published and provided to Russia if there is public pressure," he said, adding that he does not see any such pressure building anywhere in the EU. Until that changes, Berlin is likely to continue demanding "answers" from Moscow while holding off on requests by Russian for cooperation, Krah believes.

ALSO ON RT.COM European Parliament calls for international probe into alleged Navalny poisoning & suspension of Nord Stream 2 gas pipeline

The German MEP also weighed in on the fate of the Nord Stream 2 pipeline, suggesting that the alleged poisoning could work to Washington's benefit, given that the White House has been seeking to undermine the project, liking Russian gas to Germany, for months. Krah said it was "clear from the beginning" that the US would try to use the situation to scupper the project, which he says would make Germany "more independent from American influence."

The EU resolution, which is not legally binding but acts as an advisory for the bloc's leaders, was supported by 532 MEPs and opposed by 84, while 72 abstained. Fresh sanctions against Russia have been mulled by both the EU and US since news about Navalny's alleged poisoning was made public.

ALSO ON RT.COM Berlin struggles to answer RT's question on fate of mysterious Navalny aide who left Russia for Germany without being questioned

Moscow has repeatedly expressed its readiness to cooperate with Germany in the probe into the incident, while stressing that the Russian medics who first treated Navalny when he fell ill found no traces of any poison in his body. The Kremlin has also repeatedly approached Berlin for data possessed by the German side, but has so far received none.

Think your friends would be interested? Share this story!


Dachaguy 8 hours ago 17 Sep, 2020 02:02 PM

Of course, the investigation is incomplete, but that doesn't stop the EU from levying "justice." We've seen this before in the Downing Street Memos, where the facts were, "being fixed around the policy. " Millions of innocent people died as a result. When will people learn?
Jeff_P 4 hours ago 17 Sep, 2020 06:01 PM
There should be an international commission to look into this false flag. It should be comprised of Russia and Germany, of course, but no other NATO or European countries and no US vassal states other than Germany. Other members could be Cuba, China, Venezuela, and maybe India. And, of course, the US playbook of assignment of guilt without the benefit of evidence and the exacting of penalties without proving guilt won't fly. Russia might just tell Europe to go FO and leave PACE and the other organizations that it supports but which insist on abusing it.
perikleous 6 hours ago 17 Sep, 2020 04:09 PM
If Russia was determined they would say you cannot delay NSII or we cut the Ukraine pipeline as well, its all or none! Tick Tock Tick Tok, winter is coming soon! Hopefully the Covid 19 won't delay the fuel ships your relying on or the workers who procure the fuel, you know a 2nd wave... is "Highly Likely" and its taking over in the rural areas where the fuel comes from! Present evidence to a poisoning directed by either the fuel company or the gov't and we will continue, or just tell your "handlers" go ***, because I do not recall the US severing weapons sales to Saudi Arabia after Admission to them Severing the head off of (J. Koshoggei) because the US profits/jobs are bigger than one WaPo Journalists life! Hypocracy in action!
Shelbouy 6 hours ago 17 Sep, 2020 03:46 PM
Germany has offered to help pay for the construction of two LNG terminals in Germany to the tune of 1 billion plus to the US. to receive US LNG. The US in turn has said then they would not interfere with the completion of Nord Stream 2 if this were to take place. I am suggesting that Germany then would have 30% cheaper Russian gas than US LNG, blend these two prices, hi cost US LNG and low cost Russian gas of Nord Stream 2, and sell to the EU consumers at a price which would likely be higher than the current rate today, and who would be the wiser, and who would consumers blame when the price of gas goes up instead of down. This may, at least temporarily, appease the US while at the same time ensure the completion of the cheaper Russian supply line, and prevent the diversion of Russian gas to other customer nations like China, and Germany laughs all the way to the bank. This is only speculation on my part because I do not know if it would work that way or not. If it did then Germany would have their cake and eat it. The offer of Germany to the US is however, a fact. The reasons behind this offer are speculative. After all, it's really all about money anyway.
perikleous Shelbouy 5 hours ago 17 Sep, 2020 04:16 PM
The US would demand a contract/commitment for the fuel based on your yearly usage currently, if you re neg, they still bill you for it! Then its handled in court while your bank accounts are frozen and none of the US debt to you is paid until this is resolved. You may win the hearing/court but the losses from not having access to that money will cost way more!
HimandI 4 hours ago 17 Sep, 2020 05:47 PM
Just more proof that the EU rulers are bought and paid prostitutes.
Jayeshkumar 6 minutes ago 17 Sep, 2020 10:03 PM
May be EU is indirectly suggesting to use the 2nd Pipeline to be used Exclusively for Transporting the Hydrogen, in the Future!
Congozebilu 2 hours ago 17 Sep, 2020 08:06 PM
From the first minute this Navalny story broke I knew it was aimed at Nordstream. Everyone who understands geopolitics and also US desperation to sell "freedom gas" knows that Nordstream was the intended target this Navalny clown show.
ivoivo 1 hour ago 17 Sep, 2020 09:00 PM
apparently there are evidence found in a trash can in his hotel room in omsk, they poisoned him with novichock in a water they gave it to him and discard a paper cup in a trash can, standard kremlins procedure, isn't it, what is happening to world intelligence, russians can't kill some dude that is actually not even important and americans can't stop russian hackers in meddling in us election

[Sep 12, 2020] Clearly abother case of Novichok poisoning

Sep 12, 2020 | thenewkremlinstooge.wordpress.com

MOSCOWEXILE September 3, 2020 at 7:02 pm

BBC

Alexei Navalny: Two hours that saved Russian opposition leader's life

https://www.bbc.co.uk/news/world-europe-54012278

An open and shut case! Clearly Novichok poisoning, a deadly poison made only in Russia, and the Russians have already used it at least once. The most deadly nerve agent known to man and part of the brutal armament that Putin's thugs use on their murderous missions.

I rest my case, m'lud.

MOSCOWEXILE September 3, 2020 at 8:15 pm

Germany has denied allegation of falsification of the Navalny case
3 September 2020

MOSCOW, September 3 – RIA Novosti. The statement made by the President of Belarus, Alexander Lukashenko, about the falsification of data on the "poisoning" of Navalny is not true, the press service of the German Cabinet told RIA Novosti.
Earlier, at a meeting with Russian Prime Minister Mikhail Mishustin, Lukashenko said that Minsk had intercepted a conversation between Warsaw and Berlin, which denied allegations of the blogger's poisoning. He promised that he would give the Russian side a transcript of this "interesting dialogue, which clearly indicates that this is falsification".

"Of course, Mr. Lukashenko's statement does not correspond to reality. Yesterday the Federal Chancellor, the Foreign Minister and the Defence Minister expressed their views on the new circumstances in the Navalny poisoning case There is nothing to add", the cabinet told the agency.

In Moscow, they noted that they had not yet received this evidence.

"Lukashenko hast just announced this. He said that the material would be transferred to the FSB. There is no other information yet", Peskov told RIA Novosti.

What a duplicitous creep Lukashenko is!

Always jumping to one side of the fence to the other and thinking he is so smart in doing so.

Then again, perhaps he has such damning evidence, but even if he had, nobody would believe it, because Germany, being a vassal state of the USA, is on the side of freedom and democracy.

"Einigkeit und Recht und Freiheit für das deutsche Vaterland" as one sings there to a well known tune.


[Sep 12, 2020] Russia had jumped onboard the hydrogen train with a plan to use nuclear created hydrogen

Sep 12, 2020 | thenewkremlinstooge.wordpress.com

ET AL September 3, 2020 at 10:27 am

A week or so ago it was reported that the EU's carbon tax would also apply to energy imports (Russian gas etc.) and in the Tass Press Review (?) 'shock' was apparently expressed, which is weird as de-carbonization (plus more recently a setting in place the necssary infrastcture for a hydrogen based economy) has been an open and long stated plan by Brussels. Norway has already invested significant resources in de-carbonizing its gas and is ready to go.

And in the last couple of days there was a report (RT?) that Russia had jumped onboard the hydrogen train with a plan to use nuclear created hydrogen (heat, innit?) and Norway style de-carbonization tech. Will post the links if I can re-find them. Still, interesting stuff.

[Sep 12, 2020] Novichok, Navalny, Nordstream, Nonsense

Sep 12, 2020 | thenewkremlinstooge.wordpress.com

JAMES LAKE September 3, 2020 at 9:08 pm

Good article by ex Ambassador to Uzbekistan Craig Murray. Novichok, Navalny, Nordstream, Nonsense

" Once Navalny was in Berlin it was only a matter of time before it was declared that he was poisoned with Novichok. The Russophobes are delighted. This of course eliminates all vestiges of doubt about what happened to the Skripals, and proves that Russia must be isolated and sanctioned to death and we must spend untold billions on weapons and security services. We must also increase domestic surveillance, crack down on dissenting online opinion. It also proves that Donald Trump is a Russian puppet and Brexit is a Russian plot.

I am going to prove beyond all doubt that I am a Russian troll by asking the question Cui Bono?, brilliantly identified by the Integrity Initiative's Ben Nimmo as a sure sign of Russian influence.

I should state that I have no difficulty at all with the notion that a powerful oligarch or an organ of the Russian state may have tried to assassinate Navalny. He is a minor irritant, rather more famous here than in Russia, but not being a major threat does not protect you against political assassination in Russia.

What I do have difficulty with is the notion that if Putin, or other very powerful Russian actors, wanted Navalny dead, and had attacked him while he was in Siberia, he would not be alive in Germany today. If Putin wanted him dead, he would be dead.

Let us first take the weapon of attack. One thing we know about a "Novichok" for sure is that it appears not to be very good at assassination. Poor Dawn Sturgess is the only person ever to have allegedly died from "Novichok", accidentally according to the official narrative. "Novichok" did not kill the Skripals, the actual target. If Putin wanted Navalny dead, he would try something that works. Like a bullet to the head, or an actually deadly poison.

"Novichok" is not a specific chemical. It is a class of chemical weapon designed to be improvised in the field from common domestic or industrial precursors. It makes some sense to use on foreign soil as you are not carrying around the actual nerve agent, and may be able to buy the ingredients locally. But it makes no sense at all in your own country, where the FSB or GRU can swan around with any deadly weapon they wish, to be making homemade nerve agents in the sink. Why would you do that?

Further we are expected to believe that, the Russian state having poisoned Navalny, the Russian state then allowed the airplane he was traveling in, on a domestic flight, to divert to another airport, and make an emergency landing, so he could be rushed to hospital. If the Russian secret services had poisoned Navalny at the airport before takeoff as alleged, why would they not insist the plane stick to its original flight plan and let him die on the plane? They would have foreseen what would happen to the plane he was on.

Next, we are supposed to believe that the Russian state, having poisoned Navalny, was not able to contrive his death in the intensive care unit of a Russian state hospital. We are supposed to believe that the evil Russian state was able to falsify all his toxicology tests and prevent doctors telling the truth about his poisoning, but the evil Russian state lacked the power to switch off the ventilator for a few minutes or slip something into his drip. In a Russian state hospital.

Next we are supposed to believe that Putin, having poisoned Navalny with novichok, allowed him to be flown to Germany to be saved, making it certain the novichok would be discovered. And that Putin did this because he was worried Merkel was angry, not realising she might be still more angry when she discovered Putin had poisoned him with novichok

There are a whole stream of utterly unbelievable points there, every single one of which you have to believe to go along with the western narrative. Personally I do not buy a single one of them, but then I am a notorious Russophile traitor.

The United States is very keen indeed to stop Germany completing the Nord Stream 2 pipeline, which will supply Russian gas to Germany on a massive scale, sufficient for about 40% of its electricity generation. Personally I am opposed to Nord Stream 2 myself, on both environmental and strategic grounds. I would much rather Germany put its formidable industrial might into renewables and self-sufficiency. But my reasons are very different from those of the USA, which is concerned about the market for liquefied gas to Europe for US produces and for the Gulf allies of the US. Key decisions on the completion of Nord Stream 2 are now in train in Germany.

The US and Saudi Arabia have every reason to instigate a split between Germany and Russia at this time. Navalny is certainly a victim of international politics. That he is a victim of Putin I tend to doubt.

MOSCOWEXILE September 3, 2020 at 9:50 pm

I do hope that Murray was writing cynically when he penned the following words above about Navalny:

He is a minor irritant, rather more famous here than in Russia

His popularity here is minimal and his political base statistically zilch, the incessant swamping of the Russian blogosphere with his praise by his hamsters notwithstanding.

I saw one of such hamster's nonsense only the other week in which the retard wrote that Navalny is the most well-known person in Russia and another post of yet another hamster who presented a list of policies that the bullshitter would follow "when he becomes president".

MOSCOWEXILE September 3, 2020 at 10:13 pm

The whole crock of Navalny -- Novichok shite neatly summed up by a comment to Murray's article linked above:

Goose
September 4, 2020 at 00:28
We're being asked to believe by people calling themselves serious journalists, that the Kremlin's thought process was thus :

Let's poison this guy with Novichok. Nobody will know it was us and there'll be no diplomatic fallout.

Completely illogical.

Logic has no part in this machination, dear chap: the people to whom these lies are directed are fucking stupid: uneducated, brain-dead, browser surfing, soap opera and "Celebrity Come Dancing" and "Reality TV" and porn watching morons.

Oh yes! And in the UK they're daily fed pap about "The Royals": every day without fail the UK media presents page after page of "stories" concerning "Kate and Wills" and "Harry and Megan".

And much of the rest of the UK media is full of shite about "football" and its prima donnas -- that's "Associated Football" or "soccer" as they prefer to say in North America, and not "Rugby Football" -- better said: not "Rugby League Football".

MOSCOWEXILE September 4, 2020 at 9:28 pm

BBC

It gets worse and worse:

Alexei Navalny: Nato says Russia must disclose its Novichok programme
Published 13 hours ago

Nato has called for Russia to disclose its Novichok nerve agent programme to international monitors, following the poisoning of activist Alexei Navalny.

Secretary General Jens Stoltenberg said members were united in condemning the "horrific" attack.
He added there was "proof beyond doubt" that a Novichok nerve agent was used against Mr Navalny.

Where is the proof????????

You just say so or some "guy" at Porton Down or some Bundeswehr Scheißkerl laboratories?

Get fucked Stoltenberg!

And Peskov, a word of advice: Shut the fuck up and say nothing.

Don't believe that silence from you will be taken as proof of guilt!

You and the Russian state are guilty of everything as charged by the very nature of the fact that you are Russian, "the other"!

Sound familiar?

It's what the Nazis said about every Jew: guilty of all accusations because of their ethnicity -- not their religion, note: Christianized Jews were still "Jews". They were guilty of all charges from the moment of each and every one's birth as a "Jew".

And the sickening thing is that "woke" arseholes the world over condemn racism, but racism directed against Russians is fair game.

The West stinks!

It is a vile sump of festering shite.

Thank Woden I live in Russia!

MOSCOWEXILE September 4, 2020 at 9:38 pm

Trump the moron:

Trump says he's seen NO PROOF of Russian opposition activist Navalny's poisoning – but has no reason to doubt Germany's conclusion
5 Sep, 2020 00:30 / Updated 26 minutes ago

Trump the believer!

It's called blind faith.

MOSCOWEXILE September 4, 2020 at 9:41 pm

From the above linked RT article:

The US president has received heavy criticism for his reluctance to immediately join NATO allies in pressing Russia over the Navalny incident, which CNN called "the latest instance of Trump failing to speak out and call for answers from the Kremlin on issues ranging from election interference to possible bounties on US troops in Afghanistan."

I presume that the concept of "burden of proof" is now a dead letter in the Free West.

MARK CHAPMAN September 4, 2020 at 11:16 pm

I thought that whole Russia-offered-bounties-for-dead-US-troops thing had been 'debunked' for good. Several western sources which are sometimes not snapping-turtle crazy said there was nothing to it. So why are they still citing it?

MOSCOWEXILE September 4, 2020 at 10:17 pm

Editorial Independent [wall]:

Alexei Navalny is one of the most important leaders of what passes for political opposition in President Putin's Russia. Some say he is, in effect, "the" leader of the opposition in Russia. He has just been the subject of an assassination attempt, and lies in an induced coma in a German hospital. It's worth repeating: the leader of the opposition to Vladimir Putin has been poisoned, perhaps fatally, using novichok, a chemical weapon banned by international treaty. There is little doubt that, in one form or another, formal or informal agents of the Russian state would have been part of the plot, especially given the evidence of novichok, and that the highest circles of the Russian establishment would either have knowledge of the attack, or made it apparent to any shady blah, blah. blah ..

Now don't you folks go and forget, BoJo recently made Evgeny Lebedev, the owner of that rag and who penned the above shite, a Baronet.

Lebedev has dual Russian/British citizen and has lived in the UK since he arrived there as an 8-year-old with his KGB papa, who had landed a cushy number at the Soviet Embassy.

Papa Lebedev went back to Russia, where in the immediate post-Soviet years of Russia he made a mint and became an "oligarch", namely an extremely successful thief who had pillaged Russia. His son became a UK citizen in 2010.

Evgeny Lebedev is now a life peer and may now plonk his arse (and get paid for doing so!) in one of the chambers of the British legislature, the one whose members are unelected: they are there either through their aristocratic "birthright" or are appointees, such as is Lebedev.

When BoJo appointed Lebedev as a life peer, the moronic Russophobes in the UK accused that fool of a British PM of being under the Evil One's control.

Just shows you how they know shag all about Russia and Russians.

That's because they are all tossers.

MOSCOWEXILE September 4, 2020 at 10:33 pm

Опубликована запись разговора Берлина и Варшавы по делу Навального
20:40 04.09.2020 (обновлено: 05:19 05.09.2020)

Recording of conversation between Berlin and Warsaw on Navalny case published
20:40 09/04/2020 (updated: 05:19 09/05/2020)

MOSCOW, September 4 – RIA Novosti. The state Belarusian media has published a recording of the negotiations between Berlin and Warsaw on the situation with Alexei Navalny, intercepted by Minsk .
RIA Novosti is publishing a transcript of this dialogue.

– Hello, good afternoon, Nick. How are we getting on?

– Everything seems to be going according to plan. The materials about Navalny are ready. They'll be transferred to the Chancellor's office. We'll be waiting for her statement.

– Has the poisoning been definitely confirmed?

– Look, Mike, it's not that important in this case. There is a war going on. And during a war, all sorts of methods are good.

– I agree. It is necessary to discourage Putin from sticking his nose into the affairs of Belarus. The most effective way is to drown him with the problems in Russia, and there are many of them. Moreover, in the near future they will have elections, voting day in the Russian regions.

– This is what we are doing. How are you doing in Belarus?

– To be honest, not that well, really. President Lukashenko has turned out to be a tough nut to crack. They are professional and organized. It is clear that Russia supports them. The officials and the military are loyal to the president. We are working on it. The rest [of this conversation] we'll have when we meet and not on the 'phone.

– Yes, I understand. See you then, bye.

MARK CHAPMAN September 4, 2020 at 11:21 pm

I find it hard to believe this is real. Lukashenko is 'a tough nut to crack'? The Belarusian government is 'professional and organized'? Well, you never know with the Poles. But it seems so perfectly to confirm western perfidy that it must be made up. Who would be stupid enough to say things like that on the phone?

MOSCOWEXILE September 5, 2020 at 12:17 am

Who would be stupid enough to say things like that on the phone?

"Fuck the EU!" said on the 'phone by Noodles to Ambassador Pietwat.

JEN September 5, 2020 at 4:13 am

And "Yats is our man!" Victory Noodles crowed to Pie-whacked.

Don't forget also that Jens Stoltenberg was dumb enough to think he could drive a taxi around Oslo and pick up paying passengers without their recognising him and commenting on his poor driving skills and knowledge of Oslo streets.

MOSCOWEXILE September 5, 2020 at 5:43 am

And on hearing off a Latvian (?) politician, who had been observing the "Revolution of Dignity" and was involved in an investigation into the deaths of the "Heavenly Hundred", that there were good grounds to believe that those martyrs for Ukrainian freedom had been martyred by being shot in the back by their fellow countrymen who were of a fascist bent, Lady Ashton said: "Gosh!""

Now that really was a dumb utterance to make on the phone, considering the circumstances.

MOSCOWEXILE September 5, 2020 at 7:32 am

Dejevsky in today's Independent [wall]:

It is also worth underlining that the Russian pilot who decided to make an emergency landing in Omsk, rather than proceed to Moscow, may have saved Navalny's life, as may the doctors in Omsk who – despite their professed doubts about poison – administered atropine, the closest treatment there is to a novichok antidote, early on. The claim, made by some, that this was a brazen attack, with the Kremlin's fingerprints all over it, designed to be found out and interpreted as a "two fingers up" to the west, does not stack up.

But the German findings that probably the most influential Russian opposition leader was poisoned and that the substance used was the same as the one identified in the Skripal case – a military-grade nerve agent, moreover, that is associated with Russia, even though it was developed in the Soviet-era and can be found outside Russia – means that the Kremlin has a case to answer. Yes, everyone is innocent until proven guilty, and the Kremlin is all denials, but the onus is now squarely on Putin to make his case in the court of international opinion.

" the doctors in Omsk who – despite their professed doubts about poison – administered atropine, the closest treatment there is to a novichok antidote, early on."

That a fact, Doctor Dejevsky?

" everyone is innocent until proven guilty, and the Kremlin is all denials, but the onus is now squarely on Putin to make his case in the court of international opinion"

Burden of proof?

Russia has been accused! Russia is not obliged to prove its innocence, FFS!!!!

Where is the evidence to back up the accusation????

MOSCOWEXILE September 5, 2020 at 7:33 am

Link to above:

https://www.independent.co.uk/independentpremium/voices/novichok-alexei-navalny-poison-russia-putin-germany-a9703756.html?r=10355

JENNIFER HOR September 5, 2020 at 1:19 pm

Of course the Omsk hospital doctors had to apply atropine because Navalny's groupies were squealing that he had been poisoned. They would have squealed again and accused the hospital of malpractice if the hospital had not used the drug.

MOSCOWEXILE September 5, 2020 at 9:42 am

Sputnik:

Russian Doctors Suggest Setting up Joint Group With German Colleagues on Navalny Case
5 September 2020
18:56

https://sputniknews.com/world/202009051080376439-russian-doctors-suggest-setting-up-joint-group-with-german-colleagues-on-navalny-case/

Russian doctors have proposed to their German colleagues that they establish a joint group on the case of Russian opposition politician Alexei Navalny, the president of Russia's National Medical Chamber, noted paediatrician Leonid Roshal, told reporters on Saturday.

Will the Germans agree?

I shouldn't imagine so. They and the rest of the West have crossed the Rubicon:

Alea iacta est!


[Sep 11, 2020] Will the alleged Alexey Navalny poisoning sink the Nord Stream 2 pipeline- It might, but it shouldn t -- RT Op-ed

Sep 11, 2020 | www.rt.com

Will the alleged Alexey Navalny poisoning sink the Nord Stream 2 pipeline? It might, but it shouldn't 11 Sep, 2020 17:39 / Updated 4 hours ago Get short URL © REUTERS/Stine Jacobsen/File Photo; © AFP/Vasily MAXIMOV 11 Follow RT on RT

By Dr. Karin Kneissl , who works as an energy analyst and book author. She served as the Austrian minister of foreign affairs from 2017-2019. In June, she published her book on diplomacy 'Diplomatie Macht Geschichte' in Germany through Olms, and in early September her book 'Die Mobilitätswende', or 'Mobility in Transition', was released in Vienna by Braumüller. The cacophony of noise generated in the wake of the attack on the Russian opposition figure is drowning out the reality. As Angela Merkel has always maintained, the German-Russian gas deal is purely a commercial project.

Nord Stream has always had the ingredients to drive sober-minded Germans emotional. I remember energy conferences in Germany back in 2006 when already the idea of such a gas pipeline as a direct connection from Russia to Germany provoked deep political rows, not just in Berlin but across the EU.

Conservatives disliked it for the simple reason that it was a "Schröder thing," the legacy of social democrat Chancellor Gerhard Schröder, who lost the election of September 2005 to Angela Merkel. Schröder had negotiated the project with his good friend, President Vladimir Putin, and then chaired the company in charge of implementing it.

READ MORE Nord Stream 2 must be completed: Don't politicize Russian energy project over Navalny situation – Merkel Party politics and pipelines

Around that time, I was invited to an energy conference in Munich by the conservative think tank, the Hanns Seidel Foundation, managed by the Bavarian party CSU, the traditional junior partner of the ruling CDU in the government. The bottom-line of the debate on Nord Stream was negative, with the consensus being that the German-Russian pipeline would lead to the implosion of a European common foreign policy and damage the EU's energy ambitions.

I attended many other such events across Germany, from parliament to universities, and listened carefully to all the arguments. The feelings towards Nord Stream were much more benign at meetings held under the auspices of the SPD.

But over the years, the rift between different political parties evaporated, and a consensus emerged which supported enhanced energy cooperation between Berlin and Moscow. Politicians of all shades defended the first pipeline, Nord Stream 1, after it went operational in 2011, bringing Russian gas directly to Germany under the Baltic Sea.

They also enthusiastically supported the creation of the second, Nord Stream 2, better known by its acronym NS2. This $11bn (£8.4bn) 1,200km pipeline is almost finished and was due to go online next year.

But now, in the very final stage of construction, everything has been thrown in limbo thanks to the alleged poisoning of Russian opposition figure Alexey Navalny.

NS2 has always been controversial. Critics, such as the US and Poland, have argued that it makes Germany too reliant on energy from a politically unreliable partner. President Trump last year signed a law imposing sanctions on any firm that helps Russia's state-owned gas company, Gazprom, finish it. The White House fears NS2 will tighten Russia's grip over Europe's energy supply and reduce its own share of the lucrative European market for American liquefied natural gas.

These sanctions have caused delays to the project. A special ship owned by a Swiss company menaced with sanctions had to be replaced. And prior to that, various legal provisions were brought up by the European Commission that had to be fulfilled by the companies in retrospect.

Now the case of Navalny, currently being treated at a Berlin clinic after being awoken from a medically induced coma, has thrown everything up in the air again. It has triggered a political cacophony that threatens relations between Germany, the EU, Russia, and Washington. And at the center is the pipeline.

READ MORE 'Fraught with consequences for Russian-German relations': Moscow furious with Berlin over lack of cooperation on Navalny

Various German sources, among them laboratories of the armed forces, have alleged that Navalny had been poisoned with the nerve agent Novichok. Foreign Minister Heiko Maas (SPD) stated in an interview published on Sunday by Bild: " I hope the Russians don't force us to change our stance on Nord Stream 2 – we have high expectations of the Russian government that it will solve this serious crime ." He claimed to have seen " a lot of evidence " that the Russian state was behind the attack. " The deadly chemical weapon with which Navalny was poisoned was in the past in the possession of Russian authorities ," he insisted.

He conceded that stopping the almost-completed pipeline would harm German and broader European business interests, pointing out that the gas pipeline's construction involves "over 100 companies from 12 European countries, and about half of them come from Germany." Maas also threatened the Kremlin with broader EU sanctions if it did not help clarify what happened "in the coming days." Russian Foreign Minister Sergey Lavrov responded by labeling the accusations "groundless" and Moscow has staunchly denied any involvement in the affair.

The whole matter is complicated by domestic political considerations in Germany. CDU politician Norbert Röttgen, who heads up foreign affairs within the ruling party and has demanded that the pipeline should be stopped, is among those conservatives vying to lead the CDU in the run-up to Chancellor Angela Merkel's retirement next year. Meanwhile, Merkel is still trying to strike a balance between the country's legal commitments, her well-known mantra that NS2 is a " purely commercial project, " and what is now a major foreign policy crisis.

The chancellor had always focused on the business dimension. But most large energy projects also have a geopolitical dimension, and that certainly holds true with Nord Stream.

When I was Austria's foreign minister, I saw first-hand the recurring and very harsh criticism of the project by US politicians and officials. I remember the US secretary of state, Mike Pompeo, in a speech at the margins of the UN General Assembly in September 2018 that focused solely on NS2. I replied by pointing out to him that pipelines are not built to annoy others, but because there is demand. One thing was certain – the US opposition to Nord Stream would not wane and now the Navalny case has given it new impetus. What we are witnessing is a tremendous politicization of the pipeline with a wide range of people all shouting very loudly.

ALSO ON RT.COM Craig Murray: Opposition figure Navalny may possibly have been targeted by Russian state, but Western narrative doesn't add up Diplomatic confrontation instead of solution

So here we are, in a very poisoned atmosphere where it might be difficult to revise positions without losing face. The social democrat Maas, just like the conservative Röttgen and many others, have taken to the media for different reasons. In my observation, it might have to do with their respective desires to take a strong position in order to also mark their upcoming emancipation from the political giant Merkel (she is due to step down next year).

Due to her professional and empathetic handling of the pandemic, she is today much more popular than before the crisis. That makes it difficult for a junior partner, represented by Foreign Minister Maas, and for all those who wish to challenge her inside the party.

What is needed is to get the topic out of the media and out of the to-and-fro of daily petty politics. Noisy statements might serve some, but not the overall interests involved. And there are many at stake. It is not only about energy security in times of transition, namely moving away from nuclear, but much wider matters.

As a legal scholar, I deem the loss of trust in contracts. Vertragstreue, as we call it in German – loyalty to the contract – will be the biggest collateral damage if the pipeline is abandoned for political reasons. This fundamental principle of every civilization was coined as pacta sunt servanda by the Romans – agreements must be kept. Our legal system is based on this. Who would still conclude contracts of such volumes with German companies if politics can change the terms of trade overnight?

ALSO ON RT.COM German FM links Nord Stream 2 to Navalny, threatens sanctions as Moscow accuses Berlin of dragging feet on alleged poisoning probe Remember South Stream

In June 2014, construction sites on the coasts of the Black sea, both in Russia and Bulgaria, were ready for starting the gas pipeline South Stream. After pressure from the European Commission, the work never started. The political reason was the dispute on Ukraine – in particular, the annexation of the Crimea. However, the legal argument was that the tenders for the contracts were in contradiction with EU regulations on competition. Tens of thousands of work permits, which had been issued from Bulgaria to Serbia etc., were withdrawn. The economic consequence was the rise of China's influence in the region. South Stream was redirected to Turkey.

So here we are in the midst of a diplomatic standoff. It is a genuine dilemma, but it could also turn into a watershed. Will contracts be respected or will we move into a further cycle of uncertainty on all levels? Germany is built on contracts, norms (probably much too many) and not on arbitrariness.

Think your friends would be interested? Share this story!

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.

silvermoon 5 hours ago

All these weeks have passed and Germany has still not shown shared actual evidence of their Navalny tests with Russia though. That is the same as saying we found the gun with your finger prints on it but never showing it.

Count_Cash silvermoon 3 hours ago

Correct, Germany has only since 10th September (if confirmed) shared any 'evidence'. That is sufficient intervening time to concoct any test result and associated materials that they want - another Diesel scandal. Indeed people will ask why when you had the patient on 22nd of august, it took you so long to send samples to the OPCW, despite almost immediately yelling Poison!

gainwmn silvermoon 5 hours ago

U stupid sheep: Germany did show it to the OPCW, i.e. the organization RF is the member of, and therefore the latter gets the full access to all the data provided by Germany, as well as any other of 192 members. Kremlin lies and demands in this regard is more than ridiculous, they completely destroy any shred of trust left to all RF governmental structures and regime itself.

Teodor Nitu gainwmn 3 hours ago

Riiight!...Those Russians...not only their chemical weapons are no longer working, but they are no longer capable to choose the proper time to use them, or so the story goes. Think about it; they 'used' novichok to kill the Skripals and they are still alive and well (supposedly), now they (Russians) 'used' novichok again to kill Navalny and he is alive and getting better.

Besides, they chose the absolutely wrong time to do it. With Skripals it was just before the opening of the World Cup in Russia and now, just before the finishing of the North Stream 2 pipeline.

It sounds that they are sabotaging their own interests, aren't they? Are they (Russians) that stup!d? Some 'smart' posters here seem to believe it. But lets get real, one has to be able to see beyond the length of his nose, in order to understand what is really going on.

silvermoon Teodor Nitu 2 hours ago

Russia had all their chemical weapons legally destroyed. Along with hundreds of countries. The US, UK and Israel never did. Navalny the innocent anti Putin. Can't win one way try another.

Pro_RussiaPole gainwmn 2 hours ago

So why is Russia still asking for it? Clearly, something is being withheld. As for the OPCW, their credibility has been shot for years with all their fake Syrian chem weapon attack reports.

seawolf 6 hours ago

Even if there was not Navalny's story, they could invent another to stop the project.

Abraxas79 seawolf 4 hours ago

Exactly. I hope Russia is the one that abandons it. Let Germany be the one that decides to cancel it and go along with it. Concentrate on supplying China and other Asian nations and internal consumption. Forget about Europe. You don't have to turn off the current supply, just charge more for it when the market allows. Looks like the next German leader according to this article is quite the Russophobe, which means relations will only get worse.

Pro_RussiaPole Abraxas79 2 hours ago

If this navalny farce does end up cancelling the NS2 project, Russia should stop all gas transit to western Europe through Poland and Ukraine by spring of next year. Tell those countries that will be cut off that Russia can either sell them LNG, or that they will have to connect to other sources of gas. Because if certain countries are so against Russian gas, then why are they not doing anything against Russian gas going through Poland and Ukraine, and why isn't Trump threatening sanctions on these countries for doing so?

Blue8ball713 RTjackanory 3 hours ago

Its a far longer list and it have the fingerprints of GB secret services all over it.

Reply Gabriel Delpino seawolf 46 seconds ago It is not in the interest of Germany to stop de project. Reply

magicmirror 6 hours ago

Europe should have nothing to do with the USA ....... proved time and time again they cannot be trusted. All they want is markets, resources and consumers. They lie, they cheat, they steal...... (quoting mr Pompeo, I think). A big opportunity to win Europe's independence.

SmellLaRata 5 hours ago

All due respect for Mr. Navalny but since when does an individual fate of one person dictates the fate for millions ? And c' mon Germany. Your hypocrisy is so utterly laughable. You ignore the Assange and Snowden cases, the slaughter of Kashoggi, the brutal beating of yellow vests, the brutal actions against the Catalans ... but Navalni. Not even a hint of a proof of government involvemen. But it fits the agenda, does it? The agenda which is dictated by the deep state agitators who so much flourished under Obama.

gainwmn SmellLaRata 4 hours ago

Even being not a fan (to say the least) of the US foreign and some of the domestic policy, I have to point out that tried by U analogy is largely out of balance: first, the issue in Navalny (as well as in Scripals' and others cases acted on with poisons) case is not so much the assassination attempt on a person's life, as the banned use of chemical weapons, the ban RF's signature has been under since 1993. And that conclusion (Russia's guilt) has not been made by the UK or Germany or any other country alone, but the OPCW - the organization not only RF is the member of, but also 191(!) other countries, out of which not a single country (except RF) rejected that conclusion!; second, the US did not made attempt on either Snowden's or Assange's life, with any kind of weapon, not already mentioning the weapons banned by the international agreements American government(s) signed. This is a large - I would say - decisive difference! As far as Kashoggi's case or other cases sited by U, RF did not react with sanctions against the respective perpetrators either, thus demonstrating the same disregard for the law and order as the US did... therefore making all lies about innocent RF and evil US, foolish, at the least.

Pro_RussiaPole gainwmn 2 hours ago

The US and its lackeys are killing Assange. They are doing it slowly. And many voices going along with a lie does not make the lie true. Because these poisoning allegations are lies. The accused were never allowed to see the evidence or challenge it. And there is the whole issue of politicized reports coming out of the OPCW that contradicted evidence and reality.

Nathi Sibbs 4 hours ago

After completing the pipe and it start running Russia must turn off all Ukraine pipes. No more gas for free from Russia, Ukraine must start importing LNG from thier reliable partner USA. I think imports from USA will be good for Ukrainian Nazi people

Abraxas79 Nathi Sibbs 4 hours ago

How are they going to pay for it? Ukraine's only exports these days are its women to various brothels across Europe and North America.

Hilarous 5 hours ago

The German leaders know very well that the case of Navalny will never be resolved and exists for no other reason than to seize a pretext to demonize Russia and to end Nord Stream 2 in exchange for US freedom gas

magicmirror Hilarous 4 hours ago

freedom gas and handsome presents .....

SandythePole 3 hours ago

This is an excellent account by Dr Karin Kneissl. It is a genuine dilemma for 'occupied' Europe. Its occupying master does NOT want NS2 and will do anything to stop it. Russia suffers sanctions upon sanctions, but still gallantly tries to maintain friendly and honourable business relations with its implacable neighbours. For how much longer is this to continue? Surely there must be some limit to the endless provocations of occupied Europe and its Western master. Perhaps it is time to shut off the oil and gas and leave Germany to sail under its own wind.

dunkie56 3 hours ago

Perhaps Russia should disengage with Germany/EU totally and forge ahead in partnership with China and India and whoever wants to do business. let the EU tie it's ship to the sinking US ship and drown along with it's protection racket partner! Then Russia should build a new iron curtain between itself and all countries who want to align with the EU..in the long run Russia has tried to forge a partnership with the West but it just has not born any fruit and even as pragmatic as Russia is they must be coming to the conclusion they are flogging a dead horse!

Blue8ball713 dunkie56 2 hours ago With 146 million citizen Russia is too small to be a real partner to anyone like China or India. Best fit is the EU, but the EU is controlled or better said occupied by the USA. Its part of their hegemonial system. So Russia is left out in the rain..

micktaketo 5 hours ago

I am not sure if it is the right thing to do but I think Russia should sue the German authorities if this deal is withdrawn and if it is have nothing to do with Germany again along with other corrupt countries that cannot prove or at the least bring forth their evidence to be seen, to be transparent to all even Russia the first, because Russia is the one being accused. These countries must think we the people are all completely stupid and Russia more so. This corruption stinks to high heaven and is obvious to all sane people who love fairness. You cannot trust an entity that believes in getting what they want by hook or by crook. Russia learn your lesson ! So you countries that love whats good for you and your people do not cheat them for they voted for you to help them. Germany do not kick yourself, it will hurt your people. Saying, There is more than one way to skin a cat, they say.

Mutlu Ozer 3 hours ago

There is a simple concept to investigate a crime to find the criminals: Just look at whose benefit the crime is? EU politicians are certainly smart people to know this basic concept of criminal investigation. However, now they are playing a new strategy about how to domesticate(!) not only Russia China as well... Germans are the main actors in the stage of the WW-I and WW-II. I surely claim that Germans would be the main architect of the last war, WW-III.

[Aug 24, 2020] Why neoclassical economics is a yet another secular religious doctrine, and not a science

Highly recommended!
In a sense the USA is a theocratic society with neoliberal religion as the state religion. Not that different from the USSR whioch also was a theocratic society with some perversion of Marxism as the state religion.
Aug 24, 2020 | peakoilbarrel.com

Hickory Ignored says: 08/15/2020 AT 9:35 AM

I capitulate. Ron you are correct, we are post peak.
Post Peak

OK, now what?
It is so strange to be post-peak and not have high prices for crude,
and food.
I guess that will be coming.

note- biofuels should not be counted in liquids tally. It is a different animal, with the source being dependent on farming and soil, not drilling and geology. Just because ethanol is used for propulsion shouldn't matter- electrons and batteries aren't counted either, and rightly so. Those belong in a different category- transportation energy.

Schinzy Ignored says: 08/15/2020 AT 12:02 PM

I have argued for several years that peak oil is a low price phenomenon, not a high priced phenomenon.

The most overrated law in economics is that of supply and demand. This law suffers from what Richard Feynman called "vagueness" (see
https://www.youtube.com/watch?v=EYPapE-3FRw ). The problem is that it is always satisfied and hence gives absolutely no information about prices.

The latest iteration of our article on the oil cycle can be found at
http://www.math.univ-toulouse.fr/~schindle/articles/2020_oil_cycle_notes.pdf

alimbiquated Ignored says: 08/16/2020 AT 9:52 AM

Another problem with market theory (beyond vagueness) is that it lacks a time axis.

The theory states that the relationship between price and supply moves along the demand curve, but doesn't say how fast, just that "in the long run" the system will reach equilibrium. Being in equilibrium means being somewhere on the demand curve.

https://www.economicsonline.co.uk/Competitive_markets/Demand_curves.html

So for example, if prices go up, the demand quantity is expected to go down. The question is when.

Where does this go wrong? In classical market theory, for example, unemployment is impossible, because if labor supply outstrips demand prices (wages) should fall until until equilibrium is attained. This has been observed to be false on many occasions, including right now.

As Feymann states in the video, "If it disagrees with experiment, it's WRONG! That's all there is to it." Classical economics isn't just too vague, it is wrong.

Keynes joked about this that in the long term we'll all be dead. He meant equilibrium will never be reached, so we are never on the demand curve. He argued that "sticky prices", meaning the unwillingness to accept pay cuts, kept labor markets permanently out of equilibrium.

It's worth pondering whether oil prices are "sticky" as well. Saying yes is saying the law of supply and demand doesn't apply (in the short term). This year we have seen that both OPEC's politicking and panicky traders can cause wild swings in price unrelated to supply and demand.

Where market theory is vague is the shape of the demand curve. For example, if oil supply can't meet demand in the near future, as some here have posited, how high will prices go? Some claim it will go over $200, as people get desperate for it. Some claim that higher prices would increase efforts to find and drill more, putting a lid on prices. Some claim the shortage would crash the world economy, depressing prices. Some claim that faced with oil shortages, the world would simply switch to EVs, or stop wasting the gunk on poorly designed transportation systems, so prices would stay more or less the same.

Who is right? Nobody knows. So we don't know the shape of the demand curve. The theory is hopelessly vague.

Schinzy Ignored says: 08/16/2020 AT 12:25 PM

Good points. For all these reasons it is not surprising that the journalist Robert Samuelson noted last year that frequently economists don't know what they're talking about: https://www.washingtonpost.com/opinions/economists-often-dont-know-what-theyre-talking-about/2019/05/12/f91517d4-7338-11e9-9eb4-0828f5389013_story.html?noredirect=on&utm_term=.dc651d463df7 .

Han Neumann Ignored says: 08/17/2020 AT 8:25 PM

I have argued for several years that peak oil is a low price phenomenon, not a high priced phenomenon.

Schinzy,

The price of crude oil is only part of the Peakoil phenomenon. How much is left in the ground counts, however more important is at which velocity the remaining Gb can be extracted. I am not a geologist, but common sense says that when an oilfield is well depleted (50-70%) the most of the remaining barrels will be extracted at a much lower speed, even at very high oilprices. With secondary and tertiary EOR technology most conventional oilfields will not produce the same or close to the same amount of barrels/day as before for many more years. That's also my conclusion from what I have read more than a decade ago.
Of course with high oilprices new, relatively small, oil fields will come online and (more advanced) EOR will start in other fields, but no matter how you look at it: depletion never stops. With most oilfields in the world past-peak, only a tremendous amount of money (needed to develop EOR) can prevent world crude oilproduction from falling like a rock. And all those EOR technologies will deplete oilfields faster. Big gains in the beginning, more disappointments later.
Will there be significant amount of shale oil developed in the future in other countries than the U.S. ? If so, is that wise, regarding an already existing runaway climate change ?

[Aug 24, 2020] Oil price and the USA surge capacity

Aug 24, 2020 | peakoilbarrel.com

Ovi Ignored says: 08/16/2020 AT 5:32 PM

Ron/Dennis

I do not consider Canada, Brazil and Russia to be in the same category as the US. The US has what I call "Sustained Surge Capacity". The other three don't. For a few years, starting in August 2016, the US increased production at rate of more than 1 Mb/d, forcing OPEC to cut back because the US, by itself was meeting annual world demand increases of 1 Mb/d to 1.3 Mb/d.

From August 2016 to November 2019, US increased production from 8,534 kb/d to 12,866 kb/d an increase of 4,333 kb/d or an average increase of close to 1330 kb/d/yr. No other country could or has done that. Does that capability still exist? I think that will be decided by the future price of oil along with demand.

From Ron's chart, from August 2016 to November 2019, there was an increase of approximately 6,000 kb/d. Russia, Canada and Brazil only contributed 1,567 kb/d of the 6,000 kb/d, slightly more than 1/3 of of what the US added.

In other words, I think that a world production minus the US chart is more useful in assessing the probability of exceeding the November 2018 peak. On a world minus US chart, the peak occurred in November 2016. That peak was exceeded in November 2018 because the US added 3,102 kb/d over those two years, offset partially by OPEC cutting back. Clearly the US will be a major player in determining whether the November 2018 peak will be exceeded.

The only other countries that have some short term surge capacity is Saudi Arabia, Kuwait and the UAE as shown in Ron's charts above. However their demonstrated surge capacity may be more related to wells that were drilled and oil coming out of inventory and could not be sustained for three years like the US did.

I think that there is a likelihood that the next peak oil will be lower than the November 2018 peak and it will be a question of whether increasing demand around 2023 to 2024 can be met by supply and whether the associated increasing world oil prices begin to strangle world economic growth.

Ron Patterson Ignored says: 08/16/2020 AT 8:11 PM

Thanks Ovi, I agree with almost everything you say. The one place where I disagree is here. You said: The US has what I call "Sustained Surge Capacity". I would make a slight change in that statement. I would say: "The US had what I call "Sustained Surge Capacity". Of course, we don't have that anymore.

That ended in December 2019 but the virus came along and disguised that point. Of course we can increase from where we are today, but not past that December 2019 point.

There was a reason the rig count was dropping during the last half of 2019. There was a reason crack spreads were being decommissioned and sold for scrap well before that peak.

All oil reservoirs contain a finite amount of oil. It is absolutely astonishing that some people simply cannot understand that simple fact.

Ovi Ignored says: 08/16/2020 AT 10:07 PM

Ron

I grappled with that statement for a while and then I put it in because I still think that the US has that sustained surge capacity. What I don't know is whether the remaining/dormant SSC is large enough to exceed the 12,866 kb/d reached in November 2019. At that time the STEO was projecting a small increase into 2020, indicating the US was getting close to peak capacity.

Ron Patterson Ignored says: 08/17/2020 AT 8:49 AM

I have no doubt that US production can increase from where it is today. My point was the glory days are over for so-called "Saudi America". We will never get back to the point we reached in November 2019. Therefore we will never be able to cause world oil production to reach new highs.

[Aug 24, 2020] OPEC July 2020 Production Charts " Peak Oil Barrel

Notable quotes:
"... $40s WTI and Brent are wholly unsustainable prices. I'd argue that $50s and $60s are also if growth is being sought outside of a few areas. ..."
"... SS, there is no doubt that the pandemic will hasten peak oil supply. Many shut-in wells will not re-open. Frac spreads are being sold for scrap. Rigs are being decommissioned. Plus we are still producing at 80 to 90% of former levels. That means depletion is still continuing. So when they do get around to producing flat out again, the oil will just not be there. ..."
"... close to 100,000 job losses in the oil industry, many folks in their 50s and 60s. Hard to see how they bring folks on for another boom with the loss of all that skilled labor. ..."
"... So, maybe $100 oil over a period of time could turn this tide, but sub-$50 WTI sure won't. ..."
"... Yes, the future is hard to predict. But absent some tremendous financial return potential, why would young people have any interest in making a career of US upstream E & P? ..."
Aug 24, 2020 | peakoilbarrel.com

Ron Patterson Ignored says: 08/15/2020 AT 8:15 AM

OPEC peaked in 2016, Russia peaked in 2019, and the USA very likely peaked in 2019 also. And the vast majority of all other nations have peaked also as evidenced by their continuing decline. That should be enough evidence for anyone.

shallow sand Ignored says: 08/15/2020 AT 8:33 AM

Ron.

$40s WTI and Brent are wholly unsustainable prices. I'd argue that $50s and $60s are also if growth is being sought outside of a few areas.

The longer prices stay low due to the pandemic, the more likely the world has passed peak supply.

I don't see any sign that this pandemic will be over anytime soon.

Ron Patterson Ignored says: 08/15/2020 AT 8:46 AM

SS, there is no doubt that the pandemic will hasten peak oil supply. Many shut-in wells will not re-open. Frac spreads are being sold for scrap. Rigs are being decommissioned. Plus we are still producing at 80 to 90% of former levels. That means depletion is still continuing. So when they do get around to producing flat out again, the oil will just not be there.

As to the longevity of the pandemic, one can only guess. But things will never be back to the free and easy ways of the past. International travel will never be back to what it once was. There will be fewer travel vacations even within nations. The possibility of the virus returning will forever be on everyone's mind.

Stephen Hren Ignored says: 08/15/2020 AT 12:47 PM

Also close to 100,000 job losses in the oil industry, many folks in their 50s and 60s. Hard to see how they bring folks on for another boom with the loss of all that skilled labor.

Han Neumann Ignored says: 08/16/2020 AT 8:08 PM

Ron,

Once that a, in most cases, curative combination of medicines is available and one or a few very effective vaccins are registered and rolled out, it remains to be seen how 'normal' life will get again.

I don't think the virus will be forever on everyone's mind. Already now many young people have started to party like before the pandemic, even in Europe (infections rising in almost all European countries, so a lot of 'Trumpites' and Bolsonarites' also in Europe).

When vaccines are widely available at least everyone who is planning to travel by plane will be going to get a vaccin.
A good chance that vacations and air travel is close to normal somewhere in 2022 or 2023.

Dennis Coyne Ignored says: 08/16/2020 AT 9:42 AM

Shallow sand,

The pandemic will eventually subside an the US and other nations that have responded poorly to the pandemic will eventually learn from nations that have responded relatively better, compare Europe and US.

If peak supply is reached, but demand resumes 1% annual growth, I expect we will soon see Brent at $65/bo+/-5 at minimum, by 2025 to 2030.

shallow sand Ignored says: 08/16/2020 AT 10:37 AM

Dennis. Brent $65 in 2025-30 is only helpful if one or both of the following happens:

1. Capital markets continue to the pattern of 2015-19 and fund drilling that provides marginal returns or losses, but has no hope of providing superior returns.

2. Some other new, economical supply source is discovered.

Low oil prices to 2025-2030 would seem to mean supply will be constrained unless one or both of the above occur.

Conventional oil pretty much peaked in 2005.

I look at $10K invested in a major oil company in 2010. I look at $10K invested in a shale company in 2010. I then compare that to the S&P 500 return since 2010, all other industry groups, specific companies, etc.

Investing in oil is like investing in tobacco. The only allure is yield. Upstream E & P will have to keep borrowing to pay the dividend even if oil returns to $50 Brent. Same with $60 Brent.

shallow sand Ignored says: 08/16/2020 AT 11:03 AM

Dennis. One thing that you are missing is just how poor the future of the upstream oil industry is.

When the shale boom started, EV's were a pipe dream.

When the shale boom started, there wasn't widespread sentiment against oil. Global warming/climate change was on the radar, but not like now.

BP is trying to remake itself in large part because they cannot find talented and skilled younger workers who want to work for a fossil fuel company.

We have been in this industry since the 1970s. We have some of the best leases in our field and have made more money in this industry than in our professions or in other investments. There is a third generation in our family ranging from late teens to mid twenties. None are interested at all in this family business/investment. Same for one of my best friends who makes his living at this. Same for another, whose engineer son started working with him out of college, but before oil crashed in 2014 left and took a job in a "Green Energy" field.

Mike is in the same boat.

I know all of the major players in our field. All companies are family owned. There are a total of four in all of those families working in oil and gas who are under the age of 50, and those four are at or nearing 40, and started working in their family oil companies at least over 15 years ago.

As I have posted before, our employees range from 47-61 years of age. The two we hired who were in their twenties have both long ago left, and no longer work in upstream E & P.

We have participated in some Zoom meetings with the National Stripper Well Association. Almost all on those meetings is old (50-80 years old).

We hope to sell out on the next recovery, if that ever comes. But we are concerned there will not be any buyers.

So, maybe $100 oil over a period of time could turn this tide, but sub-$50 WTI sure won't.

Yes, the future is hard to predict. But absent some tremendous financial return potential, why would young people have any interest in making a career of US upstream E & P?

Hickory Ignored says: 08/15/2020 AT 9:35 AM

I capitulate. Ron you are correct, we are post peak.
Post Peak

OK, now what?
It is so strange to be post-peak and not have high prices for crude,
and food.
I guess that will be coming.

note- biofuels should not be counted in liquids tally. It is a different animal, with the source being dependent on farming and soil, not drilling and geology. Just because ethanol is used for propulsion shouldn't matter- electrons and batteries aren't counted either, and rightly so. Those belong in a different category- transportation energy.

Schinzy Ignored says: 08/15/2020 AT 12:02 PM

I have argued for several years that peak oil is a low price phenomenon, not a high priced phenomenon.

The most overrated law in economics is that of supply and demand. This law suffers from what Richard Feynman called "vagueness" (see
https://www.youtube.com/watch?v=EYPapE-3FRw ). The problem is that it is always satisfied and hence gives absolutely no information about prices.

The latest iteration of our article on the oil cycle can be found at
http://www.math.univ-toulouse.fr/~schindle/articles/2020_oil_cycle_notes.pdf

alimbiquated Ignored says: 08/16/2020 AT 9:52 AM

Another problem with market theory (beyond vagueness) is that it lacks a time axis.

The theory states that the relationship between price and supply moves along the demand curve, but doesn't say how fast, just that "in the long run" the system will reach equilibrium. Being in equilibrium means being somewhere on the demand curve.

https://www.economicsonline.co.uk/Competitive_markets/Demand_curves.html

So for example, if prices go up, the demand quantity is expected to go down. The question is when.

Where does this go wrong? In classical market theory, for example, unemployment is impossible, because if labor supply outstrips demand prices (wages) should fall until until equilibrium is attained. This has been observed to be false on many occasions, including right now.

As Feymann states in the video, "If it disagrees with experiment, it's WRONG! That's all there is to it." Classical economics isn't just too vague, it is wrong.

Keynes joked about this that in the long term we'll all be dead. He meant equilibrium will never be reached, so we are never on the demand curve. He argued that "sticky prices", meaning the unwillingness to accept pay cuts, kept labor markets permanently out of equilibrium.

It's worth pondering whether oil prices are "sticky" as well. Saying yes is saying the law of supply and demand doesn't apply (in the short term). This year we have seen that both OPEC's politicking and panicky traders can cause wild swings in price unrelated to supply and demand.

Where market theory is vague is the shape of the demand curve. For example, if oil supply can't meet demand in the near future, as some here have posited, how high will prices go? Some claim it will go over $200, as people get desperate for it. Some claim that higher prices would increase efforts to find and drill more, putting a lid on prices. Some claim the shortage would crash the world economy, depressing prices. Some claim that faced with oil shortages, the world would simply switch to EVs, or stop wasting the gunk on poorly designed transportation systems, so prices would stay more or less the same.

Who is right? Nobody knows. So we don't know the shape of the demand curve. The theory is hopelessly vague.

hole in head Ignored says: 08/16/2020 AT 1:48 PM

A comment posted on ^peakoil.com^ . Interesting .
"The price action of WTI shows it quite clearly that the non oil extracting part of the economy can't afford to pay a high enough price that would allow the extracting, processing and delivery of oil products to it.

It's that simple, most of the oil still in the ground will stay there unless somehow you find a way to pay $100++ per barrel. The last 12 years has shown that we can't!

The best yearly average weekly price of WTI was right around $100
Average weekly price of WTI for years 2008 thru 2013 was $88.
Average weekly price of WTI for years 2014 thru 2019 was $53.

The trend is what it is and it shows no signs of changing, the price of WTI is still hitting lower lows and lower high.

I have no idea what the future will bring but the next 3 years are going to be interesting and not in a good way.

Have fun everyone."

Dennis,repeating myself ,the price of oil is going to trend down . Supply and demand curves do not apply where the world^s economic system is now placed . Alimbiquated has done a very good job explaining that .

Ron Patterson Ignored says: 08/15/2020 AT 6:38 PM

Much of the fall in output of the other 9 is from Iran, Nigeria, Libya, and Venezuela, much of that decline is due to political problems

No doubt it was. But political upheaval is part of the story, and always will be. There will be political problems ongoing for decades. Dennis, if your model excludes political problems, then you are living in a dream world.

Anyway, in addition to the political problems that you point out in those four nations, which will most likely continue, we have the natural decline in the other five nations in the chart below.

Hightrekker Ignored says: 08/15/2020 AT 6:42 PM

Nov 2018 is getting further in the rear view mirror -- –

Dennis Coyne Ignored says: 08/16/2020 AT 9:03 AM

Hightrekker,

Yes and oil prices have been low from Nov 2018 until now, do you expect that to continue for the next 10 years? I do not, perhaps that's the difference. 2025 to 2030 there is likely to be a new peak for World C plus C centered 12 month average output probably 1 to 3 Mb per day higher than the Nov 2018 peak. This assumes oil prices reach $64/bo or higher in 2020$ by June 2030.

Hightrekker Ignored says: 08/16/2020 AT 9:51 AM

Yes, I do not think we will surpass Nov 2018.
But I'm a European Historian, viewing other factors.

Survivalist Ignored says: 08/18/2020 AT 1:54 AM

I seem to recall, not too long ago, various talking heads prattling on about how USA LTO is now the new "swing producer"/source of swing supply. I guess we'll now get to see how well it swings on and off, as swing producers are wont to do.
My WAG is that it doesn't swing back on so well, as the swing off phase seems to be damaging (not just a tap you see), and when demand recovers after COVID, circa 2023, we'll see a price run up. Perhaps it'll be a damaging price run up. 2023 will be in the middle of Biden's first term, presumably.

Westexasfanclub Ignored says: 08/16/2020 AT 3:57 AM

And: Nigeria and Venezuela could ramp up their production only very, very slowly. They could not stem the general trend. Lybia is too little to make any serious difference. The only real wildcard is Iran. And it's the less probable to be played.

[Aug 24, 2020] Why neoclassical economics is a yet another secular religious doctrine, and not a science

Aug 24, 2020 | peakoilbarrel.com

Hickory says: 08/15/2020 AT 9:35 AM

I capitulate. Ron you are correct, we are post peak. Post Peak

OK, now what? It is so strange to be post-peak and not have high prices for crude, and food. I guess that will be coming.

NOTE:

Schinzy , says: 08/15/2020 AT 12:02 PM

I have argued for several years that peak oil is a low price phenomenon, not a high priced phenomenon.

The most overrated law in economics is that of supply and demand. This law suffers from what Richard Feynman called "vagueness" (see https://www.youtube.com/watch?v=EYPapE-3FRw ). The problem is that it is always satisfied and hence gives absolutely no information about prices.

The latest iteration of our article on the oil cycle can be found at: http://www.math.univ-toulouse.fr/~schindle/articles/2020_oil_cycle_notes.pdf

alimbiquated , says: 08/16/2020 AT 9:52 AM

Another problem with market theory (beyond vagueness) is that it lacks a time axis. The theory states that the relationship between price and supply moves along the demand curve, but doesn't say how fast, just that "in the long run" the system will reach equilibrium. Being in equilibrium means being somewhere on the demand curve.

https://www.economicsonline.co.uk/Competitive_markets/Demand_curves.html

So for example, if prices go up, the demand quantity is expected to go down. The question is when.

Where does this go wrong? In classical market theory, for example, unemployment is impossible, because if labor supply outstrips demand prices (wages) should fall until until equilibrium is attained. This has been observed to be false on many occasions, including right now.

As Feymann states in the video, "If it disagrees with experiment, it's WRONG! That's all there is to it." Classical economics isn't just too vague, it is wrong.

Keynes joked about this that in the long term we'll all be dead. He meant equilibrium will never be reached, so we are never on the demand curve. He argued that "sticky prices", meaning the unwillingness to accept pay cuts, kept labor markets permanently out of equilibrium.

It's worth pondering whether oil prices are "sticky" as well. Saying yes is saying the law of supply and demand doesn't apply (in the short term). This year we have seen that both OPEC's politicking and panicky traders can cause wild swings in price unrelated to supply and demand.

Where market theory is vague is the shape of the demand curve. For example, if oil supply can't meet demand in the near future, as some here have posited, how high will prices go? Some claim it will go over $200, as people get desperate for it. Some claim that higher prices would increase efforts to find and drill more, putting a lid on prices. Some claim the shortage would crash the world economy, depressing prices. Some claim that faced with oil shortages, the world would simply switch to EVs, or stop wasting the gunk on poorly designed transportation systems, so prices would stay more or less the same.

Who is right? Nobody knows. So we don't know the shape of the demand curve. The theory is hopelessly vague.

Schinzy , says: 08/16/2020 AT 12:25 PM

Good points. For all these reasons it is not surprising that the journalist Robert Samuelson noted last year that frequently economists don't know what they're talking about: https://www.washingtonpost.com/opinions/economists-often-dont-know-what-theyre-talking-about/2019/05/12/f91517d4-7338-11e9-9eb4-0828f5389013_story.html?noredirect=on&utm_term=.dc651d463df7 .

Han Neumann , says: 08/17/2020 AT 8:25 PM

I have argued for several years that peak oil is a low price phenomenon, not a high priced phenomenon.

Schinzy,

The price of crude oil is only part of the Peakoil phenomenon.

How much is left in the ground counts, however more important is at which velocity the remaining Gb can be extracted. I am not a geologist, but common sense says that when an oilfield is well depleted (50-70%) the most of the remaining barrels will be extracted at a much lower speed, even at very high oilprices.

With secondary and tertiary EOR technology most conventional oilfields will not produce the same or close to the same amount of barrels/day as before for many more years. That's also my conclusion from what I have read more than a decade ago.

Of course with high oilprices new, relatively small, oil fields will come online and (more advanced) EOR will start in other fields, but no matter how you look at it: depletion never stops.

With most oilfields in the world past-peak, only a tremendous amount of money (needed to develop EOR) can prevent world crude oil production from falling like a rock. And all those EOR technologies will deplete oilfields faster.

Big gains in the beginning, more disappointments later.
Will there be significant amount of shale oil developed in the future in other countries than the U.S. ? If so, is that wise, regarding an already existing runaway climate change ?

[Aug 19, 2020] American imperialism vs. EU imperialism: Pushed into the Ukrainian adventure by the US? Rubbish. The EU and its constituent members were attempting to play their own hand and were not merely following the US lead submissively.

Highly recommended!
Aug 19, 2020 | turcopolier.typepad.com

likbez , 17 August 2020 at 11:05 AM

IMO NATO should have ended with the fall of the USSR. It now "confronts" a largely imaginary threat, concocted for the purpose of maintaining the status quo in US government expenditures for defense and supporting the imperial dreams of the neocons.

Does anyone really think Russia is going to invade the Baltics? Really?


Hear! Hear!
blue peacock , 17 August 2020 at 11:20 AM

Col. Lang,

Isn't the western alliance for all intents & purposes already dead?

It is a shame as it could work together to counter the totalitarian CCP. But Mama Merkel it seems would rather get a few yuan from the communists and turn a blind eye to CCP authoritarianism until it becomes obvious that the CCP are ruthless and will be competing with Germany around the world for machine tools and autos by undercutting them on price and heavily subsidizing their companies until German industry is destroyed.

Barbara Ann , 17 August 2020 at 11:57 AM

I have heard of these elusive creatures called "Europeans", but have yet to meet one, so am not able to comment on their alleged "smug superiority". How many divisions do they have?

JohnH , 17 August 2020 at 01:13 PM

If anything drives the US and Europe apart, it will be trade, not security. Germany is clearly chafing under the US bit, which sacrifices European industry to US interests -- sanctions on Nordstream 2, trade with Russia, trade with Iran, and China and Huawei. The US clearly prioritizes it's own LNG , finance, technology and arms industries over European prosperity. It amazes me that it has taken Europe so long to wake up.

Biden will do nothing to change that dynamic, since he is beholden to the same interests as Trump.

james , 17 August 2020 at 01:36 PM

nato is an anachronism much like a lot of western type institutions today..

i am predicting a trump win via the astro...

srw , 17 August 2020 at 01:58 PM

Does anyone really think Russia is going to invade the Baltics? The Baltics and most likely the Poles do with past history in mind. I would like to see them and the Ukrainians transition into something like the Finns who acknowledge Russian power but maintain their independence. Right now they are looking at NATO as their guarantee of independence in the future. Who can blame them when looking at history.

Polish Janitor , 17 August 2020 at 03:28 PM

Col. Lang,

The Trump admin's (and for that matter, Trump's own instincts) are and have continuously been quite correct with regards to EU's defense expenditures agenda. The European 'humanists' take advantage of the American defense umbrella inside their own countries so they can afford to NOT spend on defense and instead spend more on domestic and economic development. So while America continues to pay for the EU's defense it cannot afford to invest in its own domestic programs (infrastructure, etc.) adequately. These Europeans then with the collaboration of their Atlanticist fellows on the other side of the pond do nation-building and democratization projects (call it endless wars) abroad, such as in Afghanistan. Just don't ask them about their track record in this department.

However, the thing is when their immediate interests are in danger they forget about America in a heartbeat. Examples, Germany's Nordstream pipeline with Russia, 5G infrastructure and development, trade with China, Paris climate accord, etc.

I tend to believe that EU knows best how to make an existential threat out of Russia. Anyone still remembers the novichok incident back in 2018? The thing with Russia is that from the POV of EU, they view their Eastern neighbor as a solid and stable illiberal system that is not within the ideological orbit of the western liberal democracy and thus they feel threatened by that ideologically, NOT a scenario in which from Tallinn to Toulouse is invaded and captured by Putin. In this endeavor they also have found willing partners in 'anti-authoritarian' hawks such as Bob Kagan, Hilary, Sam Power et.al that tow the same line and advocate for NATO expansion and other similar projects.

The EU in definitely terrified of a scenario in which the U.S. (under a nationalist conservative administration) starts de-funding NATO or withdraws its troops from Europe. In this case they need to cut public spending and allocate more on defense which has a clear impact on the 'democratic spirit' of EU's over-hyped social democracy.

In the past few years we have seen the rise of right-wing populsit nationalist parties in pretty much every single major EU country. I believe there are strong tendencies in the Trump admin-if DJT manages to stay in power for another 4 years- to do a little *something something* about EU's decades-long nefarious free-riding of U.S. defense umbrella and I don't think the effeminate EU leaders will gonna like it very much.

English Outsider , 17 August 2020 at 04:31 PM


Barbara Ann - You say "I have heard of these elusive creatures called "Europeans", but have yet to meet one, so am not able to comment on their alleged "smug superiority". How many divisions do they have?"

The term "European" has become disputed territory. As an Englishman I regard myself fully as "European" as any German or Frenchman but for many the term now seems to mean exclusively "Member of the European Union". Tricky, that one.

Me, I prefer the term "Westerner". It takes in the so-called "Anglosphere" as well and therefore covers all the ground without going into the fact that some parts have become considerably less powerful over the last century and others considerably more. Also accommodates without fuss the fact that the cultural centre of gravity, at some indeterminate time in that last century, moved across from Paris, Vienna and Berlin to New York and parts west.

Not always to your advantage, to you as an American that is, because a fair chunk of the Frankfurt mob moved over your way with it. You caught from Old Europe the destructive and vacuous tenets of "Progressivism" and are now sharing the disease in its full vigour with us.

I mention that last because the violent TDS you see across the Atlantic isn't specifically European. It's merely that it's natural for progressives to detest Trump or rather, not the man himself but the "populist" forces he is taken to represent. It's garlic to the vampire for the progressive, the Little House on the Prairie or its various European equivalents, and the allergic reaction will become stronger yet. That "smug superiority" you will therefore find in the States as readily as you will find it here. America or here we live on sufferance in occupied territory, if we are not progressives ourselves, and should not the occupiers always be superior and smug?

I went hunting for the Telegraph article the Colonel discusses above. I didn't like that article at all. It gets the "freeloading" part right but in the context of a Russophobia that's seemingly set in stone. And the Telegraph is not so much a progressive newspaper as one that, while throwing a few token bones to its mainly Conservative readership, buys the progressive Weltanschauung just as much as the Guardian or New York Times.

"How many divisions do they have?" A few more than the pope but maybe that's not the point. I recently tried to follow the twists and turns of Mrs May's negotiations with the EU as they related to defence. I got the impression that in the matter of defence the supply of divisions could safely be left to the Americans. It was the allocation of defence contracts that they were all concerned about.

Deap , 17 August 2020 at 04:46 PM

Residing in Europe in the late 1960's at a US joint NATO military attachment in Northern Italy, we mused were we there to keep our eye on the Russians, or in fact keep our eyes on the Germans. One still saw in the back rooms, AXIS memorabilia.

As an aside: the only reason Michelle Obama chose as one of her FLOTUS projects - support of military families -- was so she could get Uncle Sam to jet her around to all those US military bases still in Europe for tea with the commander's wife and then on to her real purpose - shopping and having fun with friends and families she was able to drag along. On our dime.

Deap , 17 August 2020 at 04:53 PM

My last visit to Europe found there are now more Turks, than former "Europeans; except in France where they were more Algerians, than native French. And of course UK has long been little more than the entrenched polyglot of their vast far flung Empire.

Indeed, who is a "European" today. Birth rate demographics from the former colonies, boat people or import of cheap labor has now taken over anything we used to call "European". Can a resident Turk really serve up a perfect plate of raclette in Switzerland? One word answer: no. And that is a sad loss. One must instead shift their tastes to shwarma, if one wants European food today.

Diana Croissant , 17 August 2020 at 06:19 PM

In regard to Europeans--and perhaps some Australians whom I've met--I have often felt that they in some ways did feel a bit superior to Americans.

Their sense of superiority, however, seemed more rooted in a sense of cultural superiority. Those on the blog who viewed the comic rendition of the Three Little Pigs that was recently posted here might think of that and its wonderful ending about the house that was "American made." it was a wonderful ending for that well-known tale and a great defense of our culture's current limited and plain vocabulary in some groups.

As an English major and English teacher, so much of the great literature that we taught did come from England. I took three Comps when I earned my Masters: English literature from Beowulf (which I read in Old English) to Chaucer's Catterbury Tales (which I read in Middle English) and then to Virginia Woolf.

For my comp in American literature, I read from Washington Irving to the modern American writers at the time I was in college.

My third comp was in Modern Linguistic Theory.

Of course we taught Shakespeare and Dickens---English writers--to our junior high and high school classes. We studied mostly American writers in regard to short stories, as short stories are considered the American genre. Our teaching of poetry covered both English and American poets. As far as novels go, we taught both English and American novels.

Russian and German novelists were also on our list of reading for our comps. (We read them in English translation.)

In summary, American culture was often overshadowed by the many longer centureies of European culture in much of my college career.

What the Europeans can't deny, though they may want to, is that the tehcology and innovation in things like automobile production, electricity, telephones, and into space expoloration ---many things like that--is where we can indeed be quite proud.

They can continue to feel culturally superior to us if it makes them feel better. I defy them, however, to minimize our importance in World War II.

Babak makkinejad , 17 August 2020 at 11:24 PM

Deap

A European was understood, in Iran, to be a Christian. A Turk in Germany or and Algerian in France is just that, a Turk, an Algerian, i.e. another Muslim.

There are professional and managerial middle class French Muslims in Paris and elsewhere, but are they French? I do not know how assimilated they are.

Mathias Alexander , 18 August 2020 at 03:01 AM

" he will follow some Trump-era objectives, because that is what American interests demand, thus showing that Trump was no extremist on China."
So if Biden and Trump both want something, that shows that it isn't extreme. How does that work again?
The drive for confrontation with Russia contradicts Europe's desire to do buisness with her. Hence the end of the Western Alliance.

Mathias Alexander , 18 August 2020 at 04:18 AM

"The US faces a rapidly escalating political crisis. The losing party in November will undoubtedly go to the federal courts to claim that their opponents cheated in the process."
They all went along with electronic voting and postal ballots. Now they're all going to complain about the consequences.

Paco , 18 August 2020 at 04:43 AM

Of course NATO should have disappeared together with the Berlin Wall, but it is alive, kicking and ever looking for trouble, Belarus comes to mind.
The problem with propaganda is that the emitter ends up believing it, Europe does not need any protection, we have the means to protect ourselves.
The US is an occupation force, and on top of it demands payment for it. Pick up your gear and go home, and by the way, Europe should worry about countries armed to their teeth by the US, I'm thinking about Morocco for instance, since I live in Spain. The beautiful line of the Sierra that I contemplate every morning while stretching has been contaminated with a radar station of the Aegis system, and that means we in our quite and beautiful Andalusian town are a target for the biggies. Stop believing your propaganda, pick up your gear and let everybody take care of themselves, the benefits will be for the US population in the first place, and the world will rejoice.

A.I.S. , 18 August 2020 at 06:20 AM

The reason German military contribution to the "western alliance" is what it is is very simple.
It is according to the incentives that threats that German leadership perceives.

First: Objective strategic things:
Essentially, noone is going to invade Germany. This removes one major reason to have a large army. Secondly, Germany is not going to productively (in terms of return of investment) invade anyone else. This removes the second major reason to have a large army. There is something to be said to have a cadre army that can be surged into a real army if conditions change.

Second: Incentives of German political leaders.
While the degree of German vassal stateness concerning the USA is up to a degree of debate, that the USA has a lot of influence over Germany is in my view not. Schröder got elite regime changed over his Iraq war opposition (it was amazing that literally all the newspaper were against him, had a big impact on me growing up during this time).
Essentially, if you are in Nato, at some point, Uncle Sam will invite you to some adventure. If you say yes to this adventure you commit your armed forces to some confrontation in the middle east if you are lucky, or against Russia in Eastern Europe if you are unlucky. Your population is not going to like this, and you may face losing elections over this. It is also expensive in terms of life and material (although not very expensive compared to actual wars against competent enemies).
If you say no, Uncle Sam will be displeased with you and will make this known for example by sicking the entire "Transatlantic leadership networks" on you, which can also make you lose the next election.

Essentially, if Uncle Sam comes asking, you lose the next election if you say yes, and you also lose if you say no. Saying no is on balance cheaper, because you dont incurr the financial and human costs of joing a random US adventure on top of the risk of losing the next election.
The winning play is to get your army in such a state that Uncle Sam will not even ask.

Germany basically did create condition that enabled this.
Its a reasonably happy state for Germany to be in.

We are basically doing Brave Soldier Schweijk on the national level.

Solutions from a US pov:

1: Do less military adventures. If you do less adventures, people will fear being shanghaied along less. This will decrease the drawbacks associated with having a reasonable military as a Nato state.

2: Dont soft regime change governments that say no to your foreign adventures. Instead, maybe listen to them. Had the US listend to French and German criticism regarding the wisdom of going to war with Iraq, the US and also a lot of others would have been much better off.

3: Make it clear that particpation in foreign adventures is actually voluntary instead of "voluntary", make also clear that participation in defensive operations is not voluntary and is what Nato was created for and that you expect a considerable contribution towards this. Also, do some actual exercises. For example, if Germany claims that its military expenditure is sufficient, stress test this premise by having a realistic exercise in which a German divisions goes up against an American one. Yes, do some division size exercizes pretty please. Heck, after ensuring that this exercize wont be a failfest, have some Indian be the referee.

Barbara Ann , 18 August 2020 at 08:03 AM

Territoriality European Outsider

Now we are getting to the heart of the matter. My jest about never having met a European was of course designed to illustrate that "Europe" is a secondary construct. Never has a person, upon meeting me, introduced themselves as a "European".

Europe is a moveable feast and even territorial definitions are slippery. "Europeans" I think, must be characterized by short memories, for was it not less than 25 years ago that European NATO planes bombed their fellow Europeans in Bosnia? It can't have been an accident either, as I understand the op. was called "Operation Deliberate Force".

If Europe is synonymous with the EU it has precisely zero divisions and though you yourself may remain "Western", you are as a consequence of Brexit no longer "European". No, I think you and Polish Janitor are close by identifying "European" as a progressive/liberal, democratic (read "globalist") value system. An insufficiency of "European-ness" can thus be used to justify NATO involvement across various geographies - from Bosnia to Afghanistan (& shortly Belarus?).

But of course the "European" members of NATO are hardly on the same page. It looks not at all unlikely that two of its members may go to war in the Eastern Mediterranean.

I agree with you re the Telegraph article btw. "European" smugness is well represented in that organ.

nbsp; turcopolier , 18 August 2020 at 08:21 AM

Mathias Alexander

No. They did NOT all go along with "electronic voting and postal ballots." The 50 states each run federal elections in any way they please. The US Constitution requires that. There are a wide variety of voting machines in use and only a few states use mailed in ballots. the Republican Party particularly opposes mail in voting.

Barbara Ann , 18 August 2020 at 09:28 AM

Darn spellchecker "Territorially" of course EO.

I should also have added that "European" by the above definition is pretty much synonymous with "Atlanticist".

Jack , 18 August 2020 at 12:54 PM

Paco,

You should be complaining to the politicians you elect. They're the ones requesting US military protection. Prior to Trump, our governments were quite happy to provide that protection. He's now asking for some cost sharing.

Be careful though, before you know it Spain could become a vassal of the Chinese communists as many countries in Africa are finding out now. Hopefully you can continue to extract euros from the Germans and Dutch while battling the separatists in Catalonia. There's a thin veneer between stability & strife.

Deap , 18 August 2020 at 01:01 PM

Paco, with a huge cost of lives and treasure the US was twice asked to clean up Europe's self-inflicted messes in the past century. Promise you won't call on us again, and we can talk. I know, past is not necessarily prologue but do at least meet us half way. It is only good manners.

English Outsider , 18 August 2020 at 01:17 PM


Barbara Ann - Lots of Europes of course. "My" Europe may no longer be on the active list. Traces here and there. Few green shoots that are visible to me. Many rank growths overlaying it.

Also many "European Unions". They exist all right, in uneasy company.

So many "EU's". A ramshackle Northern European trading empire - I think that's too unstable to be long for this world but I could be wrong. A nascent superpower, that denied by many but for some their central aim.

A bureaucratic growth. A handy market place for all. A Holocaust memorial centre; when the EU politicians find themselves in a tight spot they can always call on Auschwitz and all fall back in line. I saw Mrs Merkel pull that trick at the last but one Munich Security Conference and all there, because Mrs Merkel was at that time in a very tight spot, applauded with relief.

A Progressive Shangri-La, all the more enticing for never being defined. Those adherents of that "EU" do actually call themselves "EU citizens" and I see the term is becoming more common usage. Maybe those are the self proclaimed "European citizens" you have not met.

And the producer of reams of lifeless prescription that seek to force all into the same mould and tough on the poor devils who can't fit the model. And on their families.

Lots of "EU's". I like none of them. While we wait for that edifice of delusion to collapse I hope the damage it does to "My" Europe is not irreparable.

Artemesia , 18 August 2020 at 02:26 PM

@ Diana Croissant: "They can continue to feel culturally superior to us if it makes them feel better. I defy them, however, to minimize our importance in World War II."

What an unfortunate conclusion to your essay.


Paco , 18 August 2020 at 05:47 PM

Jack, with all due respect, the politician who committed treason and gave away Spanish territory for a foreign power to install bases died in 1975, nobody voted for him, general Franco, an ally of Hitler, someone who sent over 50k troops to the siege of Leningrad, one of the greatest crimes in the history of mankind, a million casualties, mainly civilians, dead by hunger and disease, that fascist ally of Hitler we had to endure for 40 years, the price to close your eyes and your nose not to smell the stench were bases, an occupying force watching one of the strategic straights in Rota, close to Gibraltar, plus other bases inland. I could go on, and remind you of 4H bombs dropped over Palomares after a broken arrow incident, one of them broke and plutonium is still poisoning an area that your government is not willing to clean. So that is what foreign occupation looks like, if something goes wrong, well, we are protecting you . they say. History should be taught with a bit more detail in the USA.

English Outsider , 18 August 2020 at 06:35 PM

A.I.S

I'm afraid you're reading the dynamics of the European/US relationship quite incorrectly. Bluntly, you have the facts wrong.

This site, and particularly the Colonel's committee of correspondence, is packed with experts who have lived in this field and know their way around it. So I don't venture a comprehensive rebuttal myself - my knowledge is partial and I do not have the background to be sure of getting it dead right. But here -

"Essentially, if you are in Nato, at some point, Uncle Sam will invite you to some adventure. If you say yes to this adventure you commit your armed forces to some confrontation in the middle east if you are lucky, or against Russia in Eastern Europe if you are unlucky."

That is transparent nonsense.

Obama has stated that it was the Europeans, including the UK, who pushed him into some middle East interventions. I don't think he was shooting a line. The leaked Blumenthal emails confirm that and we merely have to look at the thrust of French military actions to understand that the French in particular push continually for intervention in the ME.

They are still doing so, and not for R2P purposes. They would see the ME and parts of Africa as part of the EU sphere of influence and their initial reaction to Trump's abortive attempt to withdraw from Syria shows they would be more than prepared to go it alone there if they could.

A squalid bunch, and here I must include my own country in that verdict. Reliant on US logistics and military strength they seek to pursue their own interests and could they but do so they would do so unassisted. Don't pretend that it's the Americans who force them into these genocidal adventures.


As for the Ukraine, we see from Sakwa's unflattering study of the EU adventure there that that was building up well before 2014. The dramatic rejection of the EU deal was the prelude to the coup. The Ashton tape shows an astonishing degree of EU intervention in Ukrainian internal affairs before that coup. And from the Nuland tape we get a glimpse of the EU regime change project that shows it was deeply implicated.

Pushed into the Ukrainian adventure by the US? Rubbish. The EU and its constituent members were attempting to play their own hand and were not merely following the US lead submissively.

We hear little of European neocon ventures. But what little has surfaced about them shows that your picture of peace loving Europeans dragged into these conflicts by an overbearing "Uncle Sam" is dishonest and misleading.

So I tell my German friends and relatives when they push the same line. They look at me with disbelief and go off and hunt around the internet themselves. And then come back and do not disagree. I suggest you do the same. The facts are all there, even for those of us without inside knowledge or who lack the requisite background.

[Aug 08, 2020] Saudi Arabia is insolvent- --- Foreign Affairs - Sic Semper Tyrannis

Aug 08, 2020 | turcopolier.typepad.com

Saudi Arabia is insolvent? --- Foreign Affairs

"An ambitious leader never lets a crisis go to waste, and MBS is nothing if not ambitious. During the early days of the pandemic, he increased the kingdom's value-added tax from five percent to 15 percent, and the government earmarked $1 billion in stimulus payments to Saudi businesses struggling with the economic downturn. MBS directed his sovereign wealth fund to shop for bargains on global stock markets. He even went nose to nose with Russian President Vladimir Putin on oil prices: when Russia refused to respect production limits set in 2017, Saudi Arabia opened the spigot, driving the price of oil down, very briefly, into negative territory . Even with oil prices back around $40 per barrel, the Saudis are left with only half the revenue they need to balance the government's books. " FA

--------------

Well pilgrims, Trumpy and Jared may love the Saudis and the murderer MBS, but I do not. I was the Defense Attaché there for three years. It was one of the most unpleasant experiences of my army career. The level of social and legal restriction imposed by the theocracy was stifling. Normal life was simply impossible. Even as a diplomat I felt imprisoned in the embassy. For a foreigner to speak Arabic in public was most unwise because the immediate suspicion, often voiced, was that the foreigner was a SPY!

The one thing the Saudis have historically had "going for them" was the money that flooded the country from the ever flowing oil and gas stream. Now, that is largely finito. Good! That means less money to use in spreading the Wahhabi cult, and less money to spend on futile fantasies like the war against the Zeidi mountaineers in Yemen.

A million gastarbeiters have left the country? Good! Perhaps the Saudis will learn how to do actual work. Perhaps. pl

https://www.foreignaffairs.com/articles/saudi-arabia/2020-08-04/end-saudi-arabias-ambitions


Jack , 07 August 2020 at 12:27 PM

Sir

What's your opinion on the dynamics that could lead to the fall of the House of Saud?

I'm sure in an insular country like that there must be much palace intrigue and suspicions on loyalty among those that bear arms. How does MbS insure his survival?

Linda , 07 August 2020 at 02:04 PM

It couldn't happen to better folks

BABAK MAKKINEJAD , 07 August 2020 at 03:37 PM

Col. Lang:

It will be decades before the identification of Salafi ideas as True Islam is discarded.

Decades of strife and bloodshed still lies ahead, in my opinion.

upstater , 07 August 2020 at 04:52 PM

With "friends" like KSA and Israel, who needs enemies? These two have driven US foreign policy for decades and the smouldering wreakage of MENA is the legacy of these miguided corrupt alliances. Between the fed and Treasury we'll be bailing out both of these monstrosities.

Unfortunately the 2 presidential candidates promise us of more of the same. I was so hopeful that Trump might make a break, but he seems to have been a weak leader with little follow through. Biden, of course, will put these misguided alliances on steroids administered by proven losers.

Richard Ong , 07 August 2020 at 07:14 PM

There's a positively classic scene at the beginning of the movie "A New Leaf." Walter Matthau's character is visited on the golf course by his accountant who's come to tell him that there's no more money in his trust account. Matthau is bewildered by this news uttering something along the lines of "But I still have plenty of checks." It's hilarious and someone in Saudi will also soon be visiting the Wahhabi loons to tell them the party is over. Life imitates art.

Polish Janitor , 07 August 2020 at 07:20 PM

Saudi Arabia has been in the news lately and none of them is good. One is WSJ's report on the quasi-secret China-Saudi nuclear cooperation and the 'Yellow-cake' production in a secret desert facility in the country's NW. I can already see the heat the Saudi's will be getting from this!

Two, is the story of the 'Tiger Squad' assassins who were ordered by MbS personally to pull off a Khashoggi on a former Saudi intelligence officer for his refusal to get back to the country.

The idea of the Saudi's march to nuclear weapons development is a terrifying idea, but the rumor is that they already have (at least) one in Pakistan. I particularly find it very strange that the Trump admin was positively 'nudging' the Saudis toward nuclear energy development until very recently, when Rick Perry was still in the administration! But a few days ago the official at the State Dep's arms control and non-proliferation desk poured cold water on Saudis and made it clear that the U.S. would not let them to do funny stuff wit uranium behind their backs.

Also of note is the part in the WSJ's report that caught my attention and where it mentions the involvement of an Argentinian energy firm that recently set up a nuclear reactor for the Saudis and that they were very keen on developing the enrichment cycle supposedly for 'research' purposes and under secrecy. This reminded me of the 'colorful' history of Israeli-Argentine secret nuclear weapons development cooperation in the 60's, in which Israel got its'yellow-cake' it needed from Argentina to develop its nukes. Which begs the question that are Saudis going the same route as Israel did back in the early 60s? Why not working with Japan, Germany, France, U.S. then if it is all peaceful?

I have had my fair share of interactions with the Saudi people. while the culture is pretty medieval with regards to social and religious matters, but when it comes to hospitality and alike they are welcoming, especially during the month of Ramadan and after Iftar, that is when they break their fasts at dusk. For the Saudis it is like a custom to be 'extra' generous and they donate free meals frequently to everyone.

nbsp; The Twisted Genius , 07 August 2020 at 09:09 PM

Years ago, I suggested a cyber operation to drain the royal family of their disposable wealth for the sole purpose of depriving the jihadists of further material support. Glad to see that the "invisible hand of capitalism" and the royal's own stupidity are doing just that. I don't want to see the royals toppled. Who knows what would replace them. But if they were weakened enough so that all their remaining resources and concentration are focused on keeping their people from rising up and ripping them to shreds, it would be fine by me. Let the jihadis be reduced to angry men in the mosque without the resources to turn their anger into meaningful action.

BTW, this idea of a cyber operation was from SST not from my time in DIA.

J , 08 August 2020 at 09:27 AM

While MBS's Tiger Squad assassins were denied entry into Canada to whack former Saudi Intel type/MBS critic Saad Aljabri, MBS succeeded in obtaining a fatwa directed against Saad Aljabri.

james , 08 August 2020 at 10:09 AM

pat - i think your personal experience of ksa reflects what most people in ksa probably feel on some level.. i can't know this for a fact, but i would say if there was any place where the usa was into doing a regime change, i would go along with this one.. anything would be better then what they have wrought.. the export of wahabbism - salafist ideology has also been a plague on the planet... at what point does this transfer of oil money into crazy religious ideology indoctrination bite the dust? it can't happen soon enough as i see it..

here is a link to one of the stories polish janitor refers to in their post above.. https://www.cbc.ca/player/play/1773116483748

Babak makkinejad , 08 August 2020 at 12:55 PM

James

The Salafist approach to Islam is not crazy, i.e. insane. It is very much like Protestanism in as much as it rejects even the theoretical possibility of a Legitimate Central Religious Authority, it rejects Tradition, it rejects the possibility of sainthood - Olya allah -, it posits that any fool can read and interpret the Scriptures, and it rejects Theoretical Reason.

I think behind both Salafism and Protestanism appeals is a yearning for a simple moral and intellectual order that does not put too much strain on the believers' cognitive faculties; live under these black tents, follow these rules, and you are granted redemption in this life as well as the next.

"No need to trouble your pretty little brains to grapple with the world as you find it and not as you think it ought to be."

nbsp; turcopolier , 08 August 2020 at 01:48 PM

Babak

By "theoretical reason" you mean Kalaam?

Babak makkinejad , 08 August 2020 at 02:44 PM

I meant Philosophy.

Babak makkinejad , 08 August 2020 at 02:47 PM

James:

I should have written:

"...read and understand...", rather than "read and interpret..."

nbsp; turcopolier , 08 August 2020 at 03:02 PM

Babak

Felsafa is not highly regarded among the Sunnis because of the ancient closure of the Gate of Ijtihad. Felsafa is much more highly regarded among you Shia because you still have widely and highly regarded mujtahideen. Khomeini was a philosopher.

james , 08 August 2020 at 03:06 PM

babak... thanks... i have a hard time understanding the distinctions... i don't know enough of protestant ideology to appreciate the comparison.. as i understand it salafist ideology adopts sharia and sharia is handed down from 'religious authorities'.. do you agree in general with the description wikpedia gives on the salafi movement?? or is this slanted too much from your point of view?
https://en.wikipedia.org/wiki/Salafi_movement

james , 08 August 2020 at 03:29 PM

is it too much to say that without philosophy there is just literalism? literalism seems to reflect the bare minimum of understanding when everything boils down to this...

nbsp; turcopolier , 08 August 2020 at 04:57 PM

james

Sunni Islam has been mostly about "literalism" since the defeat of the mu'tazila.

nbsp; turcopolier , 08 August 2020 at 05:03 PM

james

Sunni Islam does not admit of hierarchy except within consensus groups (Ijma'). Some are large and some are small. 12er Shiism effectively is hierarchical through mechanism of the "Hawza" schools of mujtahids (Ayatollahs). i will be surprised if you understand that. Ask for clarifications.

Babak makkinejad , 08 August 2020 at 06:22 PM

James

Sharia is just the Laws of Islam, the concept is common to all Muslim sects and schools, the content is common.

In my opinion, Seyyed Jamal Al Din Qazwini was not a Salafi as the worf is understood today. He was a Shia Muslim who was campaigning for a unified Muslim response to the ascendancy of the Western Diocletian civilization as well as the Russian Empire.

He was, in the final analysis, only partly successful in his effort, in as much as they could only make sense among the Seljuk Muslims.

Salafi ideas, in my opinion, are best understood as a response of Non-Seljuk Muslims to the Western Diocletian civilization. It reminds me of the Deobandis, another Muslim response to the Western Diocletian civilization, exemplified by Great Britain, in India.

Both Salafis and Deobandis consider Shia Muslims to be heretics. The Wiki omits that.

nbsp; turcopolier , 08 August 2020 at 08:13 PM

babak
"the content is common" Untrue. There are many different collections of hadith and jurisprudence that make it obvious that the content is not common among the different sects.

james , 08 August 2020 at 10:15 PM

pat... thanks for the additional comments... yes, i am confused by it all and think i am in way over my head here! maybe i ought to just bow out of the conversation...

babak.. thank you as well...as i said to pat, i believe i am in over my head on the topic... i have a viewpoint - a very subjective one again - generally all religion - the orthodox kind anyway - have all struck me as not all that religious.. it is more like a system where the so called authorities or leaders get to dictate how it is and the followers have to go along with it... the whole spirit of religion seems overlooked or upside down.. i was naive and thought religion was about love and kindness to others and basic tenets like that, but i believe in the upper echelons of these religious systems, it is one big power game... i don't know that chrisitianity is all that different from islam in this regard.. i don't know enough about buddhism to comment, but i have heard similar stories in this religion as well... call me agnostic...

i hope for the best for everyone, but in the case of saudi arabia - i personally think the ksa-uae and etc leadership exporting wahabbism and really whacked out ideologies around to places like pakistan and etc have not done the world or themselves any favours.. i hope it ends soon.. it reminds me of the christian evangelicals exporting christianity to far off places round the globe... it is a lot like that and i don't think it does much of any good.. all the generousity has serious strings attached as i see it..

and finally - i agree with pats comment at the top and would like to repeat that.. i can't see any good coming out of ksa and think it would be better gone, or replaced with something more tolerant..

[Aug 08, 2020] Russia-China -Dedollarization- Reaches -Breakthrough Moment- As Countries Ditch Greenback For Bilateral Trade -

Aug 08, 2020 | www.zerohedge.com

Russia-China "Dedollarization" Reaches "Breakthrough Moment" As Countries Ditch Greenback For Bilateral Trade by Tyler Durden Thu, 08/06/2020 - 21:55 Twitter Facebook Reddit Email Print

Late last year, data released by the PBOC and the Russian Central Bank shone a light on a disturbing - at least, for the US - trend: As the Trump Administration ratcheted up sanctions pressure on Russia and China, both countries and their central banks have substantially "diversified" their foreign-currency reserves, dumping dollars and buying up gold and each other's currencies.

Back in September, we wrote about the PBOC and RCB building their reserves of gold bullion to levels not seen in years. The Russian Central Bank became one of the world's largest buyers of bullion last year (at least among the world's central banks). At the time, we also introduced this chart.

We've been writing about the impending demise of the greenback for years now, and of course we're not alone. Some well-regarded economists have theorized that the fall of the greenback could be a good thing for humanity - it could open the door to a multi-currency basket, or better yet, a global current (bitcoin perhaps?) - by allowing us to transition to a global monetary system with with less endemic instability.

Though, to be sure, the greenback is hardly the first "global currency".

Falling confidence in the greenback has been masked by the Fed's aggressive buying, as central bankers in the Eccles Building now fear that the asset bubbles they've blown are big enough to harm the real economy, so we must wait for exactly the right time to let the air out of these bubbles so they don't ruin people's lives and upset the global economic apple cart. As the coronavirus outbreak has taught us, that time may never come.

But all the while, Russia and China have been quietly weening off of the dollar, and instead using rubles and yuan to settle transnational trade.

Since we live in a world where commerce is directed by the whims of the free market (at least, in theory), the Kremlin can just make Russian and Chinese companies substitute yuan and rubles for dollars with the flip of a switch: as Russian President Vladimir Putin once exclaimed , the US's aggressive sanctions policy risks destroying the dollar's reserve status by forcing more companies from Russia and China to search for alternatives to transacting in dollars, if for no other reason than to keep costs down (international economic sanctions can make moving money abroad difficult).

In 2019, Putin gleefully revealed that Russia had reduced the dollar holdings of its central bank by $101 billion, cutting the total in half.

https://lockerdome.com/lad/13084989113709670?pubid=ld-dfp-ad-13084989113709670-0&pubo=https%3A%2F%2Fwww.zerohedge.com&rid=www.zerohedge.com&width=890

And according to new data from the Russian Central Bank and Federal Customs Service, the dollar's share of bilateral trade between Russia and China fell below 50% for the first time in modern history.

Businesses only used the greenback for roughly 46% of settlements between the two countries. Over the same period, the euro constituted an all-time high of 30%. While other national currencies accounted for 24%, also a new high.

As one 'expert' told the Nikkei Asian Review, it's just the latest sign that Russia and China are forming a "de-dollarization alliance" to diminish the economic heft of Washington's sanctions powers, and its de facto control of SWIFT, the primary inter-bank messaging service via which banks move money from country to country.

The shift is happening much more quickly than the US probably expected. As recently as 2015, more than 90% of bilateral trade between China and Russia was conducted in dollars.

Alexey Maslov, director of the Institute of Far Eastern Studies at the Russian Academy of Sciences, told the Nikkei Asian Review that the Russia-China "dedollarization" was approaching a "breakthrough moment" that could elevate their relationship to a de facto alliance.

"The collaboration between Russia and China in the financial sphere tells us that they are finally finding the parameters for a new alliance with each other," he said. "Many expected that this would be a military alliance or a trading alliance, but now the alliance is moving more in the banking and financial direction, and that is what can guarantee independence for both countries."

Dedollarization has been a priority for Russia and China since 2014, when they began expanding economic cooperation following Moscow's estrangement from the West over its annexation of Crimea. Replacing the dollar in trade settlements became a necessity to sidestep U.S. sanctions against Russia.

"Any wire transaction that takes place in the world involving U.S. dollars is at some point cleared through a U.S. bank," explained Dmitry Dolgin, ING Bank's chief economist for Russia. "That means that the U.S. government can tell that bank to freeze certain transactions."
The process gained further momentum after the Donald Trump administration imposed tariffs on hundreds of billions of dollars worth of Chinese goods. Whereas previously Moscow had taken the initiative on dedollarization, Beijing came to view it as critical, too.

"Only very recently did the Chinese state and major economic entities begin to feel that they might end up in a similar situation as our Russian counterparts: being the target of the sanctions and potentially even getting shut out of the SWIFT system," said Zhang Xin, a research fellow at the Center for Russian Studies at Shanghai's East China Normal University.

[Aug 01, 2020] Did MI6 created White Helmets?

Notable quotes:
"... Perhaps he was even the initiator of the White Helmets? My take away from those reports is that Cummings and Johnson have commenced a transition strategy within the UK and that the future of Integrity Initiative and its bogan crew may be limited. ..."
"... They have also restrained the MI6 manipulators that would conspire and contrive the overt 'Hate Russia' policy. Not that Bojo and Cummings will necessarily change anything other than a superficial rearrangement in their favour (for a month or two anyway). ..."
"... Caitlin Johnston has recently posted an astute analysis of the current distraction politics and why we should not be distracted by Covid19 rants from seeing the immediate rendition of the great game. ..."
"... I guess the UK will be less overt re Russia but expect the Libyan war to escalate as UKUSAI use Turkey in Libya to push back against Russia and even Sisi in Egypt. ..."
"... The UK could stage yet another 'Suez incident' with this mendacious confluence of opportunities. ..."
"... The USA has become the patsy for these thugs, when will they rise? ..."
Aug 01, 2020 | www.moonofalabama.org

uncle tungsten , Aug 1 2020 0:39 utc | 39

Jackrabbut #3

Thank you for those John Helmer reports. I note that the new head of MI6 is a lover of all fine Turkish things including Erdoghan. "Richard Moore, currently a third-ranking official of the Foreign Office, an ex-Ambassador to Turkey; an ex-MI6 agent; and a Harvard graduate".

Perhaps he was even the initiator of the White Helmets? My take away from those reports is that Cummings and Johnson have commenced a transition strategy within the UK and that the future of Integrity Initiative and its bogan crew may be limited.

They have also restrained the MI6 manipulators that would conspire and contrive the overt 'Hate Russia' policy. Not that Bojo and Cummings will necessarily change anything other than a superficial rearrangement in their favour (for a month or two anyway).

AtaBrit #9 includes an excellent link to a National Interest report on Turkey and is worth the read in this context of the rise and rise of Richard Moore. Thank you AtaBrit.

Caitlin Johnston has recently posted an astute analysis of the current distraction politics and why we should not be distracted by Covid19 rants from seeing the immediate rendition of the great game.

I guess the UK will be less overt re Russia but expect the Libyan war to escalate as UKUSAI use Turkey in Libya to push back against Russia and even Sisi in Egypt. They have a willing US president now and likely continuing in the next few years (be it Trump or Biden). The UK could stage yet another 'Suez incident' with this mendacious confluence of opportunities.

The USA has become the patsy for these thugs, when will they rise?

[Jul 30, 2020] USA threatens German Nord Stream 2 contractors

Jul 30, 2020 | thenewkremlinstooge.wordpress.com

MOSCOWEXILE July 27, 2020 at 2:17 am

USA drohen deutschen Auftragnehmern von Nord Stream 2
Stand: 08:32 Uhr

USA threatens German Nord Stream 2 contractors
Status: 08:32 a.m.

https://www.welt.de/wirtschaft/plus212234259/Nord-Stream-2-USA-drohen-deutschen-Auftragnehmern.html?cid=onsite.onsitesearch

Die Welt: США угрожают европейским подрядчикам "Северного потока -- 2"
26 июля 2020

https://yandex.ru/turbo/s/ria.ru/20200726/1574926306.html?promo=navbar&utm_referrer=https%3A%2F%2Fzen.yandex.com

MOSCOW, July 26 – RIA Novosti. The US authorities are increasing pressure on German and European companies involved in the construction of Nord Stream 2, Die Welt newspaper writes, citing sources.

The newspaper notes that the American side has held two videoconferences with gas pipeline contractors from Germany and other European countries to "indicate the far-reaching consequences of their further participation in the project". The conferences were attended by representatives of the US Department of State, Treasury and Department of Energy.

Sources told the newspaper that American officials "have made it very clear that they want to prevent the completion of Nord Stream 2".

The Empire hath spoken!

MARK CHAPMAN July 27, 2020 at 1:35 pm

I suppose the Germans could crumble like cheese, but I personally think it is very unlikely, since doing so would mean total dependence on the United States, with its whims and its 'loyalty tests'. Not necessarily in energy, because Europe would still have to rely heavily on Russia; the United States would be satisfied – for the moment – with Russia continuing to supply its present amounts, provided they went through Ukraine as they do now, so that Russia has to help finance Ukraine's slow development as a US project dedicated to Russia's undoing. But America knows it cannot ever replace Russian supply, although it would ideally like to take more and more market share as its own production (theoretically) continues to increase. It just adamantly does not want Ukraine taken out of the equation, because Ukraine is like a rheostat that Washington can turn up or down as necessary.

No, the USA cannot replace Russian gas, but if Germany gives in now, Washington will run it as a wholly-owned subsidiary for as far as the eye can see. And I believe Germany knows it.

MOSCOWEXILE July 27, 2020 at 11:46 pm

The German foreign minister was making suitable noises for the USA yesterday, saying that in order to rejoin G7, Russia must firstly clean up its relations with Banderastan -- read: stop its "aggression" towards the Ukraine and return the Crimea to its rightful "owner".

The Kremlin responded that it has no intention of rejoining G7.

No mention off the German minister about the Ukraine not complying with the Minsk agreement, about the Ukraine government waging war against its citizens, its stopping the water supply to the Crimea etc., etc. just Big Bad Russia the "Aggressor State" that must learn how to behave itself according "International Law".

MOSCOWEXILE July 27, 2020 at 3:34 am

RT

Russia beating United States in battle for China's huge energy market
July 27, 2020, 11:12 GMT

https://www.rt.com/business/495949-russia-outpaces-us-lng-china/

MOSCOWEXILE July 27, 2020 at 3:36 am

Unbelievable!

They're turning down "Freedom Molecules"?

MARK CHAPMAN July 27, 2020 at 3:37 pm

So it would appear. But it should not be at all surprising – except maybe to Washington – that you cannot shit on China day and night and call it all sorts of unpleasant names, and then expect the sun to come up on happy business partners China and the USA next day. China shares with Russia an imperative that it be respected; you don't have to like it, but you must speak respectfully and politely about it, and limit your accusations to what you can prove.

Washington likes to unload the mockery by the truckload, and then, when it's time to do business, say "Aw, shucks – I were just funnin'", and have business go forward as if the insults had never been voiced. Or, worse yet, insist that it is sticking to its positions, but you must do business with it anyway because it is the world leader and there is nowhere else to turn.

Natural Gas in the USA is at what is referred to as a 'messy bottom', and both production and sales are below year-over-year average. Yet it is plain – they say so, in so many words – that America expects sales growth to come from China and India.

"The International Energy Agency expects LNG, the main driver of international gas trade, to expand by 21% in 2019-2025, reaching 585 billion cubic meters annually. The growth will come from China and India, the IEA said in its Gas 2020 report published Wednesday. Trade will increase at a slower pace than liquefaction capacity additions, limiting the prospects of a tighter market, it said in the report."

https://www.msn.com/en-us/money/markets/shell-ceo-says-lng-market-will-recover-to-pre-virus-levels/ar-BB15imQu

I think he's probably right that the natural gas market will expand by a significant number. I'm just not sure the USA will play much of a part in it. And China is on solid ground, no matter how much America screams and roars; Russian gas is cheaper, and the logistics chain is short and reliable.

WARREN July 28, 2020 at 5:31 pm

https://platform.twitter.com/embed/index.html?dnt=true&embedId=twitter-widget-1&frame=false&hideCard=false&hideThread=false&id=1288112640493928449&lang=en&origin=https%3A%2F%2Fthenewkremlinstooge.wordpress.com%2F2020%2F07%2F05%2Fhow-to-make-a-brick-from-straw-and-bullshit%2F&siteScreenName=wordpressdotcom&theme=light&widgetsVersion=9066bb2%3A1593540614199&width=550px


MARK CHAPMAN July 28, 2020 at 6:06 pm

Obviously, for this group, 'bridging the gap' in 'threat perception' does NOT mean coaxing Poland and Lithuania to realize that Nord Stream II is just a commercial venture. It means coaxing France and Germany to accept and amplify Poland and Lithuania's paranoia and loathing of Russia. Equally obviously, America's determination to be Europe's Daddy with the LNG is just a commercial venture. Nothing political about it, and if the USA ever found itself in the position where it could leverage its energy sales to Europe to make Europe do things it otherwise would not do willingly, why, it would never use that power. Only the Russians weaponize energy.

The 'panel' is simply a parade of Atlanticists, a neoconservative wet dream. There are no realists there. Fortunately, US approval of the project is not required.


[Jul 28, 2020] Turkey On The Warpath

Putin decision to save Erdogan from the coup in retrospect looks like a blunder...
Jul 28, 2020 | www.zerohedge.com

Authored by Uzay Bulut via The Gatestone Institute,

Turkey is currently involved in quite a few international military conflicts -- both against its own neighbors such as Greece, Armenia, Iraq, Syria and Cyprus, and against other nations such as Libya and Yemen. These actions by Turkey suggest that Turkey's foreign policy is increasingly destabilizing not only several nations, but the region as well.

In addition, the Erdogan regime has been militarily targeting Syria and Iraq, sending its Syrian mercenaries to Libya to seize Libyan oil and continuing, as usual, to bully Greece. Turkey's regime is also now provoking ongoing violence between Armenia and Azerbaijan.

me title=

https://imasdk.googleapis.com/js/core/bridge3.398.1_en.html#goog_750179333

https://imasdk.googleapis.com/js/core/bridge3.398.1_en.html#goog_1565758762 NOW PLAYING

Erdogan leads first Muslim prayer after Hagia Sophia mosque reconversion

Istanbul's Hagia Sophia reconversion to a mosque, 'provocation to civilised world', Greece says

Turkish top court revokes Hagia Sophia's museum status, 'tourists should still be allowed in'

Erdogan: Interference over Hagia Sophia 'direct attack on our sovereignty'

Libya's GNA says Egypt's warning on Sirte offensive a 'declaration of war'

Erdogan says 'agreements' reached with Trump on Libya

What Turkish Election Results Mean for the Lira

Erdogan Sparks Democracy Concerns in Push for Istanbul Vote Rerun

Since July 12, Azerbaijan has launched a series of cross-border attacks against Armenia's northern Tavush region in skirmishes that have resulted in the deaths of at least four Armenian soldiers and 12 Azerbaijani ones. After Azerbaijan threatened to launch missile attacks on Armenia's Metsamor nuclear plant on July 16, Turkey offered military assistance to Azerbaijan.

"Our armed unmanned aerial vehicles, ammunition and missiles with our experience, technology and capabilities are at Azerbaijan's service," said İsmail Demir, the head of Presidency of Defense Industries, an affiliate of the Turkish Presidency.

One of Turkey's main targets also seems to be Greece. The Turkish military is targeting Greek territorial waters yet again. The Greek newspaper Kathimerini reported :

"There have been concerns over a possible Turkish intervention in the East Med in a bid to prevent an agreement on the delineation of an exclusive economic zone (EEZ) between Greece and Egypt which is currently being discussed between officials of the two countries."

Turkey's choice of names for its gas exploration ships are also a giveaway. The name of the main ship that Turkey is using for seismic "surveys" of the Greek continental shelf is Oruç Reis , (1474-1518), an admiral of the Ottoman Empire who often raided the coasts of Italy and the islands of the Mediterranean that were still controlled by Christian powers. Other exploration and drilling vessels Turkey uses or is planning to use in Greece's territorial waters are named after Ottoman sultans who targeted Cyprus and Greece in bloody military invasions. These include the drilling ship Fatih "the conqueror" or Ottoman Sultan Mehmed II, who invaded Constantinople in 1453; the drilling ship Yavuz , "the resolute", or Sultan Selim I, who headed the Ottoman Empire during the invasion of Cyprus in 1571; and Kanuni , "the lawgiver" or Sultan Suleiman, who invaded parts of eastern Europe as well as the Greek island of Rhodes.

Turkey's move in the Eastern Mediterranean came in early July, shortly after the country had turned Hagia Sophia, once the world's greatest Greek Cathedral, into a mosque. Turkish President Recep Tayyip Erdogan then linked Hagia Sophia's conversion to a pledge to "liberate the Al-Aqsa Mosque" in Jerusalem.

https://lockerdome.com/lad/13084989113709670?pubid=ld-dfp-ad-13084989113709670-0&pubo=https%3A%2F%2Fwww.zerohedge.com&rid=www.zerohedge.com&width=890

On July 21, the tensions arose again following Turkey's announcement that it plans to conduct seismic research in parts of the Greek continental shelf in an area of sea between Cyprus and Crete in the Aegean and Eastern Mediterranean.

"Turkey's plan is seen in Athens as a dangerous escalation in the Eastern Mediterranean, prompting Prime Minister Kyriakos Mitsotakis to warn that European Union sanctions could follow if Ankara continues to challenge Greek sovereignty," Kathimerini reported on July 21.

Here is a short list of other countries where Turkey is also militarily involved:

In Libya , Turkey has been increasingly involved in the country's civil war. Associated Press reported on July 18:

"Turkey sent between 3,500 and 3,800 paid Syrian fighters to Libya over the first three months of the year, the U.S. Defense Department's inspector general concluded in a new report, its first to detail Turkish deployments that helped change the course of Libya's war.

"The report comes as the conflict in oil-rich Libya has escalated into a regional proxy war fueled by foreign powers pouring weapons and mercenaries into the country."

Libya has been in turmoil since 2011, when an armed revolt during the "Arab Spring" led to the ouster and murder of dictator Muammar Gaddafi. Political power in the country, the current population of which is around 6.5 million, has been split between two rival governments. The UN-backed Government of National Accord (GNA), has been led by Prime Minister Fayez al Sarraj. Its rival, the Libyan National Army (LNA), has been led by Libyan military officer, Khalifa Haftar.

Backed by Turkey, the GNA said on July 18 that it would recapture Sirte, a gateway to Libya's main oil terminals, as well as an LNA airbase at Jufra.

Egypt, which backs the LNA, announced , however, that if the GNA and Turkish forces tried to seize Sirte, it would send troops into Libya. On July 20, the Egyptian parliament gave approval to a possible deployment of troops beyond its borders "to defend Egyptian national security against criminal armed militias and foreign terrorist elements."

Yemen is another country on which Turkey has apparently set its sights. In a recent video , Turkey-backed Syrian mercenaries fighting on behalf of the GNA in Libya, and aided by local Islamist groups, are seen saying, "We are just getting started. The target is going to be Gaza." They also state that they want to take on Egyptian President Sisi and to go to Yemen.

"Turkey's growing presence in Yemen," The Arab Weekly reported on May 9, "especially in the restive southern region, is fuelling concern across the region over security in the Gulf of Aden and the Bab al-Mandeb.

"These concerns are further heightened by reports indicating that Turkey's agenda in Yemen is being financed and supported by Qatar via some Yemeni political and tribal figures affiliated with the Muslim Brotherhood."

NEVER MISS THE NEWS THAT MATTERS MOST

ZEROHEDGE DIRECTLY TO YOUR INBOX

Receive a daily recap featuring a curated list of must-read stories.

In Syria , Turkey-backed jihadists continue occupying the northern parts of the country. On July 21, Erdogan announced that Turkey's military presence in Syria would continue. "Nowadays they are holding an election, a so-called election," Erdogan said of a parliamentary election on July 19 in Syria's government-controlled regions, after nearly a decade of civil war. "Until the Syrian people are free, peaceful and safe, we will remain in this country."

Additionally, Turkey's incursion into the Syrian city of Afrin, created a particularly grim situation for the local Yazidi population:

"As a result of the Turkish incursion to Afrin," the Yazda organization reported on May 29, "thousands of Yazidis have fled from 22 villages they inhabited prior to the conflict into other parts of Syria, or have migrated to Lebanon, Europe, or the Kurdistan Region of Iraq... "

"Due to their religious identity, Yazidis in Afrin are suffering from targeted harassment and persecution by Turkish-backed militant groups. Crimes committed against Yazidis include forced conversion to Islam, rape of women and girls, humiliation and torture, arbitrary incarceration, and forced displacement. The United States Commission on International Religious Freedom (USCIRF) in its 2020 annual report confirmed that Yazidis and Christians face persecution and marginalization in Afrin.

"Additionally, nearly 80 percent of Yazidi religious sites in Syria have been looted, desecrated, or destroyed, and Yazidi cemeteries have been defiled and bulldozed."

In Iraq , Turkey has been carrying out military operations for years. The last one was started in mid-June. Turkey's Defense Ministry announced on June 17 that the country had "launched a military operation against the PKK" (Kurdistan Workers' Party) in northern Iraq after carrying out a series of airstrikes. Turkey has named its assaults "Operation Claw-Eagle" and "Operation Claw-Tiger".

The Yazidi, Assyrian Christian and Kurdish civilians have been terrorized by the bombings. At least five civilians have been killed in the air raids, according to media reports . Human Rights Watch has also issued a report , noting that a Turkish airstrike in Iraq "disregards civilian loss."

Given Turkey's military aggression in Syria, Iraq, Libya, and Armenia, among others, and its continued occupation of northern Cyprus, further aggression, especially against Greece, would not be unrealistic. Turkey's desire to invade Greece is not exactly a secret. Since at least 2018, both the Turkish government and opposition parties have openly been calling for capturing the Greek islands in the Aegean, which they falsely claim belong to Turkey.

If such an attack took place, would the West abandon Greece?


Gaius Konstantine , 10 hours ago

If such an attack took place, it will get real messy, real fast. The Turkish military is only partially adept at fighting irregular forces that lack heavy weaponry while Turkey has absolute control of the sky. Even then, the recent performance of Turkish forces has been lacklustre for "the 2nd largest Army in NATO".

Turkey should understand that a fight with Greece will mean that the advantages she enjoyed in her recent adventures will not be there. Nor should Turkey look to the past and expect an easy victory, the Greek Army will not be marching deep into Anatolia this time, (which was the wrong type of war for Greece).

So what happens if they actually take it to war?

The larger Greek islands are well defended, they won't be taken, but defending the smaller ones is hard and Turkey will probably grab some of those. The Greeks, who have absolute control and dominance in the Aegean will do several things. Turkish naval and air bases along the Aegean coastline will be attacked as will the bosphorus bridges, (those bridges WILL go down). The Greek army, which is positioned well, will blitz into eastern Thrace and stop outside Istanbul where they will dig in and shell the city, thereby causing the civilians to flee and clogging up the tunnels to restrict military re-enforcement.

That's Greece acting alone, a position will be achieved where any captured islands will be traded for eastern Thrace. Should the French intervene, (even if it's just air and naval forces), it gets a lot more interesting.

The mighty Turkish fleet was just met by the entire Greek navy in the latest stand-off, it was enough to cause Turkey to reconsider her options. There will be no Ottoman empire 2.0

OliverAnd , 9 hours ago

The Greeks need their navy for surgically precise attacks against Turkey's navy. Every island, especially the large ones are unsinkable aircraft carriers. No one has mentioned in any article that Turkey's navy is functioning with less than minimum required personnel. No one has mentioned that their air force is flying with Pakistani pilots. The only way Turks will land on Greek uninhabited islands is only if they are ship wrecked and that for a very very short period of time. Turkey's population is composed of 25% Kurds... that will also be very interesting to see once they awaken from their hibernation and realize their great and holy goal of Kurdistan. Egypt will not waste the opportunity to join in to devastate whatever Turkish navy remains. Serbian patriots will not allow the opportunity to go to waste and will attack Kosovo and indirectly Albania composed primarily of Turkish descendants... realize the coverage lately of how the US did wrong for supporting these degenerate Muslim Albanians.

I have no doubt Greeks will make it to Aghia Sophia but will not pass Bosporus. The result will be a Treaty that is a hybrid of the Treaty of Lausanne and the Treaty of Sevron. If the Albanians decide to support the Turks by attacking Greeks in the North and in Northern Epeirus they should expect annexation of Northern Epeirus to Greece. Erdogan bases his bullying on Trump's incompetences and false friendship. This is why America is non existent in any of these regions. If Trump wins the election it will be a long war and very destabilized for the region. If Trump loses the war will be much much quicker. The outcome will remain the same. The Russians will not allow Turkey to dictate in the area. Israel will not allow Turkey to dictate in the area. Egypt will not allow Turkey to dictate in the area. Not even European Union. UK is the questionable.

bobcatz , 2 hours ago

And the US in the Middle East is not????????

ALL MidEast terrorism, shenanigans, and warmongering are for APARTHEID Israhell.

Joy Division , 7 hours ago

The West has Turkey's back otherwise the Turkish currency the Turkish Lira would have collapsed by now under attacks from the City of London Freemasonic Talmudic bankers.

Remember what happened to the Russian Rouble when Russia annexed Crimea?

The Fed and the ECB in cahoots with the usual Talmudic interests, are supporting the Turkish Lira and propping up the Erdogan regime.

There is NO OTHER explanation.

The Turks have NO foreign currency reserves, no net positive euro nor dollar reserves. Their tourism industry and main hard currency generator has COLLAPSED (hotels are 95 percent empty). The Turkish central bank has resorted to STEALING Turkish citizens' dollar-denominated bank accounts via raising Turkish Banks' foreign currency reserve requirements which the Turkish central bank SPENDS upon receipt to buy TLs and prop up the Turkish Lira.

This is utter MADNESS and FRAUD and LARCENY.

London-based currency traders would be all over the Turkish Lira and/or Turkish bonds and stocks by now UNLESS they had been instructed by the Fed and the ECB or the Talmudic bankers that own and control both, to lay off the Turkish Lira.

Despite the noise on TV or the press,

BY DEFINITION,

Erdogan and the Turks are only doing the bidding of the TRIBE hence Erdogan has the blessing and the protection of the people ZH censors the name.

BUT

You know how those parasites treat their host and what the inevitable outcome is, right?

Indeed,

Erdogan and the Turks are being set up to be thrown under the proverbial bus at the appropriate time.

The Neo-Ottoman Sultan has inadvertently set up his (ill begotten) country for eventual destruction and partition. The Kurds will get a piece of it. Who knows, maybe even the Armenians will be able to recover some bits of their ancient homeland.

Greeks in Constantinople? Nothing is impossible thanks to the hubris and chutzpah of Erdogan who is purported to have "Amish" blood himself.

Know thyself , 5 hours ago

Good for the UK that they have left the EU.

Apart from the Greeks, who would be fighting for their lives and homeland, the only EU forces capable of acting are the French. German does not have an operative army or navy; Italy, Spain and Portugal have neglected their armed forces for many years, and the Baltic and Eastern Nations are unlikely to want to get involved. The Netherlands have very good forces but not many of them.

MPJones , 7 hours ago

We can live in hope. Erdogan certainly seems to need external enemies to hold the country together. Let us also hope that Erdogan's adventurism finally wakes up Europe to the reality of the ongoing Muslim invasion so that the necessary Muslim repatriation can get going without the bloodshed which Islam's current strategy in Europe will otherwise inevitably lead to.

Know thyself , 5 hours ago

The Turkish army is a conscript army. They will need to be whipped up with religious fervour to perform. Otherwise they will look after their own skins.

But remember that the Turks put up a good defence in the Dardanelles in the First World War.

HorseBuggy , 9 hours ago

What do you expect? He killed Russian fighter pilots and he survived, this empowers terrorists like him. Those pilots were the only ones at that time fighting ISIS. May they RIP.

Max.Power , 9 hours ago

Turkey is in a "proud" group of failed empires surrounded by nations they severely abused less than 100 years ago.

Other two are Germany and Japan. Any military aggression from their side will be met with rage by a coalition of nations.

US position will be irrelevant at this point, because local historical grievances will overweight anything else.

monty42 , 10 hours ago

"Libya has been in turmoil since 2011, when an armed revolt during the "Arab Spring" led to the ouster and murder of dictator Muammar Gaddafi. Political power in the country..."

Kinda gave yourself away there. The coordinated assault on Libya by the US, Britain, France, and their Al-CiA-da allies on the ground resulted in the torture, sodomizing, and murder of Gaddafi, as well as his son and grandchildren killed in bombings by the US.

Also, let's not forget that Turkey is still in NATO, and their actions in Syria were alongside the US regime and terrorist proxies labeled "moderate rebels". The same terrorists originally used in Libya, then shipped to destroy Syria, now flown back to Libya. The attempt to paint all of those things as Turkey's actions alone is not honest.

When Turkey isn't in NATO anymore, let me know.

TheZeitgeist , 10 hours ago

Don't forget that Hiftar guy Turks are fighting in Libya was a CIA toadie living in Virginia for a decade before they gave him his "chance" to among other things become a client of the Russians apparently. Flustercluck of the 1st order everywhere one looks.

monty42 , 10 hours ago

Then they put on this whole production where it's the CIA guy or the terrorist puppet regime they installed, so that the rulers win regardless of the outcome. The victims are those caught up in their sick game.

GalustGulbenkyan , 9 hours ago

Turkish population has been recently getting ****** due to the economic contractions and devaluation of the Lira. Once Turkey starts fighting against a real army the Turks will realize that they are going to be ****** by larger dildos. In 1990's they sent thousands of volunteers to Nagorno Karabagh to fight against irregular Armenian forces and we know how that ended for them. Greeks and Egyptians are not the Kurds. Erdogan is a lot of hot air and empty threats. You can't win wars with Modern drones which even Armenians have learned how to jam and shoot down with old 1970's soviet tech.

Guentzburgh , 5 hours ago

Greece should be aligned with Russia, EU and USA are a bad choice that Greece will regret.

Greece needs to pivot towards Russia which will open huge opportunities for both countries

KoalaWalla , 6 hours ago

Greeks are bitter and prideful - they would not only defend themselves if attacked but would counter attack to reclaim land they've lost. But, I don't know that Erdogan is clever enough to realize this.

60s Man , 9 hours ago

Turkey is America's Mini Me.

currency , 3 hours ago

Erdogan is in Trouble at home declining economy and his radical conservative/Thug type policies. Turks are moving away from him except the hard core radicals and conservatives. He and his family are Corrupt - they rule with threats and use of THUGS. Sense his constant wars may be over stretched Time for a Turkish Spring.

Time for US, Nato and etc. to say goodbye to this THUG

OrazioGentile , 7 hours ago

Turkey seems to be on a warpath to imploding from within. Erdogan looks like a desperate despot with a failing economy, failing political clout, and failing modernization of his Country. Like any despot, he has to rally the troops or he will literally be a dead man walking.

HorseBuggy , 9 hours ago

The world fears loud obnoxious tyrants and Erdogan is the loudest tyrant since Hitler. Remember how countries pandered to Hitler early on? Same thing is happening with Erdogan.

This terrorist will do a lot more damage than he has already before the world wakes up.

By the time Hitler was done, 70 million people were dead, what will Erdogan cause?

OliverAnd , 9 hours ago

Turkey is not Germany. Not by far. Erdogan may be a bigger lunatic than Hitler, but Turkey is not Germany of the 30's. Without military equipment/parts from Germany, Italy, Spain, France, USA, and UK he cannot even build a nail. Economies are very integrated; he will be disposed of very very quickly. He has been warned. He is running out of lives.

NewNeo , 9 hours ago

You should research a lot more. Turkey is a lot more power thank Nazi Germany of the 1930's. Turkey currently have brand new US made equipment. It even houses the nuclear arsenal of NATO.

You should probably look at information from stratfor and George Friedman to give you a better understanding.

The failed coupe a few years ago was because the lunatic had gone off the reservation and was seen as a threat to the region. Obviously the bankers thought it in their benefit to keep him going and tipped him off.

OliverAnd , 8 hours ago

Clearly the lockdown has hindered your already illiteracy. Turkey has modern US equipment. Germany did not need US equipment. They made their own equipment; in fact both the US and USSR used Grrman old tech to develop future tech.

The coup was designed by Erdogan to bring himself to full power. When this is all done he will be responsible for millions of Turkish lives; after all he is not a Turk but a Muslim Pontian.

[Jul 27, 2020] France-Turkey naval clash- Proxy war in Libya enters a new stage -- RT Op-ed

Notable quotes:
"... By Dr. Karin Kneissl , who works as an energy analyst and book author. She served as the Austrian minister of foreign affairs between 2017-2019. She is currently writing her book 'Die Mobilitätswende' (Mobility in transition), to be published this summer. ..."
"... "humanitarian corridor" ..."
"... "good opposition" ..."
"... "humanitarian war," ..."
"... "worst mistake." ..."
"... "geopolitical commission." ..."
"... "community of the good ones" ..."
"... "Friends of Libya," ..."
"... "good opposition" ..."
"... "exclusive economic zone" ..."
"... "other actors" ..."
"... "mare nostrum" ..."
"... Think your friends would be interested? Share this story! ..."
Jul 27, 2020 | www.rt.com

By Dr. Karin Kneissl , who works as an energy analyst and book author. She served as the Austrian minister of foreign affairs between 2017-2019. She is currently writing her book 'Die Mobilitätswende' (Mobility in transition), to be published this summer. A confrontation between the two NATO states France and Turkey continues to trouble the Mediterranean region; Egyptian forces are mobilizing. And many other military players are continuing operations there.

In March 2011, during a hectic weekend, the French delegation to the UN Security Council managed to convince all other member States of the Council to support Resolution 1973. It was all about a "humanitarian corridor" for Benghazi, which was considered the "good opposition" by the government of Nicolas Sarkozy. One of his whisperers was the controversial philosopher Bernard-Henri Levy, who supported a French intervention. Levy, fond of the "humanitarian war," found a congenial partner in Sarkozy.

France was at root of crisis

Muammar Gaddafi had been received generously with all his tents in the park of the Elysée, but suddenly he was coined the bad guy. The same had happened to Saddam Hussein in Iraq. It was not the Arab dictator who had changed; it was his usefulness to his allies. The Libyans had been distributing huge amounts of money in Europe, in particular in Rome and Paris at various levels. In certain cases they knew too much. Plus, the Libyans had been protecting the southern border of the Mediterranean for the European Union.

READ MORE Turkish media claims Egyptian military used fake photo to report on joint naval drills with France

So, the French started the war in 2011, took the British on board, which made the entire adventure look a bit like a replay of the Suez intervention of 1956, the official end of European colonial interventions. A humanitarian intervention changed into regime change on day two, which was March 20, 2011. Various UN Security Council members felt trapped by the French.

The US was asked to help, with then-Secretary of State Hillary Clinton and many other advisers in favor of joining that war. President Obama, however, was reluctant but, in the end, he gave in. In one of his last interviews while still in the White House, Obama stated that the aftermath of the war in Libya was his "worst mistake."

Libya ever since has mostly remained a dossier in the hands of administrative officials in Washington, but not on the top presidential agenda anymore. This practice has been slightly shifting in the past weeks. US President Donald Trump and France's Emmanuel Macron had a phone conversation on how to deescalate the situation there. Trump also spoke on that very topic with Turkish President Recep T. Erdogan. Paris supports General Haftar in his war against the Turkish-backed Government of National Accord, which is also supported by the European Union, in theory

The triggering momentum for the current rise in tensions was a naval clash between French- and Turkish-supported vessels. Both nations are NATO members, and an internal alliance investigation is underway. But France decided to pull out of the NATO naval operation that enforces the Libya arms embargo, set up during the high-level Berlin conference on Libya in mid-January 2020. Without the French vessels it will be even more toothless than its critics already deem it. This very initiative on Libya was the first test for the new European commission headed by Ursula von der Leyen and claiming to be a "geopolitical commission." The EU strives to speak the language of power but keeps failing in Libya, where two members, namely Italy and France, are pursuing very different goals. Rome is anxious about migration while Paris cares more about the terrorist threat. But both have an interest in commodities.

ALSO ON RT.COM France, Germany & Italy threaten 'sanctions' against countries that interfere in Libya It's about oil and gas

When Gaddafi was reintegrated in the "community of the good ones" in early 2004 after a curious British legal twisting on the Lockerbie attack of December 1988, a bonanza for oil and gas concessions started. The Italian energy company ENI and BP were among the first to have a big foot in the door. I studied some of those contracts and asked myself why companies were ready to accept such terms. The answer was maybe in the then rise in the oil price of oil and the proximity of Libya to the European market.

Interestingly, in September 2011, the very day of the opening ceremony of the Paris conference dubbed "Friends of Libya," a secret oil deal for the French company Total was published by the French daily Libération. The "good opposition" had promised the French an interesting range of oil concessions. Oil production continuously fell with the rise of the war, attracting sponsors, militias and smugglers from all horizons. The situation in Libya has since been called 'somalization,' but it would become even worse, since many more regional powers got involved in Libya than ever was the case in hunger-ridden Somalia.

READ MORE Turkey will be the death of NATO – its recent clash with fellow member France off the coast of Libya is an early symptom

In exchange for its military assistance, Turkey recently gained access to exploration fields off Libya's shores. Ankara had identified an "exclusive economic zone" with the government in Tripoli, which disregards the UN Convention on the Law of the Sea. Actually, Israel made the same bilateral demarcation with Cyprus about ten years ago, when Noble Energy started its delineation of blocs in the Levant Basin. So Turkey is infringing on Greek and Cypriot territorial waters, while President Macron keeps reminding his EU colleagues of the "other actors" in the Mediterranean Sea. Alas, it is nobody's "mare nostrum" as it was 2,000 years ago in the Roman era. In principle, all states which have ratified the UN Convention on the Law of the Sea should simply comply with their legal obligations.

The crucial question remains: who has which leverage to de-escalate? Is it the US President, who seemingly has acted more wisely on certain issues in recent times? Or will Russian and Turkish diplomacy be able to negotiate and implement a truce? The tightrope-walk diplomacy between these last two countries is a most interesting example of classical diplomacy: interest-based and focused; able to conduct hard-core relations even in times of direct military confrontation and assassinations (remember the Russian Ambassador Karlov, shot by his Turkish bodyguard in Ankara in December 2016?).

Meanwhile, yet another actor could move in to complicate everything even more. On July 20, the Egyptian parliament voted unanimously for the deployment of the national army outside its borders, thereby taking the risk of direct confrontation with Turkey in Libya. Egyptian troops would be mobilized in support of the eastern forces of General Khalifa Haftar. Furthermore, Cairo would thereby compete even more obviously with Algeria, spending a fortune on military control of its border with Libya. Algeria in the past could rely on US support in the region, but with the gradual decline in US engagement in that part of the world, the country faces a fairly existential crisis.

There are currently two powers, among those involved in Libya, that can still contain the next stage of a decade of proxy wars started by a French philosopher and various EU oil interests: Russia and the USA.

Think your friends would be interested? Share this story!

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.


Quizblorg 48 minutes ago Does anything here make sense? No, because France this, Italy that is not how the world is run. The parties involved here go far beyond countries. Also no mention of Saudi-Arabia/Israel. Who engineered the "Arab Spring"?

[Jul 27, 2020] 25 YEARS OF CN- 'Iraq the Nuremberg Precedent' -- March 16, 2006 by Peter Dye

Notable quotes:
"... International law is simply a weapon for the empire when it is invoked by it, and it is a useless farce for those the empire opposes. ..."
"... Interesting, but how is it possible to prosecute the US when it already dominates the world? If Hitler and the Germans had won the war there wouldn't have been a Nuremberg Trial. ..."
Mar 16, 2006 | consortiumnews.com

Editor's Note: As the United States approaches the third anniversary of the Iraq invasion, much of the commentary is focusing on the Bush administration's "incompetence" in prosecuting the war -- the failure to coimnit enough troops, the decision to disband the old Iraqi army without adequate plans for training a new one, the highhandedness of the U.S. occupation.

But what about the legal and moral questions aiising from the unprovoked invasion of Iraq? Should George W. Bush and his top aides be held accountable for violating the laws against aggressive war that the United States and other Western nations promulgated in punishing senior Nazis after World War II? Do the Nuremberg precedents that prohibit one nation from invading another apply to Bush and American officials -- or are they somehow immune? Put bluntly, should Bush and his inner circle face a war-crimes tiibunal for the tens of thousands of deaths in Iraq?

Despite the present-day conventional wisdom in Washington that these are frivolous questions, they actually go to the heart of the American commitment to the rule of law and the concept that the law applies to everyone. In this guest essay, Peter Dyer looks at this larger issue:

Just over six decades ago, the first Nuremberg Trial began. On Nov. 21, 1945, U.S. Supreme Court Justice Robert Jackson opened the prosecution of 21 Germans for initiating a war of aggression and for the crimes which flowed from this act. Now is a good time to reconsider some of the history and issues involved in this momentous trial in the light of the invasion and occupation of Iraq.

The trial lasted for over a year, culminating in verdicts of guilty of one, some, or all of these crimes for 18 of the defendants. Eleven were sentenced to death.

While the Nuremberg trial is, these days, seldom invoked or discussed, it was, and still is, in the words of Tribunal President Sir Geoffrey Lawrence, "unique in the history of the jurisprudence of the world." Among the most groundbreaking aspects were the drive to formally criminalize the three categories of crimes, and to establish responsibility by individuals for these crimes.

These days, the Nuremberg Trial is chiefly remembered for the prosecution and punishment of individuals for genocide. Equally important at the time, however, was the focus on wars of aggression. Thus, the first sentence of Justice Jackson's opening statement: "The privilege of opening the first trial in history for crimes against the peace of the world imposes a grave responsibility."

Crimes against peace and the responsibility tor them were detined in Article 6, the heart of the Charter of the IMT: "The tribunal.. .shall have the power to try and punish persons who.. .whether as individuals or as members of organizations, committed any of the following crimes...(a) Crimes Against Peace, namely, planning, preparation, initiation or waging of a war of aggression or a war in violation of international treaties, agreements or assurances..

The desire was not only to punish individuals for crimes but to set an international moral and legal precedent for the future. Indeed, before the end of 1946, the United Nations General Assembly unanimously adopted Resolution 95 (1), affirming '4he principles of International Law recognized by the Charter of the Nuremberg Tribunal and the judgment of the Tribunal." And, of course, the United Nations Charter forbids armed aggression and violations of the sovereignty of any state by any other state, except in immediate self defense (Article 2, Sec. 4 and Articles 39 and 51).

Invoking the precedent set by the United States and its allies at the Nuremberg trial in 1946, there can be no doubt that the U.S.-led invasion of Iraq in 2003 was a war of aggression. There was no imminent threat to U.S. security nor to the security of the world. The invasion violated the U.N. Charter as well as U.N. Security Council Resolution #1441.

The Nuremberg precedent calls for no less than the arrest and prosecution of those individuals responsible for the invasion of Iraq, beginning with President George W. Bush, Vice President Dick Cheney, Secretary of Defense Donald Rumsfeld, Secretary of State Condoleeza Rice, former Secretary of State Colin Powell and former Deputy Secretary of Defense Paul Wolfowitz.

Those who still justify the invasion of Iraq would do well to remember the words of Justice Jackson: "Our position is that whatever grievances a nation may have, however objectionable it finds the status quo, aggressive warfare is an illegal means for settling these grievances or for altering these conditions."

And, for those who have difficulty visualizing American leaders as defendants in such a trial, Justice Jackson's words again: "...(L)et me make clear that while this law is first applied against German aggressors, the law includes, and if it is to serve a useful purpose it must condemn, aggression by any other nations, including those which sit here now in judgment...This trial represents mankind's desperate effort to apply the discipline of the law to statesmen who have used their powers of state to attack the foundations of the world's peace and to commit aggression against the rights of their neighbors."

Peter Dyer is a machinist who moved with his wife from California to New Zealand in 2004.


Aaron , July 26, 2020 at 20:17

Well, it would have been up to one person to call for an investigation and prosecute any illegal actions pertaining to the invasion – Barack Obama. Nobody in the Bush administration would have done it, and it was something that Obama talked about alot in his speeches in his campaign to be president.

Ana Márcia Vainsencher , July 25, 2020 at 17:47

Law is only applied to the USA "enemies", are they real, or no. Historically, the USA loves to create enemies. It's the king of wars.

frank scott , July 26, 2020 at 00:30

Sadly, we still entertain notions of war crimes, meaning that mass murders can be conducted in legal ways that's the disease right there: all we have to do is make rules for how to slaughter human beings according to a scholarly and civilized rule book written by our most gifted and trained in the humanities experts and then wipe out as many humans as we need to in a completely legal way hello?

How about a Geneva convention to write up rules of child rape, wife beating, or maybe the only thing to get "civilized" people upset: pet murdering?

Germany was only doing the politcal economic business of capital, as were its enemies, except for Russia which played the greater role in the defeat of "evil" nazi capitalism..anti-democratic capitalism is in the business of war and it will take democratic communism to bring about peace and global sanity before it destroys humanity.

Andrew Thomas , July 25, 2020 at 13:25

It has been clear for several decades that Nuremberg was not a precedent. It was -- and this is very difficult to actually write out -- victor's justice, which is exactly what the Nazis and their sympathizers said it was then. The US has been "projecting power" around the world ever since in violation of the spirit of the legal terms of the international order it was instrumental in creating post World War II; and its clear provisions at least since Reagan told the World Court to drop dead re: Nicaragua vs. US.

Other more informed readers may have much earlier examples. International law is simply a weapon for the empire when it is invoked by it, and it is a useless farce for those the empire opposes.

Robert Sinuhe , July 25, 2020 at 10:34

Interesting, but how is it possible to prosecute the US when it already dominates the world? If Hitler and the Germans had won the war there wouldn't have been a Nuremberg Trial. Principles are morals and just but power trumps all.

[Jul 26, 2020] 'Very serious threats'- US reportedly ramps up pressure on Nord Stream 2 contractors -- RT Business News

Jul 26, 2020 | www.rt.com

'Very serious threats': US reportedly ramps up pressure on Nord Stream 2 contractors 26 Jul, 2020 08:12 Get short URL © Nord Stream 2 / Axel Schmidt 123 Follow RT on RT The US government has made further attempts to force European firms to ditch the Russian-led Nord Stream 2 gas pipeline project, Welt am Sonntag reported, citing people familiar with talks on the issue.

According to the newspaper, officials from US Department of State, the Treasury Department, as well as the Department of Energy approached European contractors to make sure they fully understand the consequences of staying in the project. Up to a dozen officials reportedly held at least two online conferences with representatives of the firms in recent days.

ALSO ON RT.COM Russia's Nord Stream 2 pipeline will significantly cut gas prices in Europe, energy consultancy says

Speaking in a "friendly" manner, the US side stressed that it wanted to prevent completion of Nord Stream 2, observers of the online talks said. "I believe the threat is very, very serious," one of them revealed to the German outlet.

Those threats are consistent with comments by US Secretary of State Mike Pompeo last week, in which he warned that companies involved in the project had better "get out now" or risk facing penalties under Section 232 of the notorious Countering America's Adversaries Through Sanctions Act (CAATSA).

READ MORE 'Attempted extortion': Germany reaffirms commitment to Russian gas project despite US threats

Apart from Russia's energy major Gazprom, which is developing the project, five European companies have joined. Those are France's Engie, Austria's OMV, the UK-Dutch company Royal Dutch Shell, as well as Wintershall and Germany's Uniper.

Speaking to Welt am Sonntag, the latter called US attempts to undermine the "important infrastructure project" a clear intervention into European sovereignty.

Earlier this week, the US House of Representatives approved an amendment to the National Defense Authorization Act, meant to expand US sanctions on companies involved in installing Russia's Nord Stream 2 gas pipeline. According to one of the sponsors of the bill, the measures can target companies facilitating or providing vessels, insurance, port facilities, or tethering services for those vessels, as well as to those providing certification for Nord Stream 2.

Both European businesses and government officials have repeatedly decried US attempts to meddle in European energy policy by sanctioning Nord Stream 2, with some even calling on Brussels to work on countermeasures.

Moscow has also lambasted Washington's move, calling it unfair competition. Earlier this week, presidential spokesman Dmitry Peskov said that Russia will develop a new strategy for completion of the project if Washington proceeds with new punitive measures.

[Jul 19, 2020] The Shale Bust Has Arrived

Jul 19, 2020 | neznaika-nalune.livejournal.com


1. Shale bust is here
- Shale wells decline somewhere between 70 and 90 percent from their initial peak within 3 years, with the bulk of that decline coming within the first 12 months.
- As a result, the pause in drilling quickly translates into U.S. oil production declines.
- "We just have no new drilling and these decline curves are going to catch up," Mark Rossano, founder and chief executive officer of private-equity firm C6 Capital Holdings LLC, told Bloomberg. "That hits really fast when you're not looking at new production."
- With no drilling at all, U.S. shale oil production would theoretically fall by more than a third to less than 5 mb/d by the end of the year.

2. Bankruptcies to spike
- Between 2015 and 2019, there were roughly 200 bankruptcies in the North American oil and gas sector.
- Through April of this year, there have been another 7 bankruptcies, according to Haynes and Boone, although the value of the debt involved is 2.8 times larger compared to the first quarter bankruptcies in 2019.
- Around 70 companies are on track for bankruptcy by the end of the year with WTI averaging $30 per barrel, according to Rystad Energy. If WTI remains stuck at $30, that total would rise to 150 to 200 by the end of 2021.
- "In our view, we will need WTI prices of $40 to $45 per barrel to eliminate the upcoming explosion in the number of financially distressed US E&Ps,
https://oilprice.com/Energy/Energy-General/The-Shale-Bust-Has-Arrived.html

[Jul 19, 2020] A trillion here, a trillion there, pretty soon you're talking real money (creation) -- Crooked Timber

Jul 19, 2020 | crookedtimber.org

Larry Hamelin 07.18.20 at 9:37 am (no link)

The MMTers reading your article will take umbrage at your use of finance .

According to MMT, all government spending is financed by creating money. The problem of where to get the money is a non-problem.

Once the government has spent money into existence, the real problem is how to distribute the social opportunity cost of the spending, especially if the government has spent money to allocate real resources away from the production of private goods and services.

MMT makes this distinction precisely because they (we?) want to eliminate the rich as a veto point for spending. We don't need to get their money in order to spend it, and they cannot (or we should not let them) essentially restrict spending by obstructing the government's taxation of their wealth.

If we want to get the money belonging to the rich (and we do!), we want to do so because we don't want them to have it, for whatever reason.

There's another reason to be explicit about the difference between financing and distributing opportunity costs. If the rich have a lot of money that is not in circulation (in the national economy), and the government taxing that money to "pay for" its spending will do nothing to control inflation or distribute opportunity costs. Removing money that is not circulating has no effect on prices. It seems theoretically possible to balance the budget financially but still see price-level inflation.

I haven't done any specific investigation into the GND, but it seems uncontroversial that it will involve allocating substantial real resources to the creation of a nonpolluting power, transportation, and agricultural infrastructure. However, the effect on the real economy and the price level seems uncontroversially complicated. Some of the real resources will be previously unallocated, and we will simply be transferring demand from welfare-supported to work-supported, with no effect on the price level. Some of the demand created will indirectly cause an increase in private production, putting unused industrial capacity to work; the increase in circulating money will cause a corresponding increase in real private production, and again have no net effect on the price level. And some of the real resources will indeed be transferred from private production with no corresponding offset; taxes, "enforced" borrowing, and other monetary interventions will be needed to keep price inflation manageable.

I don't know of (and, like Lee A. Arnold above, would very much like to see) a model showing what effect something like the GND would have on the real economy. Under normal circumstances, the fiscal impact is a good proxy for the real impact. But circumstances are far from normal, so think that the fiscal impact is no longer a valuable proxy for modeling the real impact.

MisterMr 07.18.20 at 10:11 am ( 4 )

"The ultimate constraint on money creation is inflation. That hasn't been a problem lately and (as I'll argue in more detail later) the world is in need of a fair bit of inflation, probably at an annual rate of about 4 per cent for the foreseeable future. It's unclear how much expansion of the monetary base would generate this outcome, while avoiding the risk of a resurgence of inflation like that of the 1970s"

I don't agree that this is the problem: IMO the direct cause of [keynesian] inflation is the wage-price spiral, and not money creation per se (this also implies a problem, which is that if we want an high level of employment because we want an higer bargaining power for workers we can't really avoid wage-price spirals and therefore inflation).

Money creation by itself creates wealth, not income, and the kind of economic policies we had in recent decades caused an increase in the wealth/income ratio (or in other words the creation of a lot of fictitious capital) more than inflation.
So the real problem of "money creation" today is that it generates financial bubbles, rather than inflation.
The difference between money printing and government debt, from this point of view, is just that money is a 0% interest financial asset, whereas bonds bear at least some interest, so money creation pushes the general interest rate down more than bond creation, but this again is a consequence of the increase of the wealth/income ratio (since more wealth extracts profits from the same quantity of income).

"Substantial reductions in private consumption and investment will be needed to make room for the required public expenditure, and that can only be achieved through a combination of taxation and debt."
In my view the problem is that taxation is needed to avoid bubbles, and therefore what we need is to tax income from wealth and wealth itself (in order to push down the wealth/income ratio).
To put it in more familiar keynesian terms, the problem is that the ex-ante saving rate is too high, so that currently we need an increase in debt levels (bubbles) to ricycle ex-ante savings into consumption; we need taxation to push down the ex-ante saving rate.

But, the problem is, is it possible to have a capitalist economy running without economic crises while the wealth/income ratio goes down (which means that a lot of people see their relative wealth go down)?
IMO this is really difficult, and also explains the political problem for policieswhose purpose is to push down the wealth/income ratio, since these policies look like just some way to be mean against wealth owners, without an immediate economic reason, and when the bubble pops everyone blames the banks and the financial sector, not the excessively high ex-ante saving rate, that is instead perceived as a virtue.

Bradley C Kuszmaul 07.18.20 at 10:38 am ( 5 )

Recent quantitative easing of only 2% of GDP doesn't provide much of a bound on how much can be tolerated without causing too much inflation. Inflation is still up against the zero lower bound, and it seems plausible that we could get more than a factor of two more money creation. Which does get us into the green new deal range.

John Quiggin 07.18.20 at 10:40 am ( 6 )

@1 The Green part is (comparatively) easy and low cost. It's the New Deal (free college tuition, Job Guarantee, single-payer health etc) that will require a bit transfer of resources.

Lee A. Arnold 07.18.20 at 11:27 am ( 7 )

@6 Transfers of real resources or financial resources? Single-payer requires an expansion of suppliers in the healthcare sector to meet the uncovered demand, and those suppliers will be new taxpayers. College learning will be going more on-line, a tendency accelerated by this pandemic and anticipating the next pandemic, so we need, not many more buildings, but more professors, but they too will be new taxpayers. The jobs guarantee could be structured to generate sector expansions, not merely makework. So couldn't all of these eventuate in expanded sectors, ergo more taxes? Government investment at rock-bottom interest rates?

bob mcmanus 07.18.20 at 11:50 am ( 8 )

How much is enough (to pay for our policy goals)?

Only too much is enough, we want to print and spend enough to change expectations.

Currently, the dollar is the reserve currency I think largely for "safe haven" reasons, i.e. the oligarchs who have all the assets believe the US will be the last place to inflate, devalue, or elect an expropriating left-wing gov't.

After 40+ years of capital share gains and worker immiseration in terms of real and social wages and labour solidarity, and assuming we have under President S Kelton control only of printing and spending but no ability to raise progressive redistributive taxes how much MMT financed spending will it take to have the average worker believe that her real wages, social wages, standard of living, opportunities etc will improve relative to capital and the rich for the next forty years? And have the oligarchs also believe it?

That's how much.

Alan White 07.19.20 at 1:21 am (no link)

John, what say you about US/global military spending, which if cut and reallocated in the low double digits could transform society? Do you think it's just politically untouchable? If the US cut its military budget by say 25% it would still be formidable, especially given its nuclear deterrent. For the life of me I can never understand why military budgets are sacrosanct. Is it just WW2 and Cold War hangover? Couldn't the obvious effects of climate change and the fragility of the economy subject to natural threats like the pandemic change attitudes about overfunding the military (like the debacle of the F-35 program)?

J-D 07.19.20 at 2:03 am ( 14 )

@Tim Worstall: The political poles shifted, but less than you might think. Southern pols were overwhelmingly opposed, and nearly all of them were D (the entire old Confederacy had only 11 R Reps and only 1 R Senator). Northern pols, including Dirksen, were overwhelmingly in favor, and they were split between the two parties. But if you break it down by party and region, a larger percentage of Ds than Rs voted for the bill within each region. https://www.theguardian.com/commentisfree/2013/aug/28/republicans-party-of-civil-rights

An interesting example of Simpson's paradox.

I don't know about the Democratic Party, but there was an important shift in the Republican Party: the thing is, that shift took place in the nineteenth century, not the twentieth. At the end of the Civil War, the Republican Party really was the party of civil rights, with champions of equality prominent within it; after the end of the Reconstruction this ceased to be true. Of course the Republican Party has changed further since then, because everything changes; but it hasn't changed as rapidly since the late nineteenth century as it did after the Civil War.

John Quiggin 07.19.20 at 3:50 am ( 15 )

Alan White @13 Military spending is about 3.4 per cent of US GDP, compared to 2 per cent or less most places. So that's a significant and unproductive use of resources that could be redirected to better effect. But the income of the top 1 per cent is around 20 per cent of total income. If that was cut in half, there would be little or no reduction in the productive services supplied by this group. If you want big change, that's where you need to look.

eg 07.19.20 at 4:08 am ( 16 )

@Alan White #13

I think some of the reluctance to cut military spending in the US is the extent to which it acts as a politically unassailable source of fiscal stimulus and "welfare" in a country where such things are otherwise anathema. Well, that and all of the grift it represents for the donor class.

[Jul 18, 2020] SCOTT RITTER- Powell Iraq -- Regime Change, Not Disarmament- The Fundamental Lie Consortiumnews

Notable quotes:
"... Special to Consortium News ..."
"... Powell was part of the policy team that crafted the post-Gulf War response to the fact that Iraq's president, Saddam Hussein, survived a conflict he was not meant to. After being labeled the Middle East equivalent of Adolf Hitler whose crimes required Nuremburg-like retribution in a speech delivered by President Bush in October 1990, the Iraqi President's post-conflict hold on power had become a political problem for Bush 41. ..."
"... Powell was aware of the CIA's post-war assessment on the vulnerability of Saddam's rule to continued economic sanctions, and helped craft the policy that led to the passage of Security Council resolution 687 in April 1991. That linked Iraq's obligation to be disarmed of its WMD prior to any lifting of sanctions and the reality that it was U.S. policy not to lift these sanctions, regardless of Iraq's disarmament status, until which time Saddam was removed from power. ..."
"... Regime change, not disarmament, was always the driving factor behind U.S. policy towards Saddam Hussein's Iraq. Powell knew this because he helped craft the original policy. ..."
"... The views expressed are solely those of the author and may or may not reflect those of ..."
"... Consortium News. ..."
"... 25th Anniversary ..."
Jul 18, 2020 | consortiumnews.com

SCOTT RITTER: Powell & Iraq -- Regime Change, Not Disarmament: The Fundamental Lie July 18, 2020 Save

Regime change, not disarmament, was always the driving factor behind U.S. policy towards Saddam Hussein. Powell knew this because he helped craft the original policy.

By Scott Ritter
Special to Consortium News

T he New York Times Magazine has published a puff piece soft-peddling former Secretary of State Colin Powell's role in selling a war on Iraq to the UN Security Council using what turned out to be bad intelligence. "Colin Powell Still Wants Answers" is the title of the article, written by Robert Draper. "The analysts who provided the intelligence," a sub-header to the article declares, "now say it was doubted inside the CIA at the time."

Draper's article is an extract from a book, To Start a War: How the Bush Administration Took America into Iraq , scheduled for publication later this month. In the interest of full disclosure, I was approached by Draper in 2018 about his interest in writing this book, and I agreed to be interviewed as part of his research. I have not yet read the book, but can note that, based upon the tone and content of his New York Times Magazine article, my words apparently carried little weight.

Regime Change, Not WMD

I spent some time articulating to Draper my contention that the issue with Saddam Hussein's Iraq was never about weapons of mass destruction (WMD), but rather regime change, and that everything had to be viewed in the light of this reality -- including Powell's Feb. 5, 2003 presentation before the UN Security Council. Based upon the content of his article, I might as well have been talking to a brick wall.

Powell's 2003 presentation before the council did not take place in a policy vacuum. In many ways, the March 2003 U.S.-led invasion and subsequent occupation of Iraq was a continuation of the 1991 Gulf War, which Powell helped orchestrate. Its fumbled aftermath was again, something that transpired on Powell's watch as the chairman of the Joint Chiefs of Staff in the administration of George H. W. Bush.

Powell at UN Security Council. (UN Photo)

Powell was part of the policy team that crafted the post-Gulf War response to the fact that Iraq's president, Saddam Hussein, survived a conflict he was not meant to. After being labeled the Middle East equivalent of Adolf Hitler whose crimes required Nuremburg-like retribution in a speech delivered by President Bush in October 1990, the Iraqi President's post-conflict hold on power had become a political problem for Bush 41.

Powell was aware of the CIA's post-war assessment on the vulnerability of Saddam's rule to continued economic sanctions, and helped craft the policy that led to the passage of Security Council resolution 687 in April 1991. That linked Iraq's obligation to be disarmed of its WMD prior to any lifting of sanctions and the reality that it was U.S. policy not to lift these sanctions, regardless of Iraq's disarmament status, until which time Saddam was removed from power.

Regime change, not disarmament, was always the driving factor behind U.S. policy towards Saddam Hussein's Iraq. Powell knew this because he helped craft the original policy.

I bore witness to the reality of this policy as a weapons inspector working for the United Nations Special Commission (UNSCOM), created under the mandate of resolution 687 to oversee the disarming of Iraq's WMD. Brought in to create an intelligence capability for the inspection team, my remit soon expanded to operations and, more specifically, how Iraq was hiding retained weapons and capability from the inspectors.

SCUDS

UN weapons inspectors in central Iraq, June 1, 1991. (UN Photo)

One of my first tasks was addressing discrepancies in Iraq's accounting of its modified SCUD missile arsenal; in December 1991 I wrote an assessment that Iraq was likely retaining approximately 100 missiles. By March 1992 Iraq, under pressure, admitted it had retained a force of 89 missiles (that number later grew to 97).

After extensive investigations, I was able to corroborate the Iraqi declarations, and in November 1992 issued an assessment that UNSCOM could account for the totality of Iraq's SCUD missile force. This, of course, was an unacceptable conclusion, given that a compliant Iraq meant sanctions would need to be lifted and Saddam would survive.

The U.S. intelligence community rejected my findings without providing any fact-based evidence to refute it, and the CIA later briefed the Senate that it assessed Iraq to be retaining a force of some 200 covert SCUD missiles. This all took place under Powell's watch as chairman of the Joint Chiefs.

I challenged the CIA's assessment, and organized the largest, most complex inspection in UNSCOM's history to investigate the intelligence behind the 200-missile assessment. In the end, the intelligence was shown to be wrong, and in November 1993 I briefed the CIA Director's senior staff on UNSCOM's conclusion that all SCUD missiles were accounted for.

Moving the Goalposts

The CIA's response was to assert that Iraq had a force of 12-20 covert SCUD missiles, and that this number would never change, regardless of what UNSCOM did. This same assessment was in play at the time of Powell's Security Council presentation, a blatant lie born of the willful manufacture of lies by an entity -- the CIA -- whose task was regime change, not disarmament.

Powell knew all of this, and yet he still delivered his speech to the UN Security Council.

In October 2002, in a briefing designed to undermine the credibility of UN inspectors preparing to return to Iraq, the Defense Intelligence Agency trotted out Dr. John Yurechko, the defense intelligence officer for information operations and denial and deception, to provide a briefing detailing U.S. claims that Iraq was engaged in a systematic process of concealment regarding its WMD programs.

John Yurechko, of the Defense Intelligence Agency, briefs reporters at the Pentagon on Oct. 8, 2002 (U.S. Defense Dept.)

According to Yurechko, the briefing was compiled from several sources, including "inspector memoirs" and Iraqi defectors. The briefing was farcical, a deliberate effort to propagate misinformation by the administration of Bush 43. I know -- starting in 1994, I led a concerted UNSCOM effort involving the intelligence services of eight nations to get to the bottom of Iraq's so-called "concealment mechanism."

Using innovative imagery intelligence techniques, defector debriefs, agent networks and communications intercepts, combined with extremely aggressive on-site inspections, I was able, by March 1998, to conclude that Iraqi concealment efforts were largely centered on protecting Saddam Hussein from assassination, and had nothing to do with hiding WMD. This, too, was an inconvenient finding, and led to the U.S. dismantling the apparatus of investigation I had so carefully assembled over the course of four years.

It was never about the WMD -- Powell knew this. It was always about regime change.

Using UN as Cover for Coup Attempt

In 1991, Powell signed off on the incorporation of elite U.S. military commandos into the CIA's Special Activities Staff for the purpose of using UNSCOM as a front to collect intelligence that could facilitate the removal of Saddam Hussein. I worked with this special cell from 1991 until 1996, on the mistaken opinion that the unique intelligence, logistics and communications capability they provided were useful to planning and executing the complex inspections I was helping lead in Iraq.

This program resulted in the failed coup attempt in June 1996 that used UNSCOM as its operational cover -- the coup failed, the Special Activities Staff ceased all cooperation with UNSCOM, and we inspectors were left holding the bag. The Iraqis had every right to be concerned that UNSCOM inspections were being used to target their president because, the truth be told, they were.

Nowhere in Powell's presentation to the Security Council, or in any of his efforts to recast that presentation as a good intention led astray by bad intelligence, does the reality of regime change factor in. Regime change was the only policy objective of three successive U.S. presidential administrations -- Bush 41, Clinton, and Bush 43.

Powell was a key player in two of these. He knew. He knew about the existence of the CIA's Iraq Operations Group. He knew of the successive string of covert "findings" issued by U.S. presidents authorizing the CIA to remove Saddam Hussein from power using lethal force. He knew that the die had been cast for war long before Bush 43 decided to engage the United Nations in the fall of 2002.

Powell Knew

Powell knew all of this, and yet he still allowed himself to be used as a front to sell this conflict to the international community, and by extension the American people, using intelligence that was demonstrably false. If, simply by drawing on my experience as an UNSCOM inspector, I knew every word he uttered before the Security Council was a lie the moment he spoke, Powell should have as well, because every aspect of my work as an UNSCOM inspector was known to, and documented by, the CIA.

It is not that I was unknown to Powell in the context of the WMD narrative. Indeed, my name came up during an interview Powell gave to Fox News on Sept. 8, 2002, when he was asked to comment on a quote from my speech to the Iraqi Parliament earlier that month in which I stated:

"The rhetoric of fear that is disseminated by my government and others has not to date been backed up by hard facts that substantiate any allegations that Iraq is today in possession of weapons of mass destruction or has links to terror groups responsible for attacking the United States. Void of such facts, all we have is speculation."

Powell responded by declaring,

"We have facts, not speculation. Scott is certainly entitled to his opinion but I'm afraid that I would not place the security of my nation and the security of our friends in the region on that kind of an assertion by somebody who's not in the intelligence chain any longer If Scott is right, then why are they keeping the inspectors out? If Scott is right, why don't they say, 'Anytime, any place, anywhere, bring 'em in, everybody come in -- we are clean?' The reason is they are not clean. And we have to find out what they have and what we're going to do about it. And that's why it's been the policy of this government to insist that Iraq be disarmed in accordance with the terms of the relevant UN resolutions."

UN inspectors in Iraq. (UN Photo)

Of course, in November 2002, Iraq did just what Powell said they would never do -- they let the UN inspectors return without preconditions. The inspectors quickly exposed the fact that the "high quality" U.S. intelligence they had been tasked with investigating was pure bunk. Left to their own devices, the new round of UN weapons inspections would soon be able to give Iraq a clean bill of health, paving the way for the lifting of sanctions and the continued survival of Saddam Hussein.

Powell knew this was not an option. And thus he allowed himself to be used as a vehicle for disseminating more lies -- lies that would take the U.S. to war, cost thousands of U.S. service members their lives, along with hundreds of thousands of Iraqis, all in the name of regime change.

Back to Robert Draper. I spent a considerable amount of time impressing upon him the reality of regime change as a policy, and the fact that the WMD disarmament issue existed for the sole purpose of facilitating regime change. Apparently, my words had little impact, as all Draper has done in his article is continue the false narrative that America went to war on the weight of false and misleading intelligence.

Draper is wrong -- America went to war because it was our policy as a nation, sustained over three successive presidential administrations, to remove Saddam Hussein from power. By 2002 the WMD narrative that had been used to support and sustain this regime change policy was weakening.

Powell's speech was a last-gasp effort to use the story of Iraqi WMD for the purpose it was always intended -- to facilitate the removal of Saddam Hussein from power. In this light, Colin Powell's speech was one of the greatest successes in CIA history. That is not the story, however, Draper chose to tell, and the world is worse off for that failed opportunity.

Scott Ritter is a former Marine Corps intelligence officer who served in the former Soviet Union implementing arms control treaties, in the Persian Gulf during Operation Desert Storm, and in Iraq overseeing the disarmament of WMD.

The views expressed are solely those of the author and may or may not reflect those of Consortium News.

Please Contribute to Consortium
News on its 25th Anniversary


[Jul 18, 2020] 'Work-From-Home' Will Reduce US Driving By 270 Billion Miles Per Year, KPMG Finds - Zero Hedge

Jul 18, 2020 | www.zerohedge.com

by Tyler Durden Fri, 07/17/2020 - 19:45 Twitter Facebook Reddit Email Print

With tens of millions of Americans out of work, people fleeing cities for rural communities, others working from home, online shopping flourishing, and the virus remerging in many states forcing governors to pause or reverse reopenings, consultancy firm KPMG International has some bad news for those betting the economy is going to "rocket ship" recovery as President Trump boasts about at press conferences and on Twitter. The consultancy firm warns "social-distancing measures" will "dramatically cut the amount of miles Americans travel by car" (fewer miles driven is terrible news for an economy driven by consumer spending).

The effects of COVID-19 will be felt for years. The response to the virus has accelerated powerful behavioral changes that will continue to shape how Americans use automobiles. We believe the changes in commuting and e-commerce are here to stay and that the combined effect of reduced commuting and shopping journeys could be as much as 270 billion fewer vehicle miles traveled (VMT) each year in the US. -KPMG

[Jul 16, 2020] The Danes have set August 3rd as the restart date

Jul 16, 2020 | thenewkremlinstooge.wordpress.com

MOSCOWEXILE July 6, 2020 at 3:38 am

Дания разрешила использовать новые суда для прокладки "Северного потока – 2"

STOCKHOLM, July 6. / TASS /. At the request of Nord Stream 2 AG, the Danish Energy Agency (DEA) has given permission that vessels with anchor positioning be used on an unfinished section of the Nord Stream 2 gas pipeline southeast of Bornholm Island. This was announced on Monday in a departmental press release.

https://tass.ru/ekonomika/8893439
https://yandex.ru/turbo/s/tass.ru/ekonomika/8893439?promo=navbar&utm_referrer=https%3A%2F%2Fzen.yandex.c

MARK CHAPMAN July 6, 2020 at 8:41 am

Ha, ha! I expect the Danes had their wetted finger to the wind, and were reasonably quick to observe Merkel's kiss-off of the United States when it did the inadvisable, and went ahead with more sanctions to try to prevent completion of the pipeline. Might be too late to start construction this summer, though – we're into the cod-spawning season now. Maybe they could do part of it at the other end, or something.

MOSCOWEXILE July 6, 2020 at 11:58 am

The Danes have set August 3rd as the restart date because that's when the Baltic cod stop doing their thing.

MOSCOWEXILE July 6, 2020 at 12:10 pm

No, not after the spawning season has stopped -- I think that must have just been a load of bollocks of an excuse for blocking further work -- but when the time allowed for an appeal against the Danish govt decision has elapsed:

К достройке газопровода приступят после истечения срока обжалования обновленного разрешения Дании -- 3 августа.

The completion of the gas pipeline will begin after the expiration of the appeal period for the renewed Denmark permit -- August 3./

https://m.gazeta.ru/business/2020/07/06/13142635.shtml

MOSCOWEXILE July 6, 2020 at 3:41 am

Send in the a United States Navy!!!

Europe must be saved from Russian gas weaponization!

Let the US freedom gas molecules ring!

[Jul 16, 2020] If Pompeo has a functioning brain, he should realize that all these blatant efforts to reserve markets for America by sanctioning all its competitors out of the picture is having the opposite effect, and frightening customers away from becoming dependent on American products

Jul 16, 2020 | thenewkremlinstooge.wordpress.com

MOSCOWEXILE July 15, 2020 at 7:58 am

Fat bully boy speaks for Bully Boy state:

"Today the Department of State is updating the public guidance for CAATSA authorities to include Nord Stream 2 and the second line of TurkStream 2. This action puts investments or other activities that are related to these Russian energy export pipelines at risk of US sanctions. It's a clear warning to companies aiding and abetting Russia's malign influence projects and will not be tolerated. Get out now or risk the consequences".

Pompeo speaking at a press conference today.

CAATSA -- Countering America's Adversaries Through Sanctions Act

So Russia and Turkey are "adversaries" of the USA?

In what way?

Do these states wish to wage war against the USA?

Is it adversarial to United States interest to compete economically with the hegemon?

MOSCOWEXILE July 15, 2020 at 7:59 am

Link to above:

https://sputniknews.com/world/202007151079893067-us-plans-to-add-nord-stream-2-turkstream-to-list-of-projects-to-be-sanctioned/

MARK CHAPMAN July 15, 2020 at 3:51 pm

Who cares? Really, is Pompeo still scary? If he has a functioning brain, he should realize that all these blatant efforts to reserve markets for America by sanctioning all its competitors out of the picture is having the opposite effect, and frightening customers away from becoming dependent on American products which might be withheld on a whim when America wants political concessions. 'Will not be tolerated' – what a pompous ass. Sanction away. The consequence is well-known to be seizure of assets held in the United States or an inability to do business in the United States. That will frighten some into submission – like the UK, which was threatened with the cessation of intelligence-sharing with the USA (sure you can spare it?) if it did not drop Huawei from its 5G networks. But others will take prudent steps to limit their exposure to such threats, in the certain knowledge that if they work, they will encourage the USA to use the technique again.

[Jul 15, 2020] -There Are No Free Lunches- - Former Reserve Bank Of India Chief Explains Why MMT Will Never Work -

Jul 14, 2020 | www.zerohedge.com

As Joe Biden tries to split the difference between the midwestern swing-state voters and the Sanders faithful, he's released an economic plan - a plan that bears the imprimatur of his one-time foe Bernie Sanders - that, in its attempt to be everything to every one, effectively promises everything to every one.

Buy American. Green New Deal. Corporate tax hikes. Trillions of dollars spent on infrastructure to install the latest eco-nonsense with money that should be going to roads, bridges, rails and airports. Docks and highways. Things people actually need and use. And who knows? Depending on his running mate, maybe we'll get a massive student-debt jubilee, too. All on the federal government's tab.

Now that MMT has gone from fringe idea to mainstream, making Stephanie Kelton, a cryptomarxist who believes that the link between value and money can be completely severed, so long as we tax the wealthiest among us enough to keep inflation low. It doesn't take a genius to suspect that an 'economic theory' grounded in the idea that governments can take on unlimited amounts of debt and never stick anybody with the tab sounds absurd - even dangerous.

me title=

https://imasdk.googleapis.com/js/core/bridge3.395.0_en.html#goog_775809346

https://imasdk.googleapis.com/js/core/bridge3.395.0_en.html#goog_860642489 NOW PLAYING

Fast-Food Chains Accused Of Fundingg Trump's Campaign

Warren Buffett Waiting To Deploy $137 Billion Cash Pile

Alexandria Ocasio-Cortez To Serve On Biden's Climate Policy Task Force

Obama Endorses Joe Biden

Obama Talked Sanders Into Dropping Out

Sanders Calls Former Press Secretary "Irresponsible" For Not Endorsing Biden

Sanders Endorses Biden

VP Picks: Biden And Bernie

We say dangerous because Kelton's greatest sin is offering pandering politicians more cover to encourage their spendthrift ways. During a recent interview with Macro Hive, former Central Bank of India Governor and University of Chicago Professor Raghuram Rajan delivered a succinct and insightful explanation of why MMT is so dangerous.

"We talked about sustainability and one of the big topics in markets at least is this whole idea of QE MMT infinity, the ability of sovereigns to borrow. Now in developed countries, they have historical capital they've built up and credibility," Rajan's interviewer began. "But you're starting to also see this idea...you're starting to see more emerging market countries experiment with it, including Indonesia and several others."

But at the same time "yields are very low, and if you look at emerging market spreads, they're very low...so markets are telling you that they aren't worried. Yet we know debt levels are high, and there's more talk in debt markets of QE and MMT."

Does the fact that markets seem content with the status quo (at least for now) validate Kelton's argument?

Of course not, Rajan explained. Because while the complexities of the global financial system, and the dollar's role within it, have allowed the Fed to spearhead this great monetary, as the veteran central banker explained, there's no such thing as a free lunch.

"We know that markets can be complacent until a certain point and then they turn on a time. We are at this point in a benign phase supported by an enormous amount of central bank liquidity emanating from the primary reserve currencies, the euro area, the US Fed and to some extent the Bank of Japan and the Bank of England."

"But we must also recognize is that there are no free lunches. If there's one statement you want to keep to pound into the head of every policy maker, it's that there are no free lunches. If you borrow today, there is a presumption that it will be repaired at some point, so you are in a sense taking away resources from somebody else in the future."

" Now it may be a generation or two down the line will be on the hook for this ...whether they can pass it on to their children is an open question...but you're definitely taking away their ability to borrow by borrowing today."

https://lockerdome.com/lad/13084989113709670?pubid=ld-dfp-ad-13084989113709670-0&pubo=https%3A%2F%2Fwww.zerohedge.com&rid=www.zerohedge.com&width=890

.While burdening future generations doesn't seem to come up much in cryptomarxist essays about the moral imperative of expansive fiscal spending - some have gone so far as to argue that the federal government has a moral obligation to forgive student debt - Rajan acknowledges that the idea is "seductive" for all the wrong reasons.

"So the idea that there are free lunches...which certainly is what the lay person takes away from MMT...is very sort of attractive, seductive - but it's absolute nonsense."

If that's the message that's going to be communicated, then that's wrong.

Asked to elaborate, he continued...

"There are times when you can spend a little bit more, but you are still making a trade off and evaluating this trade off well...I think that's the right thing to do. If that's the message from MMT, then I'm fine with that. There are periods where you have more leeway."

"The message can't be 'Don't Worry, Be Happy' it has to be 'yes take advantage of periods when you have a little more spending capacity but use it wisely, because there's no such thing as a free lunch and you will have to repay it at some point... that's what any sensible economic theory will tell you, and I think that's what we understand now."

"When banks aren't lending, when inflation is low, it is possible for the central bank to expand its balance sheet somewhat ...and finance more activities that the government wants to undertake. That doesn't mean it's free debt it's equivalent to debt issued by the government - think of the central bank issuing debt as the same as the government issuing debt: it's the consolidated balance sheet you're looking at."

"Somebody is responsible for payment, it's either the central bank or the government."

"At low interest rates it doesn't really matter who it is, but as inflation picks ups it does matter a little more who it is because the central bank often is financing itself with effectively forced loans from the banking sector, and there's a limit to how much the banking sector is willing to do that, especially as economic activity picks up."

NEVER MISS THE NEWS THAT MATTERS MOST

ZEROHEDGE DIRECTLY TO YOUR INBOX

Receive a daily recap featuring a curated list of must-read stories.

"So my sense is yes there is some room now but it doesn't mean the debt level doesn't matter and it doesn't mean that we should just keep spending without thought of who's going to repay. And I think the big philosophical issues are how much are you going to bail out companies...why should Joe Schmoe...why should his taxes go to bail out a capital owner? After all, neither of them saw the pandemic coming...neither is responsible for the pandemic...so why should one bail out the property rights of another?"

"It strikes me these guys who want to open up the government wallet and spend to protect everybody from the consequences of the pandemic don't realize that there's one person who's bearing the hit: it may not be you, but it might be your children."

"And the question is: Why do they have to pay when they have no part in this?"

Remember: As Rajan explains, we must recognize that our resources are limited and use them wisely. Keep that in mind when Democratic politicians are trying to spend trillions of dollars of public money to outfit private buildings with solar panels or whatever 'Green New Deal' infrastructure travesty AOC & Co come up with.

* * *

Source: Macro Hive

[Jul 13, 2020] Fracking Firms Fail, Rewarding Executives and Raising Climate Fears

Jul 13, 2020 | www.moonofalabama.org

vk , Jul 13 2020 13:46 utc | 176

It's now canonized in American public opinion, as the NYT has published an authorial article (in the pedantic upper middle class I-wanna-win-a-Pulitzer style) about it:

Fracking Firms Fail, Rewarding Executives and Raising Climate Fears

[Jul 13, 2020] The Danish Energy Agency (DEA) has announced a deadline after which it will be possible to begin work on completing the Russian Nord Stream-2 gas export pipeline

Jul 13, 2020 | thenewkremlinstooge.wordpress.com

MOSCOWEXILE July 6, 2020 at 8:05 am

The Danish Energy Agency (DEA) has announced a deadline after which it will be possible to begin work on completing the Russian Nord Stream-2 gas export pipeline, RIA Novosti reported with reference to the regulator's statement.

https://yandex.ru/turbo/s/lenta.ru/news/2020/07/06/restart/?promo=navbar&utm_referrer=https%3A%2F%2Fzen.yandex.c

Over to you Uncle Sam!

MOSCOWEXILE July 6, 2020 at 10:52 pm

Apart from this below, I have found nothing in the UK and German media about Denmark's giving the go-ahead for the final stage of NS2 construction:

NATURAL GAS 06 Jul 2020 | 09:44 UTC London
Denmark approves use of ships with anchors to lay Nord Stream 2 gas link

https://www.spglobal.com/platts/en/market-insights/latest-news/natural-gas/070620-denmark-approves-use-of-ships-with-anchors-to-lay-nord-stream-2-gas-link

I wonder why?

If you search through the web, you find reports in the Western media about Denmark giving its approval in 2019. It reneged on that decision. . But nothing on the Danish decision the other day.

Because the USA must never appear as a "loser".?

[Jul 07, 2020] Saddam statue toppling vs toppling of statues in the USA

Jul 07, 2020 | www.moonofalabama.org

CitizenX , Jul 6 2020 18:49 utc | 114

..
"Three weeks into the war, Marine Sgt. Ed Chin got the order: Help the Iraqis celebrating in Baghdad's Firdos Square topple the statue of Saddam Hussein.

"My captain comes over and he's got like this package. He hands it to me and he's like, he tells me there's an American flag in there and when I get up there, you know, he's like, show the boys the colors," said Chin.

https://www.cbsnews.com/news/a-decade-after-saddam-husseins-statue-falls-a-tale-of-two-memories/

I'll speak very slowly and simply just for you.

Are you seriously incapable of making a connection regarding the hypocrisy of the US Govt/US military wrapping an American Flag on the Saddam Statue and destroying it for a media photo op while cheering about it? And the condemnation of the US Govt declaring statues should not be destroyed?

Do you see no insanity regarding the US Regime illegally invading and destroying another Nation and its statues (war crime w/millions dead)? The very same Nation celebrating a "bad" Iraqi statue being destroyed is suddenly disgusted when its own statues are being destroyed by its own people?

My point is obvious if you can step back from your myopic view. The US is a mentally ill Nation ridden with hypocrisy. I personally do not put much merit into statues, cultural idolatry comes to mind, just as foolish as religious idolatry.

So what are your thoughts on the destruction of the Saddam statue sanctioned by the US govt and military?

dh , Jul 6 2020 21:40 utc | 125

@114 I expect V will be along at some point but here are my thoughts on the Saddam statue.....

The US is ridden with hypocrisy as you say ....no surprise there. The statue was actually pulled down by a rentamob of Iraqi Saddam haters while American troops high-fived each other.

They wouldn't see anything wrong with pulling the statue down because Saddam was a 'bad guy' and an American enemy.

Those same troops would probably not feel the same way about Confederate generals.....who just happened to be Americans who kept slaves and picked the losing side. They would be seen as major figures in American history.

That is how a lot of Americans would justify it. Of course it is rank hypocrisy..

[Jul 06, 2020] Prins- -We're Living In A Permanent Distortion- -

Jul 06, 2020 | www.zerohedge.com

Via Greg Hunter's USAWatchdog.com,

Three time best-selling book author Nomi Prins says long before the Covid 19 crisis, the global economy was faltering big time. The Fed stepped in with the start of massive money printing in late 2019 to save the day.

Prins explains, " We were already in crisis mode as I mentioned at the end of my last book going into 2019."

"What did we see at the end of 2019? We saw this pivot, and I call it phase two. . . . Central banks had pivoted to easing mode . . . . Come September, October, November and December, the Fed is producing repo operations. Those are short-term lending operations that are supposed to be the purview of the banks . . . . The Fed is not supposed to get involved, but it did. The Fed had all kinds of excuses. It said it was not QE, but it was. . . . The debt at the end of 2019 for the world was three times GDP. For every $3 borrowed, only $1 of economic activity occurred. That's what we started 2020 with. Throw a pandemic into that . . . and you have a long drawn out financial and economic crisis."

Now, the money printing has gone into overdrive to save the system from the virus crisis. The social and economic damage, according to Prins, is profound and not going away. Prins points out,

"We are not going to pay back this debt, and this is global. Nobody is even considering trying to pay back the debt that has been created. Let's think about why that debt has been created. It's not just because the economy slowed down. That's one reason and kind of an excuse. The reality is the Fed is on steroids, and other central banks are on steroids . . . throughout the world in a larger number and larger magnitude than in the wake of the financial crisis of 2008. This means all this new debt created is even cheaper than the debt created going into the 2008 crisis. So, more debt, created more cheaply, means less incentive to pay it back and more incentive to push it down the road and grow it. You've got this snowball of debt rolling down this high mountain, and it's rolling and growing and getting bigger. The mountain, which is the main street economy, is coming down as the snow ball is coming down, and the main street economy itself, that foundation, is really shaky. . . . How does this end? It ends with us, the foundation, which is the main street economy, by both that snowball of debt and the avalanche of the mountain. That's going to be a multi-decade problem. "

Prins says this next stage has a brand new name and explains,

" I call this a 'Permanent Distortion.' I have not used this term in prior books, but I am using it because . . . the disconnect between financial assets, equity markets and the real economy . . . has become massive ...

There is going to be this endless supply of artificial stimulation into the markets. . . . Former New York Fed President Bill Dudley said the Fed's balance sheet is going to $10 trillion. That's what I have been saying, and now he finally said it. That's not going away anytime soon. That's not being unwound anytime soon. That becomes permanent lift to financial assets . . . . In the wake of that, less real capital gets used for infrastructure, research and development, growth and retooling the economy and getting jobs into this new period."

Prins says gold prices are going to "follow the expansion of the Fed's balance sheet." It is that simple, and Prins predicts,

https://lockerdome.com/lad/13084989113709670?pubid=ld-dfp-ad-13084989113709670-0&pubo=https%3A%2F%2Fwww.zerohedge.com&rid=www.zerohedge.com&width=890

"As we saw in the wake of the financial crisis of 2008, gold and silver will have the ability to go up quite substantially as the Fed's book increases in size, which we know it is going to do. We have been told that multiple times by many different words by Federal Reserve Chairman Jerome Powell."

In closing, Prins says, " We are continuing to drive up asset bubbles where we don't have the real economy to back it up..."

NEVER MISS THE NEWS THAT MATTERS MOST

ZEROHEDGE DIRECTLY TO YOUR INBOX

Receive a daily recap featuring a curated list of must-read stories.

"The more this 'Permanent Distortion' gets bigger, the more the likelihood the next crisis will happen... and it will be from a higher height. It will be from a larger bubble, a bigger snowball accelerating downward more quickly. I don't think we are out of this crisis. I think the markets are going to have a bumpy ride as the economy has a bumpier ride ."

Join Greg Hunter as he goes One-on-One with three time best-selling author Nomi Prins.

https://www.youtube.com/embed/erwrulvyIqk

* * *

To Donate to USAWatchdog.com Click Here


Posa , 6 minutes ago

The Central Banks will buy up the debt and then liquidate it. Some currencies may be re-issued. Get over it. Not the end of the world.

hugin-o-munin , 20 minutes ago

I used to listen closely to what Nomi said before but now it is only more of the usual talk. The world is a very slow place and it takes a long time until new realizations spread but when they do there is little possibility to stop it. Right now the USD is dying as a world reserve currency. It is slow and strictly kept away as a talking point in media.

The US behaves and continues down a path that is only accelerating this process because it is not up to the US what happens to the USD, it is up to the rest of the world. This is a truth that no American wants to accept but it is a fact. The more aggressive and arrogant the US becomes the faster this will happen and a part of me thinks that is precisely the plan. It will not matter what either the Fed or Treasury does.

Nomi talks about price inflation hitting smaller and poorer nations right now but doesn't even come close to the fact that this is also happening in the US right now albeit much slower. Greg Hunter was too stuck on finding ways to praise Trump as usual to even push this question, if he even recognized it. The gospel from Wall Street and most certainly Goldman Sachs that the USD can never be questioned is all over this interview and which is why these 'former' truth tellers are just that - former.

algol_dog , 35 minutes ago

Futures at new highs tonight. This week will break S&P highs for the year. Amazing time ...

Motorhead , 40 minutes ago

We've been hearing the same old stuff for easily 10-15 years from Jim Willie, Eric King, Peter Schiff, various/numerous gold bugs. et al., ad nauseam. Yeah, one day, they might be right, but repeating the same mantra for over a decade, one is bound to be right eventually.

Balance-Sheet , 54 minutes ago

If it is permanent it is reality not a distortion and this is the point. The 1900s are long over and will not be returning nor will the 1800s be returning for that matter.

Will the National Debt ever be paid off? No and there was never any intention to do so.

The Fed is in charge and does not need to account to anyone other than Congress and its Banking and Budgeting committees therefore provides explanations it hopes people can understand though this might be ill advised in and of itself.

Will the Fed balance sheet go to 10T? It might but only if it seems necessary and that depends of future circumstances which in very fluid conditions cannot be forecast accurately especially when politicians snap the economy on and off again and again.

Do taxpayers have to pay back the Fed balance sheet? No.

Does the US Treasury or the Fed crowd out private investment making it less available or at higher interest rates. NO! and obviously not, right? Everyone can see that.

The Gold Standard is o-v-e-r and there are no practical limitations to the amount of dollars that can be authorized by Congress to the level deemed necessary.

Doesn't this mean the USG will issue unlimited e-dollars? No, anything can happen in a thought experiment of course but the target is to make sure that the supply of USD is just a little more than enough.

If a mistake is made can excess USD is issued can the excess be withdrawn? Yes, billions of dollars die every day anyway as loans mature and all UST issues like bonds that mature in Fed custody simply disappear automatically upon maturity. All of the 'dollars' and the bonds are electronic and are simply deleted electronically invisibly and with no PR issues.

Does Nomi Prins know this? Probably but, hey, she is trying to make a living here so must slightly overfulfill your existing expectations. That is just excellent marketing- you want the customer- that's you- to get a slightly heavy pour. :-)

indus creed , 58 minutes ago

Prins has co-hosted the TYT (The Young Turks) program on Youtube. In case you are wondering, TYT are deluded, woke supporters of AOC/The_Squad types.

[Jul 03, 2020] Fracking: From Revolution to Money Pit

Highly recommended!
See original for the video. it is definitely worth to watch in full. Essentially this is a reset of Art Berman's maxim "Shale is a retirement party for the oil industry"
This is about Wall street manipulation, not so much about technology. It's an indictment of our screwed-up system of Finance
Jul 02, 2020 | www.bloomberg.com
For most any nation, let alone a superpower, energy independence is considered the geopolitical holy grail. So when fracking lured in American investors, everyone had high hopes the country would finally break free of OPEC. But oil is a complex game, and 2020 saw sharp declines in demand caused by the cartel's maneuvering, shale oil's oversupply, and now the devastating effects of the coronavirus. What's worse, the startup mentality of the U.S. fracking industry promised investors mythical growth and nonexistent returns. In the end, it burned a $340 billion hole in Wall Street's pocket. (Source: Bloomberg)

[Jul 03, 2020] The world s economy is in contraction. Although capital, what actual capital exists, will have to try and do something productive, it is confronted by this fact, that everything is facing contraction.

Highly recommended!
Notable quotes:
"... I agree that globalism is/will be heading into the dumpers, but I see no chance that US-based manufacturing is going to make any significant come-back. ..."
"... What market will there be for US-manufactured goods? US "consumers" are heavily in debt and facing continued downward pressures on income. ..."
"... There will certainly be, especially given the eye-opener of COVID-19, a big push to have medical (which includes associated tech) production capacities reinvigorated in the US. ..."
"... More "disposable" income goes toward medical expenditures. Less money goes toward creating export items; wealth creation only occurs through a positive increase in balance of trade. And on the opposite end of the spectrum, death, the US will likely continue, for the mid-term, to export weaponry; but, don't expect enough growth here to mean much (margins will drop as competition increases, so figure downward pressure on net export $$). ..."
"... the planet cannot comply with our economic model's dependency on perpetual growth: there can NOT be perpetual growth on a finite planet. US manufacturing requires, as it always has, export markets; requires ever-increasing exports: this is really true for all others. Higher standards of living in the US (and add in increasing medical costs which factor into cost of goods sold) means that the price of US-manufactured goods will be less affordable to peoples outside of the US. ..."
"... I'll also note that the notion of there being a cycle, a parabolic curve, in civilizations is well noted/documented in Sir John Glubb's The Fate of Empires and Search for Survival (you can find electronic bootlegged copies on the Internet)- HIGHLY recommended reading! ..."
"... All of this is pretty much reflected in Wall Street companies ramp-ups in stock-buy-backs. That's money that's NOT put in R&D or expansion. I'm pretty sure that the brains in all of this KNOW what the situation is: growth is never coming back. ..."
"... Make no mistake, what we're facing is NOT another recession or depression, it's not part of what we think as a downturn in the "business cycle," as though we'll "pull out of it," it's basically an end to the super-cycle ..."
"... We are at the peak (slightly past peak, but not far enough to realize it yet) and there is no returning. Per-capita income and energy consumption have peaked. There's not enough resources and not enough new demand (younger people, people that have wealth) to keep the perpetual growth machine going. ..."
Jul 03, 2020 | www.moonofalabama.org

Seer , Jul 3 2020 10:34 utc | 125

NemesisCalling @ 28

I agree that globalism is/will be heading into the dumpers, but I see no chance that US-based manufacturing is going to make any significant come-back.

The world's economy is in contraction. Although capital, what actual capital exists, will have to try and do something "productive," it is confronted by this fact, that everything is facing contraction. During times of contraction it's a game of acquisition rather than expanding capacity: the sum total is STILL contraction; and the contraction WILL be a reduction in excess, excess manufacturing and labor.

What market will there be for US-manufactured goods? US "consumers" are heavily in debt and facing continued downward pressures on income. China is self-sufficient (enough) other than energy (which can be acquired outside of US markets). Most every other country is in a position of declining wealth (per capita income levels peaked and in decline). And manufacturing continues to increase its automation (less workers means less consumers).

There will certainly be, especially given the eye-opener of COVID-19, a big push to have medical (which includes associated tech) production capacities reinvigorated in the US. One has to look at this in The Big Picture of what it means, and that's that the US population is aging (and in poor health).

More "disposable" income goes toward medical expenditures. Less money goes toward creating export items; wealth creation only occurs through a positive increase in balance of trade. And on the opposite end of the spectrum, death, the US will likely continue, for the mid-term, to export weaponry; but, don't expect enough growth here to mean much (margins will drop as competition increases, so figure downward pressure on net export $$).

Lastly, and it's the reason why global trade is being knocked down, is that the planet cannot comply with our economic model's dependency on perpetual growth: there can NOT be perpetual growth on a finite planet. US manufacturing requires, as it always has, export markets; requires ever-increasing exports: this is really true for all others. Higher standards of living in the US (and add in increasing medical costs which factor into cost of goods sold) means that the price of US-manufactured goods will be less affordable to peoples outside of the US.

And here too is the fact that other countries' populations are also aging. Years ago I dove into the demographics angle/assessment to find out that ALL countries ramp and age and that you can see countries' energy consumption rise and their their net trade balance swing negative- there's a direct correlation: go to the CIA's Factbook and look at demographics and energy and the graphs tell the story.

I'll also note that the notion of there being a cycle, a parabolic curve, in civilizations is well noted/documented in Sir John Glubb's The Fate of Empires and Search for Survival (you can find electronic bootlegged copies on the Internet)- HIGHLY recommended reading!

All of this is pretty much reflected in Wall Street companies ramp-ups in stock-buy-backs. That's money that's NOT put in R&D or expansion. I'm pretty sure that the brains in all of this KNOW what the situation is: growth is never coming back.

MANY years ago I stated that we will one day face "economies of scale in reverse." We NEVER considered that growth couldn't continue forever. There was never a though about what would happen with the reverse "of economies of scale."

Make no mistake, what we're facing is NOT another recession or depression, it's not part of what we think as a downturn in the "business cycle," as though we'll "pull out of it," it's basically an end to the super-cycle.

We will never be able to replicate the state of things as they are. We are at the peak (slightly past peak, but not far enough to realize it yet) and there is no returning. Per-capita income and energy consumption have peaked. There's not enough resources and not enough new demand (younger people, people that have wealth) to keep the perpetual growth machine going.

[Jun 08, 2020] Trump is completely right when he says Powell is an complete hack and fraud who helped scam the US people into the Iraq war

Jun 08, 2020 | www.moonofalabama.org

Mao , Jun 7 2020 21:28 utc | 34

Powell on Sunday aimed a broad critique at Trump's approach to the military, a foreign policy he said was causing "disdain" abroad, and a president he portrayed as trying to amass excessive power.

"We have a Constitution and we have to follow the Constitution, and the president has drifted away from it," Powell said. Trump also, he said, "lies about things."

Trump responded swiftly on Twitter, mocking Powell and calling the retired four-star general "a real stiff" who got the U.S. into wars after the Sept. 11, 2001, terrorist attacks on the U.S.

Colin Powell, a real stiff who was very responsible for getting us into the disastrous Middle East Wars, just announced he will be voting for another stiff, Sleepy Joe Biden. Didn't Powell say that Iraq had "weapons of mass destruction?" They didn't, but off we went to WAR!

-- Donald J. Trump (@realDonaldTrump) June 7, 2020


Kadath , Jun 7 2020 22:08 utc | 37

Credit when credit is due, Trump is completely right when he says Powell is an complete hack and fraud who helped scam the US people into the Iraq war. Years after his UN appearance Powell's own chief of staff Lawrence Wilkerson, admitted that he and Powell knew that the fix was in to attack Iraq and the information they were presenting to the UN was falsified, i.e. they knowingly lied to the UN to start a war, a war crime (was of aggression)! Rather than do the honourable thing and resign in protest and go public with the truth they stayed quite and obey their illegal orders, presumably reasoning that a competently managed crime would be less damaging then an incompetently managed crime. As it turns out though, Powell was an utterly incompetent Secretary of State who was outmaneuvered at every stage of the conflict by the mad dog crazies in the administration that he thought he was controlling. in the end, all Powell's shameful behaviour accomplished was to destroy his honour and leave him forever known as a war criminal (even if the UN is too cowardly to charge him as such). So, seeing Powell and the lamestream media try to croon about him as some sort of moral authority is laughable and Trump is right to rub all of Powell's crimes right in his face.

Trisha , Jun 8 2020 0:16 utc | 46
Not to forget (as a Vietnam Vet, I can't) that Maj. Colin Powell - after a cursory investigation into the massacre at My Lai - drafted a response on Dec. 13, 1968 stating - among other lies - that "[it] is the fact that relations between Americal soldiers and the Vietnamese people are excellent" while denying any pattern of wrong-doing.

Powell was simply protecting other murderous gang members (especially his bosses) from justice, thus becoming another un-indicted accessory to murder. The gods are not interested in justice, though, and he roams free.

Sunny Runny Burger , Jun 8 2020 2:09 utc | 47
Wow I wish I had know that little tidbit back then when I watched the full uninterrupted UN broadcasts from the Security Council before the war. He pretty much managed to get the US a free pass with his testimony of lies. I believed him and so did a lot of other people. Now his whitewash of My Lai is even on his Wikipedia page. Thank you Trisha.

Several years earlier I got to know about My Lai during relatively brief military education (non-US but NATO) on the rules of the Geneva Convention, it was used as the prime example of when to resist and disobey unlawful orders (I have to wonder if it still is).

If there had been a free press they should have shouted this little fact at the top of their lungs while mocking the US, maybe someone somewhere did but I never heard any mention of it, not even from any of all the people I knew that were opposing the war and who never seemed to have anything substantive to say (a bit like BLM: who isn't against murder and particularly murder committed by "cops"? There's a serious communication problem going on).

I find this so strange that I'm starting to wonder if I have an extremely selective memory. Did anyone here learn about this at the time? Not counting anyone who already knew it well before that time.

[May 25, 2020] US oil companies are cutting production much faster than expected -- RT Business News

Notable quotes:
"... "Well, I think it's automatic. Because they're already cutting. I mean, if you look, they're cutting back. Because it's it's market. It's demand. It's supply and demand. They're already cutting back, and they're cutting back very seriously," ..."
May 25, 2020 | www.rt.com

The United States is on track to cut 1.7 million barrels of oil production per day, according to Reuters calculations of state and company data shared on Thursday. It was US President Donald Trump that suggested at the beginning of April, prior to the most recent OPEC deal signing that the United States would cut its oil output as a natural response to the worsening market conditions. The statement was not initially good enough for OPEC, who wanted more of a commitment from the world's largest producer and consumer of crude oil.

"Well, I think it's automatic. Because they're already cutting. I mean, if you look, they're cutting back. Because it's it's market. It's demand. It's supply and demand. They're already cutting back, and they're cutting back very seriously," US President Trump said at a press briefing early last month.

OPEC+ eventually agreed to cut production by 9.7 million bpd -- a landmark figure that is significantly larger than previous OPEC cuts in recent years. Its non-OPEC allies who partnered with OPEC in the deal pledged to cut an additional 10 million bpd. Also on rt.com OPEC+ strikes last-minute deal to cut almost 10 mn barrels a day of oil production

US Energy Secretary said last month that the DoE expected that production in the United States would fall by between two and three million bpd by the end of the year -- it appears the cuts have come even quicker than the department expected.

The need for the production cuts grew more evident as the United States shut down nearly all activity in an attempt to flatten that curve of infections that sought to overwhelm the country's healthcare system. Doing so, however, has idled much of the economy and crippled demand -- and as such, its oil and gas industry that fuels that economy.

READ MORE: The shale suffering has only just begun

The cuts from US producers may seek to quiet the disgruntlement of OPEC and Russia, in particular, who expressed their displeasure that the US would not require its producers to curb production. After all, the US shale industry has benefited greatly from previous rounds of OPEC cuts.

[May 21, 2020] The 'Clean Break' Doctrine OffGuardian

Highly recommended!
Notable quotes:
"... A Clean Break: A New Strategy for Securing the Realm ..."
"... "the right to plunder anything one can get their hands on" ..."
"... "the UK and France in March 2011 which led the international community to support an intervention in Libya to protect civilians from forces loyal to Muammar Gaddafi" ..."
May 21, 2020 | off-guardian.org

n 1996 a task force, led by Richard Perle, produced a policy document titled A Clean Break: A New Strategy for Securing the Realm for Benjamin Netanyahu, who was then in his first term as Prime Minister of Israel, as a how-to manual on approaching regime change in the Middle East and for the destruction of the Oslo Accords.

The "Clean Break" policy document outlined these goals:

Ending Yasser Arafat's and the Palestinian Authority's political influence, by blaming them for acts of Palestinian terrorism Inducing the United States to overthrow Saddam Hussein's regime in Iraq. Launching war against Syria after Saddam's regime is disposed of. Followed by military action against Iran, Saudi Arabia, and Egypt.

"Clean Break" was also in direct opposition to the Oslo Accords, to which Netanyahu was very much itching to obliterate. The Oslo II Accord was signed just the year before, on September 28th 1995, in Taba, Egypt.

During the Oslo Accord peace process, Likud leader Benjamin Netanyahu accused Rabin's government of being "removed from Jewish tradition and Jewish values." Rallies organised by the Likud and other right-wing fundamentalist groups featured depictions of Rabin in a Nazi SS uniform or in the crosshairs of a gun.

In July 1995, Netanyahu went so far as to lead a mock funeral procession for Rabin, featuring a coffin and hangman's noose.

The Oslo Accords was the initiation of a process which was to lead to a peace treaty based on the United Nations Security Council Resolutions 242 and 338, and at fulfilling the "right of the Palestinian people to self-determination." If such a peace treaty were to occur, with the United States backing, it would have prevented much of the mayhem that has occurred since.

However, the central person to ensuring this process, Yitzak Rabin, was assassinated just a month and a half after the signing of the Oslo II Accord, on November 4th, 1995. Netanyahu became prime minister of Israel seven months later. "Clean Break" was produced the following year.

On November 6th, 2000 in the Israeli daily Ha'aretz, Israeli Justice Minister Yossi Beilin, who was the chief negotiator of the Oslo peace accords, warned those Israelis who argued that it was impossible to make peace with the Palestinians:

Zionism was founded in order to save Jews from persecution and anti-Semitism, and not in order to offer them a Jewish Sparta or – God forbid – a new Massada."

On Oct. 5, 2003, for the first time in 30 years, Israel launched bombing raids against Syria, targeting a purported "Palestinian terrorist camp" inside Syrian territory. Washington stood by and did nothing to prevent further escalation.

"Clean Break" was officially launched in March 2003 with the war against Iraq, under the pretence of "The War on Terror". The real agenda was a western-backed list of regime changes in the Middle East to fit the plans of the United Kingdom, the U.S. and Israel.

However, the affair is much more complicated than that with each player holding their own "idea" of what the "plan" is. Before we can fully appreciate such a scope, we must first understand what was Sykes-Picot and how did it shape today's world mayhem.

Arabian Nights

WWI was to officially start July 28th 1914, almost immediately following the Balkan wars (1912-1913) which had greatly weakened the Ottoman Empire.

Never one to miss an opportunity when smelling fresh blood, the British were very keen on acquiring what they saw as strategic territories for the taking under the justification of being in war-time, which in the language of geopolitics translates to "the right to plunder anything one can get their hands on" .

The brilliance of Britain's plan to garner these new territories was not to fight the Ottoman Empire directly but rather, to invoke an internal rebellion from within. These Arab territories would be encouraged by Britain to rebel for their independence from the Ottoman Empire and that Britain would support them in this cause.

These Arab territories were thus led to believe that they were fighting for their own freedom when, in fact, they were fighting for British and secondarily French colonial interests.

In order for all Arab leaders to sign on to the idea of rebelling against the Ottoman Sultan, there needed to be a viable leader that was Arab, for they certainly would not agree to rebel at the behest of Britain.

Lord Kitchener, the butcher of Sudan, was to be at the helm of this operation as Britain's Minister of War. Kitchener's choice for Arab leadership was the scion of the Hashemite dynasty, Hussein ibn Ali, known as the Sherif of Mecca who ruled the region of Hejaz under the Ottoman Sultan.

Hardinge of the British India Office disagreed with this choice and wanted Wahhabite Abdul-Aziz ibn Saud instead, however, Lord Kitchener overruled this stating that their intelligence revealed that more Arabs would follow Hussein.

Since the Young Turk Revolution which seized power of the Ottoman government in 1908, Hussein was very aware that his dynasty was in no way guaranteed and thus he was open to Britain's invitation to crown him King of the Arab kingdom.

Kitchener wrote to one of Hussein's sons, Abdallah, as reassurance of Britain's support:

If the Arab nation assist England in this war that has been forced upon us by Turkey, England will guarantee that no internal intervention take place in Arabia, and will give Arabs every assistance against foreign aggression."

Sir Henry McMahon who was the British High Commissioner to Egypt, would have several correspondences with Sherif Hussein between July 1915 to March 1916 to convince Hussein to lead the rebellion for the "independence" of the Arab states.

However, in a private letter to India's Viceroy Charles Hardinge sent on December 4th, 1915, McMahon expressed a rather different view of what the future of Arabia would be, contrary to what he had led Sherif Hussein to believe:

[I do not take] the idea of a future strong united independent Arab State too seriously the conditions of Arabia do not and will not for a very long time to come, lend themselves to such a thing."

Such a view meant that Arabia would be subject to Britain's heavy-handed "advising" in all its affairs, whether it sought it or not.

In the meantime, Sherif Hussein was receiving dispatches issued by the British Cairo office to the effect that the Arabs of Palestine, Syria, and Mesopotamia (Iraq) would be given independence guaranteed by Britain, if they rose up against the Ottoman Empire.

The French were understandably suspicious of Britain's plans for these Arab territories. The French viewed Palestine, Lebanon and Syria as intrinsically belonging to France, based on French conquests during the Crusades and their "protection" of the Catholic populations in the region.

Hussein was adamant that Beirut and Aleppo were to be given independence and completely rejected French presence in Arabia. Britain was also not content to give the French all the concessions they demanded as their "intrinsic" colonial rights.

Enter Sykes and Picot.

... ... ...

Throughout the 1920s and 1930s violent confrontations between Jews and Arabs took place in Palestine costing hundreds of lives. In 1936 a major Arab revolt occurred over 7 months, until diplomatic efforts involving other Arab countries led to a ceasefire.

In 1937, a British Royal Commission of Inquiry headed by William Peel concluded that Palestine had two distinct societies with irreconcilable political demands, thus making it necessary to partition the land.

The Arab Higher Committee refused Peel's "prescription" and the revolt broke out again. This time, Britain responded with a devastatingly heavy hand. Roughly 5,000 Arabs were killed by the British armed forces and police. Following the riots, the British mandate government dissolved the Arab Higher Committee and declared it an illegal body.

In response to the revolt, the British government issued the White Paper of 1939, which stated that Palestine should be a bi-national state, inhabited by both Arabs and Jews.

Due to the international unpopularity of the mandate including within Britain itself, it was organised such that the United Nations would take responsibility for the British initiative and adopted the resolution to partition Palestine on November 29th, 1947.

Britain would announce its termination of its Mandate for Palestine on May 15th, 1948 after the State of Israel declared its independence on May 14th, 1948.

A New Strategy for Securing Whose Realm?

Despite what its title would have you believe, "Clean Break" is neither a "new strategy" nor meant for "securing" anything. It is also not the brainchild of fanatical neo-conservatives: Dick Cheney and Richard Perle, nor even that of crazed end-of-days fundamentalist Benjamin Netanyahu, but rather has the very distinct and lingering odour of the British Empire.

"Clean Break" is a continuation of Britain's geopolitical game, and just as it used France during the Sykes-Picot days it is using the United States and Israel.

The role Israel has found itself playing in the Middle East could not exist if it were not for over 30 years of direct British occupation in Palestine and its direct responsibility for the construction of the Israeli-Palestinian conflict, which set a course for destruction and endless war in this region long before Israel ever existed.

It was also Britain who officially launched operation "Clean Break" by directly and fraudulently instigating an illegal war against Iraq to which the Chilcot Inquiry, aka Iraq Inquiry , released 7 years later, attests to.

This was done by the dubious reporting by British Intelligence setting the pretext for the U.S.' ultimate invasion into Iraq based off of fraudulent and forged evidence provided by GCHQ, unleashing the "War on Terror", aka "Clean Break" outline for regime change in the Middle East.

In addition, the Libyan invasion in 2011 was also found to be unlawfully instigated by Britain.

In a report published by the British Foreign Affairs Committee in September 2016, it was concluded that it was "the UK and France in March 2011 which led the international community to support an intervention in Libya to protect civilians from forces loyal to Muammar Gaddafi" .

The report concluded that the Libyan intervention was based on false pretence provided by British Intelligence and recklessly promoted by the British government.

If this were not enough, British Intelligence has also been caught behind the orchestrations of Russia-Gate and the Skripal affair .

Therefore, though the U.S. and Israeli military have done a good job at stealing the show, and though they certainly believe themselves to be the head of the show, the reality is that this age of empire is distinctly British and anyone who plays into this game will ultimately be playing for said interests, whether they are aware of it or not.

Originally published by Strategic Culture


Almondson ,

Yossi B said:

Zionism was founded in order to save Jews from persecution and anti-Semitism

Ever heard of Dumbo? He's a flying elephant.

The crusade in the ME will continue, with Israel the top dog until America's military support is no longer there. Even without the Israeli eastern european invaders, the area is primed for perpetual tribal warfare because the masses are driven by tribalist doctrines and warped metaphysics dictated by insane and inhumane parasites (priests). It is the epicenter of a spiritual plague that has infected most of the planet.

paul ,

There is complete continuity between the activities of Zionist controlled western countries and those of the present day.

In the 1930s, there were about 300,000 adult Palestinian males. Over 10% were killed, imprisoned and tortured or driven into exile. 100,000 British troops were sent to Palestine to destroy completely Palestinian political and military organisations. Wingate set up the Jew terror gangs who were given free rein to murder, rape and burn, in preparation for the complete ethnic cleansing of the country.

We see the same ruthless, genocidal brutality on an even greater scale in the present day, serving exactly the same interests. Nothing has ever come of trying to negotiate with the Zionists and their western stooges – just further disasters. It is only resolute and uncompromising resistance that has ever achieved anything. Hezbollah kicking their Zionist arses out of Lebanon in 2000 and keeping them out in 2006. Had they not done so, Lebanon would still be under Zionist occupation and covered with their filthy illegal settlements.

They have never stopped and they never will. The objective is to create a vast Zionist empire comprising the whole of Palestine, Jordan, Lebanon and Syria, and parts of Egypt, Turkey, Iraq, and Saudi Arabia. This plan has never changed and it never will. The Zionist thieves will shortly steal what little is left of Palestine. But the thieving will not end there. It will just move on to neighbouring countries.

The prime reason they have been able to get away with this is not their control of British and US golems. It is by playing the old, dirty colonial games of divide and rule, with the Quisling stooge dictators serving their interests. They have always been able to set Sunni against Shia, and different factions against others. The dumb Arabs fall for it every time. Their latest intrigues are directed at the destruction of Iran, the next victim on their target list after Iraq, Libya and Syria. And the Quisling dictators of Saudi Arabia are openly agitating for this and offering to pay for all of it. Syria sent troops to join the US invasion of Iraq in 1991, though Iraqi troops fought and died in Syria in 1973 against Israel. Egypt allows Israel to use its airspace to carry out the genocidal terror bombing of Gaza.

All this is contemptible enough and fits into racist stereotypes of Arabs as stupid, irrational, corrupt, easily bought, violent and treacherous. This of course does not apply to the populations of those countries, but it is a legitimate assessment of their Quisling dictators, with a (very) few honourable exceptions.

Seamus Padraig ,

Of course, Arab rulers who don't tow the Zionist line generally get overthrown, don't they? And that usually requires the efforts/intervention of FUKUS, doesn't it? So you can't really pretend that 'Arab stupidity' is the main factor.

Richard Le Sarc ,

The fact that, as the Yesha Council of Rabbis and Torah Sages declared in 2006, as Israel was bombing Lebanon 'back to the Stone Age', under Talmudic Judaism, killing civilians is not just permissible, but a mitzvah, or good deed, explains Zionist behaviour. Other doctrines allow an entire 'city' eg Gaza, to be devastated for the 'crimes' of a few, and children, even babies, to be killed if they would grow up to 'oppose the Jews'. Dare mention these FACTS, seen everyday in Israeli barbarity, and the 'antisemitism' slurs flow, as ever.

Julia ,

" is that this age of empire is distinctly British"

.it takes some balls to make such an absurd statement and still expect to be taken seriously. The US of course with its 800 military bases around the world and gifts of 40 billion a year to Israel has no opinion on the future of the Middle East. You would have us believe that they are just humble onlookers, as a small bankrupt country tells them what to do. We are being told that the CIA, the most formidable spy agency and manipulator of countries in history, sits quietly by as the British and Israel tells the US what to do.
Absurd isn't it., Clearly the truth is that Israel is just another military base for the US in the Middle East, easily the most important geopolitical region in the world. They fund it, arm it, and protect it from all attacks, Israel does as it is told by the US for the most part despite the pantomime on the surface.
Many on the far right like to hide US interests behind a wall of antisemitism that likes to paint 'the jews' as an all powerful enemy but this is just cover for Israel's real geopolitical roll as a US puppet.
Time and time again all we are seeing is attempt to write the US, the largest empire in the history out of the news and out of the history books, like it is some invisible benign force that has not interests, no control and does noting to forward it's interests and it's empire.

''To find out who rules over you, simply find out who you are not allowed to criticise."

I don't know about you, but I'm not 10 years old and I know I am looking at Empire and it's power being flexed every day in every part do the world, especial in the parts of the world that it funds with trillions of dollars.

Julia ,

" is that this age of empire is distinctly British"

.it takes some balls to make such an absurd statement and still expect to be taken seriously. The US of course with its 800 military bases around the world and gifts of 40 billion a year to Israel has no opinion on the future of the Middle East. You would have us believe that they are just humble onlookers, as a small bankrupt country tells them what to do. We are being told that the CIA, the most formidable spy agency and manipulator of countries in history, sits quietly by as the British and Israel tells the US what to do.
Absurd isn't it., Clearly the truth is that Israel is just another military base for the US in the Middle East, easily the most important geopolitical region in the world. They fund it, arm it, and protect it from all attacks, Israel does as it is told by the US for the most part despite the pantomime on the surface.
Many on the far right like to hide US interests behind a wall of antisemitism that likes to paint 'the jews' as an all powerful enemy but this is just cover for Israel's real geopolitical roll as a US puppet.
Time and time again all we are seeing is attempt to write the US, the largest empire in the history out of the news and out of the history books, like it is some invisible benign force that has not interests, no control and does noting to forward it's interests and it's empire.

''To find out who rules over you, simply find out who you are not allowed to criticise."

I don't know about you, but I'm not 10 years old and I know I am looking at Empire and it's power being flexed every day in every part do the world, especial in the parts of the world that it funds with trillions of dollars.

Richard Le Sarc ,

The antithesis of the truth. It is US politicians who flock to AIPAC's meeting every year to pledge UNDYING fealty to Israel, not Israeli politicians pledging loyalty to the USA. It is Israeli and dual loyalty Jewish oligarchs funding BOTH US parties, it is US politicians throwing themselves to the ground in adulation when Bibi the war criminal addresses the Congress with undisguised contempt, not Israeli politicians groveling to the USA. The master-servant relationship is undisguised.

Pyewacket ,

In Daniel Yergin's The Prize, a history of the Oil industry, he provides another interesting angle to explain British interest in the region. He states that at that time, Churchill realised that a fighting Navy powered by Coal, was not nearly as good or efficient as one using Oil as a fuel, and that securing supplies of the stuff was the best way forward to protect the Empire.

BigB ,

Yergin would be right. The precursor of the First World War was a technological arms race and accelerated 'scientific' perfection of arsenals – particularly naval – in the service of imperialism. British and German imperialism. The full story involves the Berlin to Cairo railway and the resource grab that went with it. I'm a bit sketchy on the details now: but Churchill had a prominent role, rising to First Lord of the Admiralty.

Docherty and Macgregor have exposed the hidden history. F W Engdahl has written about WW1 being the first oil war.

Andreas Schlüter ,

And don´t forget which of the US Military command regions into which the US Military divided the WHOLE World is named "US CENTCOM"!
„One Thing Must be Clear to the World: The US Power Elite Regards the Whole Globe as Their Colony!": https://wipokuli.wordpress.com/2016/10/26/one-thing-must-be-clear-to-the-world-the-us-power-elite-regards-the-whole-globe-as-their-colony/

Antonym ,

In 1996 a task force, led by Richard Perle, produced a policy document titled A Clean Break: A New Strategy for Securing the Realm for Benjamin Netanyahu

No source link for this!

By the way 1996 was during the Clinton administration. Warren Christopher was secretary of state and John Deutch was the Director of Central Intelligence . George Tenet was appointed the Deputy Director of Central Intelligence in July 1995. After John Deutch's abrupt resignation in December 1996, Tenet served as acting director.

Reg ,

Here you go, sonny boy

http://www.dougfeith.com/docs/Clean_Break.pdf

Richard Le Sarc ,

Antsie, what are you going to deny next? The USS Liberty? Deir Yassin? The Lavon Affair? Sabra, Shatilla? Qana (twice)? The Five Celebrating Israelis on 9/11?Does not impress.

[May 20, 2020] Trump administration behaviour is the byproduct of having too much money and not enough brain

May 07, 2020 | www.moonofalabama.org

bevin , May 7 2020 19:17 utc | 13

"..all of these tin pot dictatorship oil rich countries are really a sick bunch.... i guess it is the byproduct off having too much money and not enough brains..

@james@ 3

karlofi beat me to it james - or were you referring to Alberta?

[May 20, 2020] A huge fleet of 117 tankers is bringing super cheap crude to China

May 20, 2020 | www.unz.com

vot tak , says: Show Comment May 20, 2020 at 5:01 am GMT

A huge fleet of 117 tankers is bringing super cheap crude to China

https://www.rt.com/business/488927-china-buys-super-cheap-oil/

"At present, a total of 117 very large crude carriers (VLCCs) -- each capable of shipping 2 million barrels of oil -- are traveling to China for unloading at its ports between the middle of May and the middle of August. If those supertankers transport standard-size crude oil cargoes, it could mean that China expects at least 230 million barrels of oil over the next three months, according to Bloomberg. The fleet en route to China could be the largest number of supertankers traveling to the world's top oil importer at one time, ever, Bloomberg News' Firat Kayakiran says.

Many of the crude oil cargoes are likely to have been bought in April, when prices were lower than the current price and when WTI Crude futures even dipped into negative territory for a day.

Last month, emerging from the coronavirus lockdown, China's oil refiners were already buying ultra-cheap spot cargoes from Alaska, Canada, and Brazil, taking advantage of the deep discounts at which many crude grades were being offered to China with non-existent demand elsewhere. ( https://oilprice.com/Energy/Crude-Oil/Chinese-Bargain-Hunters-Are-Stucking-Up-On-Ultra-Cheap-Crude-Oil.html )

China was also estimated to have doubled the fill rate at its strategic and commercial inventories in Q1 2020, taking advantage of the low oil prices and somewhat supporting the oil market amid crashing demand by diverting more imports to storage, rather than outright slashing crude imports.

China's crude oil imports jumped in April to about 9.84 million barrels per day as demand for fuels began to rebound and local refiners started to ramp up crude processing, according to Chinese customs data cited by Reuters."

Well, now we know who was taking advantage of those pindo negative oil price sales ;-D

The Chinese are at the advantage here, not being neocon/likud bottom rungers. The desperation of zionazia is expressed in choosing the neocon lowlife to run things in the western colonies. Yes, their extremism provides the initiative in getting extreme capitalist policies through and continues the push to the extreme far right in the zionazi-gay colonies. But it is at the cost of intelligent long term strategy. Short term imaginary gain at the cost of real gain. The fast food, face feeding, bum bandit approach. The quick fixers.

[May 17, 2020] Why U.S. Must Be Prosecuted for Its War Crimes Against Iraq by Eric Zuesse

May 16, 2020 | astutenews.com
The reason why the U.S. Government must be prosecuted for its war-crimes against Iraq is that they are so horrific and there are so many of them, and international law crumbles until they become prosecuted and severely punished for what they did. We therefore now have internationally a lawless world (or "World Order") in which "Might makes right," and in which there is really no effective international law, at all. This is merely gangster "law," ruling on an international level. It is what Hitler and his Axis of fascist imperialists had imposed upon the world until the Allies -- U.S. under FDR, UK under Churchill, and U.S.S.R. under Stalin -- defeated it, and established the United Nations. Furthermore, America's leaders deceived the American public into perpetrating this invasion and occupation, of a foreign country (Iraq) that had never threatened the United States; and, so, this invasion and subsequent military occupation constitutes the very epitome of "aggressive war" -- unwarranted and illegal international aggression. (Hitler, similarly to George W. Bush, would never have been able to obtain the support of his people to invade if he had not lied, or "deceived," them, into invading and militarily occupying foreign countries that had never threatened Germany, such as Belgium, Poland and Czechoslovakia. This -- Hitler's lie-based aggressions -- was the core of what the Nazis were hung for, and yet America now does it.)

As Peter Dyer wrote in 2006, about "Iraq & the Nuremberg Precedent" :

Invoking the precedent set by the United States and its allies at the Nuremberg trial in 1946, there can be no doubt that the U.S.-led invasion of Iraq in 2003 was a war of aggression. There was no imminent threat to U.S. security nor to the security of the world. The invasion violated the U.N. Charter as well as U.N. Security Council Resolution #1441.

The Nuremberg precedent calls for no less than the arrest and prosecution of those individuals responsible for the invasion of Iraq, beginning with President George W. Bush, Vice President Dick Cheney, Secretary of Defense Donald Rumsfeld, Secretary of State Condoleez[z]a Rice, former Secretary of State Colin Powell and former Deputy Secretary of Defense Paul Wolfowitz.

Take, for example, Condoleezza Rice, who famously warned "We don't want the smoking gun to be a mushroom cloud." (That warning was one of the most effective lies in order to deceive the American public into invading Iraq, because President Bush had had no real evidence, at all, that there still remained any WMD in Iraq after the U.N. had destroyed them all, and left Iraq in 1998 -- and he knew this; he was informed of this; he knew that he had no real evidence, at all: he offered none; it was all mere lies .)

So, the Nuremberg precedent definitely does apply against George W, Bush and his partners-in-crime, just as it did against Hitler and his henchmen and allies.

The seriousness of this international war crime is not as severe as those of the Nazis were, but nonetheless is comparable to it .

On 15 March 2018, Medea Benjamin and Nicolas J.S. Davies headlined at Alternet "The Staggering Death Toll in Iraq" and wrote that "our calculations, using the best information available, show a catastrophic estimate of 2.4 million Iraqi deaths since the 2003 invasion," and linked to solid evidence, backing up their estimate.

On 6 February 2020, BusinessInsider bannered "US taxpayers have reportedly paid an average of $8,000 each and over $2 trillion total for the Iraq war alone" , and linked to the academic analysis that supported this estimate. The U.S. regime's invasive war, which the Bush gang perpetrated against Iraq, was also a crime against the American people (though Iraqis suffered far more from it than we did).

On 29 September 2015, I headlined "GALLUP: 'Iraqis Are the Saddest & One of the Angriest Populations in the World'," and linked to Gallup's survey of 1,000 individuals in each of 148 countries around the world, which found that Iraq had the highest "Negative Experience Score." That score includes "sadness," "physical pain," "anger," and other types of misery -- and Iraq, after America's invasion, has scored the highest in the entire world, on it, and in the following years has likewise scored at or near the highest on "Negative Experience Score." For example: in the latest, the 2019, Gallup "Global Emotions Report" , Iraq scores fourth from the top on "Negative Experience Score," after (in order from the worst) Chad, Niger, and Sierra Leone. (Gallup has been doing these surveys ever since 2005, but the first one that was published under that title was the 2015 report, which summarized the 2014 surveys' findings.) Of course, prior to America's invasion, there had been America's 1990 war against Iraq and the U.S. regime's leadership and imposition of U.N. sanctions (which likewise were based largely on U.S.-regime-backed lies , though not totally on lies like the 2003 invasion was), which caused massive misery in that country; and, therefore, not all of the misery in Iraq which showed up in the 2015 Global Emotions Report was due to only the 2003 invasion and subsequent military occupation of that country. But almost all of it was, and is. And all of it was based on America's rulers lying to the public in order to win the public's acceptance of their evil plans and invasions against a country that had never posed any threat whatsoever to Americans -- people residing in America . Furthermore, it is also perhaps relevant that the 2012 "World Happiness Report" shows Iraq at the very bottom of the list of countries (on page 55 of that report) regarding "Average Net Affect by Country," meaning that Iraqis were the most zombified of all 156 nationalities surveyed. Other traumatized countries were immediately above Iraq on that list. On "Average Negative Affect," only "Palestinian Territories" scored higher than Iraq (page 52). After America's invasion based entirely on lies, Iraq is a wrecked country, which still remains under the U.S. regime's boot, as the following will document:

Bush's successors, Obama and Trump, failed to press for Bush's trial on these vast crimes, even though the American people had ourselves become enormously victimized by them, though far less so than Iraqis were. Instead, Bush's successors have become accessories after the fact, by this failure to press for prosecution of him and his henchmen regarding this grave matter. In fact, the "Defense One" site bannered on 26 September 2018, "US Official: We May Cut Support for Iraq If New Government Seats Pro-Iran Politicians" , and opened with "The Trump administration may decrease U.S. military support or other assistance to Iraq if its new government puts Iranian-aligned politicians in any 'significant positions of responsibility,' a senior administration official told reporters late last week." The way that the U.S. regime has brought 'democracy' to Iraq is by threatening to withdraw its protection of the stooge-rulers that it had helped to place into power there, unless those stooges do the U.S. dictators' bidding, against Iraq's neighbor Iran. This specific American dictator, Trump, is demanding that majority-Shiite Iraq be run by stooges who favor, instead, America's fundamentalist-Sunni allies, such as the Saud family who own Saudi Arabia and who hate and loathe Shiites and Iran. The U.S. dictatorship insists that Iraq, which the U.S. conquered, serve America's anti-Shiite and anti-Iranian policy-objectives. "The U.S. threat, to withhold aid if Iran-aligned politicians occupy any ministerial position, is an escalation of Washington's demands on Baghdad." The article went on to quote a "senior administration official" as asserting that, "if Iran exerts a tremendous amount of influence, or a significant amount of influence over the Iraqi government, it's going to be difficult for us to continue to invest." Get the euphemisms there! This article said that "the Trump administration has made constraining Iran's influence in the region a cornerstone of their foreign policy." So, this hostility toward Iran must be reflected in Iraq's policies, too. It's not enough that Trump wants to destroy Iran like Bush has destroyed Iraq; Trump demands that Iraq participate in that crime, against Iraq's own neighbor. This article said that, "There have also been protests against 'U.S. meddling' in the formation of a new Iraqi government, singling out Special Presidential Envoy Brett McGurk for working to prevent parties close to Iran from obtaining power." McGurk is the rabidly neconservative former high G.W. Bush Administration official, and higher Obama Administration official, who remained as Trump's top official on his policy to force Iraq to cooperate with America's efforts to conquer Iran. Trump's evil is Obama's evil, and is Bush's evil. It is bipartisan evil, no matter which Party is in power. Though Trump doesn't like either the Bushes or Obamas, all of them are in the same evil policy-boat. America's Deep State remains the same, no matter whom it places into the position of nominal power. The regime remains the same, regardless.

On April 29th, the whistleblowing former UK Ambassador Craig Murray wrote :

Nobody knows how many people died as a result of the UK/US Coalition of Death led destruction of Iraq, Afghanistan, Libya and, by proxy, Syria and Yemen. Nobody even knows how many people western forces themselves killed directly. That is a huge number, but still under 10% of the total. To add to that you have to add those who died in subsequent conflict engendered by the forced dismantling of the state the West disapproved of. Some were killed by western proxies, some by anti-western forces, and some just by those reverting to ancient tribal hostility and battle for resources into which the country had been regressed by bombing.

You then have to add all those who died directly as a result of the destruction of national infrastructure. Iraq lost in the destruction 60% of its potable drinking water, 75% of its medical facilities and 80% of its electricity. This caused millions of deaths, as did displacement. We are only of course talking about deaths, not maiming.

UK's Prime Minister Tony Blair should hang with the U.S. gang, but who is calling for this? How much longer will the necessary prosecutions wait? Till after these international war-criminals have all gone honored to their graves?

Although the International Criminal Court considered and dismissed possible criminal charges against Tony Blair's UK Government regarding the invasion and military occupation of Iraq, the actual crime, of invading and militarily occupying a country which had posed no threat to the national security of the invader, was ignored, and the conclusion was that "the situation did not appear to meet the required threshold of the Statute" (which was only "Willful killing or inhuman treatment of civilians" and which ignored the real crime, which was "aggressive war" or "the crime of aggression" -- the crime for which Nazis had been hanged at Nuremberg). Furthermore, no charges whatsoever against the U.S. Government (the world's most frequent and most heinous violator of international law) were considered. In other words: the International Criminal Court is subordinate to, instead of applicable to, the U.S. regime. Just like Adolf Hitler had repeatedly made clear that, to him, all nations except Germany were dispensable and only Germany wasn't, Barack Obama repeatedly said that "The United States is and remains the one indispensable nation" , which likewise means that every other nation is "dispensable." The criminal International Criminal Court accepts this, and yet expects to be respected.

The U.S. regime did "regime change" to Iraq in 2003, and to Ukraine in 2014 , and tried to do it to Syria since 2009 , and to Yemen since 2015, and to Venezuela since 2012, and to Iran since 2017 -- just to mention some of the examples. And, though the Nuremberg precedent certainly applies, it's not enforced. In principle, then, Hitler has posthumously won WW II.

Hitler must be smiling, now. FDR must be rolling in his grave.

The only way to address this problem, if there won't be prosecutions against the 'duly elected' (Deep-State-approved and enabled) national leaders and appointees, would be governmental seizure and nationalization of the assets that are outright owned or else controlled by America's Deep State. Ultimately, the Government-officials who are s'elected' and appointed to run the American Government have been and are representing not the American people but instead represent the billionaires who fund those officials' and former officials' careers . In a democracy, those individuals -- the financial enablers of those politicians' s'electoral' success -- would be dispossessed of all their assets, and then prosecuted for the crimes that were perpetrated by the public officials whom they had participated in (significantly funded and propagandized for) placing into power. (For example, both Parties' Presidential nominees are unqualified to serve in any public office in a democracy.)

Democracy cannot function with a systematically lied-to public . Nor can it function if the responsible governmental officials are effectively immune from prosecution for their 'legal' crimes, or if the financial string-pullers behind the scenes can safely pull those strings. In America right now, both of those conditions pertain, and, as a result, democracy is impossible . There are only two ways to address this problem, and one of them would start by prosecuting George W. Bush.


Investigative historian Eric Zuesse is the author, most recently, of They're Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of CHRIST'S VENTRILOQUISTS: The Event that Created Christianity .

[May 16, 2020] "A Seller's Market for Bankruptcy Talent:" The Beginning of the End of Methane-Producing Fracking? by Juan Cole

Mar 17, 2020 | www.truthdig.com
On Monday, the price of West Texas Intermediate petroleum fell below $30 a barrel for the first time in four years. Elliot Smith at CNBC reports that BP CFO Brian Gilvary is braced for petroleum demand actually to contract in 2020.

This prediction is very bad news for US fracking firms, most of which need a price point of from $40 to $60 a barrel to make their hydraulic fracturing method of oil production profitable.

In the Democratic primary debate on Sunday, Bernie Sanders pledged to ban fracking entirely, and even Joe Biden said no new fracking would be allowed. Fracking may be moribund anyway by November, and if a Democrat wins the presidency, the industry may never recover.

Not only is petroleum likely headed way below that profitability floor, but many energy firms involved with fracking are deeply in debt, and had taken out the debts with their petroleum fields as collateral. Since their collateral is worth only half what it used to be, the banks will call in their loans. Other energy firms involved in fracking have held significant assets in their own stocks, the price of which just zoomed to earth like a crashing meteor.

Reuters observed,

Fracking has been banned by countries such as France, and by states such as New York because it is highly polluting, leaving behind ponds of toxic water. Moreover, research has demonstrated that the process of fracking, which involves pumping water under high pressure underground to break up rocks and release oil or natural gas, causes gargantuan methane emissions that had earlier been underestimated as much as 45% . The methane in the atmosphere is burgeoning, and scientists had puzzled over why. But scientists have fingered the culprit: fracking. Methane is 80 times as potent a heat-trapping gas as carbon dioxide over two decades, and carbon dioxide is no slouch. A quarter of the global heating effect of greenhouse gas emissions put out by humans burning fossil fuels is owing to methane emissions. Rapid heating is melting the North and South Poles, causing sea level rise that will soon be calamitous.

Given that the world population is increasing and that developing countries such as China and India and Indonesia are seeing more and more people abandoning their bicycles or bus rides for mopeds or automobile ownership, for the world to want less petroleum this year than it did last is extremely unusual.

We are getting a preview courtesy COVID-19 of what will happen through the next decade and a half as electric vehicles take off, significantly reducing demand.

The world produces about $100 million barrels of petroleum a day, and given the Saudi determination to expand production starting on April 1, it could be producing 102 million barrels a day later this spring. The world may only want 90 mn. barrels a day this spring. What with the novel coronavirus pandemic, fewer trucks and cars will be on the road. Petroleum is largely used for transportation fuel.

Do you know what happens if demand falls and production increases? The price falls. In fact, it doesn't just fall. It collapses. It takes a deep dive. It falls off a cliff. It craters deep beneath the earth's crust.

How steep the fall is depends in part on whether Saudi Arabia and Russia keep playing chicken. Saudi Arabia wants to discipline Moscow, which rejected OPEC + production quotas aimed at reducing supply and supporting a $60 per barrel price. So Riyadh is opening the spigots, upping its production by two million barrels a day. Saudi Aramco says it is comfortable with a price point of $30 a barrel. But unfortunately for Aramco, the price may not have stopped falling.

Andreas de Vries at Oilspot.com believes the price could fall to as little as $10 a barrel later this spring. In 2019 the price tended to be around $60 a barrel.

The fossil fuel companies that lack deep pockets could well just fail this year. Brenda Sapino Jeffreys quotes Jason Cohen, an attorney at Bracewell in Houston, as saying of the oil industry, "There is, I'd say, a sellers market for bankruptcy talent." His observation gave me my title.

This steep decline in stock prices and oil prices comes on top of a 5-year run in which the market has destroyed 90% of the value of US investor stocks in oil services. That is, we could this year be entering an oil market crisis as severe as the Asian banking crash of 1997-1998 .

The difference is that by the time fossil fuels come out of their economic doldrums, renewables will have stolen a further march on them. From here on in, hydrocarbons are beginning their death spiral. Friends don't let friends invest in petroleum companies, and nobody should have those stocks in their retirement accounts– if they want ever to retire.

[May 15, 2020] NATO v. Nord Stream 2 caucus99percent

May 15, 2020 | caucus99percent.com

NATO v. Nord Stream 2

gjohnsit on Thu, 05/14/2020 - 3:54pm After a five month delay, Russia is ready to complete the Nord Stream 2 pipeline .

The Nord Stream 2 pipeline, built to increase the flow of Russian gas into Europe's biggest economy, was thwarted five months ago after U.S. President Donald Trump imposed sanctions that forced workers to retreat. Now, after a three-month voyage circumnavigating the globe, the Akademik Cherskiy, the Russian pipe-laying vessel that's a prime candidate to finish the project, has anchored off the German port where the remaining pipeline sections are waiting to be installed...
Satellite images captured by Planet Labs inc. on May 10 show that sections of pipeline have been moved to a jetty equipped with a crane for loading. Ship-tracking data shows that a dredging vessel operated by a Nord Stream 2 contractor, as well as a Russian pipe-laying-crane ship are also in the vicinity and that the Akademik Cherskiy had moved as of Wednesday next to the jetty loaded with pipes.

In order to complete the final 100-mile stretch of Nord Stream 2, Russia effectively needs to use its own vessels due to U.S. sanctions.
The U.S. still thinks that it can stop Gazprom from finishing the pipeline, but that's insane.

Tens of billions of dollars, along with Putin's reputation as a savvy geopolitical chess master, have been invested in the pipeline project. However, Moscow is now running out of viable options. The only move left is to proceed in defiance of sanctions that will adversely affect many in the higher echelons of the Russian establishment.

This is checkmate.

Yes, this is checkmate...for Putin.
After investing billions of dollars, Gazprom would go bust if they don't finish this pipeline. So do you really think that more U.S. sanctions will give them even a moment's pause?
Sanctions are pointless now.

The question here is, why was this pipeline such a big deal?
To give you an idea, consider the recently completed Turkstream pipeline .
The Turkstream pipeline network isn't even fully integrated yet, and it's already having an impact. Who it's impacting is the key.

Although Ukraine has not been importing any Russian gas for its domestic needs since November 2015, it has signed a five-year transit contract with Gazprom for a minimum 65bcm in 2020 and 40bcm/year from 2021.

However, transit volumes have fallen 47% year on year in the first four months of 2020, amounting to 15.5bcm. The steep drop has been linked to European oversupply and low demand, but also to the lack of transit to the Balkan region after Russian exports to Turkey, Bulgaria and Greece were diverted to the new TurkStream pipeline from January 2020.

"Our transmission system can transit 110bcm of gas [annually] but this year we expect only 50-55bcm of transit," Makogon added, pointing out that volumes would drop even lower if Russia commissions Nord Stream 2 , a 55bcm/year subsea pipeline designed to link Russia directly to Germany via the Baltic Sea.

Ukraine stands to lose $3 Billion a year in transit fees from Russia once Nord Stream 2 is completed this year. This will devastate Ukraine's budget and economy.
Before you feel any sympathy for Ukraine, consider the situation that Ukraine put Russia in.

Ukraine's NATO membership ambitions were written into the Ukrainian Constitution in February 2019 via an amendment that also confirmed the goal of eventually joining the European Union.

NATO integration has remained official Ukrainian policy following the April 2019 election of President Zelenskyy. In early 2020, the country was said to be on track to secure NATO Enhanced Opportunity Partner status later in the year if the pace of reforms was maintained.

NATO's mission continues to be "destroy Russia". So you can see why Russia would feel the need to, at the very least, not help fund an enemy nation.
Plus the potential consequences of Ukraine entering NATO are terrible.

There are ongoing concerns that membership would allow Ukraine to immediately invoke Article 5 of the NATO treaty, the stipulation that an armed attack against one member state is an attack against them all.

Fortunately, the new Ukraine government of President Zelensky doesn't appear nearly so eager for a military confrontation with Russia. Plus public support for joining NATO is dropping.

If I was to make a prediction, I would say that NATO was about to experience a political setback.

[May 10, 2020] MMT and COVID-19

May 10, 2020 | www.moonofalabama.org

financial matters , May 9 2020 22:43 utc | 34

The Fed is just following the Congressional mandate of supporting the people who fund our political system.

It should be clear that the stock market doesn't care about Main Street when you see it still going up with massive levels of unemployment.

MMT states that the Fed can create these funds that are handed out to business by the trillions but that is not what MMT 'policy' would want.

Most MMT people are actually against handouts to people in the form of a basic guaranteed income.

A major cornerstone of MMT policy though is a Job Guarantee. In times like these they would very much like to see employment supported by these government funds. Not only the basic job pool of a minimum wage job but also supporting more highly paid skilled employment such as supervising infrastructure projects etc.

MMT is more concerned with resources than money per se. It doesn't help to have money if people aren't making stuff, providing food and services etc.

[May 05, 2020] The oil business in America is going to take a very long time to recover.

May 05, 2020 | turcopolier.typepad.com

Oilman2 , 04 May 2020 at 01:54 PM

Colonel, you are NOT wrong. The oil business in America is going to take a very long time to recover. There are complete shutterings of businesses, bankruptcies and more - all while we were in the middle of a downturn. Personally, I just folded up my tent because my my active client list went from 21 to zero over this last month (and that includes intl clients).

As the number one buyer of US steel, the oilpatch represents much more than people realize. We have also been the number one buyer of many other items - where sales have disappeared as company quietly and reluctantly face the reality of the current induced glut.

I'm being forced to change livelihoods - interesting for me, as I am short of the age to get my SS check and too old to employ by most corporate masters....

[May 05, 2020] German Regulator Plans to Deny Nord Stream 2 Waiver from New Gas Directive

May 05, 2020 | sputniknews.com

javascript:void(0)

Handelsblatt newspaper reported, citing the draft decision of the Federal Network Agency of Germany (BNA), that the BNA intends to reject an application filed by Nord Stream 2 for an exemption of the pipeline project from the requirements of the updated EU gas directive.

The agency announced in mid-January that it had accepted applications from the Nord Stream 1 and Nord Stream 2 operators to exempt the gas pipelines from the requirements of the EU gas directive. According to Handelsblatt, the agency earlier on Friday sent a draft decision to the parties involved in the process. The newspaper added that the BNA will accept replies from them until 8 May, after which it will "promptly" make a final decision .

The reason for the rejection of the Nord Stream 2 application was the fact that in order to exempt the gas pipeline from the updated directive, the pipeline must have been completed before May 2019. Nord Stream 2 insisted that it was necessary to not proceed from the "construction" point of this requirement, but to take into account the fact that "billions of investments had already been made in accordance with the previous legal regime by the time the new directives of the domestic gas market came into force".

The spokesman for Nord Stream 2, Jens Mueller, said in January that the project meets all the requirements for its exemption from the rules of the updated EU gas directive in Germany and that this also applies to the completion date of the project.

[May 03, 2020] US oil consumption down 7 million barrels per day between gasoline, jet fuel and distillate

May 03, 2020 | www.moonofalabama.org

c1ue , May 3 2020 16:36 utc | 30

Wolf street: US oil consumption down 7 million barrels per day between gasoline, jet fuel and distillate EIA graph via Wolf Street

[May 03, 2020] Chevron, Exxon- the top two U.S. producers just announced their plan for combined global shut-ins of 800,000 barrels per day

May 03, 2020 | www.moonofalabama.org

Likklemore , May 1 2020 20:43 utc | 83

Chevron, Exxon- the top two U.S. producers just announced their plan for combined global shut-ins of 800,000 barrels per day in response to plunging crude prices and fuel demand.

Both companies on Friday outlined deep cuts in investments in the Permian shale basin, the top U.S. oilfield where growth in recent years made America the world's top oil producer and a net exporter for the first time in decades. They each announced global shut-ins of up to 400,000 barrels per day (bpd) this quarter due to lockdowns to fight the coronavirus pandemic.
Exxon and Chevron have been rapidly sidelining Permian drilling equipment since the market started crashing in March. U.S. crude prices have plunged nearly 70% this year, and traded in negative territory on April 20 for the first time ever.[;]

The shale oil sector bankruptcies. Wells Fargo has a tale to tell.

Sitting inside the credit-resolution group, where Wells Fargo handles struggling borrowers, the team includes many bankers who previously worked with the same oil and gas producers in its investment bank.

They work alongside bankruptcy specialists who have been reassigned to focus exclusively on energy to help Wells Fargo wade through the expected flood of restructurings.

"It's a bloodbath," said one person with knowledge of the bank's oil and gas portfolio, who was not authorized to speak publicly.[.]

Wells Fargo and JPMorgan Chase & Co (JPM.N) are considered to be the two largest lenders to U.S. energy companies. Citigroup Inc (C.N) had the largest energy loan book of any U.S. bank at the end of 2019 because of its international business.[.]

As of the end of March, Wells Fargo had $14.3 billion of oil and gas loans outstanding, according to filings.[.]

Calling Mr. Powell on the red phone please. The president is on Twitter. The CODE: Print.

[May 02, 2020] Special Report Trump told Saudis Cut oil supply or lose U.S. military support - sources

May 02, 2020 | www.msn.com

WASHINGTON/LONDON/DUBAI - As the United States pressed Saudi Arabia to end its oil price war with Russia, President Donald Trump gave Saudi leaders an ultimatum.

In an April 2 phone call, Trump told Saudi Crown Prince Mohammed bin Salman that unless the Organization of the Petroleum Exporting Countries (OPEC) started cutting oil production, he would be powerless to stop lawmakers from passing legislation to withdraw U.S. troops from the kingdom, four sources familiar with the matter told Reuters.

The threat to upend a 75-year strategic alliance, which has not been previously reported, was central to the U.S. pressure campaign that led to a landmark global deal to slash oil supply as demand collapsed in the coronavirus pandemic - scoring a diplomatic victory for the White House.

Trump delivered the message to the crown prince 10 days before the announcement of production cuts. The kingdom's de facto leader was so taken aback by the threat that he ordered his aides out of the room so he could continue the discussion in private, according to a U.S. source who was briefed on the discussion by senior administration officials.

The effort illustrated Trump's strong desire to protect the U.S. oil industry from a historic price meltdown as governments shut down economies worldwide to fight the virus. It also reflected a telling reversal of Trump's longstanding criticism of the oil cartel, which he has blasted for raising energy costs for Americans with supply cuts that usually lead to higher gasoline prices. Now, Trump was asking OPEC to slash output.

A senior U.S. official told Reuters that the administration notified Saudi leaders that, without production cuts, "there would be no way to stop the U.S. Congress from imposing restrictions that could lead to a withdrawal of U.S. forces." The official summed up the argument, made through various diplomatic channels, as telling Saudi leaders: "We are defending your industry while you're destroying ours."

Reuters asked Trump about the talks in an interview Wednesday evening at the White House, at which the president addressed a range of topics involving the pandemic. Asked if he told the crown prince that the U.S. might pull forces out of Saudi Arabia, Trump said, "I didn't have to tell him."

"I thought he and President Putin, Vladimir Putin, were very reasonable," Trump said. "They knew they had a problem, and then this happened."

Asked what he told the Crown Prince Mohammed, Trump said: "They were having a hard time making a deal. And I met telephonically with him, and we were able to reach a deal" for production cuts, Trump said.

[May 02, 2020] MBS's doomed attempt to play with the big boys over oil,

May 02, 2020 | thenewkremlinstooge.wordpress.com

Cortes April 26, 2020 at 2:55 pm

After riffing on the theme of MBS's doomed attempt to play with the big boys over oil, Andrei Martyanov goes on to suggest a possible way for superpowers to cooperate:

https://smoothiex12.blogspot.com/2020/04/one-doesnt-need-to-be.html

The intersection of great power Noblesse Oblige and The Final Frontier?

[May 02, 2020] Gazprom ramps up its export capacity to China via the Power of Siberia line, plans to add a second compressor station this year

May 02, 2020 | thenewkremlinstooge.wordpress.com

Mark Chapman April 27, 2020 at 3:59 pm

Gazprom ramps up its export capacity to China via the Power of Siberia line, plans to add a second compressor station this year. Drill rigs at the Kovykta Field are expected to go from 7 this year to 18 next year, and the extraction flows added to the Power of Siberia capacity.

https://www.spglobal.com/platts/en/market-insights/latest-news/natural-gas/041420-russias-gazprom-eyes-capacity-increase-on-china-gas-export-link

[May 02, 2020] The servants of Washington in the EU will try to extract every last concession they can before the pipeline is completed, but they absolutely want it and will back down if they think Russia would actually give up on completing it

May 02, 2020 | thenewkremlinstooge.wordpress.com

Mark Chapman May 1, 2020 at 1:41 pm

The servants of Washington in the EU will try to extract every last concession they can before the pipeline is completed, but they absolutely want it and will back down if they think Russia would actually give up on completing it. Their strategy all along was to let Russia build it, but ensure its operation fell under the control of EU regulators so that they could get plenty of gas when they needed it, but use it as a negotiating tool when they had lots in reserve, start complaining about the price and try to get more pipeline volume for competitors, variations on the ideal where the Russians would absorb all the costs of building it, but would yield all advantages of the completed pipeline to the EU. Right up until the moment the first volumes go through the pipeline, the EU is going to act as a spoiler on a project they absolutely want to be completed.

If Russia said, all right then, fuck you; Get your gas from the Americans, if that's what you want, two things would happen – one, The Donald would come in his pants, and two, Brussels would go wait wait wait wait hold on. No need to be hasty.

But they think they are in a super-strong position now, because their American pals stopped it when it was just a whisker away from completion, and gave them breathing space to renegotiate a deal that was already set, and make up a bunch of new rules using that was then, this is now for a rationale. I hope Russia does the same to them once it's complete, and says yeah, you THOUGHT that was the price, but that was then, and charges them just enough under the American price that dropping them in favour of the Americans is not feasible, but still much more than they thought they would pay.

karl1haushofer May 1, 2020 at 12:40 pm
Another setback for Nord Stream 2: https://sputniknews.com/europe/202005011079159594-german-regulator-plans-to-deny-nord-stream-2-waiver-from-new-gas-directive -- reports/

[May 02, 2020] It'd be nice to think Russia is going to complete Nord Stream II right away just to spite Washington and its endless meddling, but as we have discussed before, there really is no hurry

May 02, 2020 | thenewkremlinstooge.wordpress.com

Mark Chapman April 27, 2020 at 9:27 am

That's funny; I just checked her position last night, and it said she was bound for Nakhodka, due early in July.

Yeah; making 10 knots for Nakhodka, due there July 1st. That's where she left from originally, but so far as I could make out there is nothing in Nakhodka which might lead to the belief she will be there undergoing updates and tweaks for her employment finishing Nord Stream II.

https://www.vesselfinder.com/vessels/AKADEMIK-CHERSKIY-IMO-8770261-MMSI-273399760

It'd be nice to think Russia is going to complete Nord Stream II right away just to spite Washington and its endless meddling, but as we have discussed before, there really is no hurry. Russia is locked into a new medium-term transit contract with Ukraine, the Russian state has reduced income available due to the oil-price mess and low demand owing to the 'pandemic', and would be forging ahead with work that would cost it just as much money to do now as it would later, when it likely will have more cash available. I've read the AKADEMIK CHERKSIY needs a short refit and a little updating to ready her for Nord Stream work, since being principal pipelayer for that line possibly requires some different equipment or at least some adjustments. It likely would require crewing by some more specialists, as well, and there's no reason to believe they have been aboard all this time. I suppose they could meet the ship in Nakhodka, but there is nothing at this point to suggest that.

The only thing that argues for Russia pressing ahead now is the weather, which should be entering the season when it would be best for that kind of work. Otherwise, nothing suggests Russia is in a tearing rush to get on with it. Certainly the partners have not been told anything, and they don't appear to be unduly alarmed at the lack of immediate progress.

https://neftegaz.ru/en/news/companies/523680-no-plan-b-presented-to-austria-s-omv-on-nord-stream-2-gas-link-ceo/

[Apr 28, 2020] Hudson gives him the primary credit for providing the foundation for Modern Monetary Theory

Apr 28, 2020 | www.moonofalabama.org

karlof1 , Apr 27 2020 0:25 utc | 53

Some will know who Hyman Minsky was, some won't. Hudson gives him the primary credit for providing the foundation for Modern Monetary Theory, and he gets praise from Keen, Wolfe and many others too. On the occasion of his 100th birthday, here's a long essay that seeks the following:

"But the question still stands: Was Minsky in fact a communist? Of course not. But, a century after his birth, it is useful to clarify often neglected aspects of his intellectual biography."

Since Minsky's referenced so often by Hudson particularly, I think this piece will be helpful for those of us following the serious economic issues now in play. I'd reserve an hour for a critical read.

[Apr 24, 2020] The Use and Abuse of MMT

Apr 24, 2020 | www.moonofalabama.org

karlof1 , Apr 23 2020 18:19 utc | 35

Musburger @3--

I highly suggest you read "The Use and Abuse of MMT" by Michael Hudson, with Dirk Bezemer, Steve Keen and T.Sabri Öncü.


Leser , Apr 23 2020 18:55 utc | 41

MMT is brilliant and it's really embarrassing that it took The Deadliest Pandemic™ for some folks to come round to it. We all collectively print an extra bit of money - and give it to each other!

There are historic examples documented of successful applications of the concept, look no further than to the earnest witness of Baron Munchausen pulling himself out of a swamp by his own hair. https://en.wikipedia.org/wiki/Baron_Munchausen

karlof1 , Apr 23 2020 19:22 utc | 48
Hudson also has another video posted to his site , "An interview on the Radical Imagination: Imagining How Financial Parasites and Debt Bondage Are Destroying Us," which is based on his book Killing the Host . It's a recent video interview that's @50 minutes long prefaced by the Occupy Wall Street Anthem and introduction.

One aspect of MMT that must be made clear is it advocates the use of public banking or the Treasury to pump capital in the form of money into the productive economy , not the parasitic economy the Fed supports--the difference is huge and vital. For MMT to succeed within the Outlaw US Empire, the Fed must be liquidated. For more, please read the essay I linked to @35.

suzan , Apr 23 2020 19:56 utc | 50
Musburger @ 3 : "What do you folks think about MMT?"


Re-inflation of a depressed economy can be achieved by government spending into:
public investment
employment
income transfers
income support
labour
tangible capital
infrastructure.

This is "good" MMT.

"Bad" MMT, or fake MMT, is government spending into WallStreet, handouts to:
the banks
large corporations
speculators
bondholders.

The March 2020 CAREs Act is bad MMT as was the 2008 bailout. This one is same as that one but "on steroids."
Both bailouts further empower(ed):
rentiers (the landlord class),
monopolies,
the financial creditor class
and cast most of the rest of the US population into reduced circumstances, poverty and/or debt servitude. They burden the working economy with overhead and debt that cannot be paid. Bad MMT.

While the MMT school has a healthy diversity within it, USG applications have flipped the theory on its head, says Hudson. See below for link.

(Remember Cheney's, "We are all Keynesians now"? )

Worse, Bad MMT does more than simply bailout the top 1%. It also increases the parasitic power of financialization on the real economy. As we have repeatedly seen, now most dramatically, the financial sector is incapable of planning for anything other than its own fictional valorization.

Libertarians' freedom from government dogma excoriates against centralized planning and yet, ironically, the end result of their "government is bad" path forced upon us in USA led directly to central 'planning' by default -- by parasitic-on-the real-economy privatized finance sector, a form of fascism not democracy or liberty.

USA'ns public health crisis occurs as states, which are required by law to not run deficits, face huge costs that will force more austerity on their populations. More callous, they are forced to compete against each other as they purchase essential equipment and technology (from for-profit privateers) to deal with the highly infectious novel virus, and the fed indemnifies the privateer mask makers!!!

What is the root of inequality today? Debt and the monopolization of real estate.
What are solutions?
Wipe out and roll back debt overhead on production and consumption.
This is "good" MMT.
Bad MMT furthers the debt burden on society, concentrates monopolization and cements in central planning by parasitic private finance sector.


https://michael-hudson.com/2020/04/covid-plan-more-capital-gains-not-profits/

[Apr 24, 2020] They can top off the national reserves on the cheap and profit when their war sends prices up again

Apr 24, 2020 | www.moonofalabama.org

Zengine3 , Apr 23 2020 18:03 utc | 30

If ever there was a time, it's now. Oil has bottomed out. They can top off the national reserves on the cheap and profit when their war sends prices up again. Maybe it's why The Orange Goober has ordered the Navy to "shoot down" any Iranian boats that harass/approach/rudely gesture at US ships.

Musburger , Apr 23 2020 18:08 utc | 31

@30

Scott Ritter thinks this is quite possible.
https://www.rt.com/op-ed/486598-trump-iran-war-oil/

Tuyzentfloot , Apr 23 2020 18:23 utc | 36
Ritter's article worries me. There is now a sales argument for war: "don't worry about oil prices going sky high, Iran can't use that weapon against us now!".
LOL , Apr 23 2020 18:38 utc | 38
You over excitable little Iran war-monkeys really should take time out of your busy war-monkey daily-schedules to learn something about the topography of Iran and it's defensive and offensive military capabilities.

It would certainly save everyone else from having to listen to you being wrong yet again.

karlof1 , Apr 23 2020 18:53 utc | 39
dh @34--

You're on the right track. There's a huge supply glut as all forms of storage are mostly filled as proven by the negative WTI pricing. Global demand is still being destroyed. War in the Persian Gulf region will further destroy demand; and since very little oil's being shipped from there, the supply glut won't be used up anytime soon--certainly not quickly enough to see a sharp rebound in oil price. The crucial point is domestic US refineries have cut back their runs as their margins are even thinner than before, plus demand destruction is still occurring, thus the domestic storage glut. The wife and I jested last night if we only had a rail spur we could order up a couple of tank cars full of unleaded at the current very distressed price and be set for a longtime.

As The Saker notes in his latest , Trump must make the voting public look everywhere except at him and Congress, the bellowing at Iran being part of that entire theatre. Yes, a mistake could have very negative consequences for the USN and all US assets in the region as well as Occupied Palestine--the overall underlying dynamic hasn't changed since Trump broke the Iran Nuclear Treaty. Too add further insult to Trump and Pompeo, Iran's doing a much better job at containing COVID-19 than the Outlaw US Empire :

"The US pandemic death toll is this week heading above 50,000 compared with Iran's figure of 5,300. Considering the respective population numbers of 330 and 80 million that suggests Iran is doing a much better job at containing the virus. On a per-capita basis, according to publicly available data, Iran's mortality rate is less than half that of the US.

"This is while the US has sanctioned Iran to the hilt. American sanctions – arguably illegal under international law – have hit Iran's ability to import medical supplies to cope with COVID-19 and other fatal diseases, yet Iran through its own resources is evidently managing the crisis much better than the US."

As with the Tar Baby, the more wrestling the Outlaw US Empire does the weaker it gets.

Zengine3 , Apr 23 2020 18:55 utc | 40
@LOLtroll

They can't invade. That's your own moronic straw-man. And yes, it would further cut supply and prices would go up. The current bottom is due to overproduction but so long as civilization cranks along the oil gets used eventually.

[Apr 23, 2020] What an Oil ETF Has to Do With Plunging Oil Prices

Apr 23, 2020 | www.bloomberg.com

The oil market is in disarray, a result of a coronavirus-led collapse in demand, surplus supply following a price war and a shortage of storage. Yet there have been plenty of people willing to bet on a rebound in basement-level crude prices, and for many retail investors the vehicle of choice has been an exchange-traded fund. However, those wagers via the biggest American ETF -– the U.S. Oil Fund, or USO -– have contributed to market mayhem and helped push crude prices below zero.

1. What did the fund do?

It grew so huge so quickly that it became a sizable player in the market for West Texas Intermediate, the U.S. benchmark for crude. Investors piled in during March and April, convinced that oil prices that had been falling -- pushed down by a price war between Saudi Arabia and Russia that boosted production just as demand was slashed by pandemic-driven lockdowns -- would eventually recover once economies reopened. At different stages, the fund held about a quarter of all May and June contracts for WTI.

2. What's the problem?

Unlike shares that can be held as long as an investor chooses, oil futures have finite terms and are agreements to buy or sell a physical product. The May futures contract, for example, expired on April 21. Any holder who had not sold by then would need to take delivery of the oil -- 1,000 U.S. barrels, or 42,000 gallons, for each contract.

3. Where does USO come in?

As a favored investment vehicle for many bullish speculators , the number of shares in the fund ballooned from 145 million at the end of February to more than 1.4 billion by mid-April. Its outsized portion of the WTI market -– on paper -- came at a time when demand for physical oil was cratering and storage space was becoming harder and more expensive to find.

4. What does that have to do with the price plunge?

For years, USO was mandated to invest in the most-active WTI contract and to roll it over to the following contract. (Rolling over means selling it and, often simultaneously, buying the following month's contract.) The flood of money into May contracts earlier had pushed oil prices up; as USO sold its May futures as part of the rollover and bought June and July contracts, prices fell for May and rose for the following months, opening an unusually wide spread. Only a handful of traders remained in the May contract on Monday, when prices plunged well below zero .

5. What's the worry now?

With USO holding a significant level of June contracts, there are concerns that prices will go negative again and that the whole process might repeat -- or might be worse, if the April 20th debacle scares off more investors. To try to mitigate the prospect, USO, which lost 37% of its value in the first three weeks of April, has moved to allocate some holdings to contracts expiring later in the year, since those prices tend to be less volatile. But the fund is adding to pressure on oil prices in other ways.


6. How is that?

https://buy.tinypass.com/checkout/template/show?displayMode=inline&containerSelector=.inline-newsletter&templateId=OTK9NE7VLZ7E&offerId=fakeOfferId&showCloseButton=false&trackingId=%7Bjcx%7DH4sIAAAAAAAAAFWQXU_CMBSG_0uvKWm7fnKHyHAoCony4V3tuq1xbHMdYGL873ZENDQnTXqe8755e76AdikYgeQuvvVxUrVzMACNzu3a2VPSE4IIgohCQvqiuL-l5LBkq-0mmdX5ZDfRYzSH5M2ITGQWY0GJxlFGLUc2jbh8E5gpEoztZ2NbZytjz9bTLZ7coqWKX15uruj005pD5-rqPIYlksxLVIQc4RCf0o666P1DHvfvLGcpq8v6Sj82f2Jf1Kdnu29K3dnZckmTRfS0iNEMR0FRaH9hYNS1BzsA3e_7LH56vlePU7F-eBVT8M_WunW66vqR6lCWA2D0vtEur_ylcXTenTk4wusFRgIiCZUg8EgTv9ssHucn8epWRQPDN6MIccqyTEqDjRIpyhQzUrIUc5KGBK4JllwOsVJDgvhQytA8eNuOc1t1gaUn0wftSjDCTAquOBL0-wc_ZnWZ5gEAAA&experienceId=EX1CD0P9FUUB&tbc=%7Bjzx%7Dt_3qvTkEkvt3AGEeiiNNgAAU00osQjCe0eF96F_9vcluNhIruyJ5U_hxmYIoR_aQC3rHe7849TeV2Z2AEouDIc2XbqmfsITfbdl6zvDN4VT5RP0yLhL9h60mm8w09XJtjylU0Z664w9lha1BgkmqDg&iframeId=offer-0-ScnYD&url=https%3A%2F%2Fwww.bloomberg.com%2Fnews%2Farticles%2F2020-04-22%2Fwhat-an-oil-etf-has-to-do-with-plunging-oil-prices-quicktake%3Fsrnd%3Dpremium&parentDualScreenLeft=1536&parentDualScreenTop=0&parentWidth=1536&parentHeight=762&parentOuterHeight=864&aid=IHFDsFInrJ&contentSection=content-article&pageViewId=2020-04-22-22-41-22-886-l5QXWIGogCYCaA0J-2bc7f7fe11742a13f4e60ed368b71592&visitId=v-2020-04-22-22-37-08-972-v4IsYWMNJw7ZiQhp-808330645ff88c1c97d0f95c885d162d&userProvider=publisher_user_ref&userToken=&customCookies=%7B%7D&hasLoginRequiredCallback=false&width=170&_qh=46cb607e8b

There was so much demand for USO that it exhausted the number of shares it was allowed to issue and, on April 20, asked regulators for permission to register an additional 4 billion, more than double the existing number. Until the new shares are cleared for issuance, the ETF will not purchase more futures contracts, according to analysts, potentially adding to pressure on crude prices. Without new oil contracts, the fund will also become untethered from the prices it's supposed to track.

7. Anything else?


ETF prices are kept in sync with the value of their holdings, their so-called NAV (net-asset value), through the creation and redemption of shares. So-called "authorized participants" for instance sell an ETF when it's rising and buy the underlying security to pocket a quick profit, keeping the fund's price and NAV in lockstep in the process. However, with the authorized participants no longer able to create shares, that's disrupted demand for the underlying contracts.

8. How about other ETFs?

USO is hardly the only exchange-traded fund to be hammered by the swings in oil futures; the effects were felt around the globe. The Samsung S&P GSCI Crude Oil ER Futures ETF, whose holdings of the derivatives slumped 26% on Tuesday to $378 million , saw its traded units lose half their value for a time Wednesday. Closing down 46% at HK $1.79 , the ETF had its biggest drop and lowest finish since trading began in May 2016. Credit Suisse Group AG told investors in a leveraged exchange-traded note that tracks the price of oil they probably won't get any money back after the value of the note dropped below zero.

The Reference Shelf

[Apr 22, 2020] The Neoliberal Collapse by Miatta Fahnbulleh

Notable quotes:
"... To boost sluggish wages, governments should use all the levers of the state -- corporate taxes, wage regulations, and subsidies -- to incentivize or force businesses to pay their workers fairly. ..."
"... A new social contract with citizens should extend beyond the workplace, however, with the ultimate goal being the establishment of a "well-being state" that would provide everyone with the basics necessary to maintain a decent quality of life. This would require increased investment in the staples of the welfare state, which have been weakened under neoliberal governments, such as guaranteed universal access to high-quality health care and education. But the new approach would go beyond those familiar elements by offering universal access to childcare, public transportation, and minimum income protection -- that is, a floor below which no one's income can fall irrespective of whether a person is employed. These expansions of the welfare state should be funded through progressive taxation that would raise the tax burden on those who can most afford it, by increasing the top rates for income and corporate taxes and by taxing wealth, such as capital gains, at the same level as income. ..."
"... Top-down policies, however, will not be sufficient to spur the kind of transformation that must take place in developed countries in order to truly shake off neoliberal stagnation and decline. ..."
Feb 28, 2020 | www.foreignaffairs.com

Capitalism is in crisis. Until recently, that conviction was confined to the left. Today, however, it has gained traction across the political spectrum in advanced economies. Economists, policymakers, and ordinary people have increasingly come to see that neoliberalism -- a creed built on faith in free markets, deregulation, and small government, and that has dominated societies for the last 40 years -- has reached its limit.

This crisis has been long in the making but was brought into sharp focus in the aftermath of the global financial meltdown of 2007–8 and the global recession that followed it. In the developed countries of the Organization for Economic Cooperation and Development, economic growth over the last decade ceased to benefit most people. At the end of 2017, nominal wage growth among OECD members was only half what it was a decade earlier . More than one in three people in the OECD countries are estimated to be economically vulnerable, meaning they lack the means to maintain a living standard at or above the poverty level for at least three months. Meanwhile, in those countries, income inequality is higher than at any time in the past half century: the richest ten percent hold almost half of total wealth, and the bottom 40 percent hold just three percent.

Defenders of neoliberalism frequently point out that although decades of wage stagnation and wealth concentration have led to ballooning inequality in developed countries, the same time period has seen a dramatic increase in prosperity on a global scale. Over a billion people, they argue, have been lifted out of extreme poverty owing to technological advances, investments, and prosperity that were made possible by the spread of free markets. However, this argument fails to account for the critical role that governments have played in that change through the provision of education, health care, and employment. Such state interventions have arguably been as decisive as the invisible hand of the market in lifting living standards. This defense also ignores the fact that despite many gains in prosperity, massive wealth concentration and staggering inequality continue to shape the global economy: less than one percent of the world's population owns 46 percent of the world's wealth, and the poorest 70 percent own less than three percent.

Inequality has always been a feature of capitalist societies, and people have been willing to tolerate it as long as they felt that their quality of life was improving, their opportunities were expanding, and their children could expect to do even better than them -- that is, as long as all the proverbial boats were rising. When that stopped happening in recent decades, it fed a growing perception that the system is unfair and is not working in the interest of the majority of people. Pent-up frustration has led to a clamor for change -- including a new receptivity to socialist ideals that have long been sidelined or even considered taboo. In the United Kingdom, for example, 53 percent of people recently polled said they believed that the economy has become more unfair over the last decade. Eighty-three percent said they felt that the economy worked well for the wealthy, but only ten percent said that it worked for people born into poor families. And ideas such as restoring public ownership of the essential utilities that were privatized in recent decades, such as railways, electrical services, and water companies, are gaining traction , with over 75 percent of people polled supporting such a step. Meanwhile, in the United States, a 2018 Gallup poll found that among Americans aged 18 to 29, socialism had a higher approval rating (51 percent) than capitalism (45 percent). "This represents a 12-point decline in young adults' positive views of capitalism in just the past two years," Gallup noted, "and a marked shift since 2010, when 68 percent viewed it positively."

Neoliberalism is not just failing people: it's failing the earth.

A mere revival of the social democratic agenda of the postwar era, however, would not be sufficient. For one thing, that period's emphasis on central authority and state ownership runs counter to the widespread demand in developed economies for more local and collective control of resources. Perhaps more important, however, is the need to confront a challenge that postwar social democratic models did not have to take into account: the threat posed by climate change and catastrophic environmental degradation. After all, neoliberalism is not just failing people: it's failing the earth. Owing in no small part to the massive levels of consumption and fossil fuel use required by an economic model that prioritizes growth above all else, climate change now imperils the future of human existence. Last year, the Intergovernmental Panel on Climate Change concluded that the world has barely over a decade to halve carbon emissions if humanity is to have any chance of limiting the increase in average global temperatures to 1.5 degrees Celsius above preindustrial levels -- a point past which the damage to human and natural systems would be devastating and largely irreversible.

Just like the economic breakdown that has chipped away at people's quality of life, environmental decline is rooted in the crisis of capitalism. And both challenges can be addressed by embracing an alternative economic model, one that responds to a hunger for genuine reform by adapting socialist ideals to the contemporary era. A new economic model must prioritize a thriving and healthy natural environment. It must deliver improvements in well-being and guarantee all citizens a decent quality of life. It must be built by businesses that plan for the long term, seek to serve a social purpose beyond just increasing profits and shareholder value, and commit to giving their workers a voice. The new model would empower people and give them a larger stake in the economy by establishing common ownership of public goods and essential infrastructure and by encouraging the cooperative and joint ownership of private, locally administered enterprises. This calls for an active but decentralized state that would devolve power to the level of local communities and enable people to act collectively to improve their lives.

A NEW SOCIAL CONTRACT

The United Kingdom provides an interesting case study of how the crisis of capitalism is playing out. There, as in the United States, center-right and center-left governments alike have spent decades following a neoliberal recipe of tax cuts, reduced social welfare benefits, and deregulation -- far more enthusiastically than most other European countries, which have stronger social democratic traditions and institutions. As a result, the neoliberal breakdown has been particularly painful in the United Kingdom, where people are on average poorer today than they were in 2008, adjusting for inflation. British household debt is higher than it was before the financial crisis, as more people borrow just to get by, and a staggering 14.3 million people live in poverty .

For many British people, the 2016 referendum on whether to leave the European Union served as an outlet for their discontent and anger at a failing system. The vote in favor of Brexit was a clear message from communities under pressure that the status quo needed to change. More than three years on, this disquiet continues to grow, opening up space for more radical changes in domestic policy -- as witnessed by the Labour Party's recent embrace of ideas that would once have been considered too risky, such as the renationalization of utilities and the establishment of a state-run pharmaceutical company.

But even in the United Kingdom, political platforms have lagged behind public demands for significant change. What's needed in developed economies across the world is not tinkering around the edges but a full-scale reformation of the relationship among the state, the economy, and local communities. The first step would be a global Green New Deal: a massive mobilization of resources to decarbonize and at the same time create millions of jobs and lift living standards. The goal should be net-zero carbon emissions within ten to 15 years, which will require governments to make significant investments in green infrastructure, such as onshore and offshore wind farms and smart energy grids; in new technologies such as carbon capture and storage; and in training workers to develop the skills they will need for the jobs a green economy will create, such as installing insulation, maintaining renewable energy systems, and reconditioning and refurbishing used goods.

Policymakers will also need to create incentives for companies to reduce their carbon use by replacing subsidies for fossil fuels with tax breaks for the use of renewables. New regulations, such as zero-carbon building standards or quotas for the use of fossil fuel energy, would help bend markets that have been slow to act in response to the climate crisis. And central banks will need to encourage financial markets to divest from fossil fuels through tougher credit guidance policies, including capping the amount of credit that can be used to support investment in carbon-intensive activities and setting quotas for the amount of finance that should flow to low-carbon investment.

Anger at a failing system has opened up space for radical changes in domestic policy.

To boost sluggish wages, governments should use all the levers of the state -- corporate taxes, wage regulations, and subsidies -- to incentivize or force businesses to pay their workers fairly. A just share of the rewards from their labor should come not only in the form of higher wages but also in reductions in working time, with a move to an average four-day workweek, which governments can achieve by increasing statutory holidays. At the same time, the power of workers to protect their interests should be strengthened by requiring all companies to automatically recognize labor unions and by giving workers stronger legal rights to organize, bargain collectively, and strike. Workers must also gain greater ownership of the organizations that employ them. Governments ought to mandate employee ownership funds, which transfer a share of a firm's profits, in the form of equity, into a trust that is owned by workers collectively. Through the trust, workers would receive shares in the company, just like any shareholder. Those shares would come with voting rights, enabling employees to become the dominant shareholders in every enterprise over time, with the power to shape the direction of the businesses where they work. In the United Kingdom, a growing number of companies, including the department store chain John Lewis, the home-entertainment retailer Richer Sounds, and the consulting firm Mott MacDonald, are already reaping the benefits of putting ownership in the hands of workers : higher productivity, better worker retention and engagement, and stronger profits.

A new social contract with citizens should extend beyond the workplace, however, with the ultimate goal being the establishment of a "well-being state" that would provide everyone with the basics necessary to maintain a decent quality of life. This would require increased investment in the staples of the welfare state, which have been weakened under neoliberal governments, such as guaranteed universal access to high-quality health care and education. But the new approach would go beyond those familiar elements by offering universal access to childcare, public transportation, and minimum income protection -- that is, a floor below which no one's income can fall irrespective of whether a person is employed. These expansions of the welfare state should be funded through progressive taxation that would raise the tax burden on those who can most afford it, by increasing the top rates for income and corporate taxes and by taxing wealth, such as capital gains, at the same level as income.

POWER TO THE PEOPLE

Top-down policies, however, will not be sufficient to spur the kind of transformation that must take place in developed countries in order to truly shake off neoliberal stagnation and decline. Those societies also must become more democratic, with power and resources distributed to regional and local governments, closer to the people in the communities they serve. This is one critical way in which such a new economic agenda would differ from more traditional socialism, which tends to favor centralized authority and state ownership. For example, rather than relying on federal or provincial governments for everyday essentials, such as energy, affordable housing, and public transportation, municipalities should establish corporations owned by and accountable to residents to provide these services.

The Basque Country, in Spain, offers one example of what a more democratic economy might look like. There, the Mondragon Corporation , set up in 1956 by graduates of a technical college to provide employment through worker cooperatives, has grown to become one of the ten largest business groups and the fourth-largest employer in Spain, with hundreds of different companies and subsidiaries and over 75,000 workers. The cooperatives operate in a variety of sectors , including banking, consumer goods, and engineering. They are set up not merely to turn a profit but also to achieve a specific social or environmental goal. They are owned and run by the people who work for them rather than by external investors, and their governance structures ensure that members have a stake in the organizations and share in the wealth they create.

Community land trusts in the United Kingdom provide another example. Granby Four Streets, in Liverpool, and the London Community Land Trust, in the Mile End district, provide affordable housing to their local communities by buying land from the private sector and taking it into community ownership. The trust builds affordable homes that it sells or rents to local residents at discounted rates. An asset lock prevents the land from being resold, which guarantees that the homes will remain affordable.

Bottom-up experiments such as these will be critical to the success of a new economic model. For those experiments to flourish, influential political figures who identify with the socialist tradition -- people such as Alexandria Ocasio-Cortez and Bernie Sanders in the United States and Jeremy Corbyn in the United Kingdom -- should use their platforms to draw attention to local-level activists and organizations that are working to create a more democratic economy. Meanwhile, some degree of patience will be in order: it will take time for such new thinking to produce the large-scale changes necessary. But such patience must also have a limit: when it comes to fixing the damage that neoliberalism has done, time is running out.

[Apr 22, 2020] What an Oil ETF Has to Do With Plunging Oil Prices

Apr 22, 2020 | www.bloomberg.com

The oil market is in disarray, a result of a coronavirus-led collapse in demand, surplus supply following a price war and a shortage of storage. Yet there have been plenty of people willing to bet on a rebound in basement-level crude prices, and for many retail investors the vehicle of choice has been an exchange-traded fund. However, those wagers via the biggest American ETF -– the U.S. Oil Fund, or USO -– have contributed to market mayhem and helped push crude prices below zero.

1. What did the fund do?

It grew so huge so quickly that it became a sizable player in the market for West Texas Intermediate, the U.S. benchmark for crude. Investors piled in during March and April, convinced that oil prices that had been falling -- pushed down by a price war between Saudi Arabia and Russia that boosted production just as demand was slashed by pandemic-driven lockdowns -- would eventually recover once economies reopened. At different stages, the fund held about a quarter of all May and June contracts for WTI.

2. What's the problem?

Unlike shares that can be held as long as an investor chooses, oil futures have finite terms and are agreements to buy or sell a physical product. The May futures contract, for example, expired on April 21. Any holder who had not sold by then would need to take delivery of the oil -- 1,000 U.S. barrels, or 42,000 gallons, for each contract.

3. Where does USO come in?

As a favored investment vehicle for many bullish speculators , the number of shares in the fund ballooned from 145 million at the end of February to more than 1.4 billion by mid-April. Its outsized portion of the WTI market -– on paper -- came at a time when demand for physical oil was cratering and storage space was becoming harder and more expensive to find.

4. What does that have to do with the price plunge?

For years, USO was mandated to invest in the most-active WTI contract and to roll it over to the following contract. (Rolling over means selling it and, often simultaneously, buying the following month's contract.) The flood of money into May contracts earlier had pushed oil prices up; as USO sold its May futures as part of the rollover and bought June and July contracts, prices fell for May and rose for the following months, opening an unusually wide spread. Only a handful of traders remained in the May contract on Monday, when prices plunged well below zero .

5. What's the worry now?

With USO holding a significant level of June contracts, there are concerns that prices will go negative again and that the whole process might repeat -- or might be worse, if the April 20th debacle scares off more investors. To try to mitigate the prospect, USO, which lost 37% of its value in the first three weeks of April, has moved to allocate some holdings to contracts expiring later in the year, since those prices tend to be less volatile. But the fund is adding to pressure on oil prices in other ways.


6. How is that?

https://buy.tinypass.com/checkout/template/show?displayMode=inline&containerSelector=.inline-newsletter&templateId=OTK9NE7VLZ7E&offerId=fakeOfferId&showCloseButton=false&trackingId=%7Bjcx%7DH4sIAAAAAAAAAFWQXU_CMBSG_0uvKWm7fnKHyHAoCony4V3tuq1xbHMdYGL873ZENDQnTXqe8755e76AdikYgeQuvvVxUrVzMACNzu3a2VPSE4IIgohCQvqiuL-l5LBkq-0mmdX5ZDfRYzSH5M2ITGQWY0GJxlFGLUc2jbh8E5gpEoztZ2NbZytjz9bTLZ7coqWKX15uruj005pD5-rqPIYlksxLVIQc4RCf0o666P1DHvfvLGcpq8v6Sj82f2Jf1Kdnu29K3dnZckmTRfS0iNEMR0FRaH9hYNS1BzsA3e_7LH56vlePU7F-eBVT8M_WunW66vqR6lCWA2D0vtEur_ylcXTenTk4wusFRgIiCZUg8EgTv9ssHucn8epWRQPDN6MIccqyTEqDjRIpyhQzUrIUc5KGBK4JllwOsVJDgvhQytA8eNuOc1t1gaUn0wftSjDCTAquOBL0-wc_ZnWZ5gEAAA&experienceId=EX1CD0P9FUUB&tbc=%7Bjzx%7Dt_3qvTkEkvt3AGEeiiNNgAAU00osQjCe0eF96F_9vcluNhIruyJ5U_hxmYIoR_aQC3rHe7849TeV2Z2AEouDIc2XbqmfsITfbdl6zvDN4VT5RP0yLhL9h60mm8w09XJtjylU0Z664w9lha1BgkmqDg&iframeId=offer-0-ScnYD&url=https%3A%2F%2Fwww.bloomberg.com%2Fnews%2Farticles%2F2020-04-22%2Fwhat-an-oil-etf-has-to-do-with-plunging-oil-prices-quicktake%3Fsrnd%3Dpremium&parentDualScreenLeft=1536&parentDualScreenTop=0&parentWidth=1536&parentHeight=762&parentOuterHeight=864&aid=IHFDsFInrJ&contentSection=content-article&pageViewId=2020-04-22-22-41-22-886-l5QXWIGogCYCaA0J-2bc7f7fe11742a13f4e60ed368b71592&visitId=v-2020-04-22-22-37-08-972-v4IsYWMNJw7ZiQhp-808330645ff88c1c97d0f95c885d162d&userProvider=publisher_user_ref&userToken=&customCookies=%7B%7D&hasLoginRequiredCallback=false&width=170&_qh=46cb607e8b

There was so much demand for USO that it exhausted the number of shares it was allowed to issue and, on April 20, asked regulators for permission to register an additional 4 billion, more than double the existing number. Until the new shares are cleared for issuance, the ETF will not purchase more futures contracts, according to analysts, potentially adding to pressure on crude prices. Without new oil contracts, the fund will also become untethered from the prices it's supposed to track.

7. Anything else?


ETF prices are kept in sync with the value of their holdings, their so-called NAV (net-asset value), through the creation and redemption of shares. So-called "authorized participants" for instance sell an ETF when it's rising and buy the underlying security to pocket a quick profit, keeping the fund's price and NAV in lockstep in the process. However, with the authorized participants no longer able to create shares, that's disrupted demand for the underlying contracts.

8. How about other ETFs?

USO is hardly the only exchange-traded fund to be hammered by the swings in oil futures; the effects were felt around the globe. The Samsung S&P GSCI Crude Oil ER Futures ETF, whose holdings of the derivatives slumped 26% on Tuesday to $378 million , saw its traded units lose half their value for a time Wednesday. Closing down 46% at HK $1.79 , the ETF had its biggest drop and lowest finish since trading began in May 2016. Credit Suisse Group AG told investors in a leveraged exchange-traded note that tracks the price of oil they probably won't get any money back after the value of the note dropped below zero.

The Reference Shelf

[Apr 22, 2020] Energy Minister Alexander Novak said that the fall in prices for WTI oil futures is due to the actions of speculators.

Apr 22, 2020 | vz.ru

Energy Minister Alexander Novak said that the fall in prices for WTI oil futures is due to the actions of speculators.

"Yesterday's collapse of oil quotes of the us WTI brand occurred due to the sale of futures for delivery in may at the end of trading on paper (after April 20, the may futures are not traded on the exchange), the lack of demand for additional oil supplies in may and the likelihood of overstocking storage facilities. This caused a speculative fall of the financial instrument to negative values, " he said, according to TASS.

The head of the energy Ministry urged "not to dramatize the situation". According to him, it is important to understand that this is "a paper market, not a trade in physical oil," RIA Novosti reports.

The Minister also noted that the pressure on the oil market will continue until the start of the OPEC+ agreement in may, after which the reduction of oil production by countries outside the agreement and the easing of restrictions will begin.

"The oil market is currently in an extremely volatile state due to a sharp drop in demand associated with measures to counter the spread of coronavirus, with the gradual overstocking of storage facilities and the uncertainty of the timing of the global economic recovery. Pressure on the market will continue until the OPEC + agreement begins in may, reducing production by countries outside the agreement and easing restrictive measures, " he said.

Novak assured that OPEC+ countries are closely monitoring the situation in the oil market and have all the capabilities to respond.

"But don't dramatize the situation. It is important to understand that this is a paper market, that is, trading in derivative financial instruments, and not physical oil. Quotes for June Brent and WTI futures are significantly higher, although they are also subject to volatility due to the General negative mood in the market," Novak added.

The price of WTI oil for delivery in may ended Monday's main trading on the NYMEX on negative values, falling to minus 37.63 dollars. The decrease was 300%. Before that, the quotes reached minus 40.32 dollars per barrel. Later, the price of may WTI futures returned to positive values, rising by 160% to $ 2.21 per barrel.

The price of a barrel of oil on the morning of April 21 was trading at $ 21.41.

[Apr 21, 2020] On monetary policy: there is always money for corporate welfare, the military, tax relief and benefits for the oligarchy but never money for health care, education, infrastructure

Notable quotes:
"... The budget deficit is simply a ruse to make you believe that government funding is limited when in reality they create money on demand with a few keystrokes. ..."
"... Thus there is always money for corporate welfare, the military, tax relief and benefits for the oligarchy but never money for health care, education, infrastructure, etc. ..."
Apr 21, 2020 | www.moonofalabama.org

Noah Way , Apr 21 2020 16:42 utc | 75

@ #6 Passer by

In the broadest sense the US deficit is a measure of how much money the govt has created (not entirely accurate as the creation of money - really debt - has been largely outsourced to private banks). If the national debt was 'paid off' It would suck all the money out of society and the economy would collapse.

The Fed doesn't need taxes as revenue as it just creates whatever money it needs. The budget deficit is simply a ruse to make you believe that government funding is limited when in reality they create money on demand with a few keystrokes.

Thus there is always money for corporate welfare, the military, tax relief and benefits for the oligarchy but never money for health care, education, infrastructure, etc. The deficit is 1/2 of a balance sheet, the deficit on the govt side is balanced by a surplus (money in circulation) in the economy. Note that states are revenue constrained and depend on taxes and federal outlays to operate as they cannot create their own money on demand.

But what about inflation? Too much money in circulation lowers its value. Taxes are the real federal economic regulatory mechanism. When there is inflation, higher taxes directly remove money from circulation. The disinformation campaign is that interest rates control inflation, which has a) repeatedly been demonstrated false and b) is simply another system of rewards for the banking cartel.

The best metaphor is a sink. The faucet is the creation of money, the basin is the economy, and the drain is taxes. When the sink starts to overflow (inflation) the solution is to open up the drain (raise taxes).

Note also that this is for a sovereign economy, one that is controlled by the government. The EU has effectively destroyed all the sovereign economies in Europe with its central bank. Thus Greece, Italy, Spain, etc. have no control of their own economies and as such are unable to economically regulate themselves and subject to foreign predatory forces.

gm , Apr 21 2020 16:51 utc | 77

@Posted by: Noah Way | Apr 21 2020 16:42 utc | 75

Shorter version: "Deficits Don't Matter" Dick Cheney, 2002.
https://www.chicagotribune.com/news/ct-xpm-2004-01-12-0401120168-story.html

[Apr 21, 2020] The most acute pain was among so called hedges, namely who sold the obligations to buy oil at a certain price.

Nobody can cancel the end of cheap oil. those manipulations with futures and paper oil is just a blip of the radar. "Bottom line is that we live on a finite world which capitalism treats as an infinite resource."
Apr 21, 2020 | www.moonofalabama.org
juliania , Apr 21 2020 15:43 utc | 61

On the previous thread, Piotr Berman @ 417 did bring up the subject of this post by b, and had the following final comment: "...Actually, the most acute pain is among the clever folk who provided the so-called hedges, namely who sold the obligations to buy oil at a certain price. They are losing hundreds of billions -- my guess. Now they are forced to buy AND store, hence the negative price."

Thanks, Piotr. Some of what is happening makes a bit more sense to me as far as the strange dealings in the stock market are concerned.

Also, just above at 416, karlof1 had this to say: "...Was the West ever on the path to making its goal the improvement of the Common Man as advocated by Wallace and his political allies?..." His answer is NO (exclamation point.)

My answer is YES (exclamation point.) Even if you only progress as far as the creation of the UN, with the leadership of Eleanor, that is an important pivotal moment for mankind which we cannot ignore. But I will state uncategorically that the JFK administration had similar idealistic goals and would have carried them out, had it not been for divisive powers plotting against it. That such dastardly powers succeeded does not negate the previous effort.

And even the example of China proves that this is not an impossible dream for mankind in general. As also is the example of Russia. We are fortunate in this generation to have two role models instead of one.

I don't have the Frost poem at hand so I will thusly mangle the last lines (sorry)

Two paths lay in the woods, and I
Took the one less travelled by
And that has made all the difference.

I've mangled it, but the meaning is there, I think. (I'll go find the correct version, and point of reference, I was a college student when Robert Frost came to Johns Hopkins and I heard him read his poems. He did so also at Kennedy's inaugural.)


gm , Apr 21 2020 10:36 utc | 8

What -$37/bbl oil means to you:

Oil futures paper contracts market (in normal times of stable->rising oil prices and plenty of tank storage capacity a simple safe "buy low, hold, sell high" investment vehicle used heavily by investment banks, hedge funds, ETFs and teachers', municipal employees', etc, retirement/pension funds) explained in 5 minutes by Chris Martenson starts at ~minute 35:00:

https://www.youtube.com/watch?v=R8Pv77R3g1E

arby , Apr 21 2020 12:10 utc | 17
Emily, We may still be at or around peak oil. That does not mean that all of the heavily indebted countries and oil companies won't pump what's left as fast and hard as they can.

Now you have to stir in a massive plunge in demand to the equation. Seems to me that all newer oil discoveries are deep sea or shale. All of which require much more energy to produce then say thirty years ago.

When it takes the equivalent of one barrel of energy to produce one barrel of energy it will be lights out.

William Gruff , Apr 21 2020 12:10 utc | 18
dan of steele @2

The petrodollar was not in and of itself the mechanism that the US used to "export debt" and enrich itself off global trade. Rather, the petrodollar was the mechanism used to lock-in the US$ as the global reserve currency. If you wanted oil, you needed US$. After that it was just convenient to use US$ for other internationally traded commodities as well. Of course, this made even more sense way back in the distant past of the middle of last century because most of the international trade in manufactured goods was for American products, for which you'd have to use dollars to buy anyway.

The empire fanbois will cook up all kinds of explanations for why the dollar will remain the Global Reserve Currency in order to reassure themselves of the empire's continued hegemony, but the fact is that all of the "locks" locking other countries into that regime are now gone. Countries can choose to walk away now whereas in the past that would mean giving up access to oil and no longer importing all of those awesome things that the US used to make. That is not a barrier anymore.

Emily , Apr 21 2020 12:56 utc | 24
Arby 17.
Thank you for taking the time to reply.
But something to ponder
Forbes
https://www.forbes.com/sites/michaellynch/2018/06/29/what-ever-happened-to-peak-oil/
Yergin
https://www.technologyreview.com/2011/09/22/191161/peak-oil-debunked/
Well good news for those of us who agree with Edgar Cayce.
'Russia is the hope of the world'.
Russia has 60 years worth left and thats with its known reserves.
Hasn't touched the Arctic yet.....
https://www.worldometers.info/oil/russia-oil/
gm , Apr 21 2020 13:19 utc | 27
US/Western financial markets are a "musical chairs" game, where right now more chairs are being pulled out from the game faster than the FED and the central banks can 'digitally print' new chairs to keep the game going.
Peter AU1 , Apr 21 2020 14:27 utc | 39
Looks like energy dominance will get a bail out.
"We will never let the great US Oil & Gas Industry down. I have instructed the Secretary of Energy and Secretary of the Treasury to formulate a plan which will make funds available so that these very important companies and jobs will be secured long into the future!" Trump said via Twitter.

https://sputniknews.com/us/202004211079043543-trump-instructs-treasury-energy-depts-to-devise-plan-to-fund-us-oil-gas-industry/
juliania , Apr 21 2020 14:36 utc | 41
Is this a result of all the lockdowns? A sort of automotive general strike occasioned by the virus, aided and abetted by government enforcement of restrictions on industry, travel, general hulabaloo?

Peace has descended upon a weary world. Nature has commanded us to cease and desist from gigantic insults upon the earth. Stop digging! she says, Leave it in the ground! Cease and desist making war for oil!

What does it profit a man? It profits him nothing! I have no idea where this leads, but it is a delicious moment. Look, see the power we have to bring everything to a standstill, even when we only do it because we are forced to! What if we did it willingly?

Where are your trillions now, moghuls?

The earth has spoken. We should all listen. Me, I am going out to plant potatoes.

Trisha , Apr 21 2020 15:27 utc | 56
Peak shale has arrived. The energy inefficiency of fracking - directly related to the economic efficiency of producing shale - killed it off. This would have happened even without COVID-19.

The same will (eventually) happen with oil. The global economy - already teetering - has now been pushed over the edge by COVID-19. The demand side of capitalist growth has been temporarily (and in some cases permanently) crushed - which is a good thing for the planet - as workers are idled for the foreseeable future, and many out of a job forever.

Bottom line is that we live on a finite world which capitalism treats as an infinite resource.

[Apr 21, 2020] 20 April 2020 at 05:20 PM

Apr 21, 2020 | turcopolier.typepad.com
div This (oil + the virus) is looking like an economic Pearl Harbor for shale oil industry This (oil + the virus) is looking like an economic Pearl Harbor. I think BRICS is playing a far better game of chess so far and will win if we don't replace The Swamp with dedicated people with vision and smarts and who put country above cronyism and self-enrichment.

JJackson , 20 April 2020 at 05:33 PM

What has the fluctuating price of oil got to do with peak oil? One is reflection of demand, plus manipulation of the price by producers, and the other has to do with the long term rates of extraction relative to the creation of new reserves by deposition of marine micro-organism and there decay under pressure and temperature conditions only geological time scales. the two are as similar as the price of fish and oranges.
Jack , 20 April 2020 at 07:00 PM
Sir

You were spot on about Peak Oil. US shale will not die. While shareholders and bond holders will take a haircut today, the extraction technology will continue to improve and their costs of production will decline. As oil prices improve shale production will return. The US is in a strong position as it doesn't have to be concerned about oil at least for the next several decades.

From a supply/demand perspective, oil density in the west will continue to decline as our economies become more efficient and as solar and nuclear becomes more cost competitive for electricity generation.

An investment maxim is to buy when there's blood in the streets. We will continue to use oil for at least another couple generations IMO.

The big issue in the short term is going to be the drastic impacts for those economies entirely dependent on crude revenues. The last time crude prices were lower for a sustained period the Soviet Union collapsed. MbS is running massive budget deficits as he keeps his population from revolting against the monarchy. One possible good outcome is there's going to be less funding for the jihadists in the short term.

Jack , 20 April 2020 at 08:21 PM
BTW, huge opportunity for Trump administration. Buy paper futures for May delivery at negative prices and then accept delivery of physical.

This is the real Art of the Deal.

srw , 20 April 2020 at 08:36 PM
There is oil out there and there will be for a long, long, time. The only determining factor is the price to get it out of the ground. Here in North America fracking has opened the spigot but the price is $40+ a barrel to get it out of the ground.

What I can't fathom is why Canada is pushing through with the Keystone XL pipeline taking tar sands oil from Alberta to Nebraska and eventually to the gulf coast.

Obama put the stop to it but the Trumpster reversed his executive order and they started building again this month, although a federal judge just stopped it due to environmental review.

Several years ago I read that tar sands oil costs $70+/barrel and that doesn't include shipping cost. Does Canada know something about the future price of oil or are they just subsiding their oil companies/workers? I sure wouldn't invest in it.

[Apr 19, 2020] America was built by cheap oil, ruled through cheap oil, but it's over. All the fiscal and monetary tricks in the book will not change that.

Apr 19, 2020 | www.moonofalabama.org

sad canuck , Apr 18 2020 21:21 utc | 61

As the infamous swamp creature HRC once said: "What difference, at this point, does it make?" America can huff and puff economic bubbles and kick the national equivalents of puppies (Syria, Venezuela) but it is powerless to create cheap oil or intimidate near-peer adversaries. That is in inescapable logic of surplus energy economics. America was built by cheap oil, ruled through cheap oil, but it's over. All the fiscal and monetary tricks in the book will not change that. Of course China faces that as well (Russia not so much for now). The difference is that Asia spent its money (and more) on infrastructure and industry that will serve it for the next generation or so, while America blew it on consumer toys, services and useless war gadgets. So even if the oil engine is almost dead, China has built up some momentum that will carry it along for a while. That momentum is long since gone in the west and the economy will reset once again to a far lower level.

The gnashing of teeth and racist rage will go on in America for a decade or more, but it won't make any difference at all to the outcome. The sooner it accepts that reality, the faster it can adapt to a lesser role and lower standard of living. That's not going to happen until "somebody" admits the scale and scope of the problem. Carter was the last one who tried and the result was the neo-liberal disease that engulfs the west. Hopefully the next attempt at reality isn't met with full-blown fascism but it might.

[Apr 17, 2020] Oil price probably depends on whether the USA can deliver or will deliver: Scott Ritter thinks it can't.

Apr 17, 2020 | turcopolier.typepad.com

OIL WARS. After a lot of phonecalls – especially between Putin, Trump and Riyadh , OPEC plus Russia plus USA have agreed to a production cut. How long will the agreement last? Your guess – it probably depends on whether the USA can deliver or will deliver: Scott Ritter thinks it can't . On the other hand, Washington has had a chance to learn its lesson – shale oil needs price about twice what it is today back down to about $20/bbl ; one producer has already gone bust . COVID has so greatly reduced demand that the cuts may have little effect anyway .

[Apr 11, 2020] Exclusive U.S. banks prepare to seize energy assets as shale boom goes bust by David French and Imani Moise

Notable quotes:
"... JPMorgan Chase & Co, Wells Fargo & Co, Bank of America Corp and Citigroup Inc are each in the process of setting up independent companies to own oil and gas assets, said three people who were not authorized to discuss the matter publicly. The banks are also looking to hire executives with relevant expertise to manage them, the sources said. ..."
"... U.S. oil and gas producers have increasingly relied on banks for cash over the past year, as debt or equity options dried up. Lenders have been conservative in valuing hydrocarbons used as collateral, but recent restructurings have left them spooked. ..."
Apr 11, 2020 | finance.yahoo.com

NEW YORK (Reuters) - Major U.S. lenders are preparing to become operators of oil and gas fields across the country for the first time in a generation to avoid losses on loans to energy companies that may go bankrupt, sources aware of the plans told Reuters.

JPMorgan Chase & Co, Wells Fargo & Co, Bank of America Corp and Citigroup Inc are each in the process of setting up independent companies to own oil and gas assets, said three people who were not authorized to discuss the matter publicly. The banks are also looking to hire executives with relevant expertise to manage them, the sources said.

The banks did not provide comment in time for publication.

Energy companies are suffering through a plunge in oil prices caused by the coronavirus pandemic and a supply glut, with crude prices down more than 60% this year.

Although oil prices may gain support from a potential agreement Thursday between Saudi Arabia and Russia to cut production, few believe the curtailment can offset a 30% drop in global fuel demand, as the coronavirus has grounded aircraft, reduced vehicle use and curbed economic activity more broadly.

Oil and gas companies working in shale basins from Texas to Wyoming are saddled with debt.

The industry is estimated to owe more than $200 billion to lenders through loans backed by oil and gas reserves. As revenue has plummeted and assets have declined in value, some companies are saying they may be unable to repay.

Whiting Petroleum Corp became the first producer to file for Chapter 11 bankruptcy on April 1. Others, including Chesapeake Energy Corp, Denbury Resources Inc and Callon Petroleum Co, have also hired debt advisers.

If banks do not retain bankrupt assets, they might be forced to sell them for pennies on the dollar at current prices. The companies they are setting up could manage oil and gas assets until conditions improve enough to sell at a meaningful value.

Big banks will need to get regulatory waivers to execute their plans, because of limitations on their involvement with physical commodities, sources said.

Banks are hoping their planned ownership time frame of a year or so will pass a Federal Reserve requirement that they do not plan to hold assets for a long time. Because lenders would be stepping in to support part of the economy that is important to any potential rebound, and which has not gotten direct bailouts from the federal government, that might help applications, too.

For now, the banks are establishing holding companies that can sit above limited liability companies (LLCs) containing seized assets. The LLCs would be owned proportionally by banks participating in the original secured loan.

To run the oil-and-gas operations, banks might hire former industry executives or specialty firms that have done so for private equity, sources said. Houston-based EnerVest Operating LLC would be among the most likely operators, sources said.

"We regularly look for opportunities to operate on behalf of other entities, that is no different in this market," said EnerVest Operating's chief executive, Alex Zazzi.


GETTING ASSERTIVE

U.S. banks have not done anything like this since the late-1980s, when another oil-price rout bankrupted a bunch of energy companies. More recently, they have relied on restructuring processes that prioritize them as secured creditors and leave bondholders to seek control in lieu of payment.

But banks are becoming more assertive because of the coronavirus recession and balance sheet vulnerabilities that have developed in recent years.

U.S. oil and gas producers have increasingly relied on banks for cash over the past year, as debt or equity options dried up. Lenders have been conservative in valuing hydrocarbons used as collateral, but recent restructurings have left them spooked.

Alta Mesa Resources' bankruptcy will likely provide banks with less than two-thirds of their money, while Sanchez Energy's could leave them with nothing.

The structures banks are setting up will take a few months to establish, sources said. That gives producers until the fall - the next time banks will evaluate the collateral behind energy loans - to get their houses in order.

After several years of on-and-off issues with energy borrowers, lenders have little choice but to take more dramatic steps, said Buddy Clark, a restructuring partner at law firm Haynes and Boone.

"Banks can now believably wield the threat that they will foreclose on the company and its properties if they don't pay their loan back," he said.

(Reporting by David French and Imani Moise in New York; Additional Reporting by Elizabeth Dilts Marshall; Editing by Leslie Adler; Editing by Lauren Tara LaCapra)

[Apr 08, 2020] In Gulf's Oil Rigs, Crews Fight Virus to Keep Crude Flowing

Notable quotes:
"... Cramped quarters on drilling rigs leave no room for distancing ..."
"... That's led to worries about the safety of the sites, the biggest of which resemble mini-cities with as many as 200 workers, and the nation's dependence on their output. Oil wells in the U.S. Gulf of Mexico supply about 2 million barrels of crude a day, or 15% of U.S. production. ..."
Apr 08, 2020 | www.bloomberg.com
Cramped quarters on drilling rigs leave no room for distancing
Inside more than a thousand offshore drilling rigs and oil production platforms that dot the Gulf of Mexico, workers navigate narrow corridors, sleep in shared rooms and dine in crowded mess halls.

It's an environment designed for efficiency -- not for keeping a lethal coronavirus at bay.

"There's no way to do social distancing on a rig," said Tim Tarpley, vice president of the Petroleum Equipment and Services Association .

That's led to worries about the safety of the sites, the biggest of which resemble mini-cities with as many as 200 workers, and the nation's dependence on their output. Oil wells in the U.S. Gulf of Mexico supply about 2 million barrels of crude a day, or 15% of U.S. production.

[Apr 01, 2020] Trump, Putin Will Discuss The End Of U.S. Shale Oil

Apr 01, 2020 | www.moonofalabama.org

Jackrabbit , Mar 30 2020 18:14 utc | 6

Trump announced that he would use the cheap prices to fill the U.S. strategic oil reserve. But the spare room in the reserve storage at that time was only some 150 million barrels. As it can only be filled at a rate of 2 million barrels per day the topping off of the reserve is insignificant in the current market.

The oil producers at first pumped their oil into storage tanks to be sold later. When those filled up they rented supertankers to store the oil at sea. But empty supertankers are now also getting rare and the price for them is increasing :

The CEO of the world's largest tanker owner, Frontline Ltd., said on Friday that he'd never known such demand to hire ships for long-term storage. Traders could book ships to put 100 million barrels at sea this week alone, he estimated, but even that could accounts for less than a week's oversupply.

The only solution will be a shut down of the more expensive oil fields. Canada and Brazil are already doing it. U.S. shale producers who are bleeding cash will now have to follow.

That is clearly what Russia wants :

As soon as U.S. shale leaves the market, prices will rebound and could reach $60 a barrel, Rosneft's Igor Sechin said recently. As fate would have it, in what many would have until recently considered an impossible scenario, a lot of U.S. shale might do just that.

Breakeven prices for U.S. shale basins range between $39 and $48 a barrel, according to data compiled by Reuters. Meanwhile, West Texas Intermediate (WTI) is trading below $25 a barrel and has been for over a week now.

The Trump administration has asked the Saudis to produce less oil but as the Saudi tourist industry is currently also dead the Saudi clown prince needs every dollar he can get. The Saudis will continue to pump and they will sell their oil at any price.

The White House is now concerned that it will completely lose its beloved shale oil industry and all the jobs connected to it.

Russia of cause knows this and a few days ago it made an interesting offer :

A new OPEC+ deal to balance oil markets might be possible if other countries join in, Kirill Dmitriev, head of Russia's sovereign wealth fund said, adding that countries should also cooperate to cushion the economic fallout from coronavirus.
...
"Joint actions by countries are needed to restore the(global) economy... They (joint actions) are also possible in OPEC+ deal's framework," Dmitriev, head of the Russian Direct Investment Fund (RDIF), told Reuters in a phone interview.
...
"We are in contact with Saudi Arabia and a number of other countries. Based on these contacts we see that if the number of OPEC+ members will increase and other countries will join there is a possibility of a joint agreement to balance oil markets."

Dmitriev declined to say who the new deal's members should or could be. U.S. President Donald Trump said last week he would get involved in the oil price war between Saudi Arabia and Russia at the appropriate time.

A logical new member of an expanded crude oil cartel would be one of the biggest global producer that so far was not a member of that club - the U.S. of A.

We now learn that Trump is ready to talk about that or other concepts:

As Ria reports (in Russian) the topics of upcoming phone call [between Putin and Trump] will be Covid-19, trade (???) and, you guessed it, oil prices.

Trump, who sanctioned the Russian-German Nord-Stream II pipeline while telling Germany to buy U.S. shale gas, is now in a quite bad negotiation position. Russia does not need a new OPEC deal right now. It has many financial reserves and can live with low oil prices for much longer than the Saudis and other oil producing countries. Trump would have to make a strategic offer that Russia could not resist to get some cooperation on oil prices.

But what strategic offer could Trump make that would move Putin to agree to some new deal?

Ukraine? Russia is not interested in that unrulable , bankrupt and fascist infested entity.

Syria? The Zionist billionaires would stop their donations to Trump if he were to give up on destroying it.

Joining an OPEC++ deal and limit U.S. oil production? That would be an anti-American intervention in free markets and Congress would never agree to it.

And what reason has Russia to believe that Trump or his successor would stick to any deal? As the U.S. is non-agreement-capable it has none.

The outcome of the phone call will therefore likely be nothing.

The carnage in the oil markets will continue and will ravage those producer countries that need every penny while the corona virus is ravaging their people. Meanwhile the U.S. shale market will go bust . US financial companies had a big exposure to the Shale Oil frackers.

Good thing trillions of dollars of 'liquidity' has been shoveled their way.

<> <> <> <> <>

Lender of last resort: the unborn.

!!


Thomas Minnehan , Mar 30 2020 18:15 utc | 7

FWIW:
One aspect of the crude complete collapse is to keep an eye on futures and the serious contango at the moment: contango=prices on future contracts are higher than current contract.

e.g. May 2020 CL contract=~$20, May 2021 =~$35.50.

Someone or someones are betting that the crude market will improve, i.e. they are storing crude in very large crude carriers (VLCC) @>$200k per day lease cost. That is a serious commitment/bet on future price/mkt improvement.

karlof1 , Mar 30 2020 18:32 utc | 9
Unmentioned is the connection between Fracking Fraud and the Bond Market Bubble with Congress actively intervening/abetting the Fraud by providing more money to the Ponzi Scheme.
vk , Mar 30 2020 19:18 utc | 22
It was time. The shale industry already was a huge bubble even when oil prices were at USD 60.00 (because it had to borrow a lot to invest, and the more wells drilled, the lower was the oil output per USD invested), which insiders in Wall Street were already discussing how to burst it.

And this is a 100% intentional by the Russians. If American shale really go down, then it would be ironic, since it was the oil crisis of 1975 that effectively ended the Soviet Union.

Vengeance is dish best served cold indeed.

Krollchem , Mar 30 2020 19:28 utc | 26
Another factor going against the shale fracking pipe dream is that the Strategic Petroleum Reserve (SPR) is filled with real oil. Fracking produces light condensate (not oil) that does not meet this criteria, and thus the frackers will not benefit from filling the SPR (unless Trump changes the rules)

Besides, Exxon wants to crush the independent oil shale players and pick up the pieces at pennies on the dollar. Furthermore, former ExxonMobil head Lee Raymond once stated that "Exxon U.S. is not a "company and I don't make decisions based on what's good for the U.S."
https://www.desmogblog.com/2020/03/27/shale-bailout-trump-oil-exxon-strategic-petroleum-reserve

David , Mar 30 2020 19:35 utc | 28
A study by the Wall Street Journal concluded that in one ten year period, the shale oil companies' total costs had exceeded their revenues by two hundred and eighty billion dollars. They have stayed in business by issuing new stock and more debt to cover their losses. Their prime fields are seeing production declines. Their costs are rising as the price of is oil tanking. Collapse is imminent. It's going to have far-reaching consequences.
TG , Mar 30 2020 20:04 utc | 37
Yet another example of the utter intellectual bankruptcy of the US ruling class. They've been playing a rigged game for so long, they've forgotten how to think.

As others here have pointed out, not to worry, the US fracking industry will get bailed out.

The real thing the US might do, is not to join an expanded OPEC+, but to limit imports of foreign oil and protect the domestic industry. Contrary to current 'free trade' dogma, protectionism does work (example A: the United States from 1776 to 1970. Any questions?), but classically you want to limit imports of MANUFACTURED goods and keep the cost of raw materials low. Increasing the relative costs of raw materials in the US while still allowing mass importation of manufactured goods from low-wage nations is anti-Hamiltonian and will crush what remains of US domestic manufacturing..)

Krypton , Mar 30 2020 20:06 utc | 38
Meanwhile Western Canadian Select is now going for $5 a barrel - less than the price of a coffee and muffin at Starbucks.
Michael Droy , Mar 30 2020 20:11 utc | 40
Not sure the US shale market can "go bust" as such. The owners can go bankrupt, but that just means banks and bondholders become the new owners, and their debt investment suddenly turns into equity investment with zero gearing. Once that happens the US shale producers become solid companies financed with zero debt and no incentive to hold back on production. They pump and pump and pump until the pumps no longer work.
Sure, no new developments, but the existing infrastructure will last a few years yet.
Hal Duell , Mar 30 2020 20:15 utc | 41
I don't see a way out for the US fracking industry. Their product is too expensive in the current times, and those setting the rules in these times (Russia and Saud Arabia) have no good reason to help.
The social damage from a collapse in the US will be papered over with printed money. I don't know how that will play out.
One scenario is time being called on the US's forever-wars in the Middle East, but would they be replaced by an invasion of Venezuela? There is good stuff down there, as well as the heavy stuff they've been pulling out. And just across the border into Brazil there is some high ground that looks like a good spot to build a command post.
The US could cut its losses in the wider world, something that seems to be happening anyway, and return to America, north and south. I don't see it just quietly going down the gurgler, but the European Union might.
Stonebird , Mar 30 2020 20:35 utc | 46
Of course it is already a war. The question I ask is, who is fighting and against whom?
The tactical aim at the moment is the end of the petro-dollar. A secondary aim is finding a limit to US militarism. Which in turn depends on the pork.... soorry.... the grifting of large sums of unlimited largess. Third, is trade and domination of markets including sanctions and "treaties". Fourth, is the "domination" of population dissent and overriding Judicial systems.

So the US, China and Russia are at it "hammer and tongs" (old saying but apt). Covid is just one means to an end, regime change another. Who else is in the fight? I would suggest that the Oligarchy and the Termites, the Fed and the deep parallel financial pool, the uncontrolled but unified intelligence "agencies", all have their own agendas.

naiverealist , Mar 30 2020 20:40 utc | 48
Posted by: Laguerre | Mar 30 2020 19:14 utc | 21

"The slow collapse of the US position in Iraq means that the US is not going to hold those oil-fields for too long."

Remember where this oil is going to. During the previous presidential term, it was discovered that the oil was going into Turkey, aided and abetted by the profiteers Erdogan and his son, and then onto oil tankers that shipped it to Occupied Palestine. Current production is also going into Jordan, where it is being shipped by pipeline into the refinery in Eliat(?). I can only surmise the price to be extremely cheap.

So the inhabitants of Occupied Palestine will expect the US to maintain this flow as long as they can, come hell or dead GIs.

vk , Mar 30 2020 20:41 utc | 49
The problem with shale became clear right after the first wells were drilled.

If I understood the reports from the "shale bubble" website correctly, originally the magic over shale gas and oil came from the fact that Wall Street was involved since the beginning (so it was a "coastal elites/heartland rednecks alliance" from birth) and the expectation was that a horizontal well would perform the same way as the traditional vertical well.

A traditional vertical well follows are normal curve graphic, imitating a hill. It starts low, but keeps growing until reaching a peak, maintains this peak for a while (some decades) and then begin a suave fall, which also takes decades.

No wonder, then, the huge euphoria that started in Wall Street when those horizontal wells begun pumping out oil at absurd quantities - they imagine that was the output floor of such wells, and that productivity would only rise after the decades. Indeed, it was predicted at the time that the USA not only was firmly walking towards self-sufficiency - many also predicted it would become the world's greatest oil exporter (yes, above Saudi Arabia, Venezuela, Russia etc.).

But this euphoria was short-lived, as, some years later, productivity of the horizontal wells begun to suddenly fall. It was then realized, after further research, that those wells performed differently than the vertical wells: they begun directly with peak production, then immediately started to fall. Their output graphic looks like an upside-down, slightly inclined letter L.

Even after this discovery, the investors didn't immediately give up. They thought: let's just drill longer wells. And they did. It was then that another problem came out: it seems that, after 3-5 miles, those horizontal wells suddenly lose a lot of pressure necessary to pump the oil out of it. To make things worse, after this length, they begin to suck out pressure from the neighboring wells as well. Therefore, it is a self-defeating enterprise to extend the horizontal wells beyond 3 miles length. And the situation is even direr because shale reserves are usually concentrated in one specific area - it's not like you can drill one horizontal well in Ohio and another one in Florida and so on: the rule of thumb that the oil and gas "must be there" to be extracted in economically viable quantities still do apply to horizontal wells.

After that, all that kept the American shale industry alive was Wall Street and its rotten papers recycling machine.

El Cid , Mar 30 2020 20:44 utc | 50
The US unilateral economic siege on Venezuela and Iran has the affect of cutting world oil supply that benefits US shale and fracking industry.
karlof1 , Mar 30 2020 20:56 utc | 55
A friendly reminder to all barflies that fracking within the Outlaw US Empire also takes more energy to operate than the energy extracted. The business was bankrupt before it began, and nothing can change that fundamental fact.
Likklemore , Mar 30 2020 22:00 utc | 70
China will 'compel' Saudi Arabia to trade oil in yuan -- and that's going to affect the US dollar
from CNBC, Oct.2017
"I believe that yuan pricing of oil is coming and as soon as the Saudis move to accept it -- as the Chinese will compel them to do -- then the rest of the oil market will move along with them," Carl Weinberg, chief economist and managing director at High Frequency Economics, told CNBC

Also, recall the recent ARAMCO IPO, reportedly China took a 5 % stake. Hmmm. Was it with USTs?

occupatio , Mar 31 2020 0:16 utc | 89
The minute the Al Saud family begins accepting yuan for oil their days are numbered.
The US put them there, put the Saudi in Saudi Arabia. Any move to accept yuan will be seen as betrayal, and the Al Sauds will be removed, either replaced or simply obliterated.
Posted by: Realist | Mar 30 2020 23:21 utc | 86

+++

If Saudi Arabia shifts to the Yuan, it would have to diversify away from buying US arms. They might be the undisclosed buyer of high-end Chinese missiles, said to have an "urgent need" for them, as per Chinese media on 2020/3/29. This news might be functioning as diplomatic signalling.

Chinese high-end missile sees first export delivery despite pandemic
https://www.globaltimes.cn/content/1184117.shtml

It was the first time a third-generation anti-tank weapon system developed by the Chinese company has been exported, according to the statement.

As the client was in urgent need of the missiles, the successful delivery had significant meaning for establishing Norinco's (China North Industries Group Corporation) market position and further opening up the market, the company said.

Norinco did not disclose more details on the deal in the statement, including the name of the buyer, the quantity purchased and the value of the deal.

Likklemore , Mar 31 2020 0:37 utc | 91
The US put them there, put the Saudi in Saudi Arabia. Any move to accept yuan will be seen as betrayal, and the Al Sauds will be removed, either replaced or simply obliterated.

You hug that thought. Newsflash: The horses camels have already bolted. China is expanding its presence/influence in ME.

These 35 agreements with KSA,'centered around ways to align the Saudi Vision 2030 with the Chinese Belt and Road Initiative' will not be in USD - unless China is unloading USTs. There is nothing US can do except sell more arms to the kingdom. Reuters, WSJ reported the big signing and likely, CNN, Fox, ABC buried it.


"Saudi crown prince signs raft of cooperation agreements with China
Feb.22, 2019
BEIJING: Crown Prince Mohammed bin Salman on Friday met with Chinese Vice Premier Han Zheng to discuss ways of further developing relations between the Kingdom and China.

The meeting took place in the grand surroundings of the Great Hall of the People in the Chinese capital Beijing. After their talks, the crown prince headed the Saudi delegation at the third session of the China-Saudi Arabia High-Level Joint Committee which he co-chaired with Zheng.

Delegates at the meeting discussed moves to strengthen cooperation between the two countries on trade, investment, energy, culture and technology, as well as the coordination of political and security matters. The committee also reviewed plans for greater integration between China's Belt and Road development strategy and the Saudi Vision 2030 reform program.

After agreeing on the minutes of the meeting, the Saudi royal and Zheng took part in the signing of a range of agreements, memorandums of understanding (MoU), investment projects and bilateral cooperation accords between the Kingdom and China:[.]

MoU between the Kingdom's Ministry of Energy, Industry and Mineral Resources and the National Development and Reform Commission in China, signed by Saudi Energy Minister Khalid Al-Falih and Ning Jizhe, vice chairman of the National Development and Reform Commission.

MoU between the Chinese Ministry of Commerce and Saudi Ministry of Commerce and Investment to form a working group to facilitate trade, signed by Abdul Rahman Al-Harbi, the Kingdom's deputy minister of commerce and investment, and Qian Keming, Chinese vice minister of commerce.[.]

Piotr Berman , Mar 31 2020 1:46 utc | 99
Deciphering the mental processes of MBS is always speculative, but it is very hard for KSA to deliver on the threat to increase the deliveries by 2.5 mln bbl/day. As we can see, planes fly only a fraction of pre-virus level, people on quarantine drive much less, you can offer fuel for free and it will not sell more. Now, if you could offer some hand sanitizer and facial tissues with each "full tank", perhaps it could work... But stopping oil production is troublesome for some reasons, to the ignorant me it seems that if you interrupt flow dynamic of oil, it is troublesome to restart it, shale oil may suffer from something similar. Thus tanker ships are being filled up and used for storage as destination ports refuse to take cargoes invoking "higher power". Hapless KSA cannot find enough tankers, and when they find them, hard to find a port to accept them. So KSA combative threat could impact psychology of the traders, but the virus made a dent in demand of several times larger magnitude.

Nobody knows how long the demand will stay low, but as it does, storage will be bursting, renting tanker ships became expensive. so the glut it will take time to dissipate (folks renting the tanker ships will be pressed to get rid of the cargoes at the first opportunity), and with no coordination to cut the production, low prices may stay for a year or more. This seems necessary to cut shale oil and other high cost oil project down to size. Periodic down period of pricing does not change long term calculations, but long periods will drive a lot of small players out of business. This means so-called consolidation, creditors become owners and sell it to vultures (regular folks cannot own something that costs more to maintain than it brings revenue). And what do the vultures do? "Paring excess capacity". Happened to many industries in the past. And even brainless bankers will give it two thoughts before lending money for projects in high cost oil production.

BTW, Putin is doing a gently MBS-like manouver, with the assist from Trump. To wit, Russia started to tax repatriated profits -- no need to imprison the account holders in Ritz Carton. But why would they be motivated to repatriate the profits back to Mother Russia? A patriotic virus? Or pestering with account freezes that Trumpian robbers are so fond of doing?

One mystery for me is why Canadians bother to produce oil with single-digit prices. Stopping tar oil production should be simple, just mothball the equipment.

One rumour in the oil patch is that USG will give them bail out. That could be a boon for green thinking idealists who are hostile to carbon energy production, because many deplorables do not like bailout (unless they are the beneficiaries). This could allow Trump to be defeated by a brain dead opponent.

daffyDuct , Mar 31 2020 2:28 utc | 101
"Bloomberg reports that Plains All American Pipeline asked its suppliers to scale back production,
and Plains and Enterprise Products Partners is requiring customers to prove they have a buyer or place to offload the crude they are shipping
The companies made the requests during the past week.

This is a clear sign that a growing glut of crude is overwhelming storage capacity. Pipeline companies are running out of storage space for oil. Coronavirus related lockdowns are resulting in plunging demand."

https://www.forexlive.com/news/!/pipeline-operators-asking-oil-producers-to-reduce-output-growing-glut-is-capacity-20200329

Bill , Mar 31 2020 15:34 utc | 137
@Vic

Hajj revenues poised to exceed $150bn by 2022: Experts

(the article refers to both Hajj and Umrah revenues)

https://www.arabnews.com/node/1151751/saudi-arabia

If that actually occurred it would exceed SA's 2019 $88bn oil revenue by a good margin

Canthama , Mar 31 2020 17:26 utc | 152
It is payback time for Russia no doubt, but Russia plays always the long game, any decision or concession will always be related to the long game. for Russia, which is the global leader in energy supplier (oil, gas & nuclear).
Russia got really mad with the Nordstream II delay, this is something Russia will not forget that easy, besides costing them a lot, it was some sort of global humiliation, that combination is pure fire. Even if the sanction are lifted now, Nordstream would start late 2020 and not late 2019....1 year delay anyway, so lifting sanctions won't matter here.
My first reaction is that Russia will not agree with the USA in anything, it will drive the shale market dry for a little longer, it must if it wants to cause long term problems for the players in the US, so no short term relieve for the shale players here, and if Russia does agree in the OPEC++ with the US and other export players then this will take time, and then US Gov can not intervene in the local production, more time...and no results, at the end the US will have to give up something, and I do not think lifting sanctions will be it, they may try it, bit it has no real value for Russia....only a global military retreat, something that will cost dearly, politically and in image will. serve Russia and its key strategic ally...China, mind you that cheap oil and gas helps China's recovery...March nbrs came in from China and it has already shown a better recovery than expected.
This is the only way I can see Russia playing the long game, together with China and a major strategic geopolitical defeat for the US.
JC , Mar 31 2020 17:46 utc | 154
Posted by: Canthama | Mar 31 2020 17:26 utc | 152

"This is the only way I can see Russia playing the long game, together with China and a major strategic geopolitical defeat for the US."

I like what you said, but Russia and China must continue supports one another. Both should also supports Iran and Venezuela too.

[Apr 01, 2020] Trump Shifts to Worry Over Oil Rout, Discusses Prices With Putin

Apr 01, 2020 | finance.yahoo.com

(Bloomberg) -- President Donald Trump said he's concerned oil prices have fallen too far and called Vladimir Putin on Monday to discuss Russia's oil-price war with Saudi Arabia.

The leaders, who also talked about the spread of the coronavirus, agreed to discussions on oil between energy officials in the two countries, according to the Kremlin. Both leaders "agreed on the importance of stability in global energy markets," the White House said in a statement.

The U.S. president said earlier he doesn't want to see the American energy sector "wiped out" after Russia and Saudi Arabia "both went crazy" and launched into a conflict that depressed oil prices.

"I never thought I'd be saying that maybe we have to have an oil increase, because we do. The price is so low," Trump said in an interview on "Fox & Friends."

Crude oil futures tumbled as much as 7.7% in New York, touching an 18-year low.

The Trump-Putin call came at the request of the U.S. and was "prolonged," according to the Kremlin. Neither the White House or Kremlin statements said specifically how long the two leaders talked.

Trump's view on the oil dispute marks a shift from earlier this month, when he likened the plunge in oil prices to a "tax cut" for Americans. The U.S. president spoke to Saudi Crown Prince Mohammed bin Salman on March 9 about the price war.

Trump has long argued that improving relations between Washington and Moscow could help solve international disputes. The president said he wanted to discuss trade with Putin, though he said he expected the Russian president to raise objections to U.S. sanctions. State-run Tass quoted Kremlin spokesman Dmitry Peskov as saying that Putin didn't ask Trump for sanctions relief on the call.

Oil tumbled earlier to its lowest point in nearly two decades, heading for the worst quarter on record as coronavirus lockdowns cascaded through the world's largest economies, leaving the market overwhelmed by cratering demand and a ballooning surplus. The slump in demand has shut refineries from South Africa to Canada.

Goldman Sachs Group Inc. estimates consumption will drop by 26 million barrels a day this week. Meanwhile, Riyadh and Moscow are showing no signs of a detente in their supply battle as Saudi Arabia announced plans to increase its oil exports in the coming months, despite U.S. warnings against flooding the market.

Some analysts argue Russia's motivations extend well beyond oil and are complicated by the federation's anger over U.S. sanctions and opposition to the Nord Stream 2 pipeline linking Russia to Germany. And the price for getting Russia to back down could be too high.

"Russia's concerns with the U.S. go beyond market share. Putin is frustrated with sanctions and may be more interested in punishing the U.S. than Saudi Arabia," said Dan Eberhart, a Trump donor and chief executive of drilling services company Canary LLC. "If Trump wants an agreement with Putin, he may have to promise to ease up on sanctions. I am not sure he can deliver without the backing of congress."

Rosneft PJSC over the weekend sold its assets in Venezuela to the Russian government, a move that shields the Russian oil giant from further U.S. sanctions while keeping Moscow behind the regime of Nicolas Maduro. Fears of broader sanctions have grown after the U.S. in recent months slapped restrictions on Rosneft trading companies for handling business with Venezuela.

In the call, the White House said Trump "reiterated that the situation in Venezuela is dire, and we all have an interest in seeing a democratic transition to end theongoing crisis." The statement didn't say how Putin responded.

Talks between members of the Organization of Petroleum Exporting Countries and its allies broke down in early March as Russia refused to sign on to larger production cuts proposed by Saudi Arabia. The failure to reach an agreement prompted the Saudis to unleash a price war which, combined with the devastating effect of the virus pandemic, caused the market to crash.

Global demand is slumping by as much as 20 million barrels a day, about 20%, as billions of people go into lockdown to slow the spread of the virus. The outlook remains dire, with traders, banks and analysts forecasting a huge oversupply as governments effectively shut their economies.

[Mar 24, 2020] The government will again bail out shale industry

Mar 24, 2020 | www.unz.com

Mr McKenna , says: Show Comment March 23, 2020 at 6:20 am GMT

@Kim

They're going to have to bail out/nationalize the shale oil industry.

Or "They" could just ignore it.

It has achieved these outcomes – despite steep decline rates and a constant need for huge numbers of new wells – through massive levels of junk debt forced into existence by almost zero interest rates and by having little to no profits since 2008.

Sounds like a really rotten business model. "steep decline rates and a constant need for huge numbers of new wells" describes an industry in eclipse, to put it kindly.

The break-even for shale oils wells varies, but $70 a barrel is a good average figure.

Even worse. This 'business' is essentially fake and should be shuttered. Every dollar thrown at it will be wasted. If everything in the world somehow reverses itself one day and shale oil is once again needed, we can restart it. Won't happen, though. Obsolete.

anachronism , says: Show Comment March 23, 2020 at 7:38 am GMT
@Kim One part of the New Deal, that seemed to work very well for all parties concerned, was the Department of Agriculture's willingness to buy up excess grain/dairy production in order to encourage an ample supply of grain/dairy and a sustainable price, so that farmers could get out of the boom/bust cycle. These excess stores were intended to provide supplies when weather or disasters disrupted the harvests. The AG Dept. also established guidelines for farmers on how much acreage should be allocated to which type of food product, based upon its own estimates of aggregate demand and needs for strategic reserves. It even paid farmers to keep acreage fallow at times.

The Department of Energy could do something similar (provided the Congress should legislate it). For this to work, the government must limit foreign sources from supplying the US markets to serve only as augmentation to US energy production whenever/wherever the US energy producers can't meet the demand at the price level that the Energy Department sets. If the price is determined on an average COST+ ROI basis, our energy producers would effectively become utilities.

Miro23 , says: Show Comment March 23, 2020 at 8:35 am GMT
@Kim

They're going to have to bail out/nationalize the shale oil industry.

Why? These were private failed investment decisions, so let the industry go bankrupt along with their shareholders and junk bond investors.

The world doesn't need oil supplied at $70 – And what has this got to do with the US public? They didn't make these shale oil investment decisions.

TBTF (Too Big To Fail) is another fake argument. If the investment banks had been allowed to fail in 2008, we would now have a smaller and more prudent banking sector. There are always some serious banks out there to pick up the pieces.

[Mar 19, 2020] US imposes sanctions against #Iran after offering to help with #Coronavirus outbreak

Mar 19, 2020 | www.moonofalabama.org

karlof1 , Mar 18 2020 18:28 utc | 53

This might soon become the global rallying cry :

"USA is the greatest enemy of humanity - I hope they will pay for that:

"US imposes sanctions against #Iran after offering to help with #Coronavirus outbreak"

The situation has now gone well beyond immorality and into the realm of EVIL--an EVIL that's Bipartisan, shared by Ds and Rs alike.


bevin , Mar 18 2020 18:33 utc | 54

Miss Lacy and Arby both draw our attention to the obscenity of the US using this crisis in order to put pressure on governments that it dislikes by cutting off medicine and other resources.

Among the places where people are currently dying in large numbers because Washington chooses that they should are Cuba-under an oil embargo-, Nicaragua, Venezuela and Iran.

Those who cannot bring themselves to believe that government could be so evil as to deploy a virus as a weapon to weaken another state, only have to look at what is happening today: Venezuela desperately needs funds, much of its foreign exchange having been seized illegally by the US and its satellites, in order to weather the pandemic.

Anyone supporting such a policy, condoning the killing of vulnerable people to embarrass another state, is an accessory to murder.

farm ecologist , Mar 18 2020 19:40 utc | 67
Re., IMF refuses emergency funds to Venezuela

Posted by: arby | Mar 18 2020 14:32 utc | 11
Posted by: Miss Lacy | Mar 18 2020 18:15 utc | 50
Posted by: bevin | Mar 18 2020 18:33 utc | 55

Anyone supporting such a policy, condoning the killing of vulnerable people to embarrass another state, is an accessory to murder.

Although many argue that the foreign policies of the US government don't really reflect the views and desires of ordinary citizens, the comments in the Fox News report on this story suggest otherwise (caveat - be prepared to be appalled).

https://www.foxnews.com/world/venezuela-asks-imf-for-massive-emergency-loan-to-fight-coronavirus


[Mar 17, 2020] Russia Strikes Back Where It Hurts American Oil by Scott Ritter

Mar 17, 2020 | www.theamericanconservative.com

R ussia and Saudi Arabia are engaged in an oil price war that has sent shockwaves around the world, causing the price of oil to tumble and threatening the financial stability, and even viability, of major international oil companies.

On the surface, this conflict appears to be a fight between two of the world's largest producers of oil over market share. This may, in fact, be the motive driving Saudi Arabia, which reacted to Russia's refusal to reduce its level of oil production by slashing the price it charged per barrel of oil and threatening to increase its oil production, thereby flooding the global market with cheap oil in an effort to attract customers away from competitors.

Russia's motives appear to be far different -- its target isn't Saudi Arabia, but rather American shale oil. After absorbing American sanctions that targeted the Russian energy sector, and working with global partners (including Saudi Arabia) to keep oil prices stable by reducing oil production even as the United States increased the amount of shale oil it sold on the world market, Russia had had enough. The advent of the Coronavirus global pandemic had significantly reduced the demand for oil around the world, stressing the American shale producers. Russia had been preparing for the eventuality of oil-based economic warfare with the United States. With U.S. shale producers knocked back on their heels, Russia viewed the time as being ripe to strike back. Russia's goal is simple: to make American shale oil producers " share the pain ".

The United States has been slapping sanctions on Russia for more than six years, ever since Russia took control (and later annexed) the Crimean Peninsula and threw its weight behind Russian separatists in eastern Ukraine. The first sanctions were issued on March 6, 2014, through Executive Order 13660 , targeting "persons who have asserted governmental authority in the Crimean region without the authorization of the Government of Ukraine that undermine democratic processes and institutions in Ukraine; threaten its peace, security, stability, sovereignty, and territorial integrity; and contribute to the misappropriation of its assets."

The most recent round of sanctions was announced by Secretary of State Mike Pompeo on February 18, 2020, by sanctioning Rosneft Trading S.A., a Swiss-incorporated, Russian-owned oil brokerage firm, for operating in Venezuela's oil sector. The U.S. also recently targeted the Russian Nord Stream 2 and Turk Stream gas pipeline projects.

Russia had been signaling its displeasure over U.S. sanctions from the very beginning. In July 2014, Russian President Vladimir Putin warned that U.S. sanctions were "driving into a corner" relations between the two countries, threatening the "the long-term national interests of the U.S. government and people." Russia opted to ride out U.S. sanctions, in hopes that there might be a change of administrations following the 2016 U.S. Presidential elections. Russian President Vladimir Putin made it clear that he hoped the U.S. might elect someone whose policies would be more friendly toward Russia, and that once the field of candidates narrowed down to a choice between Donald Trump and Hillary Clinton, Putin favored Trump .

"Yes, I did," Putin remarked after the election, during a joint press conference with President Trump following a summit in Helsinki in July 2018. "Yes, I did. Because he talked about bringing the U.S.-Russia relationship back to normal."

Putin's comments only reinforced the opinions of those who embraced allegations of Russian interference in the 2016 U.S. Presidential election as fact and concluded that Putin had some sort of hold over Trump. Trump's continuous praise of Putin's leadership style only reinforced these concerns.

Even before he was inaugurated, Trump singled out Putin's refusal to respond in kind to President Obama's levying of sanctions based upon the assessment of the U.S. intelligence community that Russia had interfered in the election. "Great move on delay (by V. Putin) – I always knew he was very smart!" Trump Tweeted . Trump viewed the Obama sanctions as an effort to sabotage any chance of a Trump administration repairing relations with Russia, and interpreted Putin's refusal to engage, despite being pressured to do so by the Russian Parliament and Foreign Ministry, as a recognition of the same.

This sense of providing political space in the face of domestic pressure worked both ways. In January 2018, Putin tried to shield his relationship with President Trump by calling the release of a list containing some 200 names of persons close to the Russian government by the U.S. Treasury Department as a hostile and "stupid" move .

"Ordinary Russian citizens, employees and entire industries are behind each of those people and companies," Putin remarked. "So all 146 million people have essentially been put on this list. What is the point of this? I don't understand."

From the Russian perspective, the list highlighted the reality that the U.S. viewed the entire Russian government as an enemy and is a byproduct of the "political paranoia" on the part of U.S. lawmakers. The consequences of this, senior Russian officials warned, "will be toxic and undermine prospects for cooperation for years ahead."

While President Trump entered office fully intending to " get along with Russia ," including the possibility of relaxing the Obama-era sanctions , the reality of U.S.-Russian relations, especially as viewed from Congress, has been the strengthening of the Obama sanctions regime. These sanctions, strengthened over time by new measures signed off by Trump, have had a negative impact on the Russian economy, slowing growth and driving away foreign investment .

While Putin continued to show constraint in the face of these mounting sanctions, the recent targeting of Russia's energy sector represented a bridge too far. When Saudi pressure to cut oil production rates coincided with a global reduction in the demand for oil brought on by the Coronavirus crisis, Russia struck.

The timing of the Russian action is curious, especially given the amount of speculation that there was some sort of personal relationship between Trump and Putin that the Russian leader sought to preserve and carry over into a potential second term. But Putin had, for some time now, been signaling that his patience with Trump had run its course. When speaking to the press in June 2019 about the state of U.S.-Russian relations, Putin noted that "They (our relations) are going downhill, they are getting worse and worse," adding that "The current [i.e., Trump] administration has approved, in my opinion, several dozen decisions on sanctions against Russia in recent years."

By launching an oil price war on the eve of the American Presidential campaign season, Putin has sent as strong a signal as possible that he no longer views Trump as an asset, if in fact he ever did. Putin had hoped Trump could usher in positive change in the trajectory of relations between the two nations; this clearly had not happened. Instead, in the words of close Putin ally Igor Sechin , the chief executive of Russian oil giant Rosneft, the U.S. was using its considerable energy resources as a political weapon, ushering in an era of "power colonialism" that sought to expand U.S. oil production and market share at the expense of other nations.

From Russia's perspective, the growth in U.S. oil production -- which doubled in output from 2011 until 2019 -- and the emergence of the U.S. as a net exporter of oil, was directly linked to the suppression of oil export capability in nations such as Venezuela and Iran through the imposition of sanctions. While this could be tolerated when the target was a third party, once the U.S. set its sanctioning practices on Russian energy, the die was cast.

If the goal of the Russian-driven price war is to make U.S. shale companies "share the pain," they have already succeeded. A similar price war, initiated by Saudi Arabia in 2014 for the express purpose of suppressing U.S. shale oil production, failed, but only because investors were willing to prop up the stricken shale producers with massive loans and infusion of capital. For shale oil producers, who use an expensive methodology of extraction known as "fracking," to be economically viable, the breakeven price of oil per barrel needs to be between $40 and $60 dollars. This was the price range the Saudi's were hoping to sustain when they proposed the cuts in oil production that Russia rejected.

The U.S. shale oil producers, saddled by massive debt and high operational expenses, will suffer greatly in any sustained oil price war. Already, with the price of oil down to below $35 per barrel, there is talk of bankruptcy and massive job layoffs -- none of which bode well for Trump in the coming election.

It's clear that Russia has no intention of backing off anytime soon. According to the Russian Finance Ministry , said on Russia could weather oil prices of $25-30 per barrel for between six and ten years. One thing is for certain -- U.S. shale oil companies cannot.

In a sign that the Trump administration might be waking up to the reality of the predicament it faces, Treasury Secretary Steve Mnuchin quietly met with Russia's Ambassador to the U.S., Anatoly Antonov. According to a read out from the Russian Ministry of Foreign Affairs, the two discussed economic sanctions, the Venezuelan economy, and the potential for "trade and investment." Mnuchin, the Russians noted, emphasized the "importance of orderly energy markets."

Russia is unlikely to fold anytime soon. As Admiral Josh Painter, a character in Tom Clancy's "The Hunt for Red October," famously said , "Russians don't take a dump without a plan."

Russia didn't enter its current course of action on a whim. Its goals are clearly stated -- to defeat U.S. shale oil -- and the costs of this effort, both economically and politically (up to and including having Trump lose the 2020 Presidential election) have all been calculated and considered in advance. The Russian Bear can only be toyed with for so long without generating a response. We now know what that response is; when the Empire strikes back, it hits hard.

Scott Ritter is a former Marine Corps intelligence officer who served in the former Soviet Union implementing arms control treaties, in the Persian Gulf during Operation Desert Storm, and in Iraq overseeing the disarmament of WMD. He is the author of several books, including his forthcoming, Scorpion King: America's Embrace of Nuclear Weapons From FDR to Trump (2020).

[Mar 15, 2020] Is a Zero Growth Economy Viable?

Mar 15, 2020 | angrybearblog.com

Stormy | March 12, 2020 1:44 pm

US/Global Economics The present pandemic demonstrates that the global economy is closely tied to consumer spending. Suppose the pandemic is merely a foretaste of the effects of climate change and ecological destruction. Can we fashion a world base on Zero Growth, a Steady State Economy?

Zero growth might well entail the following:

1. A fixed and renewal body of resources.
2. A demographic balance, i.e., a fixed population size.

Can such an economy enable all of humanity to prosper and grow? If so, what must be do to enable us to grow and prosper?

Can we have an economy where consumption is stable, i.e., does not grow?

Or, to put it another way, where the amount of capital spent on consumption is constant, fixed.


Carol , March 12, 2020 2:14 pm

Changes! Not necessarily in any order
1. Stop glorifying "success" as the accumulation of things and money
2. Start defining success as a well balanced, creative life with rich human communications and community ties
3. Get rid of excessive wealth and poverty. Cultivate the "enough is enough" mentality
4. unleash creativity, without tying it to moneymaking.
5. Of course, a UBI. With that, many stressors leading to cancerous economic growth can be removed. The push to have children to support you in old age is gone (a driver in poorer countries). Yes, some people won't be interested in what we like to call work, but then, most work is in service to the cancerous economy.
6. Of course, universal health care
7. Of course, a serious community approach to child bearing, more realistic than the individualistic "I should be able to have as many children as I want."
8. A huge shift on emphasis from "lemme grab all I want" to "I am a part of the whole, and responsible for its well-being" including ecosystems

This would be nice, but the underpinnings of our current economy are based on "individualism." To have people change their philosophies to more communitarian ones without the soul crushing rule making that many non-individualistic societies indulge in would require a mature, humane approach to life in general.

2slugbaits , March 12, 2020 3:25 pm

Does zero growth mean zero sum? If the latter, then I don't think the non-OECD countries will buy into it. If not, then good luck convincing the OECD countries to cut back their consumption.

Stormy , March 12, 2020 4:01 pm

Hi, 2slugbaits–I remember our discussions from many years ago. Nice to read your responses again.

Your question is a good one. No, I do not mean "zero sum." Given that
radically falling consumer consumption may lead to a recession equal to or worse than 2008 --

Can we have an economy where consumption is stable, i.e., does not grow?

Or, to put it another way, where the amount of capital spent on consumption is constant, fixed.

I would want such an economy to be fair to all.

The conditions I outlined in my piece still hold, I think.

Stormy , March 12, 2020 4:06 pm

Carol,

Do you think your goals are feasible? Do you think a different kind of governance is needed to achieve such an economy?

J.Goodwin , March 12, 2020 7:10 pm

You can in many cases create a greater amount of something with the same or fewer inputs.

I think the key isn't non-growth consumption, but non-growth inputs.

Stormy , March 12, 2020 7:26 pm

J. Goodwin,

That is a great observation! A cleaner way of putting it. I am going to chew on that one for a while.

thanks.

[Mar 15, 2020] US seeking to carve out Sunni state as its influence in Iraq wanes: Wehrmacht occupying Ukraine vs US occupying Iraq.

Mar 15, 2020 | www.moonofalabama.org

Kali , Mar 14 2020 18:26 utc | 18

The neocons trying to control Trump are going to have a hard time this year because of the election. Trump knows his people voted for him because of his promises to get the troops back home. Of course the neocons want to build up more and more troops in Iraq or even split Iraq into 3 different countries. The Iraqi and Iranian leaders with the Syrians to a lesser degree will try to take advantage of Trump's dilemma. The Kurds are involved also. This is all explored by Pam Ho How Much Do You Suck (To lose a popularity contest with Saddam Hussein)

Willy2 , Mar 14 2020 18:32 utc | 19

- The US knows it "influence" is waning and tries to "carve out" a sunni "rump state" in North-West Iraq. First the US fights ISIS in that same area/region from the year 2014 onwards and now they are supposed to fight in FAVOUR of the sunnis/ISIS ?

"US seeking to carve out Sunni state as its influence in Iraq wanes"

https://www.middleeasteye.net/news/us-seeking-carve-out-sunni-state-its-influence-iraq-wanes

- Some politicians are recognizing that the killing of Qassam Sulemani has weakened the US position in the Middle East.

"Killing Soleimani made US 'weaker' in Middle East, US senator says".

https://www.middleeasteye.net/news/killing-soleimani-made-us-weaker-middle-east-us-senator-says

arata , Mar 14 2020 19:37 utc | 29
General McKenzie said they have bombed a civilian air port in Karbala was a right decision, Iraqi police force who were killed, they shouldn't be there!
See the video 13:00 onward.
Peter AU1 , Mar 14 2020 19:50 utc | 32
arata 29
Rueters had a piece on it which I linked in the last Iraq thread. Total yank arrogance and exceptionalism.

https://www.reuters.com/article/us-iraq-security-usa-iran-retaliation-mi/iraq-condemns-u-s-air-strikes-warns-of-consequences-idUSKBN2101AD?il=0
""These locations that we struck are clear locations of terrorist bases," said Marine General Kenneth McKenzie, head of the U.S. military's Central Command.

"If Iraqis were there and if Iraqi military forces were there, I would say it's probably not a good idea to position yourself with Kataib Hezbollah in the wake of a strike that killed Americans and coalition members," he told a Pentagon news briefing."

dltravers , Mar 14 2020 21:40 utc | 40
Despite Trump the Iraq policy transcends his administration and will continue in some form in the future. There will be a continued presence in some form and in some part of the country. Our beloved ally in the region demands our presence.

They smartly keep the presence small with no draft remembering that is what took them out of Nam. An angry draft worthy populace, a counter culture disillusioned with the murder of their liberal anti war leadership by the state, and ample media coverage of the war carnage.

All of that is long gone, and even with the age of internet reporting the populace has been bought off with entertainment, amazon, porn, and bullshit.

Abe , Mar 15 2020 0:39 utc | 54
@43

Parallel is IMO very interesting, Wehrmacht occupying Ukraine and US occupying Iraq. In both cases there was minority that welcomed occupier with open arms, wanting to oppress majority of own country folks due to earlier grievances. In both cases, invader didn't want to bother with using that minority to own goals, as they saw them all as inferior race. And invader was in both cases more interested in conquering more powerful neighbor to the east.

Irony is that, if Nazi Germany/US didn't look at Ukraine/Iraq people as inferior race they could use them for own goal to fight Russia/Iran. But, dumb as they are, they stuck all those Ukrainians into camps(lot of them sympathizers to Germany/rabidly against Russia)/ disbanding ex. Saddam's army and made kernel of future anti US force into region, not to mention Kurdish question.


Peter AU1 , Mar 15 2020 0:39 utc | 55
53 Snake put up a link back up the thread.
https://www.presstv.com/Detail/2020/03/14/620858/Iraq-military-demands-foreign-forces-swiftly-withdraw-following-US-air-raids
"Iraqi lawmakers unanimously approved a bill on January 5, demanding the withdrawal of all foreign military forces..."

"Later on January 9, former Iraqi prime minister Adel Abdul-Mahdi called on the United States to dispatch a delegation to Baghdad tasked with formulating a mechanism for the move.

According to a statement released by his office at the time, Abdul-Mahdi "requested that delegates be sent to Iraq to set the mechanisms to implement the parliament's decision for the secure withdrawal of (foreign) forces from Iraq" in a phone call with US Secretary of State Mike Pompeo."

US in response moved to a few bases they intended to occupy and give the two finger salute to Iraq. Trump threatened sanctions and theft of Iraq's oil money which is in the US. Pentagon now moving patriots in.

Jackrabbit , Mar 15 2020 2:43 utc | 69
Question to b @53: ... it was a non-binding resolution.

It's "non-binding" on USA only because the Prime Minister conducts foreign policy and there's no current written basing agreement between Iraq and USA that can be terminated. The resolution demands that the Prime Minister arrange for the departure of US troops.

The resolution is binding on the Prime Minister because it was a valid vote in accordance with Iraqi Parliamentary procedure.

USA refused to discuss leaving Iraq and claimed that the Parliamentary vote was "non-binding" because it was unrepresentative (USA got their Sunni and Kurd sympathizers to boycott the vote). But Parliament still had a quorum, so the vote is legal and binding.

<> <> <> <> <> <>

Is it enforceable?

USA/NATO are very unlikely to leaving willingly. We are seeing the start of a civil war in Iraq because most Sunnis and Kurds support USA/NATO remaining while Shia want USA/NATO to leave.

!!

james , Mar 15 2020 2:36 utc | 67
just start with the first lie and go from their... usa / uk lied the world into going to war on iraq... and from their the lies just keep on getting stacked.. if you can't acknowledge the first lie, you probably are incapable of recognizing all the other lies that have been thrown on the same bullshit pile... one big pile of lies and bullshite - a specialty of the exceptional country..
james , Mar 15 2020 2:25 utc | 65
@ 63 question.. you like this usa style bullshit that buys politicians in iraq and when that doesn't work, they go on to the next attempt at installing a politician willing to agree to their bullshite? interesting bullshit concept of democracy if you ask me... everything has a price tag and honour is something you can pick up at the grocery store... right..

[Mar 15, 2020] While it is still popular to claim that the United States has never defaulted on its debt, this is a myth

Mar 15, 2020 | www.moonofalabama.org

Likklemore , Mar 14 2020 22:42 utc | 44

@c1ue 28 and 30

Given that 2/3rds or more of the debt is owed to Americans

suggest you whisper that to the Chinese, other sovereign holders and non-US individuals - you know those Tbills and Tbonds.

Nobody has a better credit rating than the USG - because the USG can literally not default.

Really? Why did S&P downgrade US credit rating in 2014?

and

what do you think happened on August 15 1971? that date can be categorized as recent!

LINK


[.]
While it is still popular to claim that the United States has never defaulted on its debt, this is a myth. The US has been forced to default a couple of times throughout history, the last of which being when Richard Nixon&rsquo closed the gold window. By cutting the ability of foreign governments to redeem US dollars for gold, America was allowed to pay back past debt with devalued fiat money. This form of default has long been a popular option for governments with debt obligations it can't or won't honor.

Of course, as Peter Klein wrote last week, even Trump's suggestion of the US restructuring its debt isn't the doomsday scenario CNBC talking heads have made it out to be, noting that:

[T]he idea that the US can never restructure or even repudiate the national debt -- that US Treasuries must always be treated as a unique and magical "risk-free" investment -- is wildly speculative at best, preposterous at worst.

Murray Rothbard himself advocated for outright repudiating the national debt, arguing:

The government is an organization, so why not liquidate the assets of that organization and pay the creditors (the government bondholders) a pro-rata share of those assets? This solution would cost the taxpayer nothing, and, once again, relieve him of $200 billion in annual interest payments. The United States government should be forced to disgorge its assets, sell them at auction, and then pay off the creditors accordingly.

Trump himself has even touched on the possibility of selling of assets held by the Federal government as a form of debt reduction.[.]

Oops then there was 1979 said caused by word-processing error
so we defaulted on some of them."

c1ue dear friend, the current level of US debt is unsustainable. Never mind the happy cheerleaders promoting mighty U.S. is the wealthiest nation on earth. Have no fear our dollar is good as gold, backed by the full faith and credit of Uncle Sam.

Here is a brief history of U.S.defaults starting with year 1790- LINK

[Mar 11, 2020] Saudi's budget requires $85//bbl and flooding the market on no demand is stupid.

Mar 11, 2020 | www.moonofalabama.org

Likklemore , Mar 10 2020 19:38 utc | 13

Posted by: Michael Droy | Mar 10 2020 18:34 utc | 8

" Oil. Saudi has 92 years of reserves.

No. There is no independent third party certification letter with respect to the balance of the kingdom's proven oil equivalent reserves. Could be near 40 years and that figure is with heaping generosity.

Poor Matt:
Twilight in the Dessert by Matt Simmons
he was found in his swimming pool. Tut, tut.

With tiny production costs, doubling output at half the price makes sense.

if you think they can, I have two acres of oceanfront at a fair deal --- priced in cents.

Saudi's budget requires $85//bbl and flooding the market on no demand is stupid.


karlof1 , Mar 10 2020 20:22 utc | 18

Can't completely agree with Tyler Durden here on his wide-ranging postulation, "Putin Launches 'War On US Shale' After Dumping MbS & Breaking Up OPEC+" mainly because it consists of too much speculation and not enough on facts and statements of those involved in the decisions. The Bloomberg story on which this is mostly based is almost 100% speculation. IMO, this is yet another attempt to bash Russia for the massive mistakes made by the Outlaw US Empire--for years, fracking's been known as a Ponzi Scheme to those closely watching, and it was already set to implode. This Sputnik article calls the Bloomberg item Bantha Pudu and offers a completely different explanation that looks at Saudi behavior which all the Western BigLie Media outlets omitted from their coverage.

Additional opinions and analyses were provided in this Sputnik article that tend to back the analysis from the previous article. But with the internal turmoil within Saudi over what's clearly an ongoing power struggle surly contributed to Saudi's choices. As with almost all reports coming from the West about anything Russian or Chinese, they must be treated with much skepticism. This makes at least the third time lowering the price of oil through increased production aimed to harm Russia and is likely the genuine reason at work again.

As for the Outlaw US Empire's fracking corps, we shall see if today's rebound is merely a dead cat bounce, as it's now close to impossible to further hide their Enron Accounting as their bonds descend to Junk status.

J Swift , Mar 10 2020 21:06 utc | 31
karlof1 @ 18

Alexander Mercouris at the Duran also recently posted his take, saying he felt the oil market meltdown was almost entirely the doing of MbS. Essentially he posits that MbS was getting more and more panicky, and Russia was in effect so preoccupied with the antics of Erdogan that they weren't paying MbS the attention he thought he deserved...and it isn't impossible that there was indeed a CIA plot to take him out. At any rate, Mercouris believes he was basically just firing one across the bow of Russia to get their attention, but of course by taking a demanding tone with Putin he almost guaranteed that he would receive the lesson in manners for which the Russians are becoming more and more well known. Mercouris feels after letting him sweat it a bit to learn his lesson, they will work out something with the Saudis, but their return demands may be stiff.

While I do tend to agree this was probably all precipitated by MbS and his mental instability, I can easily see the Russians long-range planning having long known that this day--for one reason or another-- would eventually come, and deciding to bask in the glow for just a bit more than Mercouris anticipates. After all, US fracked gas prices will now be massively greater than Russia can provide its gas for, which with Merkle on the ropes anyway Putin might feel is a very good time to send the Germans a reminder of what they risk if they don't consummate the Nordstream 2 project. And after the years of illegal sanctions, it must feel very good to be in Russia's position, where they know they can weather the storm far better than their antagonists. So while I don't think this was Russia's doing, I can easily see them taking their sweet time to come to a new deal, and even then at a price level that will keep the Saudis and US frackers on their back foot...and maybe try to put more distance between MbS and the US, too.

Peter AU1 , Mar 10 2020 22:17 utc | 39
Regarding Putin and MBS on the oil. Who funds and supports HTS al qaeda in Idlib. I am guessing the Saudi's have a big input there. Reports some time back that the drones AQ was using to attack the Russian airbase used high tech US components.
Tuyzentfloot , Mar 10 2020 22:23 utc | 41
I recall ex UK ambassador Peter Ford saying somewhere last year that the Saudis were outspent by an order of magnitude by Qatar in Syria. That Qatar is funding like 80% of it all. Things may have shifted a bit since.
Abe , Mar 10 2020 23:58 utc | 51
Regarding KSA and their oil gamble - if I were Houthi strategist, I would wait for a while for KSA to get knee deep into this experiment, then launch missile attack on their biggest refineries and pipes. With one salvo whole KSA statehood could be shattered. Sweet sweet revenge and guarantee not to get oppressed by KSA genocidal maniacs in future.
ARN , Mar 11 2020 0:43 utc | 57
and regarding how much oil is left in Saudi even here they are calling them liers..

"the Kingdom will desperately need another primary energy source in the relatively near future because it has nowhere near the amount of oil remaining that it has stated since the early 1970s"

https://oilprice.com/Geopolitics/International/The-Great-Saudi-Shale-Swindle.html

[Mar 11, 2020] KSA will need another energy source in the relatively near future because they have much less oil remaining that it has stated since the early 1970s

Mar 11, 2020 | www.moonofalabama.org

ARN , Mar 11 2020 0:43 utc | 58

and regarding how much oil is left in Saudi even here they are calling them liers..

"the Kingdom will desperately need another primary energy source in the relatively near future because it has nowhere near the amount of oil remaining that it has stated since the early 1970s"

https://oilprice.com/Geopolitics/International/The-Great-Saudi-Shale-Swindle.html

[Mar 11, 2020] The demise of oil is overstated and the rise of renewables is also

Mar 11, 2020 | www.moonofalabama.org

snedly arkus , Mar 10 2020 23:48 utc | 50

The demise of oil is overstated and the rise of renewables is also. Electric cars? Where do you think the power is going to come from? Forget nukes and hydro as well healed enviros will fight to the death to stop them. Japan is closing their nukes and going to coal. Same with Germany. Without a way to store electricity renewables are a lost cause that needs fossil backup. Molton salt lovers won't tell you about the huge solar molton salt plant near Tonopah Nevada that's been mothballed for a year due to being totally unreliable. Or the solar plant at Ivanpah in Nevada that has never lived up to expectations and has to have a gas plant running full time to make up for night and shortfalls. The grids, especially local grids in your neighborhood are creaky and will never handle the amount of electricity if we all go to electric cars and eliminate gas heat, gas hot water, and gas cooking in favor of electric. When they tell you how much to upgrade the grid they are only talking about the main grid and not the even larger expense of upgrading the local. Some Australian neighborhoods have had grid failure with half a dozen electric cars charging at once.

Thanks to US sanctions Venezuela is not pumping much oil. To make up for the loss of the Venezuelan crude which the US Gulf coast refiners relied on they are now importing a bunch of heavy crude from RUSSIA along with other Russian petroleum products. Next door to Venezuela in Guyana huge finds of oil are in the process of being exploited. Point is the more they look the more oil they find so to say oil is on it's way out is far too premature. Point is renewables as they now exist are not ready for prime time in a modern society that needs a constant flow of electricity. Plenty of pie in the sky predictions of we'll solve the technical problems but not much in results.

In the US we are getting large numbers of wind farms getting old and junked and their large rotors made of various composites are not recyclable and are now filling up landfills. Lots of blather of we can recycle worn out batteries, which are lead acid, but not much if we can do so with lithium ion. Not to mention the cleared land and roads needed to employ wind and solar and the destruction of animals and their habitat.

Without hookup to the grid all those bragging about their cheap electricity, as power companies are required to buy their electricity at top dollar, is no longer cheap. Large solar and wind installations get a paid subsidy for the electricity they produce without which those renewables are not cost competitive with fossil fuels. The average ratepayer and taxpayer does not realize they are subsidizing those "competitive" rates.

[Mar 10, 2020] Oil war between KSA and Russia

Mar 10, 2020 | www.nakedcapitalism.com

timbers , March 9, 2020 at 8:04 am

It could crash Mr Market oil stocks and wipe out fracking and such, creating possible liquidity issues and bankruptcies which could spread. But honestly I'm not up on the details if this could even cause any domino affects with bankruptcies, or not.

But to the Fed, Mr Market is the whole economy and nothing but the economy, Fed job #1 being to make stocks always go up.

Saudi Arabia is far more dependent on oil and tourism (also being hit) than Russia. Hence Russia's reserves I think would last far longer that SA's can.

The Rev Kev , March 9, 2020 at 8:37 am

Saudi Arabia is already in the hurt locker and has run down their financial reserves under Mohammad Bin Salman Al Saud. In addition, their little expedition to Yemen is costing them billions of dollars per month which is not helping. With international tourism fading away, the threat of some two million pilgrims not being able to travel to Mecca and spending their money there as well as plummeting oil prices, 2020 is not going to be a good year for Saudi Arabia. Just to make things worse, they have their own problems with Coronavirus which may knock out important links in the Royal family.

timbers , March 9, 2020 at 8:58 am

Indeed. A pattern with Salman seems to be emerging, of him rashly starting wars or policies he can't win/finish. Makes you wonder if others in the royal family are seeing this and noticing SA is burning thru it's reserves and the solution might be a change in leadership?

The Rev Kev , March 9, 2020 at 9:06 am

I was just reading an article saying how Saudi Arabia need $60 a barrel for their budget but that now it is heading towards $20 a barrel. If they wanted to achieve a massive cost-saving, they could give their Royal Family the chop – perhaps literally so. Last I heard there were over 6,000 of them-

https://asiatimes.com/2020/03/oil-to-hit-20-amid-saudi-russian-price-war/

vlade , March 9, 2020 at 9:16 am

SA would have more problems with reserves than Russia, that's definite – if nothing else, Russia exports/has other things than oil, SA doesn't.

Oil stock crash would not cause Western recession. It could well cause recession in Texas and similar, but I very much doubt it would cause even US recession, as the problems in Texas & co would be offset by the much lower prices at the pump.

Oil debt crash would be much worse, but still I suspect brunt of it would be borne by investors, not banks.

farmboy , March 9, 2020 at 10:01 am

best energy writer Gregor McDonald breaks it down

barefoot charley , March 9, 2020 at 12:21 pm

Thanks for this excellent analysis! When oil consumption permanently plateaus, as it's about to, the stock and debt value of the industry . . . flatlines.
That's the good news from Grow or Die.

[Mar 10, 2020] The US shale sector is getting completely killed. A complete bloodbath. Billions of dollars in equity wiped out

Mar 10, 2020 | www.moonofalabama.org

karlof1 , Mar 9 2020 20:12 utc | 36

This bird tweets :

"The U.S. shale sector is getting completely killed. A complete bloodbath. Billions of dollars in equity wiped out.

"Occidental Petroleum is down 44%. EOG is down 35%. Continental Resources down 40%. Smaller players like Parsley down more than 50%."

I suggest this bird look at one of those corp's balance sheets since they had very little equity but lots of liabilities (Assets=Liabilities+Equity) as Assets and Liabilities where allowed to grow with the use of interest-free money to keep the Ponzi Scheme afloat. Also recall that CEOs often get paid in shares which get dividends. Often those dividends are paid using the zero interest loan money leaving the corp with a bigger, unstable pile of debt and the CEO with a purse fattened by the loan instead of actual company performance, ie, profits.

[Mar 09, 2020] Russia's 2020 federal budget assumes a price of $42.4 per barrel of Urals crude oil blend (

Mar 09, 2020 | www.moonofalabama.org

S , Mar 9 2020 6:19 utc | 73

@Likklemore #26:
Russia will be fine all the way down to $20//bbl

Russia's 2020 federal budget assumes a price of $42.4 per barrel of Urals crude oil blend (the prices of other oil & gas exports, such as other crude oil blends, natural gas, LNG and petroleum products, are converted into Urals blend prices using statistical formulas). If the market price turns out to be higher, the surplus goes into the National Wealth Fund ($124 bn as of December 1, 2019; currency composition is 45% U.S. dollars, 45% euros, 10% pound sterling); conversely, if the price is lower, the deficit is financed from the NWF. This is known in Russia as "the budget rule" ( бюджетное правило ).

You can see the prices of various crude oil blends at the OilPrice.com 's Oil Price Charts page, but note that the Urals blend prices shown are lagging by three days as of the time of this comment. Generally, Urals blend price is somewhere between WTI and Brent blend prices, so it should be around $32/bbl at the moment. Meaning, Russia will now have to start taking money from the NWF.

If the low prices persist for a long period of time, Russia can balance the budget by devaluing the ruble, as its foreign debt is one of the lowest in the world -- no budget cuts are necessary. Russia's foreign exchange reserves currently stand at $570 bn (77.1% foreign currencies, 1.2% SDR, 0.7% reserve position in the IMF, 21.0% gold).

[Mar 08, 2020] Why "orphan" oil and gas wells are a growing problem for states

Mar 08, 2020 | www.moonofalabama.org

Trailer Trash , Mar 6 2020 22:22 utc | 35

>USA shale producers

Soon people won't have to worry much about damage from new wells. Instead they will have to worry about existing-and-soon-to-be-abandoned wells. This is already a huge problem in Alberta, where "it's estimated that more than 155,000 Alberta energy wells have no economic potential and will eventually require reclamation".

But not to worry. It will only cost $47 Billion for Alberta to clean up the mess .

No surprise that it is worse in the US. I couldn't quickly find a cost estimate.

Nobody knows how many orphan and abandoned drilling sites litter farms, forests and backyards nationwide. The U.S. Environmental Protection Agency estimates there are more than a million of them. Unplugged wells can leak methane, an explosive gas, into neighborhoods and leach toxins into groundwater.

Why "orphan" oil and gas wells are a growing problem for states

[Mar 07, 2020] Is the U.S. Fracking Boom Based on Fraud?

Notable quotes:
"... As Fastow explained, in finance, the difference between a loophole and fraud isn't always easy to identify. And that may be something the U.S. fracking industry is working to its advantage. ..."
Mar 07, 2020 | www.nakedcapitalism.com

Posted on March 6, 2020 by Yves Smith Yves here. It really is remarkable how super low interest rates have led investors on a widespread basis to pour money down ratholes. Unicorns is one. Another has been fracking, which despite being another widespread cash sink, remarkably has kept sucking in funding. As we pointed out in 2014 :

John Dizard at the Financial Times (hat tip Scott) gives a more intriguing piece of the puzzle: the degree to which production is still chugging along despite it being uneconomical. The oil majors have been criticized for levering up to continue developing when it is cash-flow negative; they are presumably betting that prices will be much higher in short order.

But the same thing is happening further down the food chain, among players that don't begin to have the deep pockets of the industry behemoths: many of them are still in "drill baby, drill" mode. Per Dizard:

Even long-time energy industry people cannot remember an overinvestment cycle lasting as long as the one in unconventional US resources. It is not just the hydrocarbon engineers who have created this bubble; there are the financial engineers who came up with new ways to pay for it.

Justin Mikulka argues that one reason these persistently unprofitable fracking companies keep going is via fraud.

By Justin Mikulka, a freelance writer, audio and video producer living in Trumansburg, NY. Originally published at DeSmogBlog

In a 2016 interview with Fraud Magazine , former Enron CFO Andrew Fastow explained what he thought made him so successful while at the former energy corporation that's now infamous for financial scandal.

"I think my ability to do structured financing, to finance things off-balance sheet and to find ways to manipulate financial statements -- there's no nice way to say it. Like I said at the conference, I was good at finding loopholes."

As Fastow explained, in finance, the difference between a loophole and fraud isn't always easy to identify. And that may be something the U.S. fracking industry is working to its advantage.

Fastow, the convicted fraudster, does admit that what they did at Enron misled investors. "We created something that was monstrously misleading, but any one of those deals alone wasn't necessarily considered fraudulent," he said.

Fast-forward to today and a different part of the energy industry: The U.S. shale oil and gas industry has lost more than a quarter trillion dollars since 2007, while being sold to investors as an economic boom, even at oil prices much lower than those of recent years. Does that financial mismatch seem misleading? Or perhaps, familiar?

In an unexpected twist, Fastow now gives talks to the energy industry on ethical leadership.

Sounding the Alarm

Bethany McLean was the first reporter to question whether Enron was a financially sound company in a 2001 article for Fortune magazine. McLean went on to co-author the book The Smartest Guys in the Room , which documented the fall of Enron due to its fraudulent practices, including the ones Fastow engineered.

In 2018, McLean also published the book Saudi America , which highlighted many of the financial challenges the fracking industry has faced. In a recent interview for Texas Monthly's podcast Boomtown , McLean explained one of the very accepted and blatantly misleading practices of the fracking industry:

I'd raise a couple of points. One is that companies have long hyped these break-even numbers. They say we can break even at $25 a barrel, we can break even at $20 a barrel. And then you look at their consolidated financial statements and they are losing money. And so something is going wrong the people called it to me [sic] corporate math or investor economics. So they were trying to put together these investor pitch decks that would show investors a set of economics that weren't real. So they would show you that they could break even on a well at $25 barrel of oil but then yet you'd go to the corporate financial statements and they were losing money.

Is that a loophole? Where you can openly misrepresent to investors the financial reality of your business? Or is it fraud?

As more and more players in the fracking industry run out of options and file for bankruptcy, investors are beginning to ask questions about why all the money is gone.

"This is an industry that has always been filled with promoters and stock scams and swindlers and people have made billions when investors have lost their shirts."

In a bonus episode of #Boomtown , we speak to @bethanymac12 about the fracking industry. https://t.co/sSmXUM3ANu

-- Texas Monthly (@TexasMonthly) February 6, 2020

The Blank Check Companies

Much like with the housing crisis that caused the financial crisis of 2008, the fracking boom has led to Wall Street bankers finding innovative ways to finance a money-losing endeavor. Some companies are now even selling bonds based on future well performance , a concept similar to the mortgage-backed securities that led to the 2008 housing crisis.

Another Wall Street invention is what is called a "special purpose acquisition company" ( SPAC ), or, as they are also known, blank check companies. The way these investments work is a big bank or private equity firm backs a management team to raise money for the SPAC with the agreement that the leaders of the SPAC will then at some point make a "special purpose acquisition" -- which means they will find an existing company and buy it.

They are called blank check companies because the management is given a blank check to buy whatever they choose. In the 1980s, the Wall Street Journal ( WSJ ) noted that "blank-check companies were often associated with penny-stock frauds." In a 2017 article on the oil industry, the WSJ reported that " SPAC s were a hallmark of the frothy days before the financial crisis [of 2008]."

Understandably, SPAC s were often seen as a risky investment, but much like with the housing crisis, the biggest names on Wall Street are getting involved and giving the concept legitimacy, with Goldman Sachs starting to back SPAC s in 2016. And new fracking companies have come about as a result.

Ben Dell, a managing partner at investment firm Kimmeridge Energy, explained one of the risks of SPAC investments to the Wall Street Journal. " SPAC management teams have an incentive to spend the money they have raised no matter what, so they can collect fees and pay themselves a salary and stock options at the company they purchase," Dell said.

" SPAC s are the most egregious example in the industry of executive misalignment with investors," Dell told the WSJ .

As I have previously reported , one of the problems with the fracking industry is that CEO s are paid very well even when the companies lose money. According to Dell, SPAC s take this problem to a new "egregious" level.

Alta Mesa: A Star Is Born

To successfully raise money for a blank check company, having some star power in the management helps. As the Wall Street Journal has noted, investments in SPAC s " are largely bets on their executives ."

Jim Hackett would seem to be the ideal candidate to lead a SPAC in the fracking industry. Hackett has an impressive resume: the former CEO of fracking company Anadarko, former chairman of the Federal Reserve Bank of Dallas , an executive committee member of the industry lobbying group American Petroleum Institute , and partner at the major private equity firm Riverstone Holdings.

In 2013 Hackett retired from Anadarko to attend Harvard Divinity School to get a degree in theology. However, he was still a partner at Riverstone and in 2017 was lured back to the fracking business to run a SPAC backed by Riverstone.

The SPAC raised a billion dollars while being advised by the biggest names in the business, including Goldman Sachs and CitiGroup. The initial blank check company was called Silver Run Acquisition Corp. II .

Hackett used the money to buy two companies in Oklahoma -- an oil producer and a pipeline -- and the new combined company Alta Mesa was valued at $3.8 billion.

The Future Was Bright for Alta Mesa

Hackett and Alta Mesa had big plans for making money fracking wells in Oklahoma, which included forecasts for big increases in oil and gas production from the newly acquired assets with very low break-even numbers.

When the Wall Street Journal reported the creation of Alta Mesa, it noted , "Alta Mesa's core acreage in Northeast Kingfisher County has among the lowest breakevens in the U.S. at around $25 per barrel, the company said." Because oil was well over that price at the time, the future looked good, according to Hackett and Alta Mesa. Forbes reported that Hackett said Alta Mesa's holdings were "oil that will be economic even at $40 WTI [West Texas Intermediate]" and oil has been well over that mark since Hackett made that statement in 2017.

Like break-even numbers, another area where misleading investors in the oil industry might be particularly easy is making overly optimistic forecasts about how much oil will be produced by future wells. The Wall Street Journal has documented this as a significant problem for the U.S. shale industry.

Description of Alta Mesa assets in investor proxy statement. Credit: Screen capture from proxy statement.

In early 2018 when touting the potential of the proposed new company Alta Mesa, Hackett said that "its average well would produce nearly 250,000 barrels of oil over its life." A year later, Alta Mesa said it expected those wells would produce less than half that, only 120,000 barrels of oil over the life of the well.

In May last year, Alta Mesa was under investigation by the Securities and Exchange Commissions ( SEC ) "for possible issues in its financial reporting."

Later in 2019, Alta Mesa filed for bankruptcy after writing down its assets by $3.1 billion. The billion-dollar blank check had been spent, and it took less than two years to lose it all.

SEC Investigation and Multiple Investor Lawsuits

Alta Mesa's assets were sold off earlier this year. The SEC declined to comment on the status of the investigation.

In May 2019, the Houston Chronicle reported , "Alta Mesa also is facing a series of lawsuits. Some shareholders are suing claiming they were defrauded and lied to about the value of the company and its assets when the company was formed."

One lawsuit filed by the Plumbers and Pipefitters National Pension Fund claims that the proxy statement for Alta Mesa contained materially false and misleading information. That filing lays out a lot of facts to support that claim.

Statement for complaint for violation of the Securities Exchange Act of 1934. Credit: Screen capture of court documents

Another lawsuit alleges that Alta Mesa didn't pay the proper amount of royalties to landowners, with state investigations into this issue.

Yet another lawsuit has been filed against Riverstone for " misleading statements ."

Investors are saying they were misled by Hackett and Riverstone. The allegations are based on the claims that were made about how much oil the company could produce. In hindsight, those claims appeared wildly inaccurate and misleading. But is that fraud? Or just taking advantage of a loophole?

In January, the Houston Chronicle summed up the situation as it described Alta Mesa's downfall : "It was a dramatic fall from grace after significantly overestimating its potential in Oklahoma's STACK shale play "

While Alta Mesa is a spectacular example of how fast the fracking business can make large sums of money disappear after "significantly overestimating its potential," it also likely marks the beginning of investor lawsuits against many other failing fracking companies with similar histories.

Learning From Enron

When Jim Hackett decided to go to Harvard Divinity School, several favorable profiles about his choice were written, including one on the Harvard website. That article noted that one of the reasons Hackett decided to go to school was because of "the collapse of Enron, a disaster that he attributed to 'a failure in leadership' among people he knew well."

The speed with which Hackett and Alta Mesa went bankrupt is remarkable, indicating a likely failure in leadership.

However, Hackett seems to have learned something from former Enron executive Andrew Fastow: that there is work for former executives like them to teach the energy industry about ethics and morality.

Hackett is now a lecturer at the University of Texas at Austin Center for Leadership and Ethics .

Fraud? Or Just a Laughing Matter?
Good reporting is hard work but sometimes involves a bit of luck. Like when a Wall Street Journal reporter , in a room full of people hired to make forecasts of fracked oil and gas production, learned about the existence of much more accurate methods for predicting that oil production. And also learned that with accuracy comes much lower estimates of shale oil reserves.

The WSJ article that followed quoted Texas A&M professor and expert on calculating oil and gas reserves John Lee. "There are a number of practices that are almost inevitably going to lead to overestimates," said Lee. Those are the practices used by the industry, with Alta Mesa serving as just one example.

Overestimates are why Alta Mesa received funding but now no longer exists.

The Wall Street Journal reported that during a presentation given by Lee, an audience member "stood up and challenged the engineers in attendance," asking why the forecasters weren't using accurate models like the ones that were available -- as Lee had described.

Another audience member explained the reason.

" Because we own stock," replied another engineer, "sparking laughter," according to the Wall Street Journal.

Is it misleading to laugh at your company's investors if you know the estimates you are giving them are inflated, but because you own the stock that benefits from those estimates, you do it anyway? Is that fraud? Perhaps that depends on if you get you get ethics lessons from Andrew Fastow and Jim Hackett.

Will the biggest innovation of the fracking revolution be making financial fraud a laughing matter?

A lot of people on EFT like to talk about how shale is fraudulent. That's simply not true:

You can't commit fraud when the rules are so lax you can just make shit up and it's still allowed.

-- Alpine High Fire Sale (@losingyourmoney) February 19, 2020


PlutoniumKun , March 6, 2020 at 6:43 am

While I've little doubt there is a lot of fraud, so much of the stupidity around fracking comes down to the old saying that its hard to make a man undrestand something when his job is to not understand it.

The financing of the oil and gas industry is almost entirely dependent on projections – projections of flow per well, and projections of future prices. All you need to do is make a few optimistic projections of one or both, and you've suddenly turned a dud into a highly valuable asset. Anyone can look at the pricing and question it, but with oil/gas, that is much harder with 'novel' types of well as there are few if any precedents. So if someone says 'the well is producing X per day, we can continue this flow for 3 years and when thats finished, we can drill down another 200 metres and replicate the same flow', there is nobody to contradict it. The drilling guys aren't going to argue, they want to keep their jobs. The geologist isn't going to argue, he has his mortgage to pay. The senior manager won't argue, he wants a promotion. The drilling company owners won't argue, they want to cash out. And the Wall Street financier won't argue, because he can pass on the risk to the equivelent of the last booms 'German bankers'.

So when someone like Arthur Berman – a geologist who has continuously being questioning the underlying geological assumptions – raises concerns – he's listened to politely, even invited to some conferences, but is otherwise ignored. Because its not in anyones interest to listen. There is literally nobody who's job it is to shout 'stop'. So much for self regulating markets.

While there may well be very severe economic consequences if and when this blows up in everyones face (and I suspect that Covid-19 will be the catalyst for this, oil demand is collapsing day by day), the big loser is the planet we depend on for our survival.

jackiebass , March 6, 2020 at 7:15 am

I live in NY on the PA border. Fracking is still happening south in PA but is only a fraction of what it once was. If you drive into PA you will see lots full of fracking materials that have sat there for a long time. At first for about two years it was a boom. The activity from fracking was amazing. Then as fast as it started it slowed down to a crawl. There are a few reasons in my opinion. The so called sweet sports were quickly fracked leaving less attractive sights. It was concealed that a fracked well produced most of it's gas in the first two years. After that the production from a well dropped off drastically. Locals soon lost their enthusiasm for fracking.There is still some fracking but it is hardly noticeable. Local people thought this would be great but attitudes soon soured. A few made big bucks at the expense of the rest. The fracking was in former coal country. The difference is coal lasted a lot longer. Now the majority of people in the area oppose fracking. I'm thankful that NY state banned fracking because of the negatives associated with fracking. I own 50 acres near the PA border. Before fracking was banned I was constantly hounded by leasing companies. I refuse to lease because to me my land was more important than a few bucks. I hope in my life time NY doesn't reverse the fracking ban. On another note there are wind farms where I live. I would leas to a wind company because there are fewer negatives and it's less intrusive.

jefemt , March 6, 2020 at 9:31 am

The good news is that if the companies were chasing you, you own the minerals. You can donate them to a conservation land trust and assure that no mineral extraction takes place, and get a tax benefit for the foregone production.

Win Win!

Ignacio , March 6, 2020 at 7:27 am

So, one first profits from fraud to later profit by lecturing everybody about ethics?
A-ma-zing!

Kevin C. Smith , March 6, 2020 at 10:02 am

BIG red flag for me when someone like Jim Hackett decides to go to Harvard Divinity School

Shiloh1 , March 6, 2020 at 10:22 am

Daniel Plainview was baptiized, but that was so he could drink Eli's milkshake later and club him to death with a bowling pin.

Colonel Smithers , March 6, 2020 at 11:09 am

Thank you, Kevin.

That sounds like my former CEO and chairman, Stephen Green, becoming an Anglican clergyman.

Ignacio , March 6, 2020 at 7:49 am

It can be argued that the money invested in many fracking companies with such inflated pay-back periods, ROIs or breakeven estimates, apart from fraud, could be considered as a private subsidy, just like Uber investors subsidize Uber taxi services. If we can blame it to low interest rates resulting in such subsidies, for fracking oil, unicorns, education, housing etc. to my knowledge this has only been argued in very few sites like here at NC or Wolf Street but merits a close examination. If pension and mutual funds are pouring a lot of money in such business with low to negative returns what consequences are to be expected in the future?

Trent , March 6, 2020 at 8:18 am

Eight to Ten years ago you would have seen giant trucks moving water and dirt from fracking sites when you got off the turnpike around Donegal PA. Since about 2015 or 2016 i'd say that completely died. Pittsburgh actually had one year of population gain due to the fracking boom but thats done. Yves mentioned investors and low interest rates chasing bad investments and fraud. I'd say the same thing is going on in healthcare based on my exp. of it and the amount of money floating around. We need higher interest rates to nip this stuff in the bud and re-balance the economy.

a different chris , March 6, 2020 at 12:11 pm

>We need higher interest rates

Yup. In so many ways.

tegnost , March 6, 2020 at 8:25 am

This pretty much says it all regarding the health of our eCONomy, but hey, after it all falls apart we should have plenty of reformed criminals to teach ethics classes

"The Wall Street Journal reported that during a presentation given by Lee, an audience member "stood up and challenged the engineers in attendance," asking why the forecasters weren't using accurate models like the ones that were available -- as Lee had described.

Another audience member explained the reason.

"Because we own stock," replied another engineer, "sparking laughter," according to the Wall Street Journal."

fresno dan , March 6, 2020 at 8:39 am

In a 2016 interview with Fraud Magazine,
==============================================
I have to say, I was shocked, SHOCKED to find that there is a magazine actually, only devoted to fraud – that is published bi-monthly.
AND than I was shocked to find out that the magaine actually, only devoted to fraud is ONLY published bi-monthly

Zamfir , March 6, 2020 at 2:19 pm

That's what they say. After you take subscription, you'll find they publish monthly.

The Rev Kev , March 6, 2020 at 9:39 am

Is the U.S. Fracking Boom Based on Fraud? Is the Pope Catholic? There are going to have to be major structural changes in the world's economy in the next few years and with the demand for oil dropping, prices have gotten cheaper which is turning fracking into a non-profit industry. In any case, how are you suppose to frack with sick crews? This is one industry that needs to go away before it causes any more damage. You'd find more honesty in a boiler room brokerage firm than in this industry.

xkeyscored , March 6, 2020 at 12:33 pm

I did wonder why 'Fracking Boom' was in the title.

Carolinian , March 6, 2020 at 10:11 am

There's a recent documentary called The Price of Everything that is about the enormous sums being paid for every latest fad in modern art. The show says that all the great masters, old and new, have been locked up by museums or the super rich and so a recent flood of new investors are looking for any excuse to spend lots of money on paintings. Apparently there is so much money sloshing around at the top of our unequal economy that that these plutocrats don't even care if they lose their shirts on bad investments. The main thing is to keep it out of the hands of the poor.

Clearly we as a society are suffering from affluenza, at least among the elites who should all be virus quarantined and then maybe we will forget to check back.The show tries to pretend that this money driven art world is a cool thing. It had this viewer thinking of guillotines.

xkeyscored , March 6, 2020 at 12:37 pm

Unfortunately, those most negatively affected by affluenza are those not infected with it.

JBird4049 , March 6, 2020 at 6:11 pm

Yes, like all the people who cannot see the art. It's mostly buried in storage. What is the point of having over two thousand years of art from multiple civilizations, if most of it is hidden away and often only known from catalog descriptions or cramped tiny pictures.

TimH , March 6, 2020 at 10:51 am

If Enron was fraud, how come Uber isn't considered fraud?

a different chris , March 6, 2020 at 12:12 pm

Because people can still make money off it.

No, not *you*. Not *us*. But people that "matter".

lyman alpha blob , March 6, 2020 at 1:46 pm

You must mean the insiders who suckered the rubes into taking shares off their hands at the IPO. IIRC the IPO price was over $70/share. Right now it's just under $32 with no signs of every being a profitable enterprise.

Grifters, charlatans and mountebanks everywhere you look.

franklin kirk , March 6, 2020 at 11:03 am

Charging mineral resource rent, which everyone has an equal claim to, would help to reduce the tendency of financial shenanigans. The profit motive is crack to rent seekers.

Colonel Smithers , March 6, 2020 at 11:06 am

Thank you, Yves.

Speaking of Enron, it is perhaps appropriate that my employer's head of non core assets, toxic waste for fire sale, came from Enron. Standard Chartered has some, too.

Polar Donkey , March 6, 2020 at 11:32 am

It seems like the Russians today decided to put the final nail in U.S. fracking industry and turn the screws on Saudi Arabia.

inode_buddha , March 6, 2020 at 2:22 pm

Is the US a fraud?
.
Fixed it for you.

rd , March 6, 2020 at 5:31 pm

I think the big issue goes back to the investors and bond rating agencies, similar to the subprime mortgage crisis. If bondholders aren't willing to do the homework, then they don't get paid for the risk that they are undertaking. with the multiple prediction tools for well production, you can make up an optimistic and pessimistic case. If the bond yield doesn't cover that risk to your satisfaction, then you don't buy the bond or you demand a higher interest yield and lower bond price.

Instead, it seems like the industry is raising money from people who don't want to think more than a few months ahead on a multi-year investment. The challenges faced by the fracking industry have been well publicized for several years now. If an investor doesn't understand those challenges now and isn't looking at specific methods of calculating production yield etc., then they have only themselves to blame if their investment loses money.

This is a very different issue than if somebody flat out lies about whether or not wells exist etc.

A single well can make financial sense even if there will never be a net profit from it. Fracking is pretty similar to the Hollywood film industry where nobody ever has any net profits despite living high on the hog. "Don't ever settle for net profits. It's called 'creative accounting'." – Lynda Carter: https://en.wikipedia.org/wiki/Hollywood_accounting

elkern , March 6, 2020 at 5:52 pm

I dunno. There may be a sucker born every minute, but I can't picture enough of them getting born with a million (or billion) Dollars to blow on rackets like this to keep it going this long.

Sad to see that the Plumbers' Union Pension Fund was a victim; I hope that's not a pattern, but it would make sense. If it's a pattern, then it's no wonder the Fed tried so hard to postpone the next Crash until after the elections. How much junk paper has Wall Street sold to other Pension Funds? States & Municipalities are already squeezed by "unfunded liabilities"; how much repackaged funky Fracking paper are held by public (governmental) agencies? Damn, this is gonna be a mess.

I'd advise investing in popcorn, except that my 401k will probably evaporate soon, so maybe it's pitchforks.

JBird4049 , March 6, 2020 at 6:01 pm

CFO Fastow of Enron. How nice to see him land on his feet. The company made listening to the rolling blackout reports for California while driving to work a requirement.

[Mar 06, 2020] Is the U.S. Fracking Boom Based on Fraud?

Mar 06, 2020 | www.nakedcapitalism.com

Posted on March 6, 2020 by Yves Smith Yves here. It really is remarkable how super low interest rates have led investors on a widespread basis to pour money down ratholes. Unicorns is one. Another has been fracking, which despite being another widespread cash sink, remarkably has kept sucking in funding. As we pointed out in 2014 :

John Dizard at the Financial Times (hat tip Scott) gives a more intriguing piece of the puzzle: the degree to which production is still chugging along despite it being uneconomical. The oil majors have been criticized for levering up to continue developing when it is cash-flow negative; they are presumably betting that prices will be much higher in short order.

But the same thing is happening further down the food chain, among players that don't begin to have the deep pockets of the industry behemoths: many of them are still in "drill baby, drill" mode. Per Dizard:

Even long-time energy industry people cannot remember an overinvestment cycle lasting as long as the one in unconventional US resources. It is not just the hydrocarbon engineers who have created this bubble; there are the financial engineers who came up with new ways to pay for it.

Justin Mikulka argues that one reason these persistently unprofitable fracking companies keep going is via fraud.

By Justin Mikulka, a freelance writer, audio and video producer living in Trumansburg, NY. Originally published at DeSmogBlog

In a 2016 interview with Fraud Magazine , former Enron CFO Andrew Fastow explained what he thought made him so successful while at the former energy corporation that's now infamous for financial scandal.

"I think my ability to do structured financing, to finance things off-balance sheet and to find ways to manipulate financial statements -- there's no nice way to say it. Like I said at the conference, I was good at finding loopholes."

As Fastow explained, in finance, the difference between a loophole and fraud isn't always easy to identify. And that may be something the U.S. fracking industry is working to its advantage.

Fastow, the convicted fraudster, does admit that what they did at Enron misled investors. "We created something that was monstrously misleading, but any one of those deals alone wasn't necessarily considered fraudulent," he said.

Fast-forward to today and a different part of the energy industry: The U.S. shale oil and gas industry has lost more than a quarter trillion dollars since 2007, while being sold to investors as an economic boom, even at oil prices much lower than those of recent years. Does that financial mismatch seem misleading? Or perhaps, familiar?

In an unexpected twist, Fastow now gives talks to the energy industry on ethical leadership.

Sounding the Alarm

Bethany McLean was the first reporter to question whether Enron was a financially sound company in a 2001 article for Fortune magazine. McLean went on to co-author the book The Smartest Guys in the Room , which documented the fall of Enron due to its fraudulent practices, including the ones Fastow engineered.

In 2018, McLean also published the book Saudi America , which highlighted many of the financial challenges the fracking industry has faced. In a recent interview for Texas Monthly's podcast Boomtown , McLean explained one of the very accepted and blatantly misleading practices of the fracking industry:

I'd raise a couple of points. One is that companies have long hyped these break-even numbers. They say we can break even at $25 a barrel, we can break even at $20 a barrel. And then you look at their consolidated financial statements and they are losing money. And so something is going wrong the people called it to me [sic] corporate math or investor economics. So they were trying to put together these investor pitch decks that would show investors a set of economics that weren't real. So they would show you that they could break even on a well at $25 barrel of oil but then yet you'd go to the corporate financial statements and they were losing money.

Is that a loophole? Where you can openly misrepresent to investors the financial reality of your business? Or is it fraud?

As more and more players in the fracking industry run out of options and file for bankruptcy, investors are beginning to ask questions about why all the money is gone.

"This is an industry that has always been filled with promoters and stock scams and swindlers and people have made billions when investors have lost their shirts."

In a bonus episode of #Boomtown , we speak to @bethanymac12 about the fracking industry. https://t.co/sSmXUM3ANu

-- Texas Monthly (@TexasMonthly) February 6, 2020

The Blank Check Companies

Much like with the housing crisis that caused the financial crisis of 2008, the fracking boom has led to Wall Street bankers finding innovative ways to finance a money-losing endeavor. Some companies are now even selling bonds based on future well performance , a concept similar to the mortgage-backed securities that led to the 2008 housing crisis.

Another Wall Street invention is what is called a "special purpose acquisition company" ( SPAC ), or, as they are also known, blank check companies. The way these investments work is a big bank or private equity firm backs a management team to raise money for the SPAC with the agreement that the leaders of the SPAC will then at some point make a "special purpose acquisition" -- which means they will find an existing company and buy it.

They are called blank check companies because the management is given a blank check to buy whatever they choose. In the 1980s, the Wall Street Journal ( WSJ ) noted that "blank-check companies were often associated with penny-stock frauds." In a 2017 article on the oil industry, the WSJ reported that " SPAC s were a hallmark of the frothy days before the financial crisis [of 2008]."

Understandably, SPAC s were often seen as a risky investment, but much like with the housing crisis, the biggest names on Wall Street are getting involved and giving the concept legitimacy, with Goldman Sachs starting to back SPAC s in 2016. And new fracking companies have come about as a result.

Ben Dell, a managing partner at investment firm Kimmeridge Energy, explained one of the risks of SPAC investments to the Wall Street Journal. " SPAC management teams have an incentive to spend the money they have raised no matter what, so they can collect fees and pay themselves a salary and stock options at the company they purchase," Dell said.

" SPAC s are the most egregious example in the industry of executive misalignment with investors," Dell told the WSJ .

As I have previously reported , one of the problems with the fracking industry is that CEO s are paid very well even when the companies lose money. According to Dell, SPAC s take this problem to a new "egregious" level.

Alta Mesa: A Star Is Born

To successfully raise money for a blank check company, having some star power in the management helps. As the Wall Street Journal has noted, investments in SPAC s " are largely bets on their executives ."

Jim Hackett would seem to be the ideal candidate to lead a SPAC in the fracking industry. Hackett has an impressive resume: the former CEO of fracking company Anadarko, former chairman of the Federal Reserve Bank of Dallas , an executive committee member of the industry lobbying group American Petroleum Institute , and partner at the major private equity firm Riverstone Holdings.

In 2013 Hackett retired from Anadarko to attend Harvard Divinity School to get a degree in theology. However, he was still a partner at Riverstone and in 2017 was lured back to the fracking business to run a SPAC backed by Riverstone.

The SPAC raised a billion dollars while being advised by the biggest names in the business, including Goldman Sachs and CitiGroup. The initial blank check company was called Silver Run Acquisition Corp. II .

Hackett used the money to buy two companies in Oklahoma -- an oil producer and a pipeline -- and the new combined company Alta Mesa was valued at $3.8 billion.

The Future Was Bright for Alta Mesa

Hackett and Alta Mesa had big plans for making money fracking wells in Oklahoma, which included forecasts for big increases in oil and gas production from the newly acquired assets with very low break-even numbers.

When the Wall Street Journal reported the creation of Alta Mesa, it noted , "Alta Mesa's core acreage in Northeast Kingfisher County has among the lowest breakevens in the U.S. at around $25 per barrel, the company said." Because oil was well over that price at the time, the future looked good, according to Hackett and Alta Mesa. Forbes reported that Hackett said Alta Mesa's holdings were "oil that will be economic even at $40 WTI [West Texas Intermediate]" and oil has been well over that mark since Hackett made that statement in 2017.

Like break-even numbers, another area where misleading investors in the oil industry might be particularly easy is making overly optimistic forecasts about how much oil will be produced by future wells. The Wall Street Journal has documented this as a significant problem for the U.S. shale industry.

Description of Alta Mesa assets in investor proxy statement. Credit: Screen capture from proxy statement.

In early 2018 when touting the potential of the proposed new company Alta Mesa, Hackett said that "its average well would produce nearly 250,000 barrels of oil over its life." A year later, Alta Mesa said it expected those wells would produce less than half that, only 120,000 barrels of oil over the life of the well.

In May last year, Alta Mesa was under investigation by the Securities and Exchange Commissions ( SEC ) "for possible issues in its financial reporting."

Later in 2019, Alta Mesa filed for bankruptcy after writing down its assets by $3.1 billion. The billion-dollar blank check had been spent, and it took less than two years to lose it all.

SEC Investigation and Multiple Investor Lawsuits

Alta Mesa's assets were sold off earlier this year. The SEC declined to comment on the status of the investigation.

In May 2019, the Houston Chronicle reported , "Alta Mesa also is facing a series of lawsuits. Some shareholders are suing claiming they were defrauded and lied to about the value of the company and its assets when the company was formed."

One lawsuit filed by the Plumbers and Pipefitters National Pension Fund claims that the proxy statement for Alta Mesa contained materially false and misleading information. That filing lays out a lot of facts to support that claim.

Statement for complaint for violation of the Securities Exchange Act of 1934. Credit: Screen capture of court documents

Another lawsuit alleges that Alta Mesa didn't pay the proper amount of royalties to landowners, with state investigations into this issue.

Yet another lawsuit has been filed against Riverstone for " misleading statements ."

Investors are saying they were misled by Hackett and Riverstone. The allegations are based on the claims that were made about how much oil the company could produce. In hindsight, those claims appeared wildly inaccurate and misleading. But is that fraud? Or just taking advantage of a loophole?

In January, the Houston Chronicle summed up the situation as it described Alta Mesa's downfall : "It was a dramatic fall from grace after significantly overestimating its potential in Oklahoma's STACK shale play "

While Alta Mesa is a spectacular example of how fast the fracking business can make large sums of money disappear after "significantly overestimating its potential," it also likely marks the beginning of investor lawsuits against many other failing fracking companies with similar histories.

Learning From Enron

When Jim Hackett decided to go to Harvard Divinity School, several favorable profiles about his choice were written, including one on the Harvard website. That article noted that one of the reasons Hackett decided to go to school was because of "the collapse of Enron, a disaster that he attributed to 'a failure in leadership' among people he knew well."

The speed with which Hackett and Alta Mesa went bankrupt is remarkable, indicating a likely failure in leadership.

However, Hackett seems to have learned something from former Enron executive Andrew Fastow: that there is work for former executives like them to teach the energy industry about ethics and morality.

Hackett is now a lecturer at the University of Texas at Austin Center for Leadership and Ethics .

Fraud? Or Just a Laughing Matter?
Good reporting is hard work but sometimes involves a bit of luck. Like when a Wall Street Journal reporter , in a room full of people hired to make forecasts of fracked oil and gas production, learned about the existence of much more accurate methods for predicting that oil production. And also learned that with accuracy comes much lower estimates of shale oil reserves.

The WSJ article that followed quoted Texas A&M professor and expert on calculating oil and gas reserves John Lee. "There are a number of practices that are almost inevitably going to lead to overestimates," said Lee. Those are the practices used by the industry, with Alta Mesa serving as just one example.

Overestimates are why Alta Mesa received funding but now no longer exists.

The Wall Street Journal reported that during a presentation given by Lee, an audience member "stood up and challenged the engineers in attendance," asking why the forecasters weren't using accurate models like the ones that were available -- as Lee had described.

Another audience member explained the reason.

" Because we own stock," replied another engineer, "sparking laughter," according to the Wall Street Journal.

Is it misleading to laugh at your company's investors if you know the estimates you are giving them are inflated, but because you own the stock that benefits from those estimates, you do it anyway? Is that fraud? Perhaps that depends on if you get you get ethics lessons from Andrew Fastow and Jim Hackett.

Will the biggest innovation of the fracking revolution be making financial fraud a laughing matter?

A lot of people on EFT like to talk about how shale is fraudulent. That's simply not true:

You can't commit fraud when the rules are so lax you can just make shit up and it's still allowed.

-- Alpine High Fire Sale (@losingyourmoney) February 19, 2020


PlutoniumKun , March 6, 2020 at 6:43 am

While I've little doubt there is a lot of fraud, so much of the stupidity around fracking comes down to the old saying that its hard to make a man undrestand something when his job is to not understand it.

The financing of the oil and gas industry is almost entirely dependent on projections – projections of flow per well, and projections of future prices. All you need to do is make a few optimistic projections of one or both, and you've suddenly turned a dud into a highly valuable asset. Anyone can look at the pricing and question it, but with oil/gas, that is much harder with 'novel' types of well as there are few if any precedents. So if someone says 'the well is producing X per day, we can continue this flow for 3 years and when thats finished, we can drill down another 200 metres and replicate the same flow', there is nobody to contradict it. The drilling guys aren't going to argue, they want to keep their jobs. The geologist isn't going to argue, he has his mortgage to pay. The senior manager won't argue, he wants a promotion. The drilling company owners won't argue, they want to cash out. And the Wall Street financier won't argue, because he can pass on the risk to the equivelent of the last booms 'German bankers'.

So when someone like Arthur Berman – a geologist who has continuously being questioning the underlying geological assumptions – raises concerns – he's listened to politely, even invited to some conferences, but is otherwise ignored. Because its not in anyones interest to listen. There is literally nobody who's job it is to shout 'stop'. So much for self regulating markets.

While there may well be very severe economic consequences if and when this blows up in everyones face (and I suspect that Covid-19 will be the catalyst for this, oil demand is collapsing day by day), the big loser is the planet we depend on for our survival.

jackiebass , March 6, 2020 at 7:15 am

I live in NY on the PA border. Fracking is still happening south in PA but is only a fraction of what it once was. If you drive into PA you will see lots full of fracking materials that have sat there for a long time. At first for about two years it was a boom. The activity from fracking was amazing. Then as fast as it started it slowed down to a crawl. There are a few reasons in my opinion. The so called sweet sports were quickly fracked leaving less attractive sights. It was concealed that a fracked well produced most of it's gas in the first two years. After that the production from a well dropped off drastically. Locals soon lost their enthusiasm for fracking.There is still some fracking but it is hardly noticeable. Local people thought this would be great but attitudes soon soured. A few made big bucks at the expense of the rest. The fracking was in former coal country. The difference is coal lasted a lot longer. Now the majority of people in the area oppose fracking. I'm thankful that NY state banned fracking because of the negatives associated with fracking. I own 50 acres near the PA border. Before fracking was banned I was constantly hounded by leasing companies. I refuse to lease because to me my land was more important than a few bucks. I hope in my life time NY doesn't reverse the fracking ban. On another note there are wind farms where I live. I would leas to a wind company because there are fewer negatives and it's less intrusive.

jefemt , March 6, 2020 at 9:31 am

The good news is that if the companies were chasing you, you own the minerals. You can donate them to a conservation land trust and assure that no mineral extraction takes place, and get a tax benefit for the foregone production.

Win Win!

Ignacio , March 6, 2020 at 7:27 am

So, one first profits from fraud to later profit by lecturing everybody about ethics?
A-ma-zing!

Kevin C. Smith , March 6, 2020 at 10:02 am

BIG red flag for me when someone like Jim Hackett decides to go to Harvard Divinity School

Shiloh1 , March 6, 2020 at 10:22 am

Daniel Plainview was baptiized, but that was so he could drink Eli's milkshake later and club him to death with a bowling pin.

Colonel Smithers , March 6, 2020 at 11:09 am

Thank you, Kevin.

That sounds like my former CEO and chairman, Stephen Green, becoming an Anglican clergyman.

Ignacio , March 6, 2020 at 7:49 am

It can be argued that the money invested in many fracking companies with such inflated pay-back periods, ROIs or breakeven estimates, apart from fraud, could be considered as a private subsidy, just like Uber investors subsidize Uber taxi services. If we can blame it to low interest rates resulting in such subsidies, for fracking oil, unicorns, education, housing etc. to my knowledge this has only been argued in very few sites like here at NC or Wolf Street but merits a close examination. If pension and mutual funds are pouring a lot of money in such business with low to negative returns what consequences are to be expected in the future?

Trent , March 6, 2020 at 8:18 am

Eight to Ten years ago you would have seen giant trucks moving water and dirt from fracking sites when you got off the turnpike around Donegal PA. Since about 2015 or 2016 i'd say that completely died. Pittsburgh actually had one year of population gain due to the fracking boom but thats done. Yves mentioned investors and low interest rates chasing bad investments and fraud. I'd say the same thing is going on in healthcare based on my exp. of it and the amount of money floating around. We need higher interest rates to nip this stuff in the bud and re-balance the economy.

a different chris , March 6, 2020 at 12:11 pm

>We need higher interest rates

Yup. In so many ways.

tegnost , March 6, 2020 at 8:25 am

This pretty much says it all regarding the health of our eCONomy, but hey, after it all falls apart we should have plenty of reformed criminals to teach ethics classes

"The Wall Street Journal reported that during a presentation given by Lee, an audience member "stood up and challenged the engineers in attendance," asking why the forecasters weren't using accurate models like the ones that were available -- as Lee had described.

Another audience member explained the reason.

"Because we own stock," replied another engineer, "sparking laughter," according to the Wall Street Journal."

fresno dan , March 6, 2020 at 8:39 am

In a 2016 interview with Fraud Magazine,
==============================================
I have to say, I was shocked, SHOCKED to find that there is a magazine actually, only devoted to fraud – that is published bi-monthly.
AND than I was shocked to find out that the magaine actually, only devoted to fraud is ONLY published bi-monthly

Zamfir , March 6, 2020 at 2:19 pm

That's what they say. After you take subscription, you'll find they publish monthly.

The Rev Kev , March 6, 2020 at 9:39 am

Is the U.S. Fracking Boom Based on Fraud? Is the Pope Catholic? There are going to have to be major structural changes in the world's economy in the next few years and with the demand for oil dropping, prices have gotten cheaper which is turning fracking into a non-profit industry. In any case, how are you suppose to frack with sick crews? This is one industry that needs to go away before it causes any more damage. You'd find more honesty in a boiler room brokerage firm than in this industry.

xkeyscored , March 6, 2020 at 12:33 pm

I did wonder why 'Fracking Boom' was in the title.

Carolinian , March 6, 2020 at 10:11 am

There's a recent documentary called The Price of Everything that is about the enormous sums being paid for every latest fad in modern art. The show says that all the great masters, old and new, have been locked up by museums or the super rich and so a recent flood of new investors are looking for any excuse to spend lots of money on paintings. Apparently there is so much money sloshing around at the top of our unequal economy that that these plutocrats don't even care if they lose their shirts on bad investments. The main thing is to keep it out of the hands of the poor.

Clearly we as a society are suffering from affluenza, at least among the elites who should all be virus quarantined and then maybe we will forget to check back.The show tries to pretend that this money driven art world is a cool thing. It had this viewer thinking of guillotines.

xkeyscored , March 6, 2020 at 12:37 pm

Unfortunately, those most negatively affected by affluenza are those not infected with it.

JBird4049 , March 6, 2020 at 6:11 pm

Yes, like all the people who cannot see the art. It's mostly buried in storage. What is the point of having over two thousand years of art from multiple civilizations, if most of it is hidden away and often only known from catalog descriptions or cramped tiny pictures.

TimH , March 6, 2020 at 10:51 am

If Enron was fraud, how come Uber isn't considered fraud?

a different chris , March 6, 2020 at 12:12 pm

Because people can still make money off it.

No, not *you*. Not *us*. But people that "matter".

lyman alpha blob , March 6, 2020 at 1:46 pm

You must mean the insiders who suckered the rubes into taking shares off their hands at the IPO. IIRC the IPO price was over $70/share. Right now it's just under $32 with no signs of every being a profitable enterprise.

Grifters, charlatans and mountebanks everywhere you look.

franklin kirk , March 6, 2020 at 11:03 am

Charging mineral resource rent, which everyone has an equal claim to, would help to reduce the tendency of financial shenanigans. The profit motive is crack to rent seekers.

Colonel Smithers , March 6, 2020 at 11:06 am

Thank you, Yves.

Speaking of Enron, it is perhaps appropriate that my employer's head of non core assets, toxic waste for fire sale, came from Enron. Standard Chartered has some, too.

Polar Donkey , March 6, 2020 at 11:32 am

It seems like the Russians today decided to put the final nail in U.S. fracking industry and turn the screws on Saudi Arabia.

inode_buddha , March 6, 2020 at 2:22 pm

Is the US a fraud?
.
Fixed it for you.

rd , March 6, 2020 at 5:31 pm

I think the big issue goes back to the investors and bond rating agencies, similar to the subprime mortgage crisis. If bondholders aren't willing to do the homework, then they don't get paid for the risk that they are undertaking. with the multiple prediction tools for well production, you can make up an optimistic and pessimistic case. If the bond yield doesn't cover that risk to your satisfaction, then you don't buy the bond or you demand a higher interest yield and lower bond price.

Instead, it seems like the industry is raising money from people who don't want to think more than a few months ahead on a multi-year investment. The challenges faced by the fracking industry have been well publicized for several years now. If an investor doesn't understand those challenges now and isn't looking at specific methods of calculating production yield etc., then they have only themselves to blame if their investment loses money.

This is a very different issue than if somebody flat out lies about whether or not wells exist etc.

A single well can make financial sense even if there will never be a net profit from it. Fracking is pretty similar to the Hollywood film industry where nobody ever has any net profits despite living high on the hog. "Don't ever settle for net profits. It's called 'creative accounting'." – Lynda Carter: https://en.wikipedia.org/wiki/Hollywood_accounting

elkern , March 6, 2020 at 5:52 pm

I dunno. There may be a sucker born every minute, but I can't picture enough of them getting born with a million (or billion) Dollars to blow on rackets like this to keep it going this long.

Sad to see that the Plumbers' Union Pension Fund was a victim; I hope that's not a pattern, but it would make sense. If it's a pattern, then it's no wonder the Fed tried so hard to postpone the next Crash until after the elections. How much junk paper has Wall Street sold to other Pension Funds? States & Municipalities are already squeezed by "unfunded liabilities"; how much repackaged funky Fracking paper are held by public (governmental) agencies? Damn, this is gonna be a mess.

I'd advise investing in popcorn, except that my 401k will probably evaporate soon, so maybe it's pitchforks.

JBird4049 , March 6, 2020 at 6:01 pm

CFO Fastow of Enron. How nice to see him land on his feet. The company made listening to the rolling blackout reports for California while driving to work a requirement.

[Mar 04, 2020] A decline of 3.8 million barrels per day in oil consumption is a real bombshell. It has smell of the major recession.

Mar 04, 2020 | peakoilbarrel.com

Ron Patterson x Ignored says: 03/04/2020 at 2:08 pm

Oil consumption just fell off a cliff. OPEC is facing a huge test Bold mine.

Oil producers are facing the biggest drop in demand for their product ever as the coronavirus spreads around the world, forcing OPEC and its allies to consider emergency measures.

Research firm IHS Markit said Wednesday that oil demand will suffer its steepest decline on record in the first quarter -- worse even than during the 2008 global financial crisis -- as schools and offices close, airlines cancel flights worldwide and a growing number of people hunker down at home.

Most of the reduction in demand can be traced to China, where the coronavirus has caused what IHS Markit describes as an "unprecedented stoppage" of economic activity.

But reduced consumption will be widespread, and IHS Markit expects global demand to drop by 3.8 million barrels per day in the first quarter compared to 2019. Demand in the first three months of 2019 was 99.8 million barrels per day.

"This is a sudden, instant demand shock -- and the scale of the decline is unprecedented," said Jim Burkhard, vice president and head of oil markets at IHS Markit.

A decline of 3.8 million barrels per day is a real bombshell.

Despite claims by China that they have more recoveries than new infections, there is strong evidence that they are lying. Travel inside China is still almost non-existent and most industry is still shut down.

TonyEriksen x Ignored says: 03/04/2020 at 4:50 pm
Ron,

3.8 mbd demand drop is huge.

Brent heading down to $50
https://oilprice.com/

[Feb 25, 2020] A Worthless 'New Deal' from the Iran Hawks

So Menendez survived as MIC stooge. Nice.
Iran hawks never talk about diplomacy except as a way to discredit it.
Notable quotes:
"... And even if Iran were to accept and proceed comply in good faith, just as Iran complied scrupulously with the JCPOA, what's to prevent any US administration from tearing up that "new deal" and demanding more? ..."
Feb 25, 2020 | www.theamericanconservative.com
|

10:03 am

Daniel Larison Two Iran hawks from the Senate, Bob Menendez and Lindse Graham, are proposing a "new deal" that is guaranteed to be a non-starter with Iran:

Essentially, their idea is that the United States would offer a new nuclear deal to both Iran and the gulf states at the same time. The first part would be an agreement to ensure that Iran and the gulf states have access to nuclear fuel for civilian energy purposes, guaranteed by the international community in perpetuity. In exchange, both Iran and the gulf states would swear off nuclear fuel enrichment inside their own countries forever.

Iran is never going to accept any agreement that requires them to give up domestic enrichment. As far as they are concerned, they are entitled to this under the Non-Proliferation Treaty, and they regard it as a matter of their national rights that they keep it. Insisting on "zero enrichment" is what made it impossible to reach an agreement with Iran for the better part of a decade, and it was only when the Obama administration understood this and compromised to allow Iran to enrich under tight restrictions that the negotiations could move forward. Demanding "zero enrichment" today in 2020 amounts to rejecting that compromise and returning to a bankrupt approach that drove Iran to build tens of thousands of centrifuges. As a proposal for negotiations, it is dead on arrival, and Menendez and Graham must know that. Iran hawks never talk about diplomacy except as a way to discredit it. They want to make a bogus offer in the hopes that it will be rejected so that they can use the rejection to justify more aggressive measures.

The identity of the authors of the plan is a giveaway that the offer is not a serious diplomatic proposal. Graham is one of the most incorrigible hard-liners on Iran, and Menendez is probably the most hawkish Democratic senator in office today. Among other things, Menendez has been a booster of the Mujahideen-e Khalq (MEK), the deranged cult of Iranian exiles that has been buying the support of American politicians and officials for years. Graham has never seen a diplomatic agreement that he didn't want to destroy. When hard-liners talk about making a "deal," they always mean that they want to demand the other side's surrender.

Another giveaway that this is not a serious proposal is the fact that they want this imaginary agreement submitted as a treaty:

That final deal would be designated as a treaty, ratified by the U.S. Senate, to give Iran confidence that a new president won't just pull out (like President Trump did on President Barack Obama's nuclear deal).

This is silly for many reasons. The Senate doesn't ratify treaties nowadays, so any "new deal" submitted as a treaty would never be ratified. As the current president has shown, it doesn't matter if a treaty has been ratified by the Senate. Presidents can and do withdraw from ratified treaties if they want to, and the fact that it is a ratified treaty doesn't prevent them from doing this. Bush pulled out of the ABM Treaty, which was ratified 88-2 in 1972. Trump withdrew from the INF Treaty just last year. The INF Treaty had been ratified with a 93-5 vote. The hawkish complaint that the JCPOA wasn't submitted as a treaty was, as usual, made in bad faith. There was no chance that the JCPOA would have been ratified, and even if it had been that ratification would not have protected it from being tossed aside by Trump. Insisting on making any new agreement a treaty is just another way of announcing that they have no interest in a diplomatic solution.

Menendez and Graham want to make the obstacles to diplomacy so great that negotiations between the U.S. and Iran can't resume. It isn't a serious proposal, and it shouldn't be taken seriously.

Feral Finster 5 hours ago

And even if Iran were to accept and proceed comply in good faith, just as Iran complied scrupulously with the JCPOA, what's to prevent any US administration from tearing up that "new deal" and demanding more?

[Feb 23, 2020] The US Is World Leader In Bio-Weapons Research, Production, Use Against Mankind

This is mostly fear mongering as an affective bioengineered virus will create a pandemic, but the truth is that Anthrax false flag attack after 9/11 was not an accident...
Trump administration beahaves like a completely lawless gang (stealing Syrian oil is one example. Killing Soleimani is another ) , as for its behaviour on international arena, but I do not believe they go that far. Even for for such "ruptured" gangster as Pompeo
Notable quotes:
"... Consider that a deadly virus created by the U.S. and used against another country was found out and verified, and in retaliation, that country or others decided to strike back with other toxic agents against America. Where would this end, and over time, how many billions could be affected in such a scenario? ..."
"... "In vast laboratories in the Ministry of Peace, and in experimental stations, teams of experts are indefatigably at work searching for new and deadlier gases; or for soluble poisons capable of being produced in such quantities as to destroy the vegetation of whole continents; or for breeds of disease germs immunised against all possible antibodies." ..."
"... Additional notes: here , here , here , here , here and here . ..."
Feb 23, 2020 | www.zerohedge.com

... ... ...

Interestingly, in the past, U.S. universities and NGOs went to China specifically to do illegal biological experimentation, and this was so egregious to Chinese officials, that forcible removal of these people was the result. Harvard University, one of the major players in this scandal, stole the DNA samples of hundreds of thousands of Chinese citizens, left China with those samples, and continued illegal bio-research in the U.S. It is thought that the U.S. military, which puts a completely different spin on the conversation, had commissioned the research in China at the time. This is more than suspicious.

The U.S. has, according to this article at Global Research , had a massive biological warfare program since at least the early 1940s, but has used toxic agents against this country and others since the 1860s . This is no secret, regardless of the propaganda spread by the government and its partners in criminal bio-weapon research and production.

As of 1999, the U.S. government had deployed its Chemical and Biological Weapons (CBW) arsenal against the Philippines, Puerto Rico, Vietnam, China, North Korea, Laos, Cambodia, Cuba, Haitian boat people, and our neighbor Canada according to this article at Counter Punch . Of course, U.S. citizens have been used as guinea pigs many times as well, and exposed to toxic germ agents and deadly chemicals by government.

Keep in mind that this is a short list, as the U.S. is well known for also using proxies to spread its toxic chemicals and germ agents, such as happened in Iraq and Syria. Since 1999 there have been continued incidences of several different viruses, most of which are presumed to be manmade , including the current Coronavirus that is affecting China today.

There is also much evidence of the research and development of race-specific bio-warfare agents. This is very troubling. One would think, given the idiotic race arguments by post-modern Marxists, that this would consume the mainstream news, and any participants in these atrocious race-specific poisons would be outed at every level. That is not happening, but I believe it is due to obvious reasons, including government cover-up, hypocrisy at all levels, and leftist agenda driven objectives that would not gain ground with the exposure of this government-funded anti-race science.

I will say that it is not just the U.S. that is developing and producing bio-warfare agents and viruses, but many developed countries around the globe do so as well. But the United States, as is the case in every area of war and killing, is by far the world leader in its inhuman desire to be able to kill entire populations through biological and chemical warfare means. Because these agents are extremely dangerous and uncontrollable, and can spread wildly, the risk to not only isolated populations, but also the entire world is evident. Consider that a deadly virus created by the U.S. and used against another country was found out and verified, and in retaliation, that country or others decided to strike back with other toxic agents against America. Where would this end, and over time, how many billions could be affected in such a scenario?

All indications point to the fact that the most toxic, poisonous, and deadly viruses ever known are being created in labs around the world. In the U.S. think of Fort Detrick, Maryland, Pine Bluff Arsenal, Arkansas, Horn Island, Mississippi, Dugway Proving Ground, Utah, Vigo Ordinance Plant, Indiana, and many others. Think of the fascist partnerships between this government and the pharmaceutical industry. Think of the U.S. military installations positioned all around the globe. Nothing good can come from this, as it is not about finding cures for disease, or about discovering vaccines, but is done for one reason only, and that is for the purpose of bio-warfare for mass killing.

The drive to find biological weapons that will sicken and kill millions at a time is not only a travesty, but is beyond evil. This power is held by the few, but the potential victims of this madness include everyone on earth. How can such insanity at this level be allowed to continue? If any issue could ever unite the masses, governments participating in biological and germ warfare, race-specific killing, and creating viruses with the potential to affect disease and death worldwide, should cause many to stand together against it. The first step is to expose that governments, the most likely culprit being the U.S. government, are planting these viruses purposely to cause great harm. Once that is proven, the unbelievable risk to all will be known, and then people everywhere should put their divisiveness aside, stand together, and stop this assault on mankind.

"In vast laboratories in the Ministry of Peace, and in experimental stations, teams of experts are indefatigably at work searching for new and deadlier gases; or for soluble poisons capable of being produced in such quantities as to destroy the vegetation of whole continents; or for breeds of disease germs immunised against all possible antibodies." ~ George Orwell – 1984

Additional notes: here , here , here , here , here and here .

[Feb 23, 2020] Where Have You Gone, Smedley Butler The Last General To Criticize US Imperialism by Danny Sjursen

Here's a link to a free online copy of War is a Racket if anyone wants to read it. It's a short read. Pretty good too. https://www.ratical.org/ratville/CAH/warisaracket.html
From comments (Is the USA government now a "regime"): In 2018, Republicans (AND Democrats) voted to cut $23 billion dollars from the budget for food stamps (42 million Americans currently receive them). Regimes disobey international law. Like America's habit of blowing up wedding parties with drones or the illegal presence of its troops in Syria, Iraq and God knows where else. Regimes carry out illegal assassination programs – I need say no more here than Qasem Soleimani. Regimes use their economic power to bully and impose their will – sanctioning countries even when they know those sanctions will, for example, be responsible for the death of 500,000 Iraqi children (the 'price worth paying', remember?). Regimes renege on international treaties – like Iran nuclear treaty, for example. Regimes imprison and hound whistle-blowers – like Chelsea manning and Julian Assange. Regimes imprison people. America is the world leader in incarceration. It has 2.2 million people in its prisons (more than China which has 5 times the US's population), that's 25% of the world's prison population for 5% of the world's population, Why does America need so many prisoners? Because it has a massive, prison-based, slave labour business that is hugely profitable for the oligarchy.
Regimes censor free speech. Just recently, we've seen numerous non-narrative following journalists and organisations kicked off numerous social media platforms. I didn't see lots of US senators standing up and saying 'I disagree completely with what you say but I will fight to the death to preserve your right to say it'. Did you?
Regimes are ruled by cliques. I don't need to tell you that America is kakistocratic Oligarchy ruled by a tiny group of evil, rich, Old Men, do I?
Regimes keep bad company. Their allies are other 'regimes', and they're often lumped together by using another favourite presstitute term – 'axis of evil'. America has its own little axis of evil. It's two main allies are Saudi Arabia – a homophobic, women hating, head chopping, terrorist financing state currently engaged in a war of genocide (assisted by the US) in Yemen – and the racist, genocidal undeclared nuclear power state of Israel.
Regimes commit human rights abuses. Here we could talk about…ooh…let's think. Last year's treatment of child refugees from Latin America, the execution of African Americans for 'walking whilst black' by America's militarized, criminal police force or the millions of dollars in cash and property seized from entirely innocent Americans by that same police force under 'civil forfeiture' laws or maybe we could mention huge American corporations getting tax refunds whilst ordinary Americans can't afford decent, effective healthcare.
Regimes finance terrorism. Mmmm….just like America financed terrorists to help destroy Syria and Libya and invested $5 billion dollars to install another regime – the one of anti-Semites and Nazis in Ukraine…
Highly recommended!
Some comments edited for clarity...
Notable quotes:
"... But after retirement, Smedley Butler changed his tune. ..."
"... "I spent thirty-three years and four months in active military service... And during that period, I spent most of my time being a high class muscle-man for Big Business, for Wall Street, and for the Bankers." ..."
"... Smedley Butler's Marine Corps and the military of his day was, in certain ways, a different sort of organization than today's highly professionalized armed forces. History rarely repeats itself, not in a literal sense anyway. Still, there are some disturbing similarities between the careers of Butler and today's generation of forever-war fighters. All of them served repeated tours of duty in (mostly) unsanctioned wars around the world. Butler's conflicts may have stretched west from Haiti across the oceans to China, whereas today's generals mostly lead missions from West Africa east to Central Asia, but both sets of conflicts seemed perpetual in their day and were motivated by barely concealed economic and imperial interests. ..."
"... When Smedley Butler retired in 1931, he was one of three Marine Corps major generals holding a rank just below that of only the Marine commandant and the Army chief of staff. Today, with about 900 generals and admirals currently serving on active duty, including 24 major generals in the Marine Corps alone, and with scores of flag officers retiring annually, not a single one has offered genuine public opposition to almost 19 years worth of ill-advised, remarkably unsuccessful American wars . As for the most senior officers, the 40 four-star generals and admirals whose vocal antimilitarism might make the biggest splash, there are more of them today than there were even at the height of the Vietnam War, although the active military is now about half the size it was then. Adulated as many of them may be, however, not one qualifies as a public critic of today's failing wars. ..."
"... The big three are Secretary of State Colin Powell's former chief of staff, retired Colonel Lawrence Wilkerson ; Vietnam veteran and onetime West Point history instructor, retired Colonel Andrew Bacevich ; and Iraq veteran and Afghan War whistleblower , retired Lieutenant Colonel Danny Davis . All three have proven to be genuine public servants, poignant voices, and -- on some level -- cherished personal mentors. For better or worse, however, none carry the potential clout of a retired senior theater commander or prominent four-star general offering the same critiques. ..."
"... Consider it an irony of sorts that this system first received criticism in our era of forever wars when General David Petraeus, then commanding the highly publicized " surge " in Iraq, had to leave that theater of war in 2007 to serve as the chair of that selection committee. The reason: he wanted to ensure that a twice passed-over colonel, a protégé of his -- future Trump National Security Advisor H.R. McMaster -- earned his star. ..."
"... At the roots of this system lay the obsession of the American officer corps with " professionalization " after the Vietnam War debacle. This first manifested itself in a decision to ditch the citizen-soldier tradition, end the draft, and create an "all-volunteer force." The elimination of conscription, as predicted by critics at the time, created an ever-growing civil-military divide, even as it increased public apathy regarding America's wars by erasing whatever " skin in the game " most citizens had. ..."
"... One group of generals, however, reportedly now does have it out for President Trump -- but not because they're opposed to endless war. Rather, they reportedly think that The Donald doesn't "listen enough to military advice" on, you know, how to wage war forever and a day. ..."
"... That beast, first identified by President Dwight D. Eisenhower, is now on steroids as American commanders in retirement regularly move directly from the military onto the boards of the giant defense contractors, a reality which only contributes to the dearth of Butlers in the military retiree community. For all the corruption of his time, the Pentagon didn't yet exist and the path from the military to, say, United Fruit Company, Standard Oil, or other typical corporate giants of that moment had yet to be normalized for retiring generals and admirals. Imagine what Butler would have had to say about the modern phenomenon of the " revolving door " in Washington. ..."
"... Today, generals don't seem to have a thought of their own even in retirement. And more's the pity... ..."
"... Am I the only one to notice that Hollywood and it's film distributors have gone full bore on "war" productions, glorifying these historical events while using poetic license to rewrite history. Prepping the numbheads. ..."
"... Forget rank. As Mr Sjursen implies, dissidents are no longer allowed in the higher ranks. "They" made sure to fix this as Mr Butler had too much of a mind of his own (US education system also programmed against creative, charismatic thinkers, btw). ..."
"... Today, the "Masters of the Permawars" refer to the international extortion, MIC, racket as "Defending American Interests"! .....With never any explanation to the public/American taxpayer just what "American Interests" the incredible expenditures of American lives, blood, and treasure are being defended! ..."
"... "The Americans follow the principle that when one lies, one should lie big, and stick to it. They keep up their lies, even at the risk of looking ridiculous." - Jospeh Goebbels ..."
"... The greatest anti-imperialist of our times is Michael Parenti: ..."
"... The obvious types of American fascists are dealt with on the air and in the press. These demagogues and stooges are fronts for others. Dangerous as these people may be, they are not so significant as thousands of other people who have never been mentioned. The really dangerous American fascists are not those who are hooked up directly or indirectly with the Axis. The FBI has its finger on those. The dangerous American fascist is the man who wants to do in the United States in an American way what Hitler did in Germany in a Prussian way. The American fascist would prefer not to use violence. His method is to poison the channels of public information. With a fascist the problem is never how best to present the truth to the public but how best to use the news to deceive the public into giving the fascist and his group more money or more power. ..."
"... If we define an American fascist as one who in case of conflict puts money and power ahead of human beings, then there are undoubtedly several million fascists in the United States. There are probably several hundred thousand if we narrow the definition to include only those who in their search for money and power are ruthless and deceitful. Most American fascists are enthusiastically supporting the war effort. ..."
Feb 23, 2020 | www.zerohedge.com

Authored by Danny Sjursen via TomDispatch.com,

There once lived an odd little man - five feet nine inches tall and barely 140 pounds sopping wet - who rocked the lecture circuit and the nation itself. For all but a few activist insiders and scholars, U.S. Marine Corps Major General Smedley Darlington Butler is now lost to history. Yet more than a century ago, this strange contradiction of a man would become a national war hero, celebrated in pulp adventure novels, and then, 30 years later, as one of this country's most prominent antiwar and anti-imperialist dissidents.

Raised in West Chester, Pennsylvania, and educated in Quaker (pacifist) schools, the son of an influential congressman, he would end up serving in nearly all of America's " Banana Wars " from 1898 to 1931. Wounded in combat and a rare recipient of two Congressional Medals of Honor, he would retire as the youngest, most decorated major general in the Marines.

A teenage officer and a certified hero during an international intervention in the Chinese Boxer Rebellion of 1900, he would later become a constabulary leader of the Haitian gendarme, the police chief of Philadelphia (while on an approved absence from the military), and a proponent of Marine Corps football. In more standard fashion, he would serve in battle as well as in what might today be labeled peacekeeping , counterinsurgency , and advise-and-assist missions in Cuba, China, the Philippines, Panama, Nicaragua, Mexico, Haiti, France, and China (again). While he showed early signs of skepticism about some of those imperial campaigns or, as they were sardonically called by critics at the time, " Dollar Diplomacy " operations -- that is, military campaigns waged on behalf of U.S. corporate business interests -- until he retired he remained the prototypical loyal Marine.

But after retirement, Smedley Butler changed his tune. He began to blast the imperialist foreign policy and interventionist bullying in which he'd only recently played such a prominent part. Eventually, in 1935 during the Great Depression, in what became a classic passage in his memoir, which he titled "War Is a Racket," he wrote:

"I spent thirty-three years and four months in active military service... And during that period, I spent most of my time being a high class muscle-man for Big Business, for Wall Street, and for the Bankers."

Seemingly overnight, the famous war hero transformed himself into an equally acclaimed antiwar speaker and activist in a politically turbulent era. Those were, admittedly, uncommonly anti-interventionist years, in which veterans and politicians alike promoted what (for America, at least) had been fringe ideas. This was, after all, the height of what later pro-war interventionists would pejoratively label American " isolationism ."

Nonetheless, Butler was unique (for that moment and certainly for our own) in his unapologetic amenability to left-wing domestic politics and materialist critiques of American militarism. In the last years of his life, he would face increasing criticism from his former admirer, President Franklin D. Roosevelt, the military establishment, and the interventionist press. This was particularly true after Adolf Hitler's Nazi Germany invaded Poland and later France. Given the severity of the Nazi threat to mankind, hindsight undoubtedly proved Butler's virulent opposition to U.S. intervention in World War II wrong.

Nevertheless, the long-term erasure of his decade of antiwar and anti-imperialist activism and the assumption that all his assertions were irrelevant has proven historically deeply misguided. In the wake of America's brief but bloody entry into the First World War, the skepticism of Butler (and a significant part of an entire generation of veterans) about intervention in a new European bloodbath should have been understandable. Above all, however, his critique of American militarism of an earlier imperial era in the Pacific and in Latin America remains prescient and all too timely today, especially coming as it did from one of the most decorated and high-ranking general officers of his time. (In the era of the never-ending war on terror, such a phenomenon is quite literally inconceivable.)

Smedley Butler's Marine Corps and the military of his day was, in certain ways, a different sort of organization than today's highly professionalized armed forces. History rarely repeats itself, not in a literal sense anyway. Still, there are some disturbing similarities between the careers of Butler and today's generation of forever-war fighters. All of them served repeated tours of duty in (mostly) unsanctioned wars around the world. Butler's conflicts may have stretched west from Haiti across the oceans to China, whereas today's generals mostly lead missions from West Africa east to Central Asia, but both sets of conflicts seemed perpetual in their day and were motivated by barely concealed economic and imperial interests.

Nonetheless, whereas this country's imperial campaigns of the first third of the twentieth century generated a Smedley Butler, the hyper-interventionism of the first decades of this century hasn't produced a single even faintly comparable figure. Not one. Zero. Zilch. Why that is matters and illustrates much about the U.S. military establishment and contemporary national culture, none of it particularly encouraging.

Why No Antiwar Generals

When Smedley Butler retired in 1931, he was one of three Marine Corps major generals holding a rank just below that of only the Marine commandant and the Army chief of staff. Today, with about 900 generals and admirals currently serving on active duty, including 24 major generals in the Marine Corps alone, and with scores of flag officers retiring annually, not a single one has offered genuine public opposition to almost 19 years worth of ill-advised, remarkably unsuccessful American wars . As for the most senior officers, the 40 four-star generals and admirals whose vocal antimilitarism might make the biggest splash, there are more of them today than there were even at the height of the Vietnam War, although the active military is now about half the size it was then. Adulated as many of them may be, however, not one qualifies as a public critic of today's failing wars.

Instead, the principal patriotic dissent against those terror wars has come from retired colonels, lieutenant colonels, and occasionally more junior officers (like me), as well as enlisted service members. Not that there are many of us to speak of either. I consider it disturbing (and so should you) that I personally know just about every one of the retired military figures who has spoken out against America's forever wars.

The big three are Secretary of State Colin Powell's former chief of staff, retired Colonel Lawrence Wilkerson ; Vietnam veteran and onetime West Point history instructor, retired Colonel Andrew Bacevich ; and Iraq veteran and Afghan War whistleblower , retired Lieutenant Colonel Danny Davis . All three have proven to be genuine public servants, poignant voices, and -- on some level -- cherished personal mentors. For better or worse, however, none carry the potential clout of a retired senior theater commander or prominent four-star general offering the same critiques.

Something must account for veteran dissenters topping out at the level of colonel. Obviously, there are personal reasons why individual officers chose early retirement or didn't make general or admiral. Still, the system for selecting flag officers should raise at least a few questions when it comes to the lack of antiwar voices among retired commanders. In fact, a selection committee of top generals and admirals is appointed each year to choose the next colonels to earn their first star. And perhaps you won't be surprised to learn that, according to numerous reports , "the members of this board are inclined, if not explicitly motivated, to seek candidates in their own image -- officers whose careers look like theirs." At a minimal level, such a system is hardly built to foster free thinkers, no less breed potential dissidents.

Consider it an irony of sorts that this system first received criticism in our era of forever wars when General David Petraeus, then commanding the highly publicized " surge " in Iraq, had to leave that theater of war in 2007 to serve as the chair of that selection committee. The reason: he wanted to ensure that a twice passed-over colonel, a protégé of his -- future Trump National Security Advisor H.R. McMaster -- earned his star.

Mainstream national security analysts reported on this affair at the time as if it were a major scandal, since most of them were convinced that Petraeus and his vaunted counterinsurgency or " COINdinista " protégés and their " new " war-fighting doctrine had the magic touch that would turn around the failing wars in Iraq and Afghanistan. In fact, Petraeus tried to apply those very tactics twice -- once in each country -- as did acolytes of his later, and you know the results of that.

But here's the point: it took an eleventh-hour intervention by America's most acclaimed general of that moment to get new stars handed out to prominent colonels who had, until then, been stonewalled by Cold War-bred flag officers because they were promoting different (but also strangely familiar) tactics in this country's wars. Imagine, then, how likely it would be for such a leadership system to produce genuine dissenters with stars of any serious sort, no less a crew of future Smedley Butlers.

At the roots of this system lay the obsession of the American officer corps with " professionalization " after the Vietnam War debacle. This first manifested itself in a decision to ditch the citizen-soldier tradition, end the draft, and create an "all-volunteer force." The elimination of conscription, as predicted by critics at the time, created an ever-growing civil-military divide, even as it increased public apathy regarding America's wars by erasing whatever " skin in the game " most citizens had.

More than just helping to squelch civilian antiwar activism, though, the professionalization of the military, and of the officer corps in particular, ensured that any future Smedley Butlers would be left in the dust (or in retirement at the level of lieutenant colonel or colonel) by a system geared to producing faux warrior-monks. Typical of such figures is current chairman of the Joint Chiefs of Staff Army General Mark Milley. He may speak gruffly and look like a man with a head of his own, but typically he's turned out to be just another yes-man for another war-power -hungry president.

One group of generals, however, reportedly now does have it out for President Trump -- but not because they're opposed to endless war. Rather, they reportedly think that The Donald doesn't "listen enough to military advice" on, you know, how to wage war forever and a day.

What Would Smedley Butler Think Today?

In his years of retirement, Smedley Butler regularly focused on the economic component of America's imperial war policies. He saw clearly that the conflicts he had fought in, the elections he had helped rig, the coups he had supported, and the constabularies he had formed and empowered in faraway lands had all served the interests of U.S. corporate investors. Though less overtly the case today, this still remains a reality in America's post-9/11 conflicts, even on occasion embarrassingly so (as when the Iraqi ministry of oil was essentially the only public building protected by American troops as looters tore apart the Iraqi capital, Baghdad, in the post-invasion chaos of April 2003). Mostly, however, such influence plays out far more subtly than that, both abroad and here at home where those wars help maintain the record profits of the top weapons makers of the military-industrial complex.

That beast, first identified by President Dwight D. Eisenhower, is now on steroids as American commanders in retirement regularly move directly from the military onto the boards of the giant defense contractors, a reality which only contributes to the dearth of Butlers in the military retiree community. For all the corruption of his time, the Pentagon didn't yet exist and the path from the military to, say, United Fruit Company, Standard Oil, or other typical corporate giants of that moment had yet to be normalized for retiring generals and admirals. Imagine what Butler would have had to say about the modern phenomenon of the " revolving door " in Washington.

Of course, he served in a very different moment, one in which military funding and troop levels were still contested in Congress. As a longtime critic of capitalist excesses who wrote for leftist publications and supported the Socialist Party candidate in the 1936 presidential elections, Butler would have found today's nearly trillion-dollar annual defense budgets beyond belief. What the grizzled former Marine long ago identified as a treacherous nexus between warfare and capital "in which the profits are reckoned in dollars and the losses in lives" seems to have reached its natural end point in the twenty-first century. Case in point: the record (and still rising ) "defense" spending of the present moment, including -- to please a president -- the creation of a whole new military service aimed at the full-scale militarization of space .

Sadly enough, in the age of Trump, as numerous polls demonstrate, the U.S. military is the only public institution Americans still truly trust. Under the circumstances, how useful it would be to have a high-ranking, highly decorated, charismatic retired general in the Butler mold galvanize an apathetic public around those forever wars of ours. Unfortunately, the likelihood of that is practically nil, given the military system of our moment.

Of course, Butler didn't exactly end his life triumphantly. In late May 1940, having lost 25 pounds due to illness and exhaustion -- and demonized as a leftist, isolationist crank but still maintaining a whirlwind speaking schedule -- he checked himself into the Philadelphia Navy Yard Hospital for a "rest." He died there, probably of some sort of cancer, four weeks later. Working himself to death in his 10-year retirement and second career as a born-again antiwar activist, however, might just have constituted the very best service that the two-time Medal of Honor winner could have given the nation he loved to the very end.

Someone of his credibility, character, and candor is needed more than ever today. Unfortunately, this military generation is unlikely to produce such a figure. In retirement, Butler himself boldly confessed that, "like all the members of the military profession, I never had a thought of my own until I left the service. My mental faculties remained in suspended animation while I obeyed the orders of higher-ups. This is typical..."

Today, generals don't seem to have a thought of their own even in retirement. And more's the pity...

2 minutes ago
Am I the only one to notice that Hollywood and it's film distributors have gone full bore on "war" productions, glorifying these historical events while using poetic license to rewrite history. Prepping the numbheads.
14 minutes ago
TULSI GABBARD.

Forget rank. As Mr Sjursen implies, dissidents are no longer allowed in the higher ranks. "They" made sure to fix this as Mr Butler had too much of a mind of his own (US education system also programmed against creative, charismatic thinkers, btw).

The US Space Force has been created as part of a plan to disclose the deep state's Secret Space Program (SSP), which has been active for decades, and which has utilized, and repressed, advanced technologies that would provide free, unlimited renewable energy, and thus eliminate hunger and poverty on a planetary scale.

14 minutes ago
14 minutes ago

ALL wars are EVIL. Period .

29 minutes ago

Sadly enough, in the age of Trump, as numerous polls demonstrate, the U.S. military is the only public institution Americans still truly trust. Under the circumstances, how useful it would be to have a high-ranking, highly decorated, charismatic retired general in the Butler mold galvanize an apathetic public around those forever wars of ours. Unfortunately, the likelihood of that is practically nil, given the military system of our moment.

This is why I feel an oath keeping constitutionally oriented American general is what we need in power, clear out all 545 criminals in office now, review their finances (and most of them will roll over on the others) and punish accordingly, then the lobbyist, how many of them worked against the country? You know what we do with those.

And then, finally, Hollywood, oh yes I long to see that **** hole burn with everyone in it.

30 minutes ago
Republicrat: the two faces of the moar war whore.
32 minutes ago

Given the severity of the Nazi threat to mankind

Do tell, from what I've read the Nazis were really only a threat to a few groups, the rest of us didn't need to worry.

35 minutes ago
Today, the "Masters of the Permawars" refer to the international extortion, MIC, racket as "Defending American Interests"! .....With never any explanation to the public/American taxpayer just what "American Interests" the incredible expenditures of American lives, blood, and treasure are being defended!

Why are we sending our children out into the hellholes of the world to be maimed and killed in the fauxjew banksters' quest for world domination.

How stupid can we be!

41 minutes ago
(Edited) "Smedley Butler"... The last time the UCMJ was actually used before being permanently turned into a "door stop"!
49 minutes ago
He was correct about our staying out of WWII. Which, BTW, would have never happened if we had stayed out of WWI.
22 minutes ago
(Edited) Both wars were about the international fauxjew imposition of debt-money central bankstering.

Both wars were promulgated by the Financial oligarchyof New York. The communist Red Army of Russia was funded and supplied by the Financial oligarchyof New York. It was American Financial oligarchythat built the Russian Red Army that vexed the world and created the Cold War. How many hundreds of millions of goyim were sacrificed to create both the Russian and the Chinese Satanic behemoths.......and the communist horror that is now embedded in American academia, publishing, American politics, so-called news, entertainment, The worldwide Catholic religion, the Pentagon, and the American deep state.......and more!

How stupid can we be. Every generation has the be dragged, kicking and screaming, out of the eternal maw of historical ignorance to avoid falling back into the myriad dark hellholes of history. As we all should know, people who forget their own history are doomed to repeat it.

53 minutes ago
Today's General is a robot with with a DNA.
54 minutes ago
All the General Staff is a bunch of #asskissinglittlechickenshits
57 minutes ago
want to stop senseless Empire wars>>well do this

War = jobs and profit..we get work "THEY" get the profit.. If we taxed all war related profit at 99% how many wars would our rulers start? 1 hour ago

Here is a simple straightforward trading maxim that might apply here: if it works or is working keep doing it, but if it doesn't work or stops working, then STOP doing it. There are plenty of people, now poorer, for not adhering to that simple principle. Where is the Taxpayer's return on investment from the Combat taking place on their behalf around the globe? 'Nuff said - it isn't working. It is making a microscopic few richer & all others poorer so STOP doing it. 36 seconds ago We don't have to look far to figure out who they are that are getting rich off the fauxjew permawars.

How can we be so stupid???

1 hour ago

See also:

TULSI GABBARD

1 hour ago

The main reason you don't see the generals criticizing is that the current crop have not been in actual long term direct combat with the enemy and have mostly been bureaucratic paper pushers.

Take the Marine Major General who is the current commander of CENTCOM. By the time he got into the Iraq/Afghanistan war he was already a Lieutenant Colonel and far removed from direct action.

He was only there on and off for a few years. Here are some of his other career highlights aft as they appear on his official bio:

In short, these top guys aren't warriors they're bureaucrats so why would we expect them to be honest brokers of the truth?

51 minutes ago

are U saying Chesty Puller he's NOT? 1 hour ago
(Edited) The purpose of war is to ensure that the Federal Reserve Note remains the world reserve paper currency of choice by keeping it relevant and in demand across the globe by forcing pesky energy producing nations to trade with it exclusively.

It is a 49 year old policy created by the private owners of quasi public institutions called central banks to ensure they remain the Wizards of Oz doing gods work conjuring magic paper into existence with a secret spell known as issuing credit.

How else is a technologically advanced society of billions of people supposed to function w/out this divinely inspired paper?

1 hour ago

Goebbels in "Churchill's Lie Factory" where he said: "The Americans follow the principle that when one lies, one should lie big, and stick to it. They keep up their lies, even at the risk of looking ridiculous." - Jospeh Goebbels, "Aus Churchills Lügenfabrik," 12. january 1941, Die Zeit ohne Beispiel

1 hour ago

The greatest anti-imperialist of our times is Michael Parenti:

Imperialism has been the most powerful force in world history over the last four or five centuries, carving up whole continents while oppressing indigenous peoples and obliterating entire civilizations. Yet, it is seldom accorded any serious attention by our academics, media commentators, and political leaders. When not ignored outright, the subject of imperialism has been sanitized, so that empires become "commonwealths," and colonies become "territories" or "dominions" (or, as in the case of Puerto Rico, "commonwealths" too). Imperialist military interventions become matters of "national defense," "national security," and maintaining "stability" in one or another region. In this book I want to look at imperialism for what it really is.

https://www.historyisaweapon.com/defcon1/imperialism.html

49 minutes ago
"Imperialism has been the most powerful force in world history over the last four or five centuries, carving up whole continents while oppressing indigenous peoples and obliterating entire civilizations. Yet, it is seldom accorded any serious attention by our academics, media commentators, and political leaders."

Why would it when they who control academia, media and most of our politicians are our enemies.

1 hour ago

"The big three are Secretary of State Colin Powell's former chief of staff, retired Colonel Lawrence Wilkerson ; ..."

Yep, Wilkerson, who leaked Valerie Plame's name, not that it was a leak, to Novak, and then stood by to watch the grand jury fry Scooter Libby. Wilkerson, that paragon of moral rectitude. Wilkerson the silent, that *******.

sheesh,

1 hour ago
(Edited)

" A standing military force, with an overgrown Executive will not long be safe companions to liberty. The means of defence against foreign danger, have been always the instruments of tyranny at home. Among the Romans it was a standing maxim to excite a war, whenever a revolt was apprehended. Throughout all Europe, the armies kept up under the pretext of defending, have enslaved the people."

James Madison Friday June 29, 1787

https://avalon.law.yale.edu/18th_century/debates_629.asp

"What, Sir, is the use of a militia? It is to prevent the establishment of a standing army, the bane of liberty.... Whenever Governments mean to invade the rights and liberties of the people, they always attempt to destroy the militia, in order to raise an army upon their ruins." (Rep. Elbridge Gerry of Massachusetts, spoken during floor debate over the Second Amendment [I Annals of Congress at 750, August 17, 1789])

http://press-pubs.uchicago.edu/founders/documents/amendIIs6.html

1 hour ago

A particularly pernicious example of intra-European imperialism was the Nazi aggression during World War II, which gave the German business cartels and the Nazi state an opportunity to plunder the resources and exploit the labor of occupied Europe, including the slave labor of concentration camps. - M. PARENTI, Against empire

See Alexander Parvus

1 hour ago

Collapse is the cure. It's too far gone.

1 hour ago

Russia Wants to 'Jam' F-22 and F-35s in the Middle East: Report

https://nationalinterest.org/blog/buzz/russia-wants-jam-f-22-and-f-35s-middle-east-report-121041

1 hour ago

ZH retards think that the American mic is bad and all other mics are good or don't exist. That's the power of brainwashing. Humans understand that war in general is bad, but humans are becoming increasingly rare in this world.

1 hour ago

The obvious types of American fascists are dealt with on the air and in the press. These demagogues and stooges are fronts for others. Dangerous as these people may be, they are not so significant as thousands of other people who have never been mentioned. The really dangerous American fascists are not those who are hooked up directly or indirectly with the Axis. The FBI has its finger on those. The dangerous American fascist is the man who wants to do in the United States in an American way what Hitler did in Germany in a Prussian way. The American fascist would prefer not to use violence. His method is to poison the channels of public information. With a fascist the problem is never how best to present the truth to the public but how best to use the news to deceive the public into giving the fascist and his group more money or more power.

If we define an American fascist as one who in case of conflict puts money and power ahead of human beings, then there are undoubtedly several million fascists in the United States. There are probably several hundred thousand if we narrow the definition to include only those who in their search for money and power are ruthless and deceitful. Most American fascists are enthusiastically supporting the war effort.

https://truthout.org/articles/the-dangers-of-american-fascism/

2 hours ago
The swamp is bigger than the military alone. Substitute Bureaucrat, Statesman, or Beltway Bandit for General and Colonel in your writing above and you've got a whole new article to post that is just as true.
2 hours ago
(Edited) War = jobs and profit..we get work "THEY" get the profit..If we taxed all war related profit at 99% how many wars would our rulers start?
2 hours ago [edited for clarity]
War is a racket. And nobody loves a racket more than Financial oligarchy. Americans come close though, that's why Financial oligarchy use them to project their own rackets and provide protection reprisals.

[Feb 21, 2020] Russia is playing the White Knight saving nations from marauding hordes

Feb 21, 2020 | www.nakedcapitalism.com

VietnamVet February 20, 2020 at 5:02 am

This article is war porn that assumes controlling oil fields is power. Instead Russia is playing the White Knight saving nations from marauding hordes. NBC News is twisting itself into tighter knots over Syria retaking Idlib Province back from the rebels. Turkey is threatening to send in its Army.

Strategically a full-blown war between a NATO member Turkey and Russian ally Syria would surpass the adverse effects of the quarantine of China or the rising temperatures that are sliding huge glaciers off of Western Antarctica into the sea (if the war engulfs Europe). The USA remains today in Syria and Iraq to control their oil fields since to Donald Trump it means more money for the USA. Actually, America's position there is militarily untenable. Both countries want the US gone. Iran's precision conventional ballistic missiles have mutually assured destruction with Israel and Saudi Arabia and can destroy US bases there at will.

When the Wuhan coronavirus engulfs the West, killing the elderly and the ill, for-profit healthcare will be overwhelmed. With nothing to sell, the global economy stops dead. There will be a glut of oil and natural gas. If they still have money, the trip to the grocery store will be Russian Roulette for senior citizens hoping there will be food to live for another month and not get viral pneumonia. The Doomsday Clock will be at midnight. American troops will have to find their way home. The forever wars and neoliberalism died with globalism.

The Rev Kev February 20, 2020 at 6:25 am

This article sounds like the Russians have just started to go into Iraq but they were there before the invasion nearly twenty years ago. In fact, in 2007 the US tried to get the Iraqis to void a contract the Iraqis had with Russia for the massive West Qurna oil field but that failed as the Iraqis would have been on the hook for all $13 billion in debt they owed Russia and the US would not help. But there is a military aspect to being rich in resources – there always is – and for Iraq it is particularly acute.

The Middle East is a rough neighbourhood and any country there has to be strong enough to defend itself or else be vulnerable. After the invasion the Coalition tried to organize Iraq so that they had no military but the Iraqi resistance put aid to that idea. But what would make the Iraqis think hard was when ISIS was marching on Baghdad. The US refused to use its air power to stop them and refused the Iraqis the use of pilots & paid-for aircraft training in Texas until the government would fulfill a laundry list of demands. It was the Russians – and the Iranians -that sent military equipment and specialists that helped stop ISIS before they got to Baghdad.

More recently the Iraqis had to buy Russian tanks to fight ISIS as the American tanks they had purchased were being deliberately not being serviced until the Iraqis fulfilled an American demand. There is a shift now to buy Russian equipment because of American fickleness with military gear. If that was not enough, the US has never gotten Iraqi electricity production back to pre-war levles in spite of billions spent. To add insult to injury, Trump demanded recently that Iraq hand over half of Iraqi oil production to repair the electrical grid with of course no guarantees that they would ever do the work.

So the long and the short is that there is no trust with the US and Russia is seen as a more reliable partner – as is China – and that there is no net benefit with going to the US. And you never know if a second-term Trump might not seize the Iraqi oil fields if he felt he could get away with it. It is a matter of being reliable-capable and it seems that the Russians are proving themselves that, hence their success here. Reliability is vital and cannot be replaced.

Polar Socialist February 20, 2020 at 7:36 am

Russia has been using soft power in Middle East ever since Peter the Great started fighting the Ottomans. Ever since the western powers (read: great Britain) always came to the rescue of turks if Russia had military success, so they seriously used the other alternative: economical, diplomatic and cultural influence in arab countries.
During the cold war they supported any regime in Middle East opposed to US-Israeli influence (or downright aggression).
After the cold war the Russian foreign minister, later prime minister Primakov, was an Arabist by training and personally knew almost every principal actor in Middle East. He is presumed to be the architect of the current Russian policy (which is a continuation of the old Soviet policy, which was based on the old Russian Empire policy).
It's a long, long history of using culture, diplomacy, economical help and weapon sales to have influence in an area important to the Russian security in their southern sphere.

Norb February 20, 2020 at 8:23 am

The US pats itself on the back and always talks about being the worlds "policeman". The American elite also want it both ways too- to bemoan having to do the police work in the first place, while also endlessly stressing that the world would go to pieces if her armed forces were not in foreign lands. Make up your mind please.

It would be very ironic if Russia proves to truly be an effective world "policeman"- as seems more evidently to be the case.

Propaganda aside, who brings more stability and peace.

In one respect, the war profiteers are the least of the problem. If Space Force and Nuclear rearmament are just more money boondoggles, while tragic, still survivable. If there is a faction that actually believes in this stuff as a viable national policy for defense- and offense- then when reality hits the road as the saying goes, the American psyche might not survive the impact, let alone the rest of the world.

Americans are shielded from the horrors of war to the nations detriment.

Kiers February 20, 2020 at 11:09 am

You guys are NOT thinking venally nor strategically enough. The US powers that be, love to put on this news story of foreign powers eating US cake. It's simply not credible imho. Post Iraq war in 2003, "W" bush played the same "eating our cake" story out about China taking Iraq oil for example. There are definitely other arrangements in place beneath the surface we are never told. Iraq is now US piggbank. It can trade that asset as it desires, sadly. Stories like this are just smoke.

John Wright February 20, 2020 at 11:29 am

I am struck by the size of the Russian investment ($20 billion) while the USA has "invested" nearly 6 trillion (300x) as much in war expenditure in the region.

And this has the Russians bettering the USA in Iraq with their relatively small strategic investment.

Maybe it is long overdue for the USA political class to reassess how it spends its citizens' resources in the Middle East.

But I'm not expecting that to occur.

[Feb 16, 2020] The highwater mark in SEAsia was the helicopters evacuating the last invaders from Saigon. The highwater mark in the ME is going to be similar scenes in Iraq.

Feb 16, 2020 | off-guardian.org

Dungroanin ,

It seems that history is about to repeat. The highwater mark in SEAsia was the helicopters evacuating the last invaders from Saigon. The highwater mark in the ME is going to be similar scenes in Iraq.

A final warning has been issued to US troops there – 40 days after Soleimanis assassination – the Resistance is ready to move, an irresistible force about to meet a not so immovable object.

Along with Idlib and Allepo its been amazing start to 2020. And its not even spring!

[Feb 16, 2020] Africa's largest oil nation could see production drop 35%

Feb 16, 2020 | www.rt.com

Africa's largest oil producer could see oil production fall by 35 percent as low oil prices and regulatory uncertainty threaten to prompt oil majors to postpone final investment decisions. OPEC member Nigeria is the largest oil producer in Africa and it pumped 1.776 million barrels of oil per day (bpd) in January 2020, according to OPEC's secondary sources in its monthly report published this week. Adding condensate production, Nigeria's total oil output exceeds 2 million bpd.

However, three deepwater projects offshore Nigeria, operated by oil majors Exxon, Shell, and Total, could see their start-up dates delayed by two to four years to the late 2020s, according to the research WoodMac shared with Reuters ahead of publishing it on Friday.

Also on rt.com Russia to bring back to life Nigeria's major steel plant project, abandoned for decades

The regulatory changes in Nigeria's oil industry and the still pending final approval of a petroleum bill - after two decades of delays and wrangling - act as deterrents to the oil majors' investment decisions, according to Wood Mackenzie.

Moreover, the three deepwater projects - which could add a combined 300,000 bpd to Nigeria's production - are not profitable at current oil prices with Brent Crude below $60 a barrel, the consultancy noted.

Just this week, Nigeria assured foreign oil investors that the country is open to business and can guarantee high returns on investment, the country's President Muhammadu Buhari told an energy conference on Monday.

Nigeria is set to finally pass a new bill regulating the petroleum industry by the middle of this year, after nearly two decades of delays, the country's Minister of Petroleum Timipre Sylva said at the same event.

Also on rt.com Africa to become 'land of opportunity' if US & China strike trade deal – Bank of America

Mele Kyari, Group Managing Director at the Nigerian National Petroleum Corporation (NNPC), said at the conference that "We are, more than ever before, committed to working with stakeholders to increase our crude oil production from 2.3 million bbl per day to 3 million bbl per day."

The recent amendment to the Deep Offshore Act will improve financial stability and investor confidence, NNPC's head said.

This article was originally published on Oilprice.com

[Feb 10, 2020] Location, location, location Why Russian LNG can beat competition from US Australia

Feb 10, 2020 | www.rt.com

Russia's geographical position makes its exports of liquefied natural gas (LNG) more profitable and competitive with American and Australian supplies, according to Russia's Energy Minister Alexander Novak. Russia ships most of its LNG (around 69 percent) to Asian markets, where the bulk of global LNG supplies are sent. The country could also export its LNG via traditional Russian pipeline gas European routes, due to low cost and short transportation distance, the minister wrote, in an article for the Energy Policy journal.

Also on rt.com Trump urges Europe to buy American natural gas to ensure their energy security

"Russia's convenient geographical position between Europe and Asia allows our LNG to be profitable at current prices and to win competition from the US and Australia," Novak said. "If necessary, we can deliver liquefied gas to any European country, and it will be faster and cheaper than many other suppliers."

The Northern Sea Route (NSR) could be a key transport link to connect massive Arctic energy projects Russia is currently developing with target markets. The route, which lies in Arctic waters and within Russia's Exclusive Economic Zone, could cut the transportation time by a third, compared to shipments via the Suez Canal.

Also on rt.com India could become first non‑Arctic state to develop Russia's Arctic resources

Russia is one of the world's leading exporters of natural gas. Last year, it produced more than 40 billion cubic meters of LNG – a nearly 50 percent increase from 27 billion cubic meters it had in 2018. By 2035, Novak expects the country to boost production to 120 million tons, amounting to around a fifth of the forecasted global LNG production.

For more stories on economy & finance visit RT's business section

[Feb 09, 2020] Trump demand for 50% of Iraq oil revenue sound exactly like a criminal mob boss

Highly recommended!
Jan 21, 2020 | www.unz.com

Tucker , says: Show Comment January 21, 2020 at 12:27 pm GMT

I've heard and read about a claim that Trump actually called PM Abdul Mahdi and demanded that Iraq hand over 50 percent of their proceeds from selling their oil to the USA, and then threatened Mahdi that he would unleash false flag attacks against the Iraqi government and its people if he did not submit to this act of Mafia-like criminal extortion. Mahdi told Trump to kiss his buttocks and that he wasn't going to turn over half of the profits from oil sales.

This makes Trump sound exactly like a criminal mob boss, especially in light of the fact that the USA is now the world's #1 exporter of oil – a fact that the arrogant Orange Man has even boasted about in recent months. Can anyone confirm that this claim is accurate? If so, then the more I learn about Trump the more sleazy and gangster like he becomes.

I mean, think about it. Bush and Cheney and mostly jewish neocons LIED us into Iraq based on bald faced lies, fabricated evidence, and exaggerated threats that they KNEW did not exist. We destroyed that country, captured and killed it's leader – who used to be a big buddy of the USA when we had a use for him – and Bush's crime gang killed close to 2 million innocent Iraqis and wrecked their economy and destroyed their infrastructure. And, now, after all that death, destruction and carnage – which Trump claimed in 2016 he did not approve of – but, now that Trump is sitting on the throne in the Oval office – he has the audacity and the gall to demand that Iraq owes the USA 50 percent of their oil profits? And, that he won't honor and respect their demand to pull our troops out of their sovereign nation unless they PAY US back for the gigantic waste of tax payers money that was spent building permanent bases inside their country?

Not one Iraqi politician voted for the appropriations bill that financed the construction of those military bases; that was our mistake, the mistake of our US congress whichever POTUS signed off on it.

melpol , says: Show Comment January 21, 2020 at 1:41 pm GMT
...Trump learned the power of the purse on the streets of NYC, he survived by playing ball with the Jewish and Italian Mafia. Now he has become the ultimate Godfather, and the world must listen to his commands. Watch and listen as the powerful and mighty crumble under US Hegemony.
World War Jew , says: Show Comment January 21, 2020 at 1:42 pm GMT
Right TG, traditionally, as you said up there first, and legally too, under the supreme law of the land. Economic sanctions are subject to the same UNSC supervision as forcible coercion.

UN Charter Article 41: "The Security Council may decide what measures not involving the use of armed force are to be employed to give effect to its decisions, and it may call upon the Members of the United Nations to apply such measures. These may include complete or partial interruption of economic relations and of rail, sea, air, postal, telegraphic, radio, and other means of communication, and the severance of diplomatic relations."

https://www.un.org/en/charter-united-nations/index.html

US "sanctions" require UNSC authorization. Unilateral sanctions are nothing but illegal coercive intervention, as the non-intervention principle is customary international law, which is US federal common law.

The G-192, that is, the entire world, has affirmed this law. That's why the US is trying to defund UNCTAD as redundant with the WTO (UNCTAD is the G-192's primary forum.) In any case, now that the SCO is in a position to enforce this law at gunpoint with its overwhelmingly superior missile technology, the US is going to get stomped and tased until it complies and stops resisting.

Charlie , says: Show Comment January 21, 2020 at 7:53 pm GMT
@Tucker This idea that the US is any sort of a net petroleum exporter is just another lie.

https://www.eia.gov/tools/faqs/faq.php?id=268&t=6

In 2018 total US petroleum production was under 18 million barrels per day, total consumption north of 20 mmb/d. What does it matter if the US exports a bunch of super light fracked product the US itself can't refine if it turns around and imports it all back in again and then some.

The myths we tell ourselves, like a roaring economy that nevertheless generates a $1 trillion annual deficit, will someday come back to bite us. Denying reality is not a winning game plan for the long run.

Christophe GJ , says: Show Comment January 21, 2020 at 8:00 pm GMT
I long tought that US foreign policies were mainly zionist agenda – driven, but the Venezuelan affair and the statements of Trump himself about the syrian oil (ta be "kept" (stolen)) make you think twice.

Oil seems to be at least very important even if it's not the main cause of middle east problems

So maybe it's the cause of illegal and cruel sanctions against Iran : Get rid of competitor to sell shale oil everywhere ?( think also of Norstream 2 here)

Watch out US of A. in the end there is something sometimes referred to as the oil's curse . some poor black Nigerians call oil "the shit of the devil", because it's such a problem – related asset Have you heard of it ? You get your revenues from oil easily, so you don't have to make effort by yourself. And in the end you don't keep pace with China on 5G ? Education fails ? Hmm
Becommig a primary sector extraction nation sad destiny indeed, like africans growing cafe, bananas and cacao for others. Not to mention environmental problems
What has happened to the superb Nation that send the first man on the moon and invented modern computers ?
Disapointment
Money for space or money for war following the Zio. Choose Uncle Sam !
Difficult to have both

OverCommenter , says: Show Comment January 21, 2020 at 8:24 pm GMT
Everyone seems to forget how we avoided war with Syria all those years ago It was when John Kerry of all people gaffed, and said "if Assad gives up all his chemical weapons." That was in response to a reporter who asked "is there anything that can stop the war?" A intrepid Russian ambassador chimed in loud enough for the press core to hear his "OK" and history was averted. Thinking restricting the power of the President will stop brown children from dying at the hands of insane US foreign policy is a cope. "Bi-partisanship" voted to keep troops in Syria, that was only a few months ago, have you already forgotten? Dubya started the drone program, and the magical African everyone fawns over, literally doubled the remote controlled death. We are way past pretending any elected official from either side is actually against more ME war, or even that one side is worse than the other.

The problem with the supporters Trump has left is they so desperately want to believe in something bigger than themselves. They have been fed propaganda for their whole lives, and as a result can only see the world in either "this is good" or "this is bad." The problem with the opposition is that they are insane. and will say or do anything regardless of the truth. Trump could be impeached for assassinating Sulimani, yet they keep proceeding with fake and retarded nonsense. Just like keeping troops in Syria, even the most insane rabid leftoids are just fine with US imperialism, so long as it's promoting Starbucks, Marvel and homosex, just like we see with support for HK. That is foreign meddling no matter how you try to justify it, and it's not even any different messaging than the hoax "bring democracyhumanrightsfreedom TM to the poor Arabs" justification that was used in Iraq. They don't even have to come up with a new play to run, it's really quite incredible.

Just passing through , says: Show Comment January 21, 2020 at 8:44 pm GMT
@OverCommenter A lot of right-wingers also see military action in the Middle East as a way for America to flex its muscles and bomb some Arabs. It also serves to justify the insane defence budget that could be used to build a wall and increase funding to ICE.

US politics has become incredibly bi-partisan, criticising Trump will get you branded a 'Leftist' in many circles. This extreme bipartisanship started with the Obama birth certificate nonsense which was being peddled by Jews like Orly Taitz, Philip J. Berg, Robert L. Shulz, Larry Klayman and Breitbart news – most likely because Obama was pursuing the JCPOA and not going hard enough on Iran – and continued with the Trump Russian agent angle.

Now many Americans cannot really think critically, they stick to their side like a fan sticks to their sports team.

Weston Waroda , says: Show Comment January 21, 2020 at 9:11 pm GMT
The first person I ever heard say sanctions are acts of war was Ron Paul. The repulsive Madeleine Albright infamously said the deaths of 500,000 Iranian children due to US sanctions was worth it. She ought to be tried as a war criminal. Ron Paul ought to be Secretary of State.

[Feb 07, 2020] How They Sold the Iraq War by Jeffrey St. Clair

Highly recommended!
Notable quotes:
"... Americans were the victims of an elaborate con job, pelted with a daily barrage of threat inflation, distortions, deceptions and lies, not about tactics or strategy or war plans, but about justifications for war. The lies were aimed not at confusing Saddam's regime, but the American people. By the start of the war, 66 per cent of Americans thought Saddam Hussein was behind 9/11 and 79 per cent thought he was close to having a nuclear weapon. ..."
"... This charade wouldn't have worked without a gullible or a complicit press corps. Victoria Clarke, who developed the Pentagon plan for embedded reports, put it succinctly a few weeks before the war began: "Media coverage of any future operation will to a large extent shape public perception." ..."
"... During the Vietnam War, TV images of maimed GIs and napalmed villages suburbanized opposition to the war and helped hasten the U.S. withdrawal. The Bush gang meant to turn the Vietnam phenomenon on its head by using TV as a force to propel the U.S.A. into a war that no one really wanted. ..."
"... When the Pentagon needed a heroic story, the press obliged. Jessica Lynch became the war's first instant celebrity. Here was a neo-gothic tale of a steely young woman wounded in a fierce battle, captured and tortured by ruthless enemies, and dramatically saved from certain death by a team of selfless rescuers, knights in camo and night-vision goggles. ..."
"... Back in 1988, the Post felt much differently about Saddam and his weapons of mass destruction. When reports trickled out about the gassing of Iranian troops, the Washington Post's editorial page shrugged off the massacres, calling the mass poisonings "a quirk of war." ..."
"... The Bush team displayed a similar amnesia. When Iraq used chemical weapons in grisly attacks on Iran, the U.S. government not only didn't object, it encouraged Saddam. ..."
"... Nothing sums up this unctuous approach more brazenly than MSNBC's firing of liberal talk show host Phil Donahue on the eve of the war. The network replaced the Donahue Show with a running segment called Countdown: Iraq, featuring the usual nightly coterie of retired generals, security flacks, and other cheerleaders for invasion. ..."
Mar 20, 2018 | www.counterpunch.org

The war on Iraq won't be remembered for how it was waged so much as for how it was sold. It was a propaganda war, a war of perception management, where loaded phrases, such as "weapons of mass destruction" and "rogue state" were hurled like precision weapons at the target audience: us.

To understand the Iraq war you don't need to consult generals, but the spin doctors and PR flacks who stage-managed the countdown to war from the murky corridors of Washington where politics, corporate spin and psy-ops spooks cohabit.

Consider the picaresque journey of Tony Blair's plagiarized dossier on Iraq, from a grad student's website to a cut-and-paste job in the prime minister's bombastic speech to the House of Commons. Blair, stubborn and verbose, paid a price for his grandiose puffery. Bush, who looted whole passages from Blair's speech for his own clumsy presentations, has skated freely through the tempest. Why?

Unlike Blair, the Bush team never wanted to present a legal case for war. They had no interest in making any of their allegations about Iraq hold up to a standard of proof. The real effort was aimed at amping up the mood for war by using the psychology of fear.

Facts were never important to the Bush team. They were disposable nuggets that could be discarded at will and replaced by whatever new rationale that played favorably with their polls and focus groups. The war was about weapons of mass destruction one week, al-Qaeda the next. When neither allegation could be substantiated on the ground, the fall back position became the mass graves (many from the Iran/Iraq war where the U.S.A. backed Iraq) proving that Saddam was an evil thug who deserved to be toppled. The motto of the Bush PR machine was: Move on. Don't explain. Say anything to conceal the perfidy behind the real motives for war. Never look back. Accuse the questioners of harboring unpatriotic sensibilities. Eventually, even the cagey Wolfowitz admitted that the official case for war was made mainly to make the invasion palatable, not to justify it.

The Bush claque of neocon hawks viewed the Iraq war as a product and, just like a new pair of Nikes, it required a roll-out campaign to soften up the consumers. The same techniques (and often the same PR gurus) that have been used to hawk cigarettes, SUVs and nuclear waste dumps were deployed to retail the Iraq war. To peddle the invasion, Donald Rumsfeld and Colin Powell and company recruited public relations gurus into top-level jobs at the Pentagon and the State Department. These spinmeisters soon had more say over how the rationale for war on Iraq should be presented than intelligence agencies and career diplomats. If the intelligence didn't fit the script, it was shaded, retooled or junked.

Take Charlotte Beers whom Powell picked as undersecretary of state in the post-9/11 world. Beers wasn't a diplomat. She wasn't even a politician. She was a grand diva of spin, known on the business and gossip pages as "the queen of Madison Avenue." On the strength of two advertising campaigns, one for Uncle Ben's Rice and another for Head and Shoulder's dandruff shampoo, Beers rocketed to the top of the heap in the PR world, heading two giant PR houses: Ogilvy and Mathers as well as J. Walter Thompson.

At the State Department Beers, who had met Powell in 1995 when they both served on the board of Gulf Airstream, worked at, in Powell's words, "the branding of U.S. foreign policy." She extracted more than $500 million from Congress for her Brand America campaign, which largely focused on beaming U.S. propaganda into the Muslim world, much of it directed at teens.

"Public diplomacy is a vital new arm in what will combat terrorism over time," said Beers. "All of a sudden we are in this position of redefining who America is, not only for ourselves, but for the outside world." Note the rapt attention Beers pays to the manipulation of perception, as opposed, say, to alterations of U.S. policy.

Old-fashioned diplomacy involves direct communication between representatives of nations, a conversational give and take, often fraught with deception (see April Glaspie), but an exchange nonetheless. Public diplomacy, as defined by Beers, is something else entirely. It's a one-way street, a unilateral broadcast of American propaganda directly to the public, domestic and international, a kind of informational carpet-bombing.

The themes of her campaigns were as simplistic and flimsy as a Bush press conference. The American incursions into Afghanistan and Iraq were all about bringing the balm of "freedom" to oppressed peoples. Hence, the title of the U.S. war: Operation Iraqi Freedom, where cruise missiles were depicted as instruments of liberation. Bush himself distilled the Beers equation to its bizarre essence: "This war is about peace."

Beers quietly resigned her post a few weeks before the first volley of tomahawk missiles battered Baghdad. From her point of view, the war itself was already won, the fireworks of shock and awe were all after play.

Over at the Pentagon, Donald Rumsfeld drafted Victoria "Torie" Clarke as his director of public affairs. Clarke knew the ropes inside the Beltway. Before becoming Rumsfeld's mouthpiece, she had commanded one of the world's great parlors for powerbrokers: Hill and Knowlton's D.C. office.

Almost immediately upon taking up her new gig, Clarke convened regular meetings with a select group of Washington's top private PR specialists and lobbyists to develop a marketing plan for the Pentagon's forthcoming terror wars. The group was filled with heavy-hitters and was strikingly bipartisan in composition. She called it the Rumsfeld Group and it included PR executive Sheila Tate, columnist Rich Lowry, and Republican political consultant Rich Galen.

The brain trust also boasted top Democratic fixer Tommy Boggs, brother of NPR's Cokie Roberts and son of the late Congressman Hale Boggs of Louisiana. At the very time Boggs was conferring with top Pentagon brass on how to frame the war on terror, he was also working feverishly for the royal family of Saudi Arabia. In 2002 alone, the Saudis paid his Qorvis PR firm $20.2 million to protect its interests in Washington. In the wake of hostile press coverage following the exposure of Saudi links to the 9/11 hijackers, the royal family needed all the well-placed help it could buy. They seem to have gotten their money's worth. Boggs' felicitous influence-peddling may help to explain why the references to Saudi funding of al-Qaeda were dropped from the recent congressional report on the investigation into intelligence failures and 9/11.

According to the trade publication PR Week, the Rumsfeld Group sent "messaging advice" to the Pentagon. The group told Clarke and Rumsfeld that in order to get the American public to buy into the war on terrorism, they needed to suggest a link to nation states, not just nebulous groups such as al-Qaeda. In other words, there needed to be a fixed target for the military campaigns, some distant place to drop cruise missiles and cluster bombs. They suggested the notion (already embedded in Rumsfeld's mind) of playing up the notion of so-called rogue states as the real masters of terrorism. Thus was born the Axis of Evil, which, of course, wasn't an "axis" at all, since two of the states, Iran and Iraq, hated each other, and neither had anything at all to do with the third, North Korea.

Tens of millions in federal money were poured into private public relations and media firms working to craft and broadcast the Bush dictat that Saddam had to be taken out before the Iraqi dictator blew up the world by dropping chemical and nuclear bombs from long-range drones. Many of these PR executives and image consultants were old friends of the high priests in the Bush inner sanctum. Indeed, they were veterans, like Cheney and Powell, of the previous war against Iraq, another engagement that was more spin than combat .

At the top of the list was John Rendon, head of the D.C. firm, the Rendon Group. Rendon is one of Washington's heaviest hitters, a Beltway fixer who never let political affiliation stand in the way of an assignment. Rendon served as a media consultant for Michael Dukakis and Jimmy Carter, as well as Reagan and George H.W. Bush. Whenever the Pentagon wanted to go to war, he offered his services at a price. During Desert Storm, Rendon pulled in $100,000 a month from the Kuwaiti royal family. He followed this up with a $23 million contract from the CIA to produce anti-Saddam propaganda in the region.

As part of this CIA project, Rendon created and named the Iraqi National Congress and tapped his friend Ahmed Chalabi, the shady financier, to head the organization.

Shortly after 9/11, the Pentagon handed the Rendon Group another big assignment: public relations for the U.S. bombing of Afghanistan. Rendon was also deeply involved in the planning and public relations for the pre-emptive war on Iraq, though both Rendon and the Pentagon refuse to disclose the details of the group's work there.

But it's not hard to detect the manipulative hand of Rendon behind many of the Iraq war's signature events, including the toppling of the Saddam statue (by U.S. troops and Chalabi associates) and videotape of jubilant Iraqis waving American flags as the Third Infantry rolled by them. Rendon had pulled off the same stunt in the first Gulf War, handing out American flags to Kuwaitis and herding the media to the orchestrated demonstration. "Where do you think they got those American flags?" clucked Rendon in 1991. "That was my assignment."

The Rendon Group may also have had played a role in pushing the phony intelligence that has now come back to haunt the Bush administration. In December of 2002, Robert Dreyfuss reported that the inner circle of the Bush White House preferred the intelligence coming from Chalabi and his associates to that being proffered by analysts at the CIA.

So Rendon and his circle represented a new kind of off-the-shelf PSYOPs , the privatization of official propaganda. "I am not a national security strategist or a military tactician," said Rendon. "I am a politician, and a person who uses communication to meet public policy or corporate policy objectives. In fact, I am an information warrior and a perception manager."

What exactly, is perception management? The Pentagon defines it this way: "actions to convey and/or deny selected information and indicators to foreign audiences to influence their emotions, motives and objective reasoning." In other words, lying about the intentions of the U.S. government. In a rare display of public frankness, the Pentagon actually let slip its plan (developed by Rendon) to establish a high-level den inside the Department Defense for perception management. They called it the Office of Strategic Influence and among its many missions was to plant false stories in the press.

Nothing stirs the corporate media into outbursts of pious outrage like an official government memo bragging about how the media are manipulated for political objectives. So the New York Times and Washington Post threw indignant fits about the Office of Strategic Influence; the Pentagon shut down the operation, and the press gloated with satisfaction on its victory. Yet, Rumsfeld told the Pentagon press corps that while he was killing the office, the same devious work would continue. "You can have the corpse," said Rumsfeld. "You can have the name. But I'm going to keep doing every single thing that needs to be done. And I have."

At a diplomatic level, despite the hired guns and the planted stories, this image war was lost. It failed to convince even America's most fervent allies and dependent client states that Iraq posed much of a threat. It failed to win the blessing of the U.N. and even NATO, a wholly owned subsidiary of Washington. At the end of the day, the vaunted coalition of the willing consisted of Britain, Spain, Italy, Australia, and a cohort of former Soviet bloc nations. Even so, the citizens of the nations that cast their lot with the U.S.A. overwhelmingly opposed the war.

Domestically, it was a different story. A population traumatized by terror threats and shattered economy became easy prey for the saturation bombing of the Bush message that Iraq was a terrorist state linked to al-Qaeda that was only minutes away from launching attacks on America with weapons of mass destruction.

Americans were the victims of an elaborate con job, pelted with a daily barrage of threat inflation, distortions, deceptions and lies, not about tactics or strategy or war plans, but about justifications for war. The lies were aimed not at confusing Saddam's regime, but the American people. By the start of the war, 66 per cent of Americans thought Saddam Hussein was behind 9/11 and 79 per cent thought he was close to having a nuclear weapon.

Of course, the closest Saddam came to possessing a nuke was a rusting gas centrifuge buried for 13 years in the garden of Mahdi Obeidi, a retired Iraqi scientist. Iraq didn't have any functional chemical or biological weapons. In fact, it didn't even possess any SCUD missiles, despite erroneous reports fed by Pentagon PR flacks alleging that it had fired SCUDs into Kuwait.

This charade wouldn't have worked without a gullible or a complicit press corps. Victoria Clarke, who developed the Pentagon plan for embedded reports, put it succinctly a few weeks before the war began: "Media coverage of any future operation will to a large extent shape public perception."

During the Vietnam War, TV images of maimed GIs and napalmed villages suburbanized opposition to the war and helped hasten the U.S. withdrawal. The Bush gang meant to turn the Vietnam phenomenon on its head by using TV as a force to propel the U.S.A. into a war that no one really wanted.

What the Pentagon sought was a new kind of living room war, where instead of photos of mangled soldiers and dead Iraqi kids, they could control the images Americans viewed and to a large extent the content of the stories. By embedding reporters inside selected divisions, Clarke believed the Pentagon could count on the reporters to build relationships with the troops and to feel dependent on them for their own safety. It worked, naturally. One reporter for a national network trembled on camera that the U.S. Army functioned as "our protectors." The late David Bloom of NBC confessed on the air that he was willing to do "anything and everything they can ask of us."

When the Pentagon needed a heroic story, the press obliged. Jessica Lynch became the war's first instant celebrity. Here was a neo-gothic tale of a steely young woman wounded in a fierce battle, captured and tortured by ruthless enemies, and dramatically saved from certain death by a team of selfless rescuers, knights in camo and night-vision goggles. Of course, nearly every detail of her heroic adventure proved to be as fictive and maudlin as any made-for-TV-movie. But the ordeal of Private Lynch, which dominated the news for more than a week, served its purpose: to distract attention from a stalled campaign that was beginning to look at lot riskier than the American public had been hoodwinked into believing.

The Lynch story was fed to the eager press by a Pentagon operation called Combat Camera, the Army network of photographers, videographers and editors that sends 800 photos and 25 video clips a day to the media. The editors at Combat Camera carefully culled the footage to present the Pentagon's montage of the war, eliding such unsettling images as collateral damage, cluster bombs, dead children and U.S. soldiers, napalm strikes and disgruntled troops.

"A lot of our imagery will have a big impact on world opinion," predicted Lt. Jane Larogue, director of Combat Camera in Iraq. She was right. But as the hot war turned into an even hotter occupation, the Pentagon, despite airy rhetoric from occupation supremo Paul Bremer about installing democratic institutions such as a free press, moved to tighten its monopoly on the flow images out of Iraq. First, it tried to shut down Al Jazeera, the Arab news channel. Then the Pentagon intimated that it would like to see all foreign TV news crews banished from Baghdad.

Few newspapers fanned the hysteria about the threat posed by Saddam's weapons of mass destruction as sedulously as did the Washington Post. In the months leading up to the war, the Post's pro-war op-eds outnumbered the anti-war columns by a 3-to-1 margin.

Back in 1988, the Post felt much differently about Saddam and his weapons of mass destruction. When reports trickled out about the gassing of Iranian troops, the Washington Post's editorial page shrugged off the massacres, calling the mass poisonings "a quirk of war."

The Bush team displayed a similar amnesia. When Iraq used chemical weapons in grisly attacks on Iran, the U.S. government not only didn't object, it encouraged Saddam. Anything to punish Iran was the message coming from the White House. Donald Rumsfeld himself was sent as President Ronald Reagan's personal envoy to Baghdad. Rumsfeld conveyed the bold message than an Iraq defeat would be viewed as a "strategic setback for the United States." This sleazy alliance was sealed with a handshake caught on videotape. When CNN reporter Jamie McIntyre replayed the footage for Rumsfeld in the spring of 2003, the secretary of defense snapped, "Where'd you get that? Iraqi television?"

The current crop of Iraq hawks also saw Saddam much differently then. Take the writer Laura Mylroie, sometime colleague of the New York Times' Judy Miller, who persists in peddling the ludicrous conspiracy that Iraq was behind the 1993 bombing of the World Trade Center.

How times have changed! In 1987, Mylroie felt downright cuddly toward Saddam. She wrote an article for the New Republic titled "Back Iraq: Time for a U.S. Tilt in the Mideast," arguing that the U.S. should publicly embrace Saddam's secular regime as a bulwark against the Islamic fundamentalists in Iran. The co-author of this mesmerizing weave of wonkery was none other than Daniel Pipes, perhaps the nation's most bellicose Islamophobe. "The American weapons that Iraq could make good use of include remotely scatterable and anti-personnel mines and counterartillery radar," wrote Mylroie and Pipes. "The United States might also consider upgrading intelligence it is supplying Baghdad."

In the rollout for the war, Mylroie seemed to be everywhere hawking the invasion of Iraq. She would often appear on two or three different networks in the same day. How did the reporter manage this feat? She had help in the form of Eleana Benador, the media placement guru who runs Benador Associates. Born in Peru, Benador parlayed her skills as a linguist into a lucrative career as media relations whiz for the Washington foreign policy elite. She also oversees the Middle East Forum, a fanatically pro-Zionist white paper mill. Her clients include some of the nation's most fervid hawks, including Michael Ledeen, Charles Krauthammer, Al Haig, Max Boot, Daniel Pipes, Richard Perle, and Judy Miller. During the Iraq war, Benador's assignment was to embed this squadron of pro-war zealots into the national media, on talk shows, and op-ed pages.

Benador not only got them the gigs, she also crafted the theme and made sure they all stayed on message. "There are some things, you just have to state them in a different way, in a slightly different way," said Benador. "If not, people get scared." Scared of intentions of their own government.

It could have been different. All of the holes in the Bush administration's gossamer case for war were right there for the mainstream press to expose. Instead, the U.S. press, just like the oil companies, sought to commercialize the Iraq war and profit from the invasions. They didn't want to deal with uncomfortable facts or present voices of dissent.

Nothing sums up this unctuous approach more brazenly than MSNBC's firing of liberal talk show host Phil Donahue on the eve of the war. The network replaced the Donahue Show with a running segment called Countdown: Iraq, featuring the usual nightly coterie of retired generals, security flacks, and other cheerleaders for invasion. The network's executives blamed the cancellation on sagging ratings. In fact, during its run Donahue's show attracted more viewers than any other program on the network. The real reason for the pre-emptive strike on Donahue was spelled out in an internal memo from anxious executives at NBC. Donahue, the memo said, offered "a difficult face for NBC in a time of war. He seems to delight in presenting guests who are anti-war, anti-Bush and skeptical of the administration's motives."

The memo warned that Donahue's show risked tarring MSNBC as an unpatriotic network, "a home for liberal anti-war agenda at the same time that our competitors are waving the flag at every opportunity." So, with scarcely a second thought, the honchos at MSNBC gave Donahue the boot and hoisted the battle flag.

It's war that sells.

There's a helluva caveat, of course. Once you buy it, the merchants of war accept no returns.

This essay is adapted from Grand Theft Pentagon.

[Jan 30, 2020] So it is a matter of change the flag in the US bases and all will be OK?

Jan 30, 2020 | www.moonofalabama.org

DFC , Jan 30 2020 18:02 utc | 63

A bit off-topic but seems that may be US will be Iraq, but who remains is NATO:

https://middle-east-online.com/en/iraq-considers-nato-role-instead-us-led-coalition

So it is a matter of change the flag in the US bases and all will be OK?

[Jan 24, 2020] It's amazing all the money in the State Department and other intelligence agencies should be attracting the best minds. Yet a bunch of us sitting here watching this from our boring office jobs realize how genuinely stupid US foreign policy has been.

Jan 24, 2020 | www.moonofalabama.org

Danny , Jan 24 2020 15:11 utc | 25

It's amazing all the money in the State Department and other intelligence agencies should be attracting the best minds. Yet a bunch of us sitting here watching this from our boring office jobs realize how genuinely stupid US foreign policy has been.

A separate Sunni state in West Iraq would be doomed. We need to leave these people alone, we've made enough foolish mistakes and this will get a lot of people killed. That's along with US troops being put in harms way for ridiculous reasons like stealing Syrian oil and now occupying Iraq against their parliaments wishes.

Back in the day you told someone you were American and they wanted to shake your hand and ask you about this place or that. Now they want to spit in our faces

[Jan 12, 2020] MIC along with Wall Street controls the government and the country

Highly recommended!
Jan 12, 2020 | angrybearblog.com
  1. likbez , January 12, 2020 5:30 pm

    Everyone keeps dancing around it: Iraqi PM Abdul-Mahdi has reported that Soleimani was on the way to see him with a reply to a Saudi peace proposal. Who profits from Peace? Who does not?

    The killing of Soleimani, while a tragic even with far reaching consequences, is just an illustration of the general rule: MIC does not profit from peace. And MIC dominates any national security state, into which the USA was transformed by the technological revolution on computers and communications, as well as the events of 9/11.

    The USA government can be viewed as just a public relations center for MIC. That's why Trump/Pompeo/Esper/Pence gang position themselves as rabid neocons, which means MIC lobbyists in order to hold their respective positions. There is no way out of this situation. This is a classic Catch 22 trap.

    The fact that a couple of them are also "Rapture" obsessed religious bigots means that the principle of separation of church and state does no matter when MIC interests are involved.

    The health of MIC requires maintaining an inflated defense budget at all costs. Which, in turn, drives foreign wars and the drive to capture other nations' resources to compensate for MIC appetite. The drive which is of course closely allied with Wall Street interests (disaster capitalism.)

    In such conditions fake "imminent threat" assassinations necessarily start happening. Although the personality of Pompeo and the fact that he is a big friend of the current head of Mossad probably played some role.

    It's really funny that Trump (probably with the help of his "reference group," which includes Adelson and Kushner), managed to appoint as the top US diplomat a person who was trained as a mechanic engineer and specialized as a tank repair mechanic. And who was a long-time military contractor. So it is quite natural that he represents interests of MIC.

    IMHO under Trump/Pompeo/Esper trio some kind of additional skirmishes with Iran are a real possibility: they are necessary to maintain the current inflated level of defense spending.

    State of the US infrastructure, the actual level of unemployment (U6 is ~7% which some neolibs call full employment ;-), and the level of poverty of the bottom 33% of the USA population be damned. Essentially the bottom 33% is the third world country within the USA.

    "If you make more than $15,000 (roughly the annual salary of a minimum-wage employee working 40 hours per week), you earn more than 32.2% of Americans

    The 894 people that earn more than $20 million make more than 99.99989% of Americans, and are compensated a cumulative $37,009,979,568 per year. "

    ( https://www.huffpost.com/entry/income-inequality-crisis_n_4221012 )

[Jan 12, 2020] Luongo Fears "An Abyss Of Losses" As Iraq Becomes MidEast Battleground

Highly recommended!
Jan 12, 2020 | www.zerohedge.com

Authored by Tom Luongo via Gold, Goats, 'n Guns blog,

The future of the U.S.'s involvement in the Middle East is in Iraq. The exchange of hostilities between the U.S. and Iran occurred wholly on Iraqi soil and it has become the site on which that war will continue.

Israel continues to up the ante on Iran, following President Trump's lead by bombing Shia militias stationed near the Al Bukumai border crossing between Syria and Iraq.

The U.S. and Israel are determined this border crossing remains closed and have demonstrated just how far they are willing to go to prevent the free flow of goods and people across this border.

The regional allies of Iran are to be kept weak, divided and constantly under harassment.

Iraq is the battleground because the U.S. lost in Syria. Despite the presence of U.S. troops squatting on Syrian oil fields in Deir Ezzor province or the troops sitting in the desert protecting the Syrian border with Jordan, the Russians, Hezbollah and the Iranian Quds forces continue to reclaim territory previously lost to the Syrian government.

Now with Turkey redeploying its pet Salafist head-choppers from Idlib to Libya to fight General Haftar's forces there to legitimize its claim to eastern Mediterannean gas deposits, the restoration of Syria's territorial integrity west of the Euphrates River is nearly complete.

The defenders of Syria can soon transition into the rebuilders thereof, if allowed. And they didn't do this alone, they had a silent partner in China the entire time.

And, if I look at this situation honestly, it was China stepping out from behind the shadows into the light that is your inciting incident for this chapter in Iraq's story.

China moving in to sign a $10.1 billion deal with the Iraqi government to begin the reconstruction of its ruined oil and gas industry in exchange for oil is of vital importance.

It doubles China's investment in Iraq while denying the U.S. that money and influence.

This happened after a massive $53 billion deal between Exxon-Mobil and Petrochina was put on hold after the incident involving Iran shooting down a U.S. Global Hawk drone in June.

With the U.S balking over the Exxon/Petrochina big deal, Iraqi Prime Minster Adel Abdul Mahdi signed the new one with China in October. Mahdi brought up the circumstances surrounding that in Iraqi parliaments during the session in which it passed the resolution recommending removal of all foreign forces from Iraq.

Did Trump openly threaten Mahdi over this deal as I covered in my podcast on this? Did the U.S. gin up protests in Baghdad, amplifying unrest over growing Iranian influence in the country?

And, if not, were these threats simply implied or carried by a minion (Pompeo, Esper, a diplomat)? Because the U.S.'s history of regime change operations is well documented. Well understood color revolution tactics used successfully in places like Ukraine , where snipers were deployed to shoot protesters and police alike to foment violence between them at the opportune time were on display in Baghdad.

Mahdi openly accused Trump of threatening him, but that sounds more like Mahdi using the current impeachment script to invoke the sinister side of Trump and sell his case.

It's not that I don't think Trump capable of that kind of threat, I just don't think he's stupid enough to voice it on an open call. Donald Trump is capable of many impulsive things, openly threatening to remove an elected Prime Minister on a recorded line is not one of them.

Mahdi has been under the U.S.'s fire since he came to power in late 2018. He was the man who refused Trump during Trump's impromptu Christmas visit to Iraq in 2018 , refusing to be summoned to a clandestine meeting at the U.S. embassy rather than Trump visit him as a head of state, an equal.

He was the man who declared the Iraqi air space closed after Israeli air attacks on Popular Mobilization Force (PMF) positions in September.

And he's the person, at the same time, being asked by Trump to act as a mediator between Saudi Arabia and Iran in peace talks for Yemen.

So, the more we look at this situation the more it is clear that Abdul Madhi, the first Iraqi prime minister since the 2003 U.S. invasion push for more Iraqi sovereignty, is emerging as the pivotal figure in what led up to the attack on General Soleimani and what comes after Iran's subsequent retaliation.

It's clear that Trump doesn't want to fight a war with Iran in Iran. He wants them to acquiesce to his unreasonable demands and begin negotiating a new nuclear deal which definitively stops the possibility of Iran developing a nuclear weapon, and as P atrick Henningsen at 21st Century Wire thinks ,

Trump now wants a new deal which features a prohibition on Iran's medium range missiles , and after events this week, it's obvious why. Wednesday's missile strike by Iran demonstrates that the US can no longer operate in the region so long as Iran has the ability to extend its own deterrence envelope westwards to Syria, Israel, and southwards to the Arabian Peninsula, and that includes all US military installations located within that radius.

Iraq doesn't want to be that battlefield. And Iran sent the message with those two missile strikes that the U.S. presence in Iraq is unsustainable and that any thought of retreating to the autonomous Kurdish region around the air base at Erbil is also a non-starter.

The big question, after this attack, is whether U.S. air defenses around the Ain al Assad airbase west of Ramadi were active or not. If they were then Trump's standing down after the air strikes signals what Patrick suggests, a new Middle East in the making.

If they were not turned on then the next question is why? To allow Iran to save face after Trump screwed up murdering Soleimani?

I'm not capable of believing such Q-tard drivel at this point. It's far more likely that the spectre of Russian electronics warfare and radar evasion is lurking in the subtext of this story and the U.S. truly now finds itself after a second example of Iranian missile technology in a nascent 360 degree war in the region.

It means that Iran's threats against the cities of Haifa and Dubai were real.

In short, it means the future of the U.S. presence in Iraq now measures in months not years.

Because both China and Russia stand to gain ground with a newly-united Shi'ite Iraqi population. Mahdi is now courting Russia to sell him S-300 missile defense systems to allow him to enforce his demands about Iraqi airspace.

Moqtada al-Sadr is mobilizing his Madhi Army to oust the U.S. from Iraq. Iraq is key to the U.S. presence in the region. Without Iraq the U.S. position in Syria is unsustainable.

If the U.S. tries to retreat to Kurdish territory and push again for Masoud Barzani and his Peshmerga forces to declare independence Turkish President Recep Tayyip Erdogan will go ballistic.

And you can expect him to make good on his threat to close the Incerlik airbase, another critical logistical juncture for U.S. force projection in the region.

But it all starts with Mahdi's and Iraq's moves in the coming weeks. But, with Trump rightly backing down from escalating things further and not following through on his outlandish threats against Iran, it may be we're nearing the end of this intractable standoff.

Back in June I told you that Iran had the ability to fight asymmetrically against the U.S., not through direct military confrontation but through the after-effects of a brief, yet violent period of war in which all U.S., Israeli and Arab assets in the Middle East come under fire from all directions.

It sent this same message then that by attacking oil tankers it could make the transport of oil untenable and not insurable. We got a taste of it back then and Trump, then, backed down.

And the resultant upheaval in the financial markets creating an abyss of losses, cross-asset defaults, bank failures and government collapses.

Trump has no real option now but to negotiate while Iraq puts domestic pressure on him to leave and Russia/China come in to provide critical economic and military support to assist Mahdi rally his country back towards some semblance of sovereignty

* * *

Join My Patreon if you want help making sense of this insane world. Install the Brave Browser if you want to build an internet free to allow us to do so.


MalteseFalcon , 3 minutes ago link

OK kids,

Play time is over.

China needs Iraqi oil to build the BRI.

Last one into Africom is a rotten egg!!!!

daveeemc2 , 14 minutes ago link

This is the most delicious of irony

https://en.wikipedia.org/wiki/Financial_cost_of_the_Iraq_War

The american imperial style of intervention is dead.

China debt trap model of belt and road is the path forward.

They will win hearts and minds, and not a single shot fired.

USA gets debt from paying war machine and killed and maimed soldiers whose personal psychiatry will haunt them for an entire lifetime.

In the end, Americans get nothing but debt and risk their own soverignty as a population ages and infrastructure crumbles....kinda like now.

MalteseFalcon , 1 minute ago link

The last 30 years of American foreign policy has been an unmitigated disaster.

yerfej , 26 minutes ago link

How about "what is the goal?" There is none of course. The assholes in the Washington/MIC just need war to keep them relevant. What if the US were to closed down all those wars and foreign bases? THEN the taxpayer could demand some accounting for the trillions that are wasted on complete CRAP. There are too many old leftovers from the cold war who seem to think there is benefit to fighting wars in shithole places just because those wars are the only ones going on right now. The stupidity of the ****** in the US military/MIC/Washington is beyond belief. JUST LEAVE you ******* idiots.

Rusticus2.0 , 22 minutes ago link

Your comment should have been directed at Trump, the commander in chief.

I guess that's still a bridge too far, but sooner than later you're going to have to cross it.

BobEore , 29 minutes ago link

Excellent Smithers, excellent:

Sometimes, in treading thru the opaque, sandstorm o ******** swept wastes of the ' desert of the really real '...

one must rely upon a marking... some kind of guidepost, however tenuous, to show you to be still... on the trail, not lost in the vast haunted reaches of post-reality. And you know, Tommy is that sort of guide; the sort of guy who you take to the fairgrounds, set him up with the 'THROW THE BALL THRU THE HOOP... GUARANTEED PRIZE TO SCOOP' kiosk...

and he misses every time. Just by watching Tom run through his paces here... zeroing in on the exact WRONG interpretation of events ... every dawg gone time... one resets their compass to tru course and relaxes into the flow agin! Thanks Tom! Let's break down ... the Schlitzy shopping list of sloppy errors:

Israel continues to up the ante on Iran, f ollowing President Trump's lead by bombing Shia militias stationed near the Al Bukumai border crossing between Syria and Iraq. Urusalem.. and its pathetically obedient dogsbody USSA ... are busy setting up RIMFISTAN Tom.. you really need to start expanding your reading list; On both sides of that border you mention .. they will be running - and guarding - pipeline running to the mothership. Shia miitias and that project just don't mix. Nobody gives a frying fluck bout your imaginary 'land bridge to the Med'... except you and the gomers. And you and they aren't ANYWHERES near to here.

  • Abdul Madhi, the first Iraqi prime minister since the 2003 U.S. invasion push for more Iraqi sovereignty, is emerging as the pivotal figure in what led up to the attack on General Soleimani and what comes after Iran's subsequent retaliation.
  • Ok... this is getting completely embarrassing. The man is a 'caretaker' Tom... that's similar to a 'janitor' - he's on the way out. If you really think thats' being pivotal... I'm gonna suggest that you've 'pivoted' on one of your goats too many times.

Look, Tom... I did sincerely undertake to hold your arm, and guide you through this to a happier place. But you... are underwater my man. And that's quite an accomplishment, since we be traveling through the deserts of the really real. You've enumerated a list of things which has helped me to understand just how completely distorted is the picture of the situation here in mudded east.. is... in the minds of the myriad victims of your alt-media madness. And I thank you for that. But its time we part company.

These whirring klaidescope glasses I put on, in order to help me see how you see things, have given me a bit of a headache. Time to return to seeing the world... as it really works!

simpson seers , 14 minutes ago link

says the yankee chicken ******......

Fireman , 32 minutes ago link

Like Ukraine, everything the anglozionazi empire of **** smear$...turns to ****.

https://www.youtube.com/watch?v=gVMbCTWRcSs

https://theduran.com/ukranian-whistleblower-reveals-mh-17-tragedy-was-orchestrated-by-poroshenko-and-british-secret-service/

https://www.youtube.com/watch?time_continue=3&v=wR1NFI6TBH0

BGO , 39 minutes ago link

The whole *target and destroy* Iran (and Iraq) clusterfuck has always been about creating new profit scenarios, profit theaters, for the MIC.

If the US govt was suddenly forced to stop making and selling **** designed to kill people... if the govt were forced to stopping selling **** to other people so they can kill people... if the govt were forced to stop stockpiling **** designed to kill people just so other people would stop building and stockpiling **** designed to kill people... first the US then the world would collapse... everyone would finally see... the US is a nation of people that allows itself to be propped up by the worst sort of people... an infinitesimally small group of gangsters who legally make insane amounts of money... by creating in perpetuity... forever new scenarios that allow them to kill other people.

Jesus ******* Christ ZeroHedge software ******* sucks.

Fireman , 40 minutes ago link

Understanding why Agent Orange is a meat puppet.

The following has been known to cure T.D.S.

https://www.bitchute.com/video/NJF06yjvdErM/

Wantoknow , 44 minutes ago link

Why has Trump no real option? What do you believe are the limits of Trump's options that assure he must negotiate? Perhaps all out war is not yet possible politically in the US, but public sentiment has been manipulated before. Why not now?

One must not yet reject the idea that the road to Moscow and Beijing does not run through Iran. Throwing the US out of the Middle East would be a grievous failure for the deep state which has demonstrated itself to be absolutely ruthless. It is hard to believe the US will leave without a much more serious war forcing the issue.

So far Trump has appeared artless and that may continue but that artlessness may well bring a day when Trump will not back down.

Fireman , 39 minutes ago link

Why has Trump no real option?

Ask the towel girls at Maralago and Jeffrey Pedovore.

Rusticus2.0 , 49 minutes ago link

The motivation behind Trump pulling out of the Joint Comprehensive Plan of Action wasn't because, after careful analytical study of the plan, he decided it was a bad deal. It was because Israel demanded it as it didn't fit into their best interests and, as with the refreezing of relationships with Cuba, it was a easier way to undo Obama policy rather than tackling Obamacare. Hardly sound judgement.

The war will continue in Iraq as the Shia majority mobilize against an occupying force that has been asked to leave, but refuse. What will quickly become apparent is that this war is about to become far more multifaceted with Iraqi and Iranian proxies targeting American interests across numerous fronts.

Trump is the head of a business empire; Downsizing is not a strategy that he's ever employed; His business history is a case study in go big or go bust.

not-me---it-was-the-dog , 32 minutes ago link

so it will work like this....

trump's zionist overlords have demanded he destroy iran.

as a simple lackey, he agreed, but he does need political cover to do so.

thus the equating of any attack or threat of attack by any group of any political persuasion as originating from iran.

any resistance by the shia in iraq will be considered as being directed from iran, thus an attack on iran is warranted.

any resistance by the currect governement of iraq will be considered as being directed from iran, thus an attack on iran is warranted.

any resistance by the sunni in iraq will be considered subversion by iran, or a false flag by iran, thus an attack on iran is warranted.

trump's refusal to follow the SOFA agreement, and heed the call of the democratic government we claim to have gone in to install, is specifically designed to lead to more violence, which in turn can be blamed on iran's "malign" influence, which gives the entity lackeys cover to spread more democracy.

MIGA!

Brazen Heist II , 55 minutes ago link

America is a nation of imbeciles. They have meddled in Iraq since the 1980s and still can't subdue the place to their content.

Dey hate us for our freedumbs!

Ghost who Walks , 54 minutes ago link

I'm more positive that Iraq can resolve its issues without starting a Global War.

The information shared by the Iraqi Prime Minister goes part way to awakening the population as to what is happening and why.

Once more information starts to leak out (and it will from those individuals who want to avoid extinction) the broad mass of the global population can take action to protect themselves from the psychopaths.

new game , 1 hour ago link

This is what empires in decline do. Hubris...

meanwhile China rises with Strategic economic investment.

And the econ hitmen aren't done yet...

moar war...

Arising , 1 hour ago link

China moving in to sign a $10.1 billion deal with the Iraqi government to begin the reconstruction of its ruined oil and gas industry in exchange for oil is of vital importance.

Come on Tom, you should know better than that: the U.S will destroy any agreements between China and the people of Iraq.

The oil will continue to be stolen and sent to Occupied Palestine to administer and the people of Iraq will be in constant revolt, protest mode and subjugation- but they will never know they are being manipulated by the thieving zionists in D.C and Tel aviv.

Ms No , 1 hour ago link

Agreed. It will take nothing short of a miracle to stop this. Time isnt on their side though so they better get on it. They will do something big to get it going.

RoyalDraco , 14 minutes ago link

This isn't "humanity." Few people are psychopathic killers. It is being run by a small cliche of Satanists who are well on their way to enslaving humanity in a dystopia even George Orwell could not imagine. They control most of the levers of power and influence and have done so for centuries.

Why of course the people don't want war. Why should some poor slob on a farm want to risk his life in a war when the best he can get out of it is to come back to his farm in one piece? Naturally, the common people don't want war; neither in Russia, nor in England, nor for that matter in Germany. That is understood. But, after all, it is the leaders of the country who determine the policy and it is always a simple matter to drag the people along, whether it is a democracy, or a fascist dictatorship, or a parliament, or a communist dictatorship. Voice or no voice, the people can always be brought to the bidding of the leaders. All you have to do is tell them they are being attacked, and denounce the peacemakers for lack of patriotism and exposing the country to danger. It works the same in any country.

- Reichsmarschall Hermann Göring's testimony before the Nuremberg tribunal on crimes against humanity

[Jan 10, 2020] The Saker interviews Michael Hudson

Highly recommended!
Looks like Iran is Catch22 for the USA: it can destroy it, but only at the cost of losing empire and dollar hegemony...
Notable quotes:
"... The United States is now turning on the screws demanding that other countries sacrifice their growth in order to finance the U.S. unipolar empire. In effect, foreign countries are beginning to respond to the United States what the ten tribes of Israel said when they withdrew from the southern kingdom of Judah, whose king Rehoboam refused to lighten his demands (1 Kings 12). They echoed the cry of Sheba son of Bikri a generation earlier: "Look after your own house, O David!" The message is: What do other countries have to gain by remaining in the US unipolar neoliberalized world, as compared to using their own wealth to build up their own economies? It's an age-old problem. ..."
"... The dollar will still play a role in US trade and investment, but it will be as just another currency, held at arms length until it finally gives up its domineering attempt to strip other countries' wealth for itself. However, its demise may not be a pretty sight. ..."
"... Conflict in the ME has traditionally almost always been about oil [and of course Israel]. This situation is different. It is only partially about oil and Israel, but OVERWHHEMINGLY it is about the BRI. ..."
"... The salient factor as I see it is the Oil for Technology initiative that Iraq signed with China shortly before it slid into this current mess. ..."
"... This was a mechanism whereby China would buy Iraq oil and these funds would be used directly to fund infrastructure and self-sufficiency initiatives and technologies that would help to drag Iraq out of the complete disaster that the US war had created in this country. A key part of this would be that China would also make extra loans available at the same time to speed up this development. ..."
"... "Iraq's Finance Ministry that the country had started exporting 100,000 barrels per day (bpd) of crude oil to China in October as part of the 20-year oil-for-infrastructure deal agreed between the two countries." ..."
"... "For Iraq and Iran, China's plans are particularly far-reaching, OilPrice.com has been told by a senior oil industry figure who works closely with Iran's Petroleum Ministry and Iraq's Oil Ministry. China will begin with the oil and gas sector and work outwards from that central point. In addition to being granted huge reductions on buying Iranian oil and gas, China is to be given the opportunity to build factories in both Iran and Iraq – and build-out infrastructure, such as railways – overseen by its own management staff from Chinese companies. These are to have the same operational structure and assembly lines as those in China, so that they fit seamlessly into various Chinese companies' assembly lines' process for whatever product a particular company is manufacturing, whilst also being able to use the still-cheap labour available in both Iraq and Iraq." ..."
"... Hudson is so good. He's massively superior to most so called military analysts and alternative bloggers on the net. He can clearly see the over arching picture and how the military is used to protect and project it. The idea that the US is going to leave the middle east until they are forced to is so blind as to be ridiculous. ..."
"... I'd never thought of that "stationary aircraft carrier" comparison between Israel and the British, very apt. ..."
"... Trump et al assassinated someone who was on a diplomatic mission. This action was so far removed from acceptable behavior that it must have been considered to be "by any means and at all costs". ..."
"... This article, published by Strategic Culture, features a translation of Mahdi's speech to the Iraqi parliament in which he states that Trump threatened him with assassination and the US admitted to killing hundreds of demonstrators using Navy SEAL snipers. ..."
"... This description provided by Mr Hudson is no Moore than the financial basis behind the Cebrowski doctrine instituted on 9/11. https://www.voltairenet.org/article ..."
"... "The leading country breaking up US hegemony obviously is the United States itself. That is Trump's major contribution The United States is now turning on the screws demanding that other countries sacrifice their growth in order to finance the U.S. unipolar empire." ..."
"... The US govt. have long since paid off most every European politician. Thusly, Europe, as separate nations that should be remain still under the yolk of the US Financial/Political/Military power. ..."
"... In any event, it is the same today. Energy underlies, not only the military but, all of world civilization. Oil and gas are overwhelmingly the source of energy for the modern world. Without it, civilization collapses. Thus, he who controls oil (and gas) controls the world. ..."
"... the link between the US $$$ and Saudi Oil, is the absolute means of the American Dollar to reign complete. This payment system FEEDS both the US Military, but WALL STREET, hedge funds, the US/EU oligarchs – to name just a few entities. ..."
Jan 09, 2020 | thesaker.is

[this interview was made for the Unz Review ]

Introduction: After posting Michael Hudson's article " America Escalates its "Democratic" Oil War in the Near East " on the blog, I decided to ask Michael to reply to a few follow-up questions. Michael very kindly agreed. Please see our exchange below.

The Saker

-- -- -

The Saker: Trump has been accused of not thinking forward, of not having a long-term strategy regarding the consequences of assassinating General Suleimani. Does the United States in fact have a strategy in the Near East, or is it only ad hoc?

Michael Hudson: Of course American strategists will deny that the recent actions do not reflect a deliberate strategy, because their long-term strategy is so aggressive and exploitative that it would even strike the American public as being immoral and offensive if they came right out and said it.

President Trump is just the taxicab driver, taking the passengers he has accepted – Pompeo, Bolton and the Iran-derangement syndrome neocons – wherever they tell him they want to be driven. They want to pull a heist, and he's being used as the getaway driver (fully accepting his role). Their plan is to hold onto the main source of their international revenue: Saudi Arabia and the surrounding Near Eastern oil-export surpluses and money. They see the US losing its ability to exploit Russia and China, and look to keep Europe under its control by monopolizing key sectors so that it has the power to use sanctions to squeeze countries that resist turning over control of their economies and natural rentier monopolies to US buyers. In short, US strategists would like to do to Europe and the Near East just what they did to Russia under Yeltsin: turn over public infrastructure, natural resources and the banking system to U.S. owners, relying on US dollar credit to fund their domestic government spending and private investment.

This is basically a resource grab. Suleimani was in the same position as Chile's Allende, Libya's Qaddafi, Iraq's Saddam. The motto is that of Stalin: "No person, no problem."

The Saker: Your answer raises a question about Israel: In your recent article you only mention Israel twice, and these are only passing comments. Furthermore, you also clearly say the US Oil lobby as much more crucial than the Israel Lobby, so here is my follow-up question to you: On what basis have you come to this conclusion and how powerful do you believe the Israel Lobby to be compared to, say, the Oil lobby or the US Military-Industrial Complex? To what degree do their interests coincide and to what degree to they differ?

Michael Hudson: I wrote my article to explain the most basic concerns of U.S. international diplomacy: the balance of payments (dollarizing the global economy, basing foreign central bank savings on loans to the U.S. Treasury to finance the military spending mainly responsible for the international and domestic budget deficit), oil (and the enormous revenue produced by the international oil trade), and recruitment of foreign fighters (given the impossibility of drafting domestic U.S. soldiers in sufficient numbers). From the time these concerns became critical to today, Israel was viewed as a U.S. military base and supporter, but the U.S. policy was formulated independently of Israel.

I remember one day in 1973 or '74 I was traveling with my Hudson Institute colleague Uzi Arad (later a head of Mossad and advisor to Netanyahu) to Asia, stopping off in San Francisco. At a quasi-party, a U.S. general came up to Uzi and clapped him on the shoulder and said, "You're our landed aircraft carrier in the Near East," and expressed his friendship.

Uzi was rather embarrassed. But that's how the U.S. military thought of Israel back then. By that time the three planks of U.S. foreign policy strategy that I outlined were already firmly in place.

Of course Netanyahu has applauded U.S. moves to break up Syria, and Trump's assassination choice. But the move is a U.S. move, and it's the U.S. that is acting on behalf of the dollar standard, oil power and mobilizing Saudi Arabia's Wahabi army.

Israel fits into the U.S.-structured global diplomacy much like Turkey does. They and other countries act opportunistically within the context set by U.S. diplomacy to pursue their own policies. Obviously Israel wants to secure the Golan Heights; hence its opposition to Syria, and also its fight with Lebanon; hence, its opposition to Iran as the backer of Assad and Hezbollah. This dovetails with US policy.

But when it comes to the global and U.S. domestic response, it's the United States that is the determining active force. And its concern rests above all with protecting its cash cow of Saudi Arabia, as well as working with the Saudi jihadis to destabilize governments whose foreign policy is independent of U.S. direction – from Syria to Russia (Wahabis in Chechnya) to China (Wahabis in the western Uighur region). The Saudis provide the underpinning for U.S. dollarization (by recycling their oil revenues into U.S. financial investments and arms purchases), and also by providing and organizing the ISIS terrorists and coordinating their destruction with U.S. objectives. Both the Oil lobby and the Military-Industrial Complex obtain huge economic benefits from the Saudis.

Therefore, to focus one-sidedly on Israel is a distraction away from what the US-centered international order really is all about.

The Saker: In your recent article you wrote: " The assassination was intended to escalate America's presence in Iraq to keep control the region's oil reserves ." Others believe that the goal was precisely the opposite, to get a pretext to remove the US forces from both Iraq and Syria. What are your grounds to believe that your hypothesis is the most likely one?

Michael Hudson: Why would killing Suleimani help remove the U.S. presence? He was the leader of the fight against ISIS, especially in Syria. US policy was to continue using ISIS to permanently destabilize Syria and Iraq so as to prevent a Shi'ite crescent reaching from Iran to Lebanon – which incidentally would serve as part of China's Belt and Road initiative. So it killed Suleimani to prevent the peace negotiation. He was killed because he had been invited by Iraq's government to help mediate a rapprochement between Iran and Saudi Arabia. That was what the United States feared most of all, because it effectively would prevent its control of the region and Trump's drive to seize Iraqi and Syrian oil.

So using the usual Orwellian doublethink, Suleimani was accused of being a terrorist, and assassinated under the U.S. 2002 military Authorization Bill giving the President to move without Congressional approval against Al Qaeda. Trump used it to protect Al Qaeda's terrorist ISIS offshoots.

Given my three planks of U.S. diplomacy described above, the United States must remain in the Near East to hold onto Saudi Arabia and try to make Iraq and Syria client states equally subservient to U.S. balance-of-payments and oil policy.

Certainly the Saudis must realize that as the buttress of U.S. aggression and terrorism in the Near East, their country (and oil reserves) are the most obvious target to speed the parting guest. I suspect that this is why they are seeking a rapprochement with Iran. And I think it is destined to come about, at least to provide breathing room and remove the threat. The Iranian missiles to Iraq were a demonstration of how easy it would be to aim them at Saudi oil fields. What then would be Aramco's stock market valuation?

The Saker: In your article you wrote: " The major deficit in the U.S. balance of payments has long been military spending abroad. The entire payments deficit, beginning with the Korean War in 1950-51 and extending through the Vietnam War of the 1960s, was responsible for forcing the dollar off gold in 1971. The problem facing America's military strategists was how to continue supporting the 800 U.S. military bases around the world and allied troop support without losing America's financial leverage. " I want to ask a basic, really primitive question in this regard: how cares about the balance of payments as long as 1) the US continues to print money 2) most of the world will still want dollars. Does that not give the US an essentially "infinite" budget? What is the flaw in this logic?

Michael Hudson: The U.S. Treasury can create dollars to spend at home, and the Fed can increase the banking system's ability to create dollar credit and pay debts denominated in US dollars. But they cannot create foreign currency to pay other countries, unless they willingly accept dollars ad infinitum – and that entails bearing the costs of financing the U.S. balance-of-payments deficit, getting only IOUs in exchange for real resources that they sell to U.S. buyers.

This is the situation that arose half a century ago. The United States could print dollars in 1971, but it could not print gold.

In the 1920s, Germany's Reichsbank could print deutsche marks – trillions of them. When it came to pay Germany's foreign reparations debt, all it could do was to throw these D-marks onto the foreign exchange market. That crashed the currency's exchange rate, forcing up the price of imports proportionally and causing the German hyperinflation.

The question is, how many surplus dollars do foreign governments want to hold. Supporting the dollar standard ends up supporting U.S. foreign diplomacy and military policy. For the first time since World War II, the most rapidly growing parts of the world are seeking to de-dollarize their economies by reducing reliance on U.S. exports, U.S. investment, and U.S. bank loans. This move is creating an alternative to the dollar, likely to replace it with groups of other currencies and assets in national financial reserves.

The Saker: In the same article you also write: " So maintaining the dollar as the world's reserve currency became a mainstay of U.S. military spending. " We often hear people say that the dollar is about to tank and that as soon as that happens, then the US economy (and, according to some, the EU economy too) will collapse. In the intelligence community there is something called tracking the "indicators and warnings". My question to you is: what are the economic "indicators and warnings" of a possible (probable?) collapse of the US dollar followed by a collapse of the financial markets most tied to the Dollar? What shall people like myself (I am an economic ignoramus) keep an eye on and look for?

Michael Hudson: What is most likely is a slow decline, largely from debt deflation and cutbacks in social spending, in the Eurozone and US economies. Of course, the decline will force the more highly debt-leveraged companies to miss their bond payments and drive them into insolvency. That is the fate of Thatcherized economies. But it will be long and painfully drawn out, largely because there is little left-wing socialist alternative to neoliberalism at present.

Trump's protectionist policies and sanctions are forcing other countries to become self-reliant and independent of US suppliers, from farm crops to airplanes and military arms, against the US threat of a cutoff or sanctions against repairs, spare parts and servicing. Sanctioning Russian agriculture has helped it become a major crop exporter, and to become much more independent in vegetables, dairy and cheese products. The US has little to offer industrially, especially given the fact that its IT communications are stuffed with US spyware.

Europe therefore is facing increasing pressure from its business sector to choose the non-US economic alliance that is growing more rapidly and offers a more profitable investment market and more secure trade supplier. Countries will turn as much as possible (diplomatically as well as financially and economically) to non-US suppliers because the United States is not reliable, and because it is being shrunk by the neoliberal policies supported by Trump and the Democrats alike. A byproduct probably will be a continued move toward gold as an alternative do the dollar in settling balance-of-payments deficits.

The Saker: Finally, my last question: which country out there do you see as the most capable foe of the current US-imposed international political and economic world order? whom do you believe that US Deep State and the Neocons fear most? China? Russia? Iran? some other country? How would you compare them and on the basis of what criteria?

Michael Hudson: The leading country breaking up US hegemony obviously is the United States itself. That is Trump's major contribution. He is uniting the world in a move toward multi-centrism much more than any ostensibly anti-American could have done. And he is doing it all in the name of American patriotism and nationalism – the ultimate Orwellian rhetorical wrapping!

Trump has driven Russia and China together with the other members of the Shanghai Cooperation Organization (SCO), including Iran as observer. His demand that NATO join in US oil grabs and its supportive terrorism in the Near East and military confrontation with Russia in Ukraine and elsewhere probably will lead to European "Ami go home" demonstrations against NATO and America's threat of World War III.

No single country can counter the U.S. unipolar world order. It takes a critical mass of countries. This already is taking place among the countries that you list above. They are simply acting in their own common interest, using their own mutual currencies for trade and investment. The effect is an alternative multilateral currency and trading area.

The United States is now turning on the screws demanding that other countries sacrifice their growth in order to finance the U.S. unipolar empire. In effect, foreign countries are beginning to respond to the United States what the ten tribes of Israel said when they withdrew from the southern kingdom of Judah, whose king Rehoboam refused to lighten his demands (1 Kings 12). They echoed the cry of Sheba son of Bikri a generation earlier: "Look after your own house, O David!" The message is: What do other countries have to gain by remaining in the US unipolar neoliberalized world, as compared to using their own wealth to build up their own economies? It's an age-old problem.

The dollar will still play a role in US trade and investment, but it will be as just another currency, held at arms length until it finally gives up its domineering attempt to strip other countries' wealth for itself. However, its demise may not be a pretty sight.

The Saker: I thank you very much for your time and answers! ­


Col...'the farmer from NZ' on January 09, 2020 , · at 5:19 pm EST/EDT

What a truly superb interview!

Another one that absolutely stands for me out is the below link to a recent interview of Hussein Askary.

As I wrote a few days ago IMO this too is a wonderful insight into the utterly complicated dynamics of the tinderbox that the situation in Iran and Iraq has become.

Conflict in the ME has traditionally almost always been about oil [and of course Israel]. This situation is different. It is only partially about oil and Israel, but OVERWHHEMINGLY it is about the BRI.

The salient factor as I see it is the Oil for Technology initiative that Iraq signed with China shortly before it slid into this current mess.

This was a mechanism whereby China would buy Iraq oil and these funds would be used directly to fund infrastructure and self-sufficiency initiatives and technologies that would help to drag Iraq out of the complete disaster that the US war had created in this country. A key part of this would be that China would also make extra loans available at the same time to speed up this development.

In essence, this would enable the direct and efficient linking of Iraq into the BRI project. Going forward the economic gains and the political stability that could come out of this would be a completely new paradigm in the recovery of Iraq both economically and politically. Iraq is essential for a major part of the dynamics of the BRI because of its strategic location and the fact that it could form a major hub in the overall network.

It absolutely goes without saying that the AAA would do everything the could to wreck this plan. This is their playbook and is exactly what they have done. The moronic and extraordinarily impulsive Trump subsequently was easily duped into being a willing and idiotic accomplice in this plan.

The positive in all of this is that this whole scheme will backfire spectacularly for the perpetrators and will more than likely now speed up the whole process in getting Iraq back on track and working towards stability and prosperity.

Please don't anyone try to claim that Trump is part of any grand plan nothing could be further from the truth he is nothing more than a bludgeoning imbecile foundering around, lashing out impulsively indiscriminately. He is completely oblivious and ignorant as to the real picture.

I urge everyone involved in this Saker site to put aside an hour and to listen very carefully to Askary's insights. This is extremely important and could bring more clarity to understanding the situation than just about everything else you have read put together. There is hope, and Askary highlights the huge stakes that both Russia and China have in the region.

This is a no brainer. This is the time for both Russia and China to act and to decisively. They must cooperate in assisting both Iraq and Iran to extract themselves from the current quagmire the one that the vicious Hegemon so cruelly and thoughtlessly tossed them into.

Cheers from the south seas
Col

And the link to the Askary interview: . https://youtu.be/UD1hWq6KD44

Col...'the farmer from NZ' on January 09, 2020 , · at 8:22 pm EST/EDT
Also interesting is what Simon Watkins reports in his recent article entitled "Is Iraq About To Become A Chinese Client State?"

To quote from the article:

"Iraq's Finance Ministry that the country had started exporting 100,000 barrels per day (bpd) of crude oil to China in October as part of the 20-year oil-for-infrastructure deal agreed between the two countries."

and

"For Iraq and Iran, China's plans are particularly far-reaching, OilPrice.com has been told by a senior oil industry figure who works closely with Iran's Petroleum Ministry and Iraq's Oil Ministry. China will begin with the oil and gas sector and work outwards from that central point. In addition to being granted huge reductions on buying Iranian oil and gas, China is to be given the opportunity to build factories in both Iran and Iraq – and build-out infrastructure, such as railways – overseen by its own management staff from Chinese companies. These are to have the same operational structure and assembly lines as those in China, so that they fit seamlessly into various Chinese companies' assembly lines' process for whatever product a particular company is manufacturing, whilst also being able to use the still-cheap labour available in both Iraq and Iraq."

and

"The second key announcement in this vein made last week from Iraq was that the Oil Ministry has completed the pre-qualifying process for companies interested in participating in the Iraqi-Jordanian oil pipeline project. The U$5 billion pipeline is aimed at carrying oil produced from the Rumaila oilfield in Iraq's Basra Governorate to the Jordanian port of Aqaba, with the first phase of the project comprising the installation of a 700-kilometre-long pipeline with a capacity of 2.25 million bpd within the Iraqi territories (Rumaila-Haditha). The second phase includes installing a 900-kilometre pipeline in Jordan between Haditha and Aqaba with a capacity of 1 million bpd. Iraq's Oil Minister – for the time being, at least – Thamir Ghadhban added that the Ministry has formed a team to prepare legal contracts, address financial issues and oversee technical standards for implementing the project, and that May will be the final month in which offers for the project from the qualified companies will be accepted and that the winners will be announced before the end of this year. Around 150,000 barrels of the oil from Iraq would be used for Jordan's domestic needs, whilst the remainder would be exported through Aqaba to various destinations, generating about US$3 billion a year in revenues to Jordan, with the rest going to Iraq. Given that the contractors will be expected to front-load all of the financing for the projects associated with this pipeline, Baghdad expects that such tender offers will be dominated by Chinese and Russian companies, according to the Iran and Iraq source."

Cheers
Col

And the link https://oilprice.com/Geopolitics/Middle-East/Is-Iraq-About-To-Become-A-Chinese-Client-State.html#

Anonymouse on January 09, 2020 , · at 5:20 pm EST/EDT
Hudson is so good. He's massively superior to most so called military analysts and alternative bloggers on the net. He can clearly see the over arching picture and how the military is used to protect and project it. The idea that the US is going to leave the middle east until they are forced to is so blind as to be ridiculous.

They will not sacrifice the (free) oil until booted out by a coalition of Arab countries threatening to over run them and that is why the dollar hegemonys death will be slow, long and drawn out and they will do anything, any dirty trick in the book, to prevent Arab/Persian unity. Unlike many peoples obsession with Israel and how important they feel themselves to be I think Hudson is correct again. They are the middle eastern version of the British – a stationary aircraft carrier who will allow themselves to be used and abused whilst living under the illusion they are major players. They aren't. They're bit part players in decline, subservient to the great dollar and oil pyramid scheme that keeps America afloat. If you want to beat America you have to understand the big scheme, that and the utter insanity that backs it up. It is that insanity of the leites, the inability to allow themselves to be 'beaten' that will keep nuclear exchange as a real possibility over the next 10 to 15 years. Unification is the only thing that can stop it and trying to unite so many disparate countries (as the Russians are trying to do despite multiple provocations) is where the future lies and why it will take so long. It is truly breath taking in such a horrific way, as Hudson mentions, that to allow the world to see its 'masters of the universe' pogram to be revealed:

"Of course American strategists will deny that the recent actions do not reflect a deliberate strategy, because their long-term strategy is so aggressive and exploitative that it would even strike the American public as being immoral and offensive if they came right out and said it."

Would be to allow it to be undermined at home and abroad. God help us all.

Little Black Duck on January 09, 2020 , · at 7:01 pm EST/EDT
They're bit part players in decline, subservient to the great dollar and oil pyramid scheme that keeps America afloat.

So who owns the dollar? And who owns the oil companies?

Osori on January 09, 2020 , · at 8:06 pm EST/EDT
I'd never thought of that "stationary aircraft carrier" comparison between Israel and the British, very apt.
Zachary Smith on January 09, 2020 , · at 9:53 pm EST/EDT
Clever would be a better word. Looking at my world globe, I see Italy, Greece, and Turkey on that end of the Mediterranean. Turkey has been in NATO since 1952. Crete and Cyprus are also right there. Doesn't Hudson own a globe or regional map?

That a US Admiral would be gushing about the Apartheid state 7 years after the attempted destruction of the USS Liberty is painful to consider. I'd like to disbelieve the story, but it's quite likely there were a number of high-ranking ***holes in a Naval Uniform.

44360 on January 09, 2020 , · at 5:34 pm EST/EDT
The world situation reminds us of the timeless fable by Aesop of The North Wind and the Sun.

Trump et al assassinated someone who was on a diplomatic mission. This action was so far removed from acceptable behavior that it must have been considered to be "by any means and at all costs".

Perhaps the most potent weapon Iran or anyone else has at this critical juncture, is not missiles, but diplomacy.

Ahmed on January 09, 2020 , · at 5:37 pm EST/EDT
"Therefore, to focus one-sidedly on Israel is a distraction away from what the US-centered international order really is all about."

Thank you for saying this sir. In the US and around the world many people become obsessively fixated in seeing a "jew" or zionist behind every bush. Now the Zionists are certinly an evil, blood thirsty bunch, and certainly deserve the scorn of the world, but i feel its a cop out sometimes. A person from the US has a hard time stomaching the actions of their country, so they just hoist all the unpleasentries on to the zionists. They put it all on zionisim, and completly fail to mention imperialism. I always switced back and forth on the topic my self. But i cant see how a beachead like the zionist state, a stationary carrier, can be bigger than the empire itself. Just look at the major leaders in the resistance groups, the US was always seen as the ultimate obstruction, while israel was seen as a regional obstruction. Like sayyed hassan nasrallah said in his recent speech about the martyrs, that if the US is kicked out, the Israelis might just run away with out even fighting. I hate it when people say "we are in the middle east for israel" when it can easily be said that "israel is still in the mid east because of the US." If the US seized to exist today, israel would fall rather quickly. If israel fell today the US would still continue being an imperalist, bloodthirsty entity.

Azorka1861 on January 09, 2020 , · at 5:57 pm EST/EDT
The Deeper Story behind the Assassination of Soleimani

This article, published by Strategic Culture, features a translation of Mahdi's speech to the Iraqi parliament in which he states that Trump threatened him with assassination and the US admitted to killing hundreds of demonstrators using Navy SEAL snipers.

https://www.veteranstoday.com/2020/01/08/vital-the-deeper-story-behind-the-assassination-of-soleimani/

..

Nils on January 09, 2020 , · at 6:05 pm EST/EDT
This description provided by Mr Hudson is no Moore than the financial basis behind the Cebrowski doctrine instituted on 9/11. https://www.voltairenet.org/article

I wish the Saker had asked Mr Hudson about some crucial recent events to get his opinion with regards to US foreign policy. Specifically, how does the emergence of cryptocurrency relate to dollar finance and the US grand strategy? A helpful tool for the hegemon or the emergence of a new currency that prevents unlimited currency printing? Finally, what is global warming and the associated carbon credit system? The next planned model of continuing global domination and balance of payments? Or true organic attempt at fair energy production and management?

Much thanks for this interview, Saker

Col...'the farmer from NZ' on January 09, 2020 , · at 6:26 pm EST/EDT
With all due respect, these are huge questions in themselves and perhaps could to be addressed in separate interviews. IMO it doesn't always work that well to try to cover too much ground in just one giant leap.

Regards
Col

Mike from Jersey on January 09, 2020 , · at 7:26 pm EST/EDT
I have never understood the Cebrowski doctrine. How does the destruction of Middle Eastern state structures allow the US to control Middle East Oil? The level of chaos generated by such an act would seem to prevent anyone from controlled the oil.
Outlaw Historian on January 09, 2020 , · at 7:48 pm EST/EDT
Dr. Hudson often appears on RT's "Keiser Report" where he covers many contemporary topics with its host Max Keiser. Many of the shows transcripts are available at Hudson's website . Indeed, after the two Saker items, you'll find three programs on the first page. Using the search function at his site, you'll find the two articles he's written that deal with bitcoin and cryptocurrencies, although I think he's been more specific in the TV interviews.

As for this Q&A, its an A+. Hudson's 100% correct to playdown the Zionist influence given the longstanding nature of the Outlaw US Empire's methods that began well before the rise of the Zionist Lobby, which in reality is a recycling of aid dollars back to Congress in the form of bribes.

RR on January 09, 2020 , · at 7:59 pm EST/EDT
Nils: Good Article. The spirit of Nihilism.
Quote from Neocon Michael Ladeen.

"Creative destruction is our middle name, both within our own society and abroad. We tear down the old order every day, from business to science, literature, art, architecture, and cinema to politics and the law. Our enemies have always hated this whirlwind of energy and creativity, which menaces their traditions (whatever they may be) and shames them for their inability to keep pace. Seeing America undo traditional societies, they fear us, for they do not wish to be undone. They cannot feel secure so long as we are there, for our very existence -- our existence, not our politics -- threatens their legitimacy. They must attack us in order to survive, just as we must destroy them to advance our historic mission."

Frank on January 09, 2020 , · at 10:27 pm EST/EDT
@NILS As far as crypto currency goes it is a brilliant idea in concept. But since during the Bush years we have been shown multiple times, who actually owns [and therefore controls] the internet. Many times now we have also been informed that through the monitoring capability's of our defense agency's, they are recording every key stroke. IMO, with the flip of a switch, we can shut down the internet. At the very least, that would stop us from being able to trade in crypto, but they have e-files on each of us. They know our passwords, or can easily access them. That does not give me confidence in e=currency during a teotwawki situation.
Anonymous on January 09, 2020 , · at 6:34 pm EST/EDT
A truly superb interview, thanks Michael Hudson.
David on January 09, 2020 , · at 6:39 pm EST/EDT
One thing that troubles me about the petrodollar thesis is that ANNUAL trade in oil is about 2 trillion DAILY trade in $US is 4 trillion. I can well believe the US thinks oil is the bedrock if dollar hegemony but is it? I see no alternative to US dollar hegemony.
Mike from Jersey on January 09, 2020 , · at 7:17 pm EST/EDT
Excellent article.

The lines that really got my attention were these:

"The leading country breaking up US hegemony obviously is the United States itself. That is Trump's major contribution The United States is now turning on the screws demanding that other countries sacrifice their growth in order to finance the U.S. unipolar empire."

That is so completely true. I have wondered why – to date – there had not been more movement by Europe away from the United States. But while reading the article the following occurred to me. Maybe Europe is awaiting the next U.S. election. Maybe they hope that a new president (someone like Biden) might allow Europe to keep more of the "spoils."

If that is true, then a re-election of Trump will probably send Europe fleeing for the exits. The Europeans will be cutting deals with Russia and China like the store is on fire.

Rubicon on January 09, 2020 , · at 10:22 pm EST/EDT
The critical player in forming the EU WAS/IS the US financial Elites. Yes, they had many ultra powerful Europeans, especially Germany, but it was the US who initiated the EU.

Purpose? For the US Financial Powerhouses & US politicians to "take Europe captive." Notice the similarities: the EU has its Central Bank who communicates with the private Banksters of the FED. Much austerity has ensued, especially in Southern nations: Greece, Italy, etc. Purpose: to smash unions, worker's pay, eliminate unions, and basically allowing US/EU Financial capital to buy out Italy, most of Greece, and a goodly section of Spain and Portugal.

The US govt. have long since paid off most every European politician. Thusly, Europe, as separate nations that should be remain still under the yolk of the US Financial/Political/Military power.

Craig Mouldey on January 09, 2020 , · at 8:19 pm EST/EDT
I have a hard time wrapping my head around this but it sounds like he is saying that the U.S. has a payment deficit problem which is solved by stealing the world's oil supplies. To do this they must have a powerful, expensive military. But it is primarily this military which is the main cause of the balance deficit. So it is an eternally fuelled problem and solution. If I understand this, what it actually means is that we all live on a plantation as slaves and everything that is happening is for the benefit of the few wealthy billionaires. And they intend to turn the entire world into their plantation of slaves. They may even let you live for a while longer.
Mike from Jersey on January 09, 2020 , · at 9:25 pm EST/EDT
Actually, oil underlies everything.

I didn't know this until I read a history of World War I.

As you know, World War One was irresolvable, murderous, bloody trench warfare. People would charge out of the trenches trying to overrun enemy positions only to be cutdown by the super weapon of the day – the machine gun. It was an unending bloody stalemate until the development of the tank. Tanks were immune to machine gun fire coming from the trenches and could overrun enemy positions. In the aftermath of that war, it became apparently that mechanization had become crucial to military supremacy. In turn, fuel was crucial to mechanization. Accordingly, in the Sykes Picot agreement France and Britain divided a large amount of Middle Eastern oil between themselves in order to assure military dominance. (The United States had plenty of their own oil at that time.)

In any event, it is the same today. Energy underlies, not only the military but, all of world civilization. Oil and gas are overwhelmingly the source of energy for the modern world. Without it, civilization collapses. Thus, he who controls oil (and gas) controls the world.

That is one third of the story. The second third is this.

Up till 1971, the United States dollar was the most trusted currency in the world. The dollar was backed by gold and lots and lots of it. Dollars were in fact redeemable in gold. However, due to Vietnam War, the United States started running huge balance of payments deficits. Other countries – most notably France under De Gaulle – started cashing in dollars in exchange for that gold. Gold started flooding out of the United States. At that point Nixon took the United States off of the gold standard. Basically stating that the dollar was no longer backed by gold and dollars could not be redeemed for gold. That caused an international payments problem. People would no longer accept dollars as payment since the dollar was not backed up by anything. The American economy was in big trouble since they were running deficits and people would no longer take dollars on faith.

To fix the problem, Henry Kissinger convinced the Saudis to agree to only accept dollars in payment for oil – no matter who was the buyer. That meant that nations throughout the world now needed dollars in order to pay for their energy needs. Due to this, the dollars was once again the most important currency in the world since – as noted above – energy underlies everything in modern industrial cultures. Additionally, since dollars were now needed throughout the world, it became common to make all trades for any product in highly valued dollars. Everyone needed dollars for every thing, oil or not.

At that point, the United States could go on printing dollars and spending them since a growing world economy needed more and more dollars to buy oil as well as to trade everything else.

That leads to the third part of the story. In order to convince the Saudis to accept only dollars in payments for oil (and to have the Saudis strong arm other oil producers to do the same) Kissinger promised to protect the brutal Saudi regime's hold on power against a restive citizenry and also to protect the Saudi's against other nations. Additionally, Kissinger made an implicit threat that if the Saudi's did not agree, the US would come in and just take their oil. The Saudis agreed.

Thus, the three keys to dominance in the modern world are thus: oil, dollars and the military.

Thus, Hudson ties in the three threads in his interview above. Oil, Dollars, Military. That is what holds the empire together.

Rubicon on January 09, 2020 , · at 10:26 pm EST/EDT
Thank you for thinking through this. Yes, the link between the US $$$ and Saudi Oil, is the absolute means of the American Dollar to reign complete. This payment system FEEDS both the US Military, but WALL STREET, hedge funds, the US/EU oligarchs – to name just a few entities.
Stanislaw Janowicz on January 09, 2020 , · at 8:58 pm EST/EDT
I should make one note only to this. That "no man, no problem" was Stalin's motto is a myth. He never said that. It was invented by a writer Alexei Rybnikov and inserted in his book "The Children of Arbat".
Greg Horrall on January 09, 2020 , · at 9:42 pm EST/EDT
Wow! Absolutely beautiful summation of the ultimate causes that got us where we are and, if left intact, will get us to where we're going!

So, the dreamer says: If only we could throw-off our us-vs-them BS political-economic ideology & religious doctrine-faith issues, put them into live-and-let-live mode, and see that we are all just humans fighting over this oil resource to which our modern economy (way of life) is addicted, then we might be able to hammer out some new rules for interacting, for running an earth-resource sustainable and fair global economy We do at least have the technology to leave behind our oil addiction, but the political-economic will still is lacking. How much more of the current insanity must we have before we get that will? Will we get it before it's too late?

Only if we, a sufficient majority from the lowest economic classes to the top elites and throughout all nations, are able to psychologically-spiritually internalize the two principles of Common Humanity and Spaceship Earth soon enough, will we stop our current slide off the cliff into modern economic collapse and avert all the pain and suffering that's already now with us and that will intensify.

The realist says we're not going to stop that slide and it's the only way we're going to learn, if we are indeed ever going to learn.

Ann Watson on January 09, 2020 , · at 10:42 pm EST/EDT
So now we know why Michael Hudson avoids the Israel involvment – Like Pepe.
Лишний Человек on January 09, 2020 , · at 11:02 pm EST/EDT
Thank you for this excellent interview. You ask the kind of questions that we would all like to ask. It's regrettable that Chalmers Johnson isn't still alive. I believe that you and he would have a lot in common.

Naxos has produced an incredible, unabridged cd audiobook of Gibbon's Decline and Fall of the Roman Empire. One of Gibbon's observations really resonates today: "Assassination is the last resource of cowards". Thanks again.

[Jan 09, 2020] Opposing War With Iran: Three Reasons by Anthony DiMaggio

Highly recommended!
Notable quotes:
"... War will allow Trump to claim the mantle of "national" wartime leader, while diverting attention away from his impeachment trial. And in light of the intensification of belligerent rhetoric from this administration, war appears to be increasingly likely. ..."
"... The American people have a moral responsibility to question not only Trump's motives, but to consider the humanitarian disaster that inevitably accompanies war. ..."
"... is an Assistant Professor of Political Science at Lehigh University. He holds a PhD in political communication, and is the author of the newly released: The Politics of Persuasion: Economic Policy and Media Bias in the Modern Era (Paperback, 2018), and Selling War, Selling Hope: Presidential Rhetoric, the News Media , and U.S. Foreign Policy After 9/11 (Paperback: 2016). He can be reached at: [email protected] ..."
Jan 09, 2020 | www.counterpunch.org

The U.S. stands at the precipice of war. President Trump's rhetorical efforts to sell himself as the "anti-war" president have been exposed as a fraud via his assault on Iran. Most Orwellian of all is Trump's claim that the assassination of Iranian General Qassam Soleimani was necessary to avert war, following the New Year's Eve attack on the U.S. embassy in Baghdad. In reality the U.S. hit on Soleimani represents a criminal escalation of the conflict between these two countries. The general's assassination was rightly seen as an act of war , so the claim that the strike is a step toward peace is absurd on its face. We should be perfectly clear about the fundamental threat to peace posed by the Trump administration. Iran has already promised "harsh retaliation" following the assassination, and announced it is pulling out of the 2015 multi-national agreement prohibiting the nation from developing nuclear weapons. Trump's escalation has dramatically increased the threat of all-out war. Recognizing this threat, I sketch out an argument here based on my initial thoughts of this conflict, providing three reasons for why Americans need to oppose war.

#1: No Agreement about an Iranian Threat

Soleimani was the head of Iran's Islamic Revolutionary Guard Corps – the Quds Force – a clandestine military intelligence organization that specializes in paramilitary-style operations throughout the Middle East, and which is described as seeking to further Iranian political influence throughout the region. Trump celebrated the assassination as necessary to bringing Soleimani's "reign of terror" to an end. The strike, he claimed, was vital after the U.S. caught Iran "in the act" of planning "imminent and sinister attacks on American diplomats and military personnel."

But Trump's justification for war comes from a country with a long history of distorting and fabricating evidence of an Iranian threat. American leaders have disingenuously and propagandistically portrayed Iran as on the brink of developing nuclear weapons for decades. Presidents Bush and Obama were both rebuked, however, by domestic intelligence and international weapons inspectors , which failed to uncover evidence that Iran was developing these weapons, or that it was a threat to the U.S.

Outside of previous exaggerations, evidence is emerging that the Trump administration and the intelligence community are not of one mind regarding Iran's alleged threat. Shortly after Soleimani's assassination, the Department of Homeland Security declared there was "no specific, credible threat" from Iran within U.S. borders. And U.S. military officials disagree regarding Trump's military escalation. As the New York Times reports :

"In the chaotic days leading to the death of Maj. Gen. Qassim Suleimani, Iran's most powerful commander, top American military officials put the option of killing him -- which they viewed as the most extreme response to recent Iranian-led violence in Iraq -- on the menu they presented to President Trump. They didn't think he would take it. In the wars waged since the Sept. 11, 2001, attacks, Pentagon officials have often offered improbable options to presidents to make other possibilities appear more palatable."

"Top pentagon officials," the Times reports , "were stunned" by the President's order. Furthermore, the paper reported that "the intelligence" supposedly confirming Iranian plans to attack U.S. diplomats was "thin," in the words of at least one U.S. military official who was privy to the administration's deliberations. According to that source , there is no evidence of an "imminent" attack in the foreseeable future against American targets outside U.S. borders.

U.S. leaders have always obscured facts, distorted intelligence, and fabricated information to stoke public fears and build support for war. So it should come as no surprise that this president is politicizing intelligence. He certainly has reason to – in order to draw attention away from his Senate impeachment trial, and considering Trump's increasingly desperate efforts to demonstrate that he is a serious President, not a tin-pot authoritarian who ignores the rule of law, while shamelessly coercing and extorting foreign leaders in pursuit of domestic electoral advantage.

Independent of the corruption charges against Trump, it is unwise for Americans to take the President at his word, considering the blatant lies employed in the post-9/11 era to justify war in the Middle East. Not so long ago the American public was sold a bill of goods regarding Iraq's alleged WMDs and ties to terrorism. Neither of those claims was remotely true, and Americans were left footing the bill for a war that cost trillions , based on the lies of an opportunistic president who was dead-set on exploiting public fears of terrorism in a time of crisis. The Bush administration sold war based on intelligence they knew was fraudulent, manipulating the nation into on a decade-long war that led to the murder of more than 1 million Iraqis and more than 5,000 American servicemen, resulting in a failed Iraqi state, and paving the way for the rise of ISIS. All of this is to say that the risks of beginning another war in the Middle East are incredibly high, and Americans would do well to seriously consider the consequences of entering a war based (yet again) on questionable intelligence.

#2: The "War on Terrorism" as a Red Herring

U.S. leaders have long used the rhetoric of terrorism to justify war. But this strategy represents a serious distortion of reality, via the conflation of terrorism – understood as premeditated acts of violence to intimidate civilians – with acts of war. Trump fed into this misrepresentation when he described Soleimani's "reign of terror" as encompassing not only the alleged targeting of U.S. diplomats, but attacks on "U.S. military personnel." The effort to link the deaths of U.S. soldiers in wartime to terrorism echoes the State Department's 2019 statement , which designated Iran's Quds Force a "terrorist" organization, citing its responsibility "for the deaths of at least 603 American service members in Iraq" from "2003 to 2011" via its support for Iraqi militias that were engaging in attacks on U.S. forces.

As propaganda goes, the attempt to link these acts of war to "terrorism" is quite perverse. U.S. military personnel killed in Iraq were participating in a criminal, illegal occupation, which was widely condemned by the international community. The U.S. war in Iraq was a crime of aggression under the Nuremberg Charter, and it violated the United Nations Charter's prohibition on the use of force, which is only allowed via Security Council authorization (which the U.S. did not have), or in the case of military acts undertaken in self-defense against an ongoing attack (Iraq was not at war with the U.S. prior to the 2003 invasion). Contrary to Trump's and the State Department's propaganda, there are no grounds to classify the deaths of military personnel in an illegal war as terrorism. Instead, one could argue that domestic Iraqi political actors (of which Iraqi militias are included, regardless of their ties to Iran) were within their legal rights under international law to engage in acts of self-defense against American troops acting on behalf of a belligerent foreign power, which was conducting an illegal occupation.

#3: More War = Further Destabilization of the Middle East

The largest takeaway from recent events should be to recognize the tremendous danger that escalation of war poses to the U.S. and the region. The legacy of U.S. militarism in the Middle East, North Africa, and Central Asia, is one of death, destruction, and instability. Every major war involving the U.S. has produced humanitarian devastation and mass destruction, while fueling instability and terrorism. With the 1979 Soviet Invasion of Afghanistan, U.S. support for Mujahedeen radicals led to the breakdown of social order, and the rise of the radical Taliban regime, which housed al Qaeda fundamentalists in the years prior to the September 11, 2001 terror attacks. The 2001 U.S. invasion of Afghanistan contributed to the further deterioration of Afghan society, and was accompanied by the return of the Taliban, ensuing in a civil war that has persisted over the last two decades.

With Iraq, the U.S. invasion produced a massive security vacuum following the collapse of the Iraqi government, which made possible the rise of al Qaeda in Iraq. The U.S. fueled numerous civil wars, in Iraq during the 2000s and Syria in the 2010s, creating mass instability, and giving rise to ISIS, which became a mini-state of its own operating across both countries. And then there was the 2011 U.S.-NATO supported rebellion against Muammar Gaddafi, which not only resulted in the dictator's overthrow, but in the rise of another ISIS affiliate within Libya's border. Even Obama, the biggest cheerleader for the war, subsequently admitted the intervention was his "worst mistake," due to the civil war that emerged after Gaddafi's overthrow, which opened the door for the rise of ISIS.

All of these conflicts have one thing in common. They brought tremendous devastation to the countries under assault, via scorched-earth military campaigns, which left death, misery, and destruction in their wake. The U.S. is adept at destroying countries, but shows little interest in, or ability to reconstruct them. These wars provided fertile ground for Islamist radicals, who took advantage of the resulting chaos and instability.

The primary lesson of the "War on Terror" should be clear to rationally minded observers: U.S. wars breed not only instability, but desperation, as the people victimized by war become increasingly tolerant of domestic extremist movements. Repressive states are widely reviled by the people they subjugate. But the only thing worse than a dictatorship is no order at all, when societies collapse into civil war, anarchy, and genocide. The story of ISIS's rise is one of citizens suffering under war and instability, and becoming increasingly tolerant of extremist political actors, so long as they are able to provide order in times of crisis. This point is consistently neglected in U.S. political and media discourse – a sign of how propagandistic "debates" over war have become, nearly 20 years into the U.S. "War on Terrorism."

Where Do We Go From Here?

Trump followed up the Soleimani assassination with a Twitter announcement that the U.S. has "targeted" 52 additional "Iranian sites," which will be attacked "if Iran strikes any Americans or American assets." There's no reason in light of recent events to chalk this announcement up to typical Trump-Twitter bluster. This President is desperate to begin a war with Iran, as Trump has courted confrontation with the Islamic republic since the early days of his presidency.

War will allow Trump to claim the mantle of "national" wartime leader, while diverting attention away from his impeachment trial. And in light of the intensification of belligerent rhetoric from this administration, war appears to be increasingly likely.

The American people have a moral responsibility to question not only Trump's motives, but to consider the humanitarian disaster that inevitably accompanies war. War with Iran will only make the Middle East more unstable, further fueling anti-American radicalism, and increasing the terror threat to the U.S. This conclusion isn't based on speculation, but on two decades of experience with a "War on Terror" that's done little but destroy nations and increase terror threats. The American people can reduce the dangers of war by protesting Trump's latest provocation, and by pressuring Congress to pass legislation condemning any future attack on Iran as a violation of national and international law.

To contact your Representative or Senator, use the following links:

Join the debate on Facebook

More articles by: Anthony DiMaggio

Anthony DiMaggio is an Assistant Professor of Political Science at Lehigh University. He holds a PhD in political communication, and is the author of the newly released: The Politics of Persuasion: Economic Policy and Media Bias in the Modern Era (Paperback, 2018), and Selling War, Selling Hope: Presidential Rhetoric, the News Media , and U.S. Foreign Policy After 9/11 (Paperback: 2016). He can be reached at: [email protected]

[Jan 08, 2020] Do you really want to be a one term president? Pompeo can talk big now and then go back to Kansas to run for senator. Where will you be able to take refuge?

Highly recommended!
Iran has incentives to increase the chance of a Democrat administration, bearing in mind the great deal they got from the last one and the lack of anything they can expect from Trump Term Two.
Notable quotes:
"... Reflection, self criticism or self restraint are not exactly the big strengths of Trump. He prefers solo acts (Emergency! Emergency!) and dislikes advice (especially if longer than 4 pages) and the advice of the sort " You're sure? If you do that the the shit will fly in your face in an hour, Sir ". ..."
"... Trump can order attacks and I don't expect much protest from Mark Esper and it depends on the military (which likely will obey). ..."
"... These so called grownups have been replaced by (then still) happy Bolton (likely, even after being fired, still war happy) and applauders like Pompeo and his buddy Esper. ..."
"... As a thank you to Trump calling the Israel occupied Golan a part of Israel Netanyahu called an (iirc also illegal) new Golan settlement "Ramat Trump" ..."
"... I disagree. Trump maybe the only person who could sell a war with Iran. What he has cultivated is a rabid base that consists of sycophants on one extreme end and desperate nationalists on the other. His base must stick with him...who else do they have? ..."
"... The Left is indifferent to another war. Further depleting the quality stock of our military will aid there agenda of international integration. A weaker US military will force us to collaborate with the world community and not lead it is their thinking. ..."
"... Göring: Why, of course, the people don't want war. Why would some poor slob on a farm want to risk his life in a war when the best that he can get out of it is to come back to his farm in one piece? Naturally, the common people don't want war; neither in Russia nor in England nor in America, nor for that matter in Germany. That is understood. But, after all, it is the leaders of the country who determine the policy and it is always a simple matter to drag the people along, whether it is a democracy or a fascist dictatorship or a Parliament or a Communist dictatorship. ..."
"... Göring: Oh, that is all well and good, but, voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is tell them they are being attacked and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same way in any country. ..."
"... We have been so thoroughly indoctrinated with the idea that Iran and Russia are intrinsically and immutable evil and hostile that the thought of actual two sided diplomacy does not occur. IMO neither of these countries are what we collectively think them. So, we could actually give it a try rather than trying to beggar them and destroy their economies. If all fails than we have to be prepared to defend our forces. DOL ..."
Sep 18, 2019 | turcopolier.typepad.com

Do you really want to be a one term president? Pompeo can talk big now and then go back to Kansas to run for senator. Where will you be able to take refuge? Don't let the neocons like Pompeo sell you on war.

Make the intelligence people show you the evidence in detail. Make your own judgments. pl


Vegetius , 17 September 2019 at 08:37 PM

Whatever else he knows, Trump knows that he can't sell a war to the American people.
confusedponderer -> Vegetius... , 18 September 2019 at 03:51 AM
Vegetius,

re " Trump knows that he can't sell a war to the American people "

Are you sure? I am not.

Reflection, self criticism or self restraint are not exactly the big strengths of Trump. He prefers solo acts (Emergency! Emergency!) and dislikes advice (especially if longer than 4 pages) and the advice of the sort " You're sure? If you do that the the shit will fly in your face in an hour, Sir ".

A good number of the so called grownups who gave such advice were (gameshow style) fired, sometimes by twitter.

Trump can order attacks and I don't expect much protest from Mark Esper and it depends on the military (which likely will obey).

These so called grownups have been replaced by (then still) happy Bolton (likely, even after being fired, still war happy) and applauders like Pompeo and his buddy Esper.

Israel could, if politically just a tad more insane, bomb Iran and thus invite the inevitable retaliation. When that happens they'll cry for US aid, weapons and money because they alone ~~~

(a) cannot defeat Iran (short of going nuclear) and ...
(b) Holocaust! We want weapons and money from Germany, too! ...
(c) they know that ...
(d) which does not lead in any way to Netanyahu showing signgs of self restraint or reason.

Netanyahu just - it is (tight) election time - announced, in his sldedge hammer style subtlety, that (he) Israel will annect the palestinian west jordan territory, making the Plaestines an object in his election campaign.

IMO that idea is simply insane and invites more "troubles". But then, I didn't hear anything like, say, Trump gvt protests against that (and why expect that from the dudes who moved the US embassy to Jerusalem).

confusedponderer -> Vegetius... , 18 September 2019 at 07:28 AM
Vegetius,

as for Trump and Netanyahu ... policy debate ... I had that here in mind, which pretty speaks for itself. And I thought Trumo is just running for office in the US. Alas, it is a Netanyaho campaign poster from the current election:

https://i.guim.co.uk/img/media/a6e60efd3bde0befbcb8b0a95a42bf4c2624e017/57_296_5123_3074/master/5123.jpg?width=1920&quality=85&auto=format&fit=max&s=1958b9e7cf24d7a3a7b024845de08f7e

As a thank you to Trump calling the Israel occupied Golan a part of Israel Netanyahu called an (iirc also illegal) new Golan settlement "Ramat Trump"

https://cdn.mdr.de/nachrichten/mdraktuell-golan-hoehen-trump-hights-100-resimage_v-variantSmall24x9_w-704.jpg?version=0964

I generously assume that things like that only happen because of the hard and hard ly work of Kushner on his somewhat elusive but of course GIGANTIC and INCREDIBLE Middle East peace plan.

Kushner is probably getting hard and hard ly supported by Ivanka who just said that she inherited her moral compass from her father. Well ... congatulations ... I assume.

Stueeeeeeee said in reply to Vegetius... , 18 September 2019 at 08:31 AM
I disagree. Trump maybe the only person who could sell a war with Iran. What he has cultivated is a rabid base that consists of sycophants on one extreme end and desperate nationalists on the other. His base must stick with him...who else do they have?

The Left is indifferent to another war. Further depleting the quality stock of our military will aid there agenda of international integration. A weaker US military will force us to collaborate with the world community and not lead it is their thinking.

The rest of the nation will follow.

prawnik said in reply to Vegetius... , 18 September 2019 at 10:36 AM
Need I trot out Goering's statement regarding selling a war once more?

Göring: Why, of course, the people don't want war. Why would some poor slob on a farm want to risk his life in a war when the best that he can get out of it is to come back to his farm in one piece? Naturally, the common people don't want war; neither in Russia nor in England nor in America, nor for that matter in Germany. That is understood. But, after all, it is the leaders of the country who determine the policy and it is always a simple matter to drag the people along, whether it is a democracy or a fascist dictatorship or a Parliament or a Communist dictatorship.

Gilbert: There is one difference. In a democracy, the people have some say in the matter through their elected representatives, and in the United States only Congress can declare wars.

Göring: Oh, that is all well and good, but, voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is tell them they are being attacked and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same way in any country.

turcopolier , 17 September 2019 at 09:31 PM
jonst

We have been so thoroughly indoctrinated with the idea that Iran and Russia are intrinsically and immutable evil and hostile that the thought of actual two sided diplomacy does not occur. IMO neither of these countries are what we collectively think them. So, we could actually give it a try rather than trying to beggar them and destroy their economies. If all fails than we have to be prepared to defend our forces. DOL

Matt said in reply to turcopolier ... , 18 September 2019 at 12:54 AM
I agree with your reply 100%

these phobias are so entrenched now they're a huge obstacle to overcome,

Mark Twain: "It's easier to fool people than to convince them that they have been fooled."

William Casey: "We'll know our disinformation program is complete when everything the American public believes is false"

Christian Chuba , 18 September 2019 at 05:22 AM
The 'ivestigations are a formality. The Saudis (with U.S. backing) are already saying that the missiles were Iranian made and according to them, this proves that Iran fired them. The Saudis are using the more judicious phrase 'behind the attack' but Pompeo is running with the fired from Iran narrative.

How can we tell the difference between an actual Iranian manufactured missile vs one that was manufactured in Yemen based on Iranian designs? We only have a few pictures Iranian missiles unlike us, the Iranians don't toss them all over the place so we don't have any physical pieces to compare them to.

Perhaps honest investigators could make a determination but even if they do exist they will keep quiet while the bible thumping Pompeo brays and shamelessly lies as he is prone to do.

PRC90 said in reply to Christian Chuba... , 18 September 2019 at 10:36 AM
These kinds of munition will leave hundreds of bits scattered all over their targets. I'm waiting for the press conference with the best bits laid out on the tables.
I doubt that there will be any stencils saying 'Product of Iran', unless the paint smells fresh.
Nuff Sed , 18 September 2019 at 07:22 AM
1. I am still waiting to read some informed discussion concerning the *accuracy* of the projectiles hitting their targets with uncanny precision from hundreds of miles away. What does this say about the achievement of those pesky Eye-rainians? https://www.moonofalabama.org/images9/saudihit2.jpg

2. "The US Navy has many ships in the Gulf and the Arabian Sea. The Iranian Navy and the IRGC Navy will attack our naval vessels until the Iranian forces are utterly destroyed.: Ahem, Which forces are utterly destroyed? With respect colonel, you are not thinking straight. An army with supersonic land to sea missiles that are highly accurate will make minced meat of any fool's ship that dare attack it. The lesson of the last few months is that Iran is deadly serious about its position that if they cannot sell their oil, no one else will be able to either. And if the likes of the relatively broadminded colonel have not yet learned that lesson, then this can only mean that the escalation ladder will continue to be climbed, rung by rung. Next rung: deep sea port of Yanbu, or, less likely, Ra's Tanura. That's when the price of oil will really go through the roof and the Chinese (and possibly one or two of the Europoodles) will start crying Uncle Scam. Nuff Sed.

turcopolier , 18 September 2019 at 08:07 AM
nuff Sed

It sounds like you are getting a little "help" with this. You statement about the result of a naval confrontation in the Gulf reflects the 19th Century conception that "ships can't fight forts." that has been many times exploded. You have never seen the amount of firepower that would be unleashed on Iran from the air and sea. Would the US take casualties? Yes, but you will be destroyed.

Nuff Sed -> turcopolier ... , 18 September 2019 at 08:18 AM
We will have to agree to disagree. But unless I am quite mistaken, the majority view if not the consensus of informed up to date opinion holds that the surest sign that the US is getting ready to attack Iran is that it is withdrawing all of its naval power out of the Persian Gulf, where they would be sitting ducks.

Besides, I don't think it will ever come to that. Not to repeat myself, but taking out either deep sea ports of Ra's Tanura and/ or Yanbu (on the Red Sea side) will render Saudi oil exports null and void for the next six months. The havoc that will play with the price of oil and consequently on oil futures and derivatives will be enough for any president and army to have to worry about. But if the US would still be foolhardy enough to continue to want to wage war (i.e. continue its strangulation of Iran, which it has been doing more or less for the past 40 years), then the Yemeni siege would be broken and there would be a two-pronged attack from the south and the north, whereby al-Qatif, the Shi'a region of Saudi Arabia where all the oil and gas is located, will be liberated from their barbaric treatment at the hands of the takfiri Saudi scum, which of course is completely enabled and only made possible by the War Criminal Uncle Sam.

Go ahead, make my day: roll the dice.

scott s. said in reply to Nuff Sed ... , 18 September 2019 at 11:32 AM
AFAIK the only "US naval power" currently is the Abraham Lincoln CSG and I haven't seen any public info that it was in the Persian Gulf. Aside from the actual straits, I'm not sure of your "sitting ducks" assertion. First they wouldn't be sitting, and second you have the problem of a large volume of grey shipping that would complicate the targeting problem. Of course with a reduced time-of-flight, that also reduces target position uncertainty.
CK said in reply to turcopolier ... , 18 September 2019 at 09:55 AM
Forts are stationary.
Nothing I have read implies that Iran has a lot of investment in stationary forts.
Millennium Challenge 2002, only the game cannot be restarted once the enemy does not behave as one hopes. Unlike in scripted war simulations, Opfor can win.
I remember the amount of devastation that was unleashed on another "backwards nation" Linebackers 1 - 20, battleship salvos chemical defoliants, the Phoenix program, napalm for dessert.
And not to put to fine a point on it, but that benighted nation was oriental; Iran is a Caucasian nation full of Caucasian type peoples.
Nothing about this situation is of any benefit to the USA.
We do not need Saudi oil, we do not need Israel to come to the defense of the USA here in North America, we do not need to stick our dick into the hornet's nest and then wonder why they sting and it hurts. How many times does Dumb have to win?
Nuff Sed , 18 September 2019 at 08:07 AM
3. Also, I can't imagine this event as being a very welcome one for Israeli military observers, the significance of which is not lost on them, unlike their US counterparts. If Yemen/ Iran can put the Abqaiq processing plant out of commission for a few weeks, then obviusly Hezbollah can do the same for the giant petrochemical complex at Haifa, as well as Dimona, and the control tower at Ben Gurion Airport.
http://www.israelnationalnews.com/News/News.aspx/239251

https://www.timesofisrael.com/haifa-municipal-workers-block-refinery-access-for-2nd-day/

These are the kinds of issues which are germane: the game has changed. What are the implications?

turcopolier , 18 September 2019 at 08:08 AM
nuff sed

I have said repeatedly that Hizbullah can destroy Israel. Nothing about that has changed.

turcopolier , 18 September 2019 at 08:17 AM
Yeah, right

It was late at night when I wrote this. Yeah, Right. the Iranians could send their massive ground force into Syria where it would be chewed up by US and Israeli air. Alternatively they could invade Saudi arabia.

Yeah, Right said in reply to turcopolier ... , 18 September 2019 at 08:38 AM
Thank you for the reply but actually I was thinking that an invasion of Afghanistan would be the more sensible ploy.

To my mind if the Iranian Army sits on its backside then the USAF and IAF will ignore it to roam the length and breadth of Iran destroying whatever ground targets are on their long-planned target-list.

Or that Iranian Army can launch itself into Afghanistan, at which point all of the USA plans for a methodical aerial pummelling of Iran's infrastructure goes out the window as the USAF scrambles to save the American forces in Afghanistan from being overrun.

Isn't that correct?

So what incentive is there for that Iranian Army to sit around doing nothing?

Iran will do what the USAF isn't expecting it to do, if for no other reason that it upsets the USA's own game-plan.

johnf , 18 September 2019 at 08:41 AM
There seems to be a bit of a hiatus in proceedings - not in these columns but on the ground in the ME.

Everyone seems to be waiting for something.

Could this "something" be the decisive word fron our commander in chief Binyamin Netanyahu?

The thing is he has just pretty much lost an election. Likud might form part of the next government of Israel but most likely not with him at its head.

Does anyone have any ideas on what the future policy of Israel is likely to be under Gantz or whoever? Will it be the same, worse or better?

turcopolier , 18 September 2019 at 08:51 AM
Yeah Right

The correct US move would be to ignore an Iranian invasion of Afghanistan and continue leaving the place. The Iranian Shia can then fight the Sunni jihadi tribesmen.

Yeah, Right said in reply to turcopolier ... , 18 September 2019 at 09:29 AM
Oh, I completely agree that if the Iranians launch an invasion of Afghanistan then the only sensible strategy would be for the US troops to pack up and get out as fast as possible.

But that is "cut and run", which many in Washington would view as a humiliation.

Do you really see the beltway warriors agreeing to that?

turcopolier , 18 September 2019 at 08:53 AM
Stueee

A flaw in your otherwise sound argument is that the US military has not been seriously engaged for several years and has been reconstituting itself with the money Trump has given them.

turcopolier , 18 September 2019 at 08:57 AM
Nuff Sed

Re-positioning of forces does not indicate that a presidential decision for war has been made. The navy will not want to fight you in the narrow, shallow waters of the Gulf.

Lars , 18 September 2019 at 09:53 AM
I would think that Mr. Trump would have a hard time sell a war with Iran over an attack on Saudi Arabia. The good question about how would that war end will soon be raised and I doubt there are many good answers.

The US should have gotten out of that part of the world a long time ago, just as they should have paid more attention to the warnings in President Eisenhower's farewell address.

turcopolier , 18 September 2019 at 10:12 AM
CK

The point was about shore based firepower, not forts. don't be so literal.

CK said in reply to turcopolier ... , 18 September 2019 at 10:34 AM
The Perfumed Fops in the DOD restarted Millennium Challenge 2002,because Gen Van Riper had used 19th and early 20th century tactics and shore based firepower to sink the Blue Teams carrier forces. There was a script, Van Riper did some adlibbing. Does the US DOD think that Iran will follow the US script? In a unipolar world maybe the USA could enforce a script, that world was severely wounded in 1975, took a sucking chest wound during operation Cakewalk in 2003 and died in Syria in 2015. Too many poles too many powers not enough diplomacy. It will not end well.
turcopolier , 18 September 2019 at 10:16 AM
lars

We would crush Iran at some cost to ourselves but the political cost to the anti-globalist coalition would catastrophic. BTW Trump's "base" isn't big enough to elect him so he cannot afford to alienate independents.

prawnik , 18 September 2019 at 10:32 AM
Even if Rouhani and the Iranian Parliament personally designed, assembled, targeted and launched the missiles (scarier sounding version of "drones"), then they should be congratulated, for the Saudi tyrant deserves every bad thing that he gets.
turcopolier , 18 September 2019 at 10:49 AM
prawnik (Sid) in this particular situation goering's glittering generalization does not apply. Trump needs a lot of doubting suburbanites to win and a war will not incline them to vote for him.
Bill Wade , 18 September 2019 at 10:53 AM
Looks like President Trump is walking it back, tweet: I have just instructed the Secretary of the Treasury to substantially increase Sanctions on the country of Iran!
PRC90 , 18 September 2019 at 11:34 AM
I doubt there will be armed conflict of any kind.
Everything Trump does from now (including sacking the Bolton millstone) will be directed at winning 2020, and that will not be aided by entering into some inconclusive low intensity attrition war.
Iran, on the other hand, will be doing everything it can to increase the chance of a Democrat administration, bearing in mind the great deal they got from the last one and the lack of anything they can expect from Trump Term Two.
This may be a useful tool for determining their next move, but the limit of their actions would be when some Democrats begin making the electorally damaging mistake of critising Trump for not retaliating against Iranian provocations.
Terence Gore , 18 September 2019 at 11:35 AM
Pros and cons of many options considered against Iran

https://www.brookings.edu/wp-content/uploads/2016/06/06_iran_strategy.pdf

[Jan 06, 2020] But they could always find an un-scorched Iranian passport in mint condition among the debris of the explosion.

Jan 06, 2020 | www.unz.com

Commentator Mike , says: Show Comment January 5, 2020 at 9:08 pm GMT

@Bookish1

Not only Mossad but probably many others would like to see a suicide bomber blow himself up somewhere in the US killing alot of people. That makes it difficult to figure out who did it and maybe impossible to figure it out. It would be a mess.

But they could always find an un-scorched Iranian passport in mint condition among the debris of the explosion.

[Jan 04, 2020] The USA only choice is a Sunni sandwich with Kurdish Bread and Shia Mayo

Jan 04, 2020 | www.moonofalabama.org

Peeps like Sen Graham saying "the Iraqi's need to choose between us or Iran."

(That choice is a Sunni sandwich with Kurdish Bread and Shia Mayo)

[Jan 03, 2020] A new brilliant diplomatic strategy of Trump administration: Threatening Iran by killing Iraqis

"USA clusterfuck express hurtles headlong down the track for a rendezvous with disaster: War with a united Iraq and Iran, with the latter backed by the Russians and Chinese. https://www.checkpointasia.net/iraqi-pm-told-trump-gang-they-didnt-have-permission-to-bomb-iraqi-paramilitaries-they-did-it-anyway/ "
Jan 03, 2020 | thenewkremlinstooge.wordpress.com

et Al January 2, 2020 at 10:32 am

Sic Semper tyrannis: Our Embassy in Baghdad – TTG
https://turcopolier.typepad.com/sic_semper_tyrannis/

For weeks, it was Iranian consulates and facilities that bore the brunt of Iraqi popular unrest. Iran reacted with restraint. With our lethal attacks on the Kata'ib Hezbollah, we changed that. Pompeo, Esper and Trump are keeping up the trash talking. Threatening Iran by killing Iraqis whose ass was that brilliant diplomatic strategy pulled from?
####

Plenty more at the link.

Have dick, will step on!

[Jan 03, 2020] If you previously have doubts that Trump is senile warmonger, not you have a definite proof

Bombing a civilian airport in another country in order to assassinate Iranian and Iraq leaders is a very bad diplomacy ;-)
It might well be that today this idiot blow up his chances fro reelection because revenge is dish that should be served cold and Iran can postpone it for 11 months or so.
What is interesting is that neoliberal MSM are glad and still talking about Zelensky and impeachment. What a country ! It looks like the decade of the twenties can be the decade of another World War. "In every war the first casualty is truth."
Jan 03, 2020 | www.theamericanconservative.com

Trump think that the war with Iran will be another cake walk, like in Afghanistan and Iraq. This is a proof that he is a senile idiot.

[Jan 03, 2020] I guess Trump decided had to make the 1914-vintage Hapsburgs look relatively competent

Bombing a civilian airport in another country in order to assassinate Iranian and Iraq leaders is a very bad diplomacy ;-)
It might well be that today this idiot blow up his chances fro reelection because revenge is dish that should be served cold and Iran can postpone it for 11 months or so.
What is interesting is that neoliberal MSM are glad and still talking about Zelensky and impeachment. What a country ! It looks like the decade of the twenties can be the decade of another World War. "In every war the first casualty is truth."
Jan 03, 2020 | www.theamericanconservative.com

I guess somebody had to make the 1914-vintage Hapsburgs look relatively competent,

Trump think that the war with Iran will be another cake walk, like in Afghanistan and Iraq. This is a proof that he is a senile idiot.

[Jan 01, 2020] "Freedom gas" named Worst Words of the Year

Jan 01, 2020 | www.moonofalabama.org

Mao , Dec 30 2019 9:03 utc | 48

"Freedom gas" named Worst Words of the Year

Plain English Foundation has voted freedom gas as the worst word or phrase of 2019.

The term comes from the United States Department of Energy, which rebranded natural gas as "freedom gas" and boasted about bringing molecules of US freedom to the world.

"When a simple product like natural gas starts being named through partisan politics, we are entering dangerous terrain," said the Foundation's Executive Director, Dr Neil James. "Why can't natural gas just remain natural gas?"

Each year, Plain English Foundation gathers dozens of examples of the worst words to highlight the importance of clear and ethical public language.

The full list of 2019's worst words and phrases follows.

https://www.plainenglishfoundation.com/documents/10179/636280/2019_Worst_Words_media_release

[Dec 21, 2019] Trump administration sanction companies involved in laying the remaining pipe, and also companies involved in the infrastructure around the arrival point.

Highly recommended!
Dec 21, 2019 | peakoilbarrel.com

Watcher x Ignored says: 12/13/2019 at 6:27 am

The new US defense bill, agreed on by both parties, includes sanctions on executives of companies involved in the completion of Nordstream 2. This is companies involved in laying the remaining pipe, and also companies involved in the infrastructure around the arrival point.

This could include arrest of the executives of those companies, who might travel to the United States. One of the companies is Royal Dutch Shell, who have 80,000 employees in the United States.

Hightrekker x Ignored says: 12/13/2019 at 12:28 pm
So much for the "Free Market".
Hickory x Ignored says: 12/12/2019 at 11:28 pm
Some people believe 'the market' for crude oil is a fair and effective arbiter of the industry supply and demand. But if we step back an inch or two, we all can see it has been a severely broken mechanism during this up phase in oil. For example, there has been long lags between market signals of shortage or surplus.

Disruptive policies and mechanisms such as tariffs, embargo's, and sanctions, trade bloc quotas, military coups and popular revolutions, socialist agendas, industry lobbying, multinational corporate McCarthyism, and massively obese debt financing, are all examples of forces that have trumped an efficient and transparent oil market.

And yet, the problems with the oil market during this time of upslope will look placid in retrospect, as we enter the time beyond peak.
I see no reason why it won't turn into a mad chaotic scramble.
We had a small hint of what this can look like in the last mid-century. The USA responded to military expansionism of Japan by enacting an oil embargo against them. The response was Pearl Harbor. This is just one example of many.
How long before Iran lashes out in response to their restricted access to the market?
People generally don't respond very calmly to involuntary restriction on food, or energy, or access to the markets for these things.

[Dec 21, 2019] Trump comes clean from world s policeman to thug running a global protection racket by Finian Cunningham

Highly recommended!
In any case withdrawal from Syria was a surprising and bold move on the Part of the Trump. You can criticizes Trump for not doing more but before that he bahvaves as a typical neocon, or a typical Republican presidents (which are the same things). And he started on this path just two month after inauguration bombing Syria under false pretences. So this is something
I think the reason of change is that Trump intuitively realized the voters are abandoning him in droves and the sizable faction of his voters who voted for him because of his promises to end foreign wars iether already defected or is ready to defect. So this is a move designed to keep them.
Notable quotes:
"... "America shouldn't be doing the fighting for every nation on earth, not being reimbursed in many cases at all. If they want us to do the fighting, they also have to pay a price," Trump said. ..."
Dec 27, 2018 | www.rt.com

President Trump's big announcement to pull US troops out of Syria and Afghanistan is now emerging less as a peace move, and more a rationalization of American military power in the Middle East. In a surprise visit to US forces in Iraq this week, Trump said he had no intention of withdrawing the troops in that country, who have been there for nearly 15 years since GW Bush invaded back in 2003.

Hinting at private discussions with commanders in Iraq, Trump boasted that US forces would in the future launch attacks from there into Syria if and when needed. Presumably that rapid force deployment would apply to other countries in the region, including Afghanistan.

In other words, in typical business-style transactional thinking, Trump sees the pullout from Syria and Afghanistan as a cost-cutting exercise for US imperialism. Regarding Syria, he has bragged about Turkey being assigned, purportedly, to "finish off" terror groups. That's Trump subcontracting out US interests.

Critics and supporters of Trump are confounded. After his Syria and Afghanistan pullout call, domestic critics and NATO allies have accused him of walking from the alleged "fight against terrorism" and of ceding strategic ground to US adversaries Russia and Iran.

'We're no longer suckers of the world!' Trump says US is respected as nation AGAIN (VIDEO)

Meanwhile, Trump's supporters have viewed his decision in more benign light, cheering the president for "sticking it to" the deep state and military establishment, assuming he's delivering on electoral promises to end overseas wars.

However, neither view gets what is going on. Trump is not scaling back US military power; he is rationalizing it like a cost-benefit analysis, as perhaps only a real-estate-wheeler-dealer-turned president would appreciate. Trump is not snubbing US militarism or NATO allies, nor is he letting loose an inner peace spirit. He is as committed to projecting American military as ruthlessly and as recklessly as any other past occupant of the White House. The difference is Trump wants to do it on the cheap.

Here's what he said to reporters on Air Force One before touching down in Iraq:

"The United States cannot continue to be the policeman of the world. It's not fair when the burden is all on us, the United States We are spread out all over the world. We are in countries most people haven't even heard about. Frankly, it's ridiculous." He added: "We're no longer the suckers, folks."

Laughably, Trump's griping about US forces "spread all over the world" unwittingly demonstrates the insatiable, monstrous nature of American militarism. But Trump paints this vice as a virtue, which, he complains, Washington gets no thanks for from the 150-plus countries around the globe that its forces are present in.

As US troops greeted him in Iraq, the president made explicit how the new American militarism would henceforth operate.

"America shouldn't be doing the fighting for every nation on earth, not being reimbursed in many cases at all. If they want us to do the fighting, they also have to pay a price," Trump said.

'We give them $4.5bn a year': Israel will still be 'good' after US withdrawal from Syria – Trump

This reiterates a big bugbear for this president in which he views US allies and client regimes as "not pulling their weight" in terms of military deployment. Trump has been browbeating European NATO members to cough up more on military budgets, and he has berated the Saudis and other Gulf Arab regimes to pay more for American interventions.

Notably, however, Trump has never questioned the largesse that US taxpayers fork out every year to Israel in the form of nearly $4 billion in military aid. To be sure, that money is not a gift because much of it goes back to the Pentagon from sales of fighter jets and missile systems.

The long-held notion that the US has served as the "world's policeman" is, of course, a travesty.

Since WWII, all presidents and the Washington establishment have constantly harped on, with self-righteousness, about America's mythical role as guarantor of global security.

Dozens of illegal wars on almost every continent and millions of civilian deaths attest to the real, heinous conduct of American militarism as a weapon to secure US corporate capitalism.

But with US economic power in historic decline amid a national debt now over $22 trillion, Washington can no longer afford its imperialist conduct in the traditional mode of direct US military invasions and occupations.

Perhaps, it takes a cost-cutting, raw-toothed capitalist like Trump to best understand the historic predicament, even if only superficially.

This gives away the real calculation behind his troop pullout from Syria and Afghanistan. Iraq is going to serve as a new regional hub for force projection on a demand-and-supply basis. In addition, more of the dirty work can be contracted out to Washington's clients like Turkey, Israel and Saudi Arabia, who will be buying even more US weaponry to prop the military-industrial complex.

'With almost $22 trillion of debt, the US is in no position to attack Iran'

This would explain why Trump made his hurried, unexpected visit to Iraq this week. Significantly, he said : "A lot of people are going to come around to my way of thinking", regarding his decision on withdrawing forces from Syria and Afghanistan.

Since his troop pullout plan announced on December 19, there has been serious pushback from senior Pentagon figures, hawkish Republicans and Democrats, and the anti-Trump media. The atmosphere is almost seditious against the president. Trump flying off to Iraq on Christmas night was reportedly his first visit to troops in an overseas combat zone since becoming president two years ago.

What Trump seemed to be doing was reassuring the Pentagon and corporate America that he is not going all soft and dovish. Not at all. He is letting them know that he is aiming for a leaner, meaner US military power, which can save money on the number of foreign bases by using rapid reaction forces out of places like Iraq, as well as by subcontracting operations out to regional clients.

Thus, Trump is not coming clean out of any supposed principle when he cuts back US forces overseas. He is merely applying his knack for screwing down costs and doing things on the cheap as a capitalist tycoon overseeing US militarism.

During past decades when American capitalism was relatively robust, US politicians and media could indulge in the fantasy of their military forces going around the world in large-scale formations to selflessly "defend freedom and democracy."

Today, US capitalism is broke. It simply can't sustain its global military empire. Enter Donald Trump with his "business solutions."

But in doing so, this president, with his cheap utilitarianism and transactional exploitative mindset, lets the cat out of the bag. As he says, the US cannot be the world's policeman. Countries are henceforth going to have to pay for "our protection."

Inadvertently, Trump is showing up US power for what it really is: a global thug running a protection racket.

It's always been the case. Except now it's in your face. Trump is no Smedley Butler, the former Marine general who in the 1930s condemned US militarism as a Mafia operation. This president is stupidly revealing the racket, while still thinking it is something virtuous.

Finian Cunningham (born 1963) has written extensively on international affairs, with articles published in several languages. Originally from Belfast, Northern Ireland, he is a Master's graduate in Agricultural Chemistry and worked as a scientific editor for the Royal Society of Chemistry, Cambridge, England, before pursuing a career in newspaper journalism. For over 20 years he worked as an editor and writer in major news media organizations, including The Mirror, Irish Times and Independent. Now a freelance journalist based in East Africa, his columns appear on RT, Sputnik, Strategic Culture Foundation and Press TV.

dnm1136

Once again, Cunningham has hit the nail on the head. Trump mistakenly conflates fear with respect. In reality, around the world, the US is feared but generally not respected.

My guess is that the same was true about Trump as a businessman, i.e., he was not respected, only feared due to his willingness to pursue his "deals" by any means that "worked" for him, legal or illegal, moral or immoral, seemingly gracious or mean-spirited.

William Smith

Complaining how the US gets no thanks for its foreign intervention. Kind of like a rapist claiming he should be thanked for "pleasuring" his victim. Precisely the same sentiment expressed by those who believe the American Indians should thank the Whites for "civilising" them.

Phoebe S,

"Washington gets no thanks for from the 150-plus countries around the globe that its forces are present in."

That might mean they don't want you there. Just saying.

ProRussiaPole

None of these wars are working out for the US strategically. All they do is sow chaos. They seem to not be gaining anything, and are just preventing others from gaining anything as well.

Ernie For -> ProRussiaPole

i am a huge Putin fan, so is big Don. Please change your source of info Jerome, Trump is one man against Billions of people and dollars in corruption. He has achieved more in the USA in 2 years than all 5 previous parasites together.

Truthbetold69

It could be a change for a better direction. Time will tell. 'If you do what you've always been doing, you'll get what you've always been getting.'

[Nov 15, 2019] Trump And Zelensky Want Peace With Russia. The Fascists Oppose That

Notable quotes:
"... "In direct contravention of U.S. interests" says the NBC and quotes a member of the permanent state who declares "it is clearly in our national interest" to give weapons to Ukraine. ..."
"... But is that really in the national U.S. interest? Who defined it as such? ..."
"... And that's where the policy community and I part company. It is the president, not the bureaucracy, who was elected by the American people. That puts him -- not the National Security Council, the State Department, the intelligence community, the military, and their assorted subject-matter experts -- in charge of making policy. If we're to remain a constitutional republic, that's how it has to stay. ..."
"... The constitution does not empower the "U.S. government policy community", nor "the administration", nor the "consensus view of the interagency" and certainly not one Lt.Col. Vindman to define the strategic interests of the United States and its foreign policy. It is the duly elected president who does that. ..."
"... Mr. Kolomoisky, widely seen as Ukraine's most powerful figure outside government, given his role as the patron of the recently elected President Volodymyr Zelensky, has experienced a remarkable change of heart: It is time, he said, for Ukraine to give up on the West and turn back toward Russia. ..."
"... "They're stronger anyway. We have to improve our relations," he said, comparing Russia's power to that of Ukraine. "People want peace, a good life, they don't want to be at war. And you" -- America -- "are forcing us to be at war , and not even giving us the money for it." ..."
"... Mr. Kolomoisky [..] told The Times in a profanity-laced discussion, the West has failed Ukraine, not providing enough money or sufficiently opening its markets. ..."
"... Instead, he said, the United States is simply using Ukraine to try to weaken its geopolitical rival. "War against Russia," he said, "to the last Ukrainian." Rebuilding ties with Russia has become necessary for Ukraine's economic survival, Mr. Kolomoisky argued. He predicted that the trauma of war will pass. ..."
"... Kolomoisky's interview is obviously a trial balloon for the policies Zelensky wants to pursue. He has, like Trump, campaigned on working for better relations with Russia. He received nearly 73% of all votes. ..."
"... Ambassador Taylor and the other participants of yesterday's clown show would certainly "mess it up and get in the way" if Zelensky openly pursues the policy he promised to his voters. They are joined in this with the west-Ukrainian fascists they have used to arrange the Maidan coup: ..."
"... Only some 20% of the Ukrainians are in favour of continuing the war against the eastern separatists who Russia supports. During the presidential election Poroshenko received just 25% of the votes. His party European Solidarity won 8.1% of the parliamentary election. Voice won 5.8%. ..."
"... on Yovanovitch, She added: "If our chief representative is kneecapped, it limits our effectiveness to safeguard the vital national security interests of the United States." ..."
"... She wasn't fired, she was kneecapped, and Ukraine is a US vital national security interest, especially after it installed a new government with neo-fascism support.. . .Kneecapping is a form of malicious wounding, often as torture, in which the victim is injured in the knee ..."
Nov 14, 2019 | www.moonofalabama.org

NBC News is not impressed by the first day of the Democrats' impeachment circus. But it fails to note what the conflict is really about:

It was substantive, but it wasn't dramatic.

In the reserved manner of veteran diplomats with Harvard degrees, Bill Taylor and George Kent opened the public phase of the House impeachment inquiry into President Donald Trump on Wednesday by bearing witness to a scheme they described as not only wildly unorthodox but also in direct contravention of U.S. interests.

"It is clearly in our national interest to deter further Russian aggression," Taylor, the acting U.S. ambassador to Ukraine and a decorated Vietnam War veteran, said in explaining why Trump's decision to withhold congressionally appropriated aid to the most immediate target of Russian expansionism didn't align with U.S. policy.

But at a time when Democrats are simultaneously eager to influence public opinion in favor of ousting the president and quietly apprehensive that their hearings could stall or backfire, the first round felt more like the dress rehearsal for a serious one-act play than the opening night of a hit Broadway musical.

"In direct contravention of U.S. interests" says the NBC and quotes a member of the permanent state who declares "it is clearly in our national interest" to give weapons to Ukraine.

But is that really in the national U.S. interest? Who defined it as such?

President Obama was against giving weapons to Ukraine and never transferred any to Ukraine despite pressure from certain circles. Was Obama's decision against U.S. national interest? Where are the Democrats or deep state members accusing him of that?

Which brings us to the really critical point of the whole issue. Who defines what is in the "national interest" with regards to foreign policy? Here is a point where for once I agree with the right-wingers at the National Review where Andrew McCarthy writes :

[O]n the critical matter of America's interests in the Russia/Ukraine dynamic, I think the policy community is right, and President Trump is wrong. If I were president, while I would resist gratuitous provocations, I would not publicly associate myself with the delusion that stable friendship is possible (or, frankly, desirable) with Putin's anti-American dictatorship, which runs its country like a Mafia family and is acting on its revanchist ambitions.

But you see, much like the policy community, I am not president. Donald Trump is.

And that's where the policy community and I part company. It is the president, not the bureaucracy, who was elected by the American people. That puts him -- not the National Security Council, the State Department, the intelligence community, the military, and their assorted subject-matter experts -- in charge of making policy. If we're to remain a constitutional republic, that's how it has to stay.

We have made the very same point :

The U.S. constitution "empowers the President of the United States to propose and chiefly negotiate agreements between the United States and other countries."

The constitution does not empower the "U.S. government policy community", nor "the administration", nor the "consensus view of the interagency" and certainly not one Lt.Col. Vindman to define the strategic interests of the United States and its foreign policy. It is the duly elected president who does that.

and :

The president does not like how the 'American policy' on Russia was built. He rightly believes that he was elected to change it. He had stated his opinion on Russia during his campaign and won the election. It is not 'malign influence' that makes him try to have good relations with Russia. It is his own conviction and legitimized by the voters.
...
[I]t is the president who sets the policies. The drones around him who serve "at his pleasure" are there to implement them.

There is another point that has to be made about the NBC's assertions. It is not in the interest of Ukraine to be a proxy for U.S. deep state antagonism towards Russia. Robber baron Igor Kolomoisky, who after the Maidan coup had financed the west-Ukrainian fascists who fought against east-Ukraine, says so directly in his recent NYT interview :

Mr. Kolomoisky, widely seen as Ukraine's most powerful figure outside government, given his role as the patron of the recently elected President Volodymyr Zelensky, has experienced a remarkable change of heart: It is time, he said, for Ukraine to give up on the West and turn back toward Russia.

"They're stronger anyway. We have to improve our relations," he said, comparing Russia's power to that of Ukraine. "People want peace, a good life, they don't want to be at war. And you" -- America -- "are forcing us to be at war , and not even giving us the money for it."
...
Mr. Kolomoisky [..] told The Times in a profanity-laced discussion, the West has failed Ukraine, not providing enough money or sufficiently opening its markets.

Instead, he said, the United States is simply using Ukraine to try to weaken its geopolitical rival. "War against Russia," he said, "to the last Ukrainian." Rebuilding ties with Russia has become necessary for Ukraine's economic survival, Mr. Kolomoisky argued. He predicted that the trauma of war will pass.
...
Mr. Kolomoisky said he was feverishly working out how to end the war, but he refused to divulge details because the Americans "will mess it up and get in the way."

Kolomoisky's interview is obviously a trial balloon for the policies Zelensky wants to pursue. He has, like Trump, campaigned on working for better relations with Russia. He received nearly 73% of all votes.

Ambassador Taylor and the other participants of yesterday's clown show would certainly "mess it up and get in the way" if Zelensky openly pursues the policy he promised to his voters. They are joined in this with the west-Ukrainian fascists they have used to arrange the Maidan coup:

Zelenskiy's decision in early October to accept talks with Russia on the future of eastern Ukraine resulted in an outcry from a relatively small but very vocal minority of Ukrainians opposed to any deal-making with Russia. The protests were relatively short-lived, but prospects for a negotiated end to the war in the eastern Donbas region became more remote in light of this domestic opposition.
...
The supporters for war with Russia are ex-president Poroshenko and two parliamentary factions, European Solidarity and Voice, whose supporters are predominantly located in western Ukraine. Crucially, however, they can also rely on right-wing paramilitary groups composed of veterans from the hottest phase of the war in Donbas in 2014-5.

Only some 20% of the Ukrainians are in favour of continuing the war against the eastern separatists who Russia supports. During the presidential election Poroshenko received just 25% of the votes. His party European Solidarity won 8.1% of the parliamentary election. Voice won 5.8%.

By pursuing further conflict with Russia the deep state of the United States wants to ignore the wishes not only of the U.S. voters but also those of the Ukrainian electorate. That undemocratic mindset is another point that unites them with the Ukrainian fascists.

Zelensky should ignore the warmongers in the U.S. embassy in Kiev and sue for immediate peace with Russia. (He should also investigate Biden's undue influence .) Reengaging with Russia is also the easiest and most efficient step the Ukraine can take to lift its desolate economy.

It is in the national interest of both, the Ukraine and the United States.

Posted by b on November 14, 2019 at 18:23 UTC | Permalink


pretzelattack , Nov 14 2019 18:28 utc | 1

next page " agree with mccarthy about who conducts foreign policy, disagree about who the aggressor is; it's the USA, trying to weaken Russia, which is the aggressor.
james , Nov 14 2019 18:48 utc | 2
thanks b... typo - immediate piece with Russia - 'peace' is the spelling here...

the comments from Kolomoisky in the recent nyt interview are very telling.. aside from being a first rate kleptomaniac who will willingly play both sides if he can profit from it, he is also speaking a moment of truth..for him Ukraine is available to the highest bidder... he could give a rats ass about Ukraine or the people... but still, it is refreshing that the NYT published his comments in this regard..

the quote "the Americans "will mess it up and get in the way." is very true... it was true before kolomisky picked a side too.. this guy is very shrewd.. i wonder if his own country is able to see thru him?

national interest.... yes, trump gets to decide and he won on the idea of having closer relations with russia, but the cia-msm has been lambasting him and anyone else associated with him since before the election over the clinton e mails... they have painted a scenario that it is all russias fault and have been relentless in this portrayal... hoping trump is going to turn this around is like hoping someone is going to turn the titanic around from hitting a giant iceberg... the usa is too far gone and will be hitting the iceberg.. they are in fact...

michael lacey , Nov 14 2019 19:00 utc | 3
Good article what the American people miss is good articles instead of the mind numbing BS! They actually receive!
Piotr Berman , Nov 14 2019 19:01 utc | 4
From NYT about Kolomo???? (spelling in English is highly variable)

George D. Kent, a senior State Department official, said he had told Mr. Zelensky that his willingness to break with Mr. Kolomoisky -- "somebody who had such a bad reputation" -- would be a litmus test for his independence. [If is good to be independent, i.e. to do what we want.]

And William Taylor, the acting ambassador in Kiev, said he had warned Mr. Zelensky: "He, Mr. Kolomoisky, is increasing his influence in your government, which could cause you to fail." [La Paz is a fresh reminder for Kiev?]

Bemildred , Nov 14 2019 19:07 utc | 5
Well the thing about Zelensky is he's still there, and he is making changes in Donbass.

Kolomoisky was interested in the fracked gas in Donbass, the completion of NordStream II has made a mess of that idea. It is good that he has seen the light, as it means Zelensky will have support in his attempts to adapt to reality. But Kolomoisky is still a crook no doubt.

Montreal , Nov 14 2019 19:14 utc | 6
My immediate reaction was that Kolomoisky realises he has to act - the Ukrainian oligarchs have got too close to America. I agree with James that he is a extremely clever man. Ukraine's traditional business is playing both ends against the middle and sending the proceeds to Switzerland (or the Caribbean in Porosyonok's case). Since 1990 a few of these robber barons have made a very good business winding up the west against Russia, it could go on ever - why spoil it by lifting the rock and seeing all the insects scurrying around in the light?

Another rock that has been lifted is in Washington, where the khokhol diaspora are desperately trying to get Uncle Sam to right the wrongs of a century ago.

Montreal , Nov 14 2019 19:25 utc | 7
I should have written: the "perceived" wrongs" of a century ago.
Babyl-on , Nov 14 2019 19:26 utc | 8
"Deep state" is misleading and actually a false construction.

There is an Imperial State (the ruling faction)which consists of imperial apparatchiks placed in every key position in government.

There is one and only one Western Empire and its deep state spreads throughout Western governments and society. They are the owners oif the world and they run the world they own.

chet380 , Nov 14 2019 19:28 utc | 9
... @ b -- "Only some 20% of the Ukrainians favor to continue the war against the eastern separatists who Russia supports."

The are not 'separatists', but rather Ukrainians who want to stay in a federated Ukraine as 'provinces' with powers to pass their regional laws, similar to those in Canada.

psychohistorian , Nov 14 2019 19:35 utc | 10
The segment of empire in the US that are against Russia act so because it was Russia that stymied them in Syria and continues to be in their way of expanding the control from that part of empire...the US segment.

I still believe that the global private finance core segment of empire is behind Trump and throwing America(ns) under the bus as the world turns more multilateral. The cult of global private finance intends on still having some overarching super-national role in the new multilateral world and holding debt guns to everyones heads to make it ongoing.

I don't believe that strategy will work but as long as they can be fronted by a MAD player of some sort (Occupied Palestine comes to mind) they can be bully players in international matters.

As the world economies grind to a "halt" there will be lots of pressure everywhere and very little clarity about the key civilization war over public/private finance, IMO

NOBTS , Nov 14 2019 19:37 utc | 11
For a military dictatorship, diplomacy is the continuation of war by other means. The US has been at war with Russia since the right-wing coup at the Democratic convention of 1944. All presidents have been servants of the military, which includes the police/intel/security apparatus; the few who did not entirely accept their figurehead role were "dealt with." Kennedy, Nixon, Carter and now Trump. The Washington permanent state bureaucrats are shocked and understandably offended; they have after all, been running US foreign policy for 75 years!
karlof1 , Nov 14 2019 19:39 utc | 12
Wow! The depth of delusion on display is as breathtaking as its complete projection of the intentions and actions of the Evil Outlaw US Empire! Oh so many saying I'm displaying four fingers instead of two. Too bad there isn't a padded cell big enough to contain all the lunatics. I recall the pre- and post-coup discussions from 2014--that Russia was going to make NATO own Ukraine until it was forced to concede it has no business being there; that Russia would teach the would-be leaders of Ukraine a serious lesson in where their national interests lay. NATO is ready to cede and the lesson's been learned.

IMO, two referendums must be held. The first within Russia: Will you accept portions of Ukraine wanting to merge with Russia: Yes/No? Second to be given within Ukraine provided Yes wins in #1: Do you wish to join Russia or remain in Ukraine? IMO, this is a very longstanding unresolved issue of consequence for the people involved. The political leaders of Russia and Ukraine might both be against such a vote, but IMO that merely kicks the can further down the road and opens the door for more mischief making by the Evil Outlaw US Empire. Assuming a Yes from Russia and some from Ukraine, a strategic threat to Russia and Europe would be mitigated. Additional questions about those parts of Ukraine not wanting to join Russia could be solved via additional referenda in the Ukraine and neighboring nations that might prove willing to absorb the remnants and their people. Such action would of course negate the Minsk Agreements.

Given the ideological passions of those living in Western and Northern Ukraine, I don't see any hope for the continuation of the Ukrainian state as currently arranged, thus the proposed referenda. However, if Russia says Nyet, then Minsk must be implemented.

TG , Nov 14 2019 19:39 utc | 13
Ah, well said, but missing the point.

"Democracy" is not about letting the people as a whole have a say in how the country is governed. That would be fascist, and racist, and populist, and LITERALLY HITLER. Letting the people decide on things like foreign policy, is literally anti-democratic.

No, "Democracy" is about privatizing power and socializing responsibility. The elites get to set the policy, but the public at large gets to take responsibility when things go wrong. Because you see, we are a "Democracy."

jayc , Nov 14 2019 19:41 utc | 14
Breaking off long established economic and cultural ties with a large neighbouring country, virtually overnight, is a rash act, and certain to create dislocation and hardship. The craziness of the idea was only achievable through the traumatizing psy-op of the sniper event, leading directly to the coup and the state of war. The EU and the US were clearly malevolent in orchestrating the Association agreement with its ridiculous terms and the corresponding Maidan pressures.

The fools in Hong Kong, after protester-sponsored screenings of the World On Fire documentary, were actually quoted as presuming the Maidan protests had "won" and expressed their hopes that they too could "win". Good luck to them.

AntiSpin , Nov 14 2019 19:49 utc | 15
Ukraine Timeline

for anyone who hasn't had the time to get caught up on the topic, by Ray McGovern
https://www.opednews.com/articles/Ukraine-For-Dummies-by-Ray-McGovern-Crimea_Ignorance_Intelligence_Media-191114-285.html

Taffyboy , Nov 14 2019 19:50 utc | 16
Kolomoisky and Zelensky know what needs to be done, but they fear the blood that will flow with Nazi-Banderist scum! Zelinski's balls are not that big, and has no options left after compromising his position from day one. Who will make the first move, I fear not him? Russia has time, and patience, which is sorely lacking in the west who feel they have to push the envelope.
Don Bacon , Nov 14 2019 19:57 utc | 17
The Minsk II protocol was agreed to on 12 February 2015 by the leaders of Ukraine, Russia, France, and Germany, It included provisions for a halt in the fighting, the withdrawal of foreign forces, new constitution to allow special status for Donbass, and election in Donbass for local self governance. Control of the present border of Ukraine would be restored to the Ukraine government. Donbass would continue to be in Ukraine with some autonomy here (scroll down).
There are many such autonomous zones in the world, and in Europe, seen here .
The problem in Ukraine is that the neo-Nazi factions promoted by the US don't want to see a resolution, and will fight it with US support.
flankerbandit , Nov 14 2019 19:59 utc | 18
Kolomoysky is obviously a master thief and general scumbag...but he is no fool...

I think the writing on the wall became obvious with the Nordstream 2 finalization, where, it is noted, Denmark came in just under the wire in terms of not disrupting the timetable...

Obviously the interests of German business have prevailed...and rightly so in this case...

And what of the famous EU line about 'protecting' Ukraine as a gas transit corridor...?

LOLOLOL...that is in the same category of nothingburger as the EU noises about 'alternate payment' mechanisms for trade with Iran...

As soon as the Denmark story broke, Gazprom and Russian energy analysts talked openly about the tiny volumes that Ukraine could expect to see transiting its territory...as part of a new agreement to replace the one that has expired...

It works out to a small fraction of the several billion dollars in transit fees the Ukraine was getting...

Also considering that the IMF appears to be finally shutting off the tap of loans to this failed gangster state...and that the promises from the EU in 2013 were just so much fairy tales...hard-nosed operators like Kolomoysky are recalculating...

The chaos and national ruin has really cost these gangster capitalists nothing [in fact they have profited wildly]...so it is easy for them to reverse course and come begging back to Russia...

Bryan MacDonald has a good piece about this today in RT...

Ukraine's most powerful oligarch states the obvious: Ukraine has to turn back towards Russia

So, here we are, almost six years since the first "EuroMaidan" protests in Kiev, and Ukraine's most prominent oligarch has finally voiced the unmentionable: the project has failed.

As for Kolomoysky...like Trump, there is something to like about dirtballs who speak their minds openly...LOL

Vonu , Nov 14 2019 20:08 utc | 19
According to Kevin Shipp, the National Security Council really runs the executive branch, not the president. https://www.youtube.com/watch?time_continue=11&v=XHbrOg092GA
PJB , Nov 14 2019 20:11 utc | 20
Quite a turnaround by Kolomoisky. Wasn't he once caught on a tapped phone call admitting while chuckling about Ukrainian complicity in shooting down MH-17? i.e. NOT Donbas rebels and NOT Russia.
james , Nov 14 2019 20:13 utc | 21
@12 karlof1... a referendum... as if the usa would agree to that, lol.... look how they processed the one in crimea...

@18 flankerbandit... last line is true, but it pales in relation to the ugliness these 2 exhibit 99% of the time, although the 1% when they don't it's refreshing! ukraine will continue to be used as a tool by the west..

forget about any referendum.. that makes too much sense and won't be allowed..

Kadath , Nov 14 2019 20:23 utc | 22
Nordstream 2 will come online in less than 2 months and the Ukrainian gas exports at that time will cease (I.e. no oil for the Oligarchs to steal), no matter what the US says they can't replace the Russian oil exports in terms of money & support to Ukraine, so the Oligarchs are now positioning themselves to abandon the US in order for the Russians to keep even a tiny bit of oil flowing into their pockets
J Swift , Nov 14 2019 20:31 utc | 23
It's a tough balancing act, being a Ukrainian oligarch. For two decades they stole what they could from the Ukraine (and from perverting the various sweetheart deals Russia was providing). Once the industry and energy money was stripped, and Russia started closing the spigots, they managed to get the West to pump in ungodly amounts of cash so long as they would agree to talk mean about Russia, and didn't mind the US machine taking its cut of the loot.

But now the Ukrainian thieves are beginning to realize that the Western thieves are going to steal the very ground from under their feet, so there will be no more Ukraine to steal from. That's not a very good business model. Plus they're no doubt seeing how the US treats its partners in crime in Syria and elsewhere, and realize they could easily find themselves the next meal for the US beast. Pretty easy to see why the smarter ones are getting nervous.

DannC , Nov 14 2019 20:37 utc | 24
they need to make peace with Russia or they will be left out in the cold, literally. They seemed to have previously bought into some insane lie that they'd be a part of the EU and NATO if theyd do Washington's bidding. The Deep state vastly underestimated Putin's resolve when it became clear to the Russians that Washington may try and turn Crimea into a NATO port one day. The game is over. Ukraine needs to find a way forward now for itself or it will be a failed state in the near future. It's clear Merkel and Europe want no part of this headache
flankerbandit , Nov 14 2019 20:42 utc | 25
I don't think Russians want to 'own' any part of Ukraine...at least that is the nearly unanimous opinion of my own contacts and colleagues in Russia...so I don't think any referenda will be on the table...

What I do think is possible is what Yanukovich and Russia agreed to in terms of a trade and economic deal...which was a lot more practical [not to mention generous] than the EU 'either or' nonsense...

Ukraine has run itself into the ground, literally...now they are selling vast tracts of agricultural land to huge Euro agribusiness concerns...literally dispossessing themselves of their own food security...

At the time of the Soviet dissolution, Ukraine had the highest living standards and some of the world's prime industry and technology...including for instance the Yuzhnoye design bureau [rocket engines and spacecraft] and many more such cutting edge aerospace concerns...

For years these crucial enterprises were able to keep going due to the Russian market...that all ended in 2014 [and in fact was tapering off even before due to the massive corruption]...

Now the Chinese are looking to scoop up these gems at firesale prices...

It is really quite unbelievable that the nutcases in the Ukraine would be willing to cut off their own arm just to bleed on Russia's shirt...

Why did the Ukraine never recover from the gangster capitalism like Russia did...because no Putin ever came along to reign in the oligarchy...[It could be argued Putin hasn't done nearly enough in this regard].

The Ukraine is actually a preview of what we can expect to see in our own future...as the unleashed oligarchy similarly runs everything into the ground in order to extract maximal wealth for a parasite elite...already we are nothing but a Ponzi Scheme on the verge of toppling...

Jackrabbit , Nov 14 2019 20:49 utc | 26
Disappointed in b's analysis.

Kolomoisky is talking his book and helping USA to make the case that Nordstream is a NATO security issue. To pretend that he's serious about a rapproachment with Russia just plays into that effort.

And b ignores my comment on the prior thread that he references (about Trump being Constitutionally charged with foreign policy). Repeating: the "Imperial Presidency" has flung off Constitutional checks and balances by circumventing the need to get Congressional approval for spending. Wars (like Syria) are now be funded by Gulf Monarchies, black ops, and black budgets.

While for practical reasons the Executive Branch of USA government has the power to negotiate treaties and manage foreign relations, Constitutionally he does so for the sovereign (the American people) and his efforts are subject to review and approval of the people's representatives via the power of the purse.

Ignoring how the "Imperial Presidency" has usurped power leads to faulty analysis that supports that power grab.

Ukrainegate IS a farce, but for other reasons. Chief among them being the inherent fakery of 'managed democracy' which manifests as kayfabe.

uncle tungsten , Nov 14 2019 20:50 utc | 27
Babyl-on #8
There is an Imperial State (the ruling faction)which consists of imperial apparatchiks placed in every key position in government.

There is one and only one Western Empire and its deep state spreads throughout Western governments and society. They are the owners of the world and they run the world they own.

Nicely put:- that is the reality. Thanks b for your intrepid reports.

Paul Craig Roberts has a deeply aggrieved rant at zero hedge if barflies want a chuckle. What a shitshow.

uncle tungsten , Nov 14 2019 20:58 utc | 28
flankerbandit #25

YES to all that and we are all getting the same split and plunder treatment.

Indonesia is the trial ground and has been where the methods were in place the longest as Andre Vitchek reports .

That is our future unless we intervene and throw the USA out of our countries.

jo6pac , Nov 14 2019 21:06 utc | 29
Long but a good read on the Ukraine by David Stockman.

https://original.antiwar.com/David_Stockman/2019/11/12/the-ukrainian-influence-peddling-rings-a-microcosm-of-how-imperial-washington-rolls/

flankerbandit , Nov 14 2019 21:16 utc | 30
Agree with Uncle on Indonesia...yes that Vltchek piece [and much of his previous work on Indonesia] is pretty sobering...this is our future folks...
Duncan Idaho , Nov 14 2019 21:21 utc | 31
Crimea?
It has been part of Russia about as long as the USA has been a country.
9 out of 10 residents are of Russian origin, and Russian is the spoken language.
I guess it could be returned to the 10%-- but out of fairness, we must turn the USA over to its original occupants.
If you live in the USA, get your ass ready to leave.
bevin , Nov 14 2019 21:47 utc | 32
One of the problems that the anti-nazis face in Ukraine is that there are occupying armies in the country. Armies which cannot be trusted to obey instructions which are not agreed upon by NATO warmongers.
One such army is Canadian, commanded I believe by a descendant of the Ukrainian SS refugees and reporting to the Foreign Minister in Ottawa, a Russophobe with a family background of nazi collaboration.
The actual political situation is much more delicate than media reports suggest: what are called elections feature, in the Washington approved fashion, the banning of socialist and communist candidates. Bans which are enforced by a combination of fascist commanded police forces and, even less responsible, private nazi militias. Opponents of the Maidan regime are driven into exile, jailed or murdered.
Those who wonder as Jackrabbit, in a rare essay into rationality, does above, about the nature of the US Constitution after decades of the erosion of checks and balances thanks to the Imperial Presidency, will recognise that a dialectic is at work here. Washington's support for fascism abroad has instituted fascism at home which has led in turn to the installation of fascist regimes abroad, not just occasionally but routinely. Wherever the US intervenes it leaves a fascist regime, in which socialists are banned and persecuted, behind it.
And what this means is that, among other things, the ability of the population to effect political change is cancelled: there is no way that the people of Ukraine can decide what they want because the decisions have been taken for them, in weird cult like gatherings of SS worshiping Bandera supporters in Toronto and Chicago. It is no accident that most of the 'Ukrainians' being wheeled out by the Democrats to testify against Trump are actually greedy expatriates who have never really lived in Ukraine.
There was a moment, not long ago, when it looked as if the Minsk accords promised a path to peace and reconciliation. Unfortunately the plain people of Ukraine, the poorest in Europe though living in one of the richest countries, Washington, Ottawa and NATO didn't like the sound of Minsk. Nor did the fascists in the Baltic states and Poland, for whom, for centuries, Ukraine has been a cow to milk, its people slaves to be exploited and its rich resources too tempting to ignore.
michael , Nov 14 2019 21:56 utc | 33
As Thomas Jefferson explained the President's role in foreign affairs in 1790, and the lack of advisors' policy making decisions: ''as the President was the only channel of communication between the United States and foreign nations, it was from him alone 'that foreign nations or their agents are to learn what is or has been the will of the nation'; that whatever he communicated as such, they had a right and were bound to consider 'as the expression of the nation'; and that no foreign agent could be 'allowed to question it,' or 'to interpose between him and any other branch of government, under the pretext of either's transgressing their functions.' Mr. Jefferson therefore declined to enter into any discussion of the question as to whether it belonged to the President under the Constitution to admit or exclude foreign agents. 'I inform you of the fact,' he said, 'by authority from the President.'
Sadness , Nov 14 2019 22:04 utc | 34
Might also be worth yesterdays hero's asking if dear Mr Kolomoisky, joint Uki/Israeli national, took a part in authorising the shoot down of MH17 as a news cover for Operation Protective Edge. Heave ho zionist USA ....et al.
steven t johnson , Nov 14 2019 22:11 utc | 35
1.The decisions to with hold and release aid have nothing to do with the President making foreign policy but with his campaign. Saying it was about foreign policy is a damned lie.
2.Trump as president is supposed to lead foreign policy, which means actually setting a policy. Military aid to Ukraine, yes, except no, except yes, personal handling without asking anybody with experience how to achieve the national goal desired, national agenda kept secret from the people who have to carry it out, abuse of officials, demands for dubiously legal actions without rationale...Saying it was about the president's executive role is a damned lie.
3.Trump has not made even a tweet that questions US support for fascists. That not even a issue for Trump. Saying this is about support for fascism is a damned lie.
4.Kolomoyskiy is a bankroller of fascists. It is not impossible even a billionaire might get frightened by the genie he's let out of the bottle, even if he's Jewish and rich enough to run away. But actually undoing the fascist regime means taming the paramilitaries and this is not even on the horizon. Given the rivalry between Poroshenko and Kolomoyskiy it's not even certain it's a real change of heart or just soothing words for the non-fascist people. Nor is it even clear the Zelensky will follow even the Steinmeier formula. If he does, good, but until something actually happens? Saying it's about the antifascist turn is a damned lie.

The only thing that isn't a lie is that Trump was not committing treasons, "merely" a campaign violation. But then, Clinton never did either. The crybabies who dished it out but can't take it deserve zero respect, and zero time.

Don Bacon , Nov 14 2019 22:16 utc | 36
@ michael 34
There's a major difference between being a national spokesman and being a national decision-maker.
Don Bacon , Nov 14 2019 22:17 utc | 37
@ stj 36
Trump as president is supposed to lead foreign policy, which means actually setting a policy.
There's no basis for that in the Constitution.
Jen , Nov 14 2019 22:32 utc | 38
Curious to know how Kolomoisky is working "feverishly" to end the war in the Donbass region. Wonder if he is planning to come clean on what he knows of the Malaysia Airlines MH17 shootdown and crash in an area not far from Slavyansk and near where his Privat Group's subsidiary company Burisma Holdings holds a licence to drill for oil and natural gas. What does he know about Kiev and Dnepropetrovsk air traffic control personnel's direction to MH17 to fly at 10,000 metres in the warzone and not an extra 1,000 metres above as the flight crew had requested? He had been governor of Dnepropetrovsk region at the time.
ben , Nov 14 2019 22:47 utc | 39
A quote from b's article;"It is clearly in our national interest to deter further Russian aggression".

Spoken by two sycophants for the empire.

It would be in our "national interest" if we could stop our aggression's around the globe.

DJT, IMO, only favors peace with Russia, or any one else,if, it furthers HIS personal, and his families enrichment.

He has a record of shafting people, I just wish people would inform themselves about it, and see what he's done with his life, not what says about it.

Paul Damascene , Nov 14 2019 22:56 utc | 40
Somewhere I read it alleged that the actual owner of Burisma was or is Kolomoiski.

Anything to this?

And via John Helmer (via Checkpointasia and dances with bears) comes the perspective that it's not so much Kolomoiski floating trial balloons (though that may also be true) but that K is being given space in the NYT to build his credentials as the new Borg villain, thereby making it still harder for Zelensky to reconcile with Russia.

ben , Nov 14 2019 22:56 utc | 41
fb @ 25 said;"The Ukraine is actually a preview of what we can expect to see in our own future...as the unleashed oligarchy similarly runs everything into the ground in order to extract maximal wealth for a parasite elite...already we are nothing but a Ponzi Scheme on the verge of toppling..."

Yup, aided and abetted by our current regime, while pretending not to...

Really?? , Nov 14 2019 23:23 utc | 42
@23
"It's a tough balancing act, being a Ukrainian oligarch. For two decades they stole what they could from the Ukraine (and from perverting the various sweetheart deals Russia was providing). Once the industry and energy money was stripped, and Russia started closing the spigots, they managed to get the West to pump in ungodly amounts of cash so long as they would agree to talk mean about Russia, and didn't mind the US machine taking its cut of the loot."

This is it in a nutshell. The Russians were fed up with Ukraine stealing gas. Hence, Nord Stream 2. That was always the plan. Whether the Yanks truly grasped the rationale here ---Russia is cutting off gas to Ukraine, simple---has never been clear to me. Although it is a fairly simple plot. The Russians had decades of shenanigans with the Ukes and said Basta. By not overreacting to the Ukrainian-USA freakout and keeping their eyes on the prize (Nord Stream and disengaging, gas-wise, from Uk), they have managed to reach their goal of getting Nord Stream 2 online.

oldhippie , Nov 14 2019 23:25 utc | 43
Kolomoiski is the bankroller and commander of the Azov Battalion. Has close arrangements with other paramilitaries. And is the current principal of Burisma. And is Privatbank, the only bank left in Ukraine. He gets a cut of all the action.

When Trump queries Zelensky, all that Zelensky is thinking is this guy does not know the score. This guy does not know who's on first. He wants me to investigate the boss? Let him talk to the boss. And who does Z talk to in D.C.? Pointless getting into detail with Trump.

Trump has no team. No one in D.C. is on his side. He's unable to finish anything.

OutOfThinAir , Nov 14 2019 23:45 utc | 44
1) Say the fantasy happens and the US/Russia become BFFs like US/UK...

- Say hello to the new boss, same as the old boss?

- Tough to answer, many unknowns- Russia may act different once its on top, actors may derail schemes, Deep State temper tantrum, etc...

In general, governments are the order-providing solution for chaos and problems that only first existed inside the minds of those seeking power over others.

Zedd , Nov 14 2019 23:50 utc | 45
Kolomoiski is a U.S. asset. His interview with the NYTimes proves it.

His threats are meant to mobilize NATO and Russia haters in general; because Trump and most of his cadre care nothing for Ukraine.

Does anyone think Russia will give Kolomoiski 100 million dollars? Why was he given an opportunity to threaten the USA? For no reason? Something else is afoot but Russia still won't take the bait because they are winning.

Russia is quite happy with the status quo. The war in Ukraine keeps the war against Russia on a level which is easy to manipulate and therefore geostrategically beneficial. Kolomoiski will get nothing.

Steve , Nov 15 2019 0:03 utc | 46
Thank you, b, for that snippet from NY Interview with Kolomoisky . I had glanced the headline on RT but didn't read it because of RT's usual clumsy writing.
evilempire , Nov 15 2019 0:51 utc | 47
Kolomoiski is taunting the empire: investigate my crimes and
ukraine will seek reconciliation and alliance with russia.
Russia won't fall for it. They want kolomoiski's scalp even
more than the empire. From the statements putin has made, maybe
the only concession russia would accept is the dissolution of
ukraine as a sovereign entity and reintegration with russia, minus galicia.
Putin has remarked that they are not one people but one state. Ukraine
already knows that its domestic industry is only viable in competition
with the eu industrial powerhouses if it is integrated with russia.
flankerbandit , Nov 15 2019 0:59 utc | 48
Jen said...
What does [Kolomoysky] know about Kiev and Dnepropetrovsk air traffic control personnel's direction to MH17 to fly at 10,000 metres in the warzone and not an extra 1,000 metres above as the flight crew had requested?

Okay..so an interesting can of worms here...

First is the fact that Kolomoysky was the governor of Dnipropetrovsk Oblast at the time...

Now as to the flight and Dnipro Radar [the regional air traffic control facility that controls a very big chunk of airspace over eastern Ukraine]...

First the issue of the airplane cruising altitude...the crew had filed their flight plan to climb from flight level 330 [33,000 ft] to FL350 after passing a certain waypoint in eastern Ukraine...

Now the controllers did instruct the crew to go ahead and climb to their planned altitude, but the crew declined the clearance and opted to stay at FL330...this was done very likely because the atmospheric conditions at that height were better for fuel economy...

[To be even more specific...the Boeing manual gave an optimum flight altitude of 33,800 ft, but flying eastward you only have odd numbered flight levels to choose from, so the crew figured they would be better off staying at 33 than climbing to 35...]

BUT...there are a couple of very curious things here...

First is the fact that Dnipro controllers deviated the airplane from its flight plan just before it went down...ostensibly due to other traffic...

We can see this in the following map, which is what's called a high altitude en route chart, which is used by pilots to plan and execute their flight...

Here we see the route of MH17 superimposed on the chart...

You will note a couple of things here...the airplane is flying on the L980 airway [basically a highway in the sky] when it is turned south by controllers to the RND waypoint, which is in Russian territory...

This is NOT the route filed by the crew...which can be seen here...

They were supposed to continue flying on L980 right to the TAMAK waypoint, which is visible on the previous chart and is right on the border with Russia...

They would have continued on the A87 airway to their next waypoint in Russia which is TIKNA...

Now here is the thing...right after they were turned south, they got shot down...

According to the radio transcripts, the crew acknowledged the course change, but did not object...however, usually these kinds of course changes aren't appreciated on the flight deck because the crew is trying to minimize wasted time and wasted fuel on course deviations...

Most times you will just not bother to complain to controllers...but for sure there will always be chatter between the captain and copilot about being yanked around like that...

No mention is made in the Dutch Safety Board report about such chatter from the cockpit voice recorder, which I find very odd...

Also odd is the fact that Dnipro ATC primary radar was down, and only the so-called 'secondary' was working which uses the transponder signals from the airplane...

This is very busy airspace because a lot of flights from western Europe to South Asia traverse this territory...the plan is always to fly what's called a 'great circle route' which is basically a straight line, if you flattened out the globe...

Plus considering that you have a war going on underneath...it's very unusual to have your PRIMARY radar inoperable...

This is significant also because military aircraft will not be using transponders and so will not be visible to the secondary surveillance...

The Russian primary radar did pick up two other aircraft very nearby MH17...but the Dutch have made some kind of excuse about that data not being in 'raw' form and thus not usable...

So we see some very suspicious anomalies here...

The Ukrainian authorities did have a NOTAM [notice to airmen] in effect up to FL320 [32,000 ft] so commercial traffic could not fly under that height...but clearly they should have closed the airspace over the hot conflict area...

They didn't do that...and Kolomoysky was in charge...


Kiza , Nov 15 2019 1:12 utc | 49
The Deep State's view on the members' God given right to make foreign policy decisions (it must be the God who has give it to them, because the people certainly have not) just reminds the of the general attitude of the Government's bureaucracy. Give any fartbag a position in the government and he/she becomes "a prince/princes over the people", give him or her a monopoly over violence and you got yourself a king/queen. All these police and military kings & queens milling around and lording over us. "Deep State" is such a totally natural consequence of the government bureaucracy corrupted by power that it appropriated. Pillaging taxes from the sheeple (and taking young maidens like Sheriff of Nottingham/Epstein) could have never ever been enough. Did you seriously think that the Deep Staters would constrain themselves to only stealing your money, taking your children for their pleasure and to die in their wars of conquest, and putting you into a totally unsafe airplanes to die for their profit? Constrain themselves when there is a whole globe out there to be lorded over, like Bidens over Ukraine? It is the poor people of Ukraine who just have too much money, thus had to give it through the gas monopoly to the Biden gang, which selflessly brought them "democracy" at $5B in US taxpayers' expense. Therefore, it is the Deep State which has been chosen by God, or someone just like that, to make the decisions about the imperialist/globalist foreign policy and have billions of dollars thrown by the grateful natives into their own pockets, as consulting fees:
https://www.zerohedge.com/political/leaked-bank-records-confirm-burisma-biden-payments-morgan-stanley-account

So far the only clear-cut globalization is that one of crime, which has become global.

dh , Nov 15 2019 1:42 utc | 50
What is the US National Interest b asks? Who defines it as such?

Ome magazine that might know is none other than The National Interest. Hopefully I won't get attacked for quoting from what seems like a fairly sane article to me....

"The US should consider whom they are giving weapons to. Ukraine is a debt-ridden state and only five years beyond an extralegal revolution. Should the government collapse again, then American weapons could end up in the possession of any number of dubious paramilitary groups.

It wouldn't be the first time. In the 2000s, CIA operatives were forced to repurchase Stinger missiles that had fallen into the hands of Afghani warlords -- at a markup. Originally offered to the Mujahideen in the 1980s, the Stingers came to threaten American forces in the region. Similarly, many weapons provided with US authorization to Libyan rebels in 2011 ended up in the possession of jihadists."

https://www.yahoo.com/news/dressed-kill-arming-ukraine-could-173200746.html

karlof1 , Nov 15 2019 1:47 utc | 51
It's difficult to find clean information on happenings within Ukraine and those involving Russia. The Ministry of Foreign affairs has this page dedicated to the "Situation Around Ukraine." Of the three most recent listings, this one --"Comment by Russian Foreign Ministry Spokesperson Maria Zakharova on the NATO Council's visit to Ukraine"--from 1 November is quite important as it deals with the reality on the ground versus the circus happening thousands of miles away, although it's clear the delusions in Washington and Brussels are the same and "continue to be guided by the Cold War logic of exaggerating the nonexistent 'threat from the East' rather than the interests of pan-European security."

In the second most recent listing --"Remarks by Deputy Permanent Representative of the Russian Federation to the OSCE Vladimir Zheglov at the OSCE Permanent Council meeting on the situation in Ukraine and the need to implement the Minsk Agreements, Vienna, October 31, 2019"--the following was noted:

"There's more to it. The odious site Myrotvorets continues to function using servers located in the United States. The UN has repeatedly stated that this violates the presumption of innocence and the right to privacy. Recently, Deputy Head of the UN Human Rights Monitoring Mission in Ukraine, Benjamin Moreau, reiterated the recommendation to shut down this website. A similar demand was made by other representatives of the international community, including the German government. The problem was brought to the attention of the European Court of Human Rights. The other day, the representative of Ukraine at the ECHR was made aware of the groundlessness of the Ukrainian government's excuses saying that it allegedly 'has no influence' on the above website.

"In closing, recent opinion polls in Ukraine indicate that its residents are expecting the government to do more to bring peace to Donbas. The path to a settlement is well known, that is, the full implementation of the Minsk Package of Measures of February 12, 2015, that was approved by the UN Security Council."

Clearly, Zelensky's government is much like Poroschenko's when it comes to listening to those who empowered it, the above citation is one of several from the overall report.

The latest report deals with an ongoing case at the International Court of Justice at The Hague that reveals some of the anti-Russian bias there. It has no bearing on this discussion, although it does provide evidence of the contextual background against which the entire affair, including the circus in Washington, operates.

MoA consensus is Minsk backed NATO and its Ukrainian minions into a corner from which there's only one way out, which is the implementation of the Accords they continue to oppose to implement despite their promise to do so. Clearly an excellent example of not being agreement capable that hasn't changed since 2015.

If the Republicans had any brains, they'd turn the Ukrainian aspect of the hearings into an indictment against Obama/Biden for illegally overthrowing Kiev and trying to obtain their piece-of-the-action, but then that would be the logical thing to do and thus isn't an option. The prospect of each day providing similar spectacle is mind numbing as it airs the sordid, unwashed underwear if the Evil Outlaw US Empire.

Kiza , Nov 15 2019 2:01 utc | 52
I normally do not reply to trolls, but I make an exception for you. Pedo-dollar? Do you have any more such crap to dilute the valid points discussed here?
james , Nov 15 2019 2:36 utc | 53
@41 paul damascene... regarding the helmer article - thanks for pointing it out.. IGOR KOLOMOISKY MAKES A MISTAKE, AND THE NEW YORK TIMES DOES WHAT IT ALWAYS DOES

i liked what @ 32 tod said - "he's just doing the old Jewish threatening/begging dance!
"And you are forcing us to be at war, and not even giving us the money for it." Wink! Wink!"

stating the obvious is one remedy for any possible confusion here..

@54 karlof1... i don't believe trump is allowed to shine any light on the usas illegal actions as that would be sacrilege to all the americans who see their country in such a great, exceptional-ist light... how would trumps MAGA concept swallow that? it wouldn't, so it won't happen...

UnionHorse , Nov 15 2019 2:40 utc | 54
I just watched Seven Days in May for the first time in a long while. It is worth the time. It resonates loudly today.
Kiza , Nov 15 2019 2:50 utc | 55
@flankerbandit 18

You are a bit off on that story. NS2 pipeline will increase the capacity not transitioning via Ukraine and reduce the price banditry by the Ukrainian & US gangs, but it will not make gas transit via Ukraine unnecessary. The planned switch off of the German nuclear and coal power plants will gradually increase the German demand for gas, that is the Russian gas by so much that NS1 and NS2 will not be enough. Primarily, NS2 is a signal to the Ukrainian & US Democrat gangs that if they try excessive transit fees and stealing of gas again, that they will be circumvented within a few years by NS 3,4,5 ...

BTW, the globalized pillaging of the population is clearly not an invention of the DNC crime gang only. For example, the 737Max is a product of primarily Republican activity on deregulating what should have never been deregulated and subjugation to the Wall Street (aka financialization). The pillaging of the World is strictly bipartisan, just differently packaged:
1) R - packaging the deregulation to steal & kill as "freedom" or
2) D - packaging the regime change as responsibility to protect R2P (such regime change and stuffing of own pockets later).

Grieved , Nov 15 2019 3:01 utc | 56
karlof1 @54 - "Minsk backed NATO and its Ukrainian minions into a corner from which there's only one way out, which is the implementation of the Accords"

Yes. As you well know, and as we have well discussed, Minsk was in its very essence the surrender terms dictated to the US by NAF and Russia in return for letting the NATO contractors go free and secretly out of the Debaltsevo cauldron. Either actually or poetically, this was the basis. The US lost against NAF. The only way to prevent Donbass incursion into the rest of Ukraine was to freeze the situation. The US had no choice, and surrendered.

Out of the heat and fog of warfare came a simple document made of words which, even so, illustrated perfectly just how elegantly the Kremlin had the entire situation both war-gamed and peace-gamed. Minsk from that day until forever has locked the Ukraine play into a lost war of attrition for the US sponsors, with zero gain - except for thieves.

To attempt to parse Ukraine in terms of statecraft is to miss the point that Ukraine can only be parsed in terms of thievery. This is not cynicism, simply truth.

Now they sell their land because this is all there is left to sell. Kolomoisky proposes selling the entire country to Russia for $100 billion but not only will Russia not bite, the country isn't worth even a fraction of that - because of Minsk, it can cause zero harm to Russia. But this ploy raises the perceived value (Kolomoisky hopes) in the eyes of the west, and starts the bidding.

In Russia the people see all this very clearly, including on their TV. Yakov Kedmi in this Vesti News clip of Vladimir Soloviev's hugely popular talk show, discusses the situation. He baits Soloviev by saying that the Ukrainian thieves are only doing what the Russian thieves did in the 1990's - and one must filter through this badinage to take out the nuggets he supplies. Here are three:

1. Zelensky has no security apparatus that follows his command, therefore how can he be considered the leader of the country?
2. There is no power in Ukraine, only forces that contend over the scraps of plunder.
3. These forces are creating the only law there is, which is the sacred nature of private property for the rich - the only thing the US holds sacred.

Therefore sell the very soil.

~~

The Minsk agreement is a sheer wall of ice reaching to the sky. No force imaginable can scale it or break it. Against that ultimate, immovable wall the US pounds futilely, with Ukraine caught in the middle, while Russia waits for Ukraine to devolve into whatever it can.

And the Russian people and government regard the people of the Ukraine as brothers and sisters. But until the west has worn itself down, and either gone away or changed the equation through a weakening of its own position in some significant way, nothing can be done by Russia except to wait.

Kiza , Nov 15 2019 3:09 utc | 57
What Tod @32 described is spot-on, "the old Jewish threatening/begging dance". It is not that the Russians do not know this about Kolomoyskyi. They will play along not expecting anything from the Zelo-on-a-String and his master. The Russians like to let those scumbags (Erdo comes to mind) huff & puff and embarrass themselves by flips. They know - it could always be worse if those did something intelligent. Kolomoyskyi is vile but he ain't no genius, not any more than Erdo.
flankerbandit , Nov 15 2019 3:42 utc | 58
You are a bit off on that story.

Sure Cheeza...everybody's a 'bit off' except you...

Gazprom is talking about 10 bcm a year through Ukraine for the new 10 year deal, as opposed to the 60 bcm [billion cubic meters] that Ukraine is hoping for...

The Vesti report right here...

james , Nov 15 2019 3:47 utc | 59
@62 grieved.. nice to see you back.. thanks of the link with yako kedmi talking.. that was fascinating.. i think the guy is bang on..
snake , Nov 15 2019 3:58 utc | 60

"Deep state" is misleading and actually a false construction.

There is an Imperial State (the ruling faction/)which consists of imperial apparatchiks placed in every key position in government. Babyl-on @ 8

? before I begin , how do you measure the political and economic power of money as opposed to the political and economic power of the intentions and needs of the masses. Does $1 control a 100 people? A million dollars control 100,000,000 people? How do we measure the comparative values between money power and people power? I think the divisions of economics and the binaries of politics established by the nation state system means that the measurement function (political and economic values) varies as a function of the total wealth vs the total population in each nation state. If true, become obvious how it is that: foreign investments displaces the existing homeostatis in any particular nation state, the smaller the poorer the nation state, the more impact foreign wealth can have; in other words outside wealth can completely destroy the homeostatis of an existing nation state. I think it is this fact which makes globalization so attractive to the ruling interest (RI) and so damning to the poorest of the poor.

Change by amendment is impossible There is one and only one Western Empire but there is also an Eastern Empire, a southern empire, and a Northern Empire and I believe the ruling interest (faction) manipulate all nations through these empires. In fact, they can do this in any nation they wish. The world has been divided into containers of humans and propaganda and culture have highly polarized the humans in one container against the humans in other containers. <=divide, polarize, then exploit: its like pry the window, and gain access to the residence, then exploit. It is obvious that the strength of the resistance to ruling class exploitation is a function of common cause among the masses. But money allows to control both the division of power and the polarization of the masses. The persons who have the powers described in Article II of the US Constitution since Lincoln was murdered can be controlled (Epstein, MSM directed propaganda, impeachment, assassination, to accomplish the objects of the ruling interest (faction). Article II of the USA constitution removes foreign activity of the USA from domestic view of the governed at home Americans. Article II makes it possible for the POTUS to use American assets and resources to assist his/her feudal lords in exploiting foreign nations almost at will and there is no way governed Americans can control who the ruling interest place in the Article II position.

A little History Immigration to NYC from Eastern (the poor) and Western (the rich) Europe transitioned NYC and other cities from Irish majority to a Jewish majority; and the wealthy interest used the Jewish majorities in key cities to take control over both Article I and Article II constitutional powers by electing field effect controlled politicians (political puppets are elected that can be reprogrammed while they are in office to suit the ruling interest. The source code is called rule of law, and money buys the programmers who write the code. So the ruling interest can reprogram in field effect fashion, any POTUS they wish. Out of sight use of the resources of America in foreign lands is nothing new, it was established when the constitution was written in Philadelphia in 1787 and ratified in 1788.

Propaganda targeted to the Jewish Immigrants allowed the wealthy interest to control the outcome of the 1912 election. That election allowed to destroy Article I, Section 9, paragraph 4 " No Capitation, or other direct, Tax shall be laid unless in Proportion to the Census of enumeration herein before directed to be taken". and to enact a law which privatized the USA monopoly on money into the hands of private bankers (the federal reserve act of 1913)

What was the grand design Highly competitive, independent too strong economic Germany was interfering with Western hegemony and the oil was in the lands controlled by the Ottomans. It took two wars, but Germany was destroyed, and the Ottoman empire (basically the entire Middle East) became the war gained property of the British (Palestine), the French (Syria) and the USA (Israel). Since then, the ruling interest have used their (field effect devices to align governments so the wealthy could pillage victim societies the world over. Field effect programming allows wealth interest to use the leaders of governments to use such governments to enable pillage in foreign places. The global rich and powerful, and their corporations are the ruling interest.

psychohistorian says it well "..the global private finance core segment of empire is behind Trump and throwing America(ns) under the bus as the world turns more multilateral. The cult of global private finance intends on still having some overarching super-national role in the new multilateral world and holding debt guns to everyone's heads to make it ongoing..." by psychochistorian @ 10


NOBITs @ 11 says it also "All presidents have been servants of the military, which includes the police/intel/security apparatus; the few who did not entirely accept their figurehead role were "dealt with." Kennedy, Nixon, Carter and now Trump. The Washington permanent state bureaucrats are shocked and understandably offended; they have after all, been running US foreign policy for 75 years!" by: NOBTS @ 11

According to TG @ 13 "Democracy" is about privatizing power and socializing responsibility. The elites get to set the policy, but the public at large gets to take responsibility when things go wrong. Because you see, we are a "Democracy."by: TG @ 13 <= absolutely not.. the constitution isolates governed Americans from the USA, because the USA is a republic and republics are about privatizing power and socializing responsibility; worse, there ain't nothing you can do about it.


Vonu @ 19 says "According to Kevin Shipp, the National Security Council really runs the executive branch, not the president. https://www.youtube.com/watch?time_continue=11&v=XHbrOg092GA" by: Vonu @ 19 <=but it is by the authority of Ariicle II that the NSC has the power to run the executive branch?

KAdath @ 22 says "the Oligarchs are now positioning themselves to abandon the US in order for the Russians to keep even a tiny bit of oil flowing into their pockets by: Kadath @ 22" <=exactly.. but really its not abandoning the USA, its abandoning the oligarchs local to the pillaged nation..

J Swift @ 23 says "the US treats its partners in crime in Syria and elsewhere," [poorly] but its not the USA per say, because only one person has the power to deal in foreign places. Its that the POTUS, or those who control the Article II powers vested in the POTUS, have or has been reprogrammed.. J. Switft @23>>

flankerbandit @ 25 says " Ukraine has run itself into the ground, literally...now they are selling vast tracts of agricultural land to huge Euro agribusiness concerns...literally dispossessing themselves of their own food security..." flankerbandit @ 25 <=Not really the wealthy (investor interest) have pushed the pillage at will button.. since there is no resistance remaining, the wealthy will take it all for a song..


Jackrabbit @ 26 says "Trump [is].. Constitutionally charged with foreign policy. Repeating: the "Imperial Presidency" has flung off Constitutional checks and balances by circumventing the need to get Congressional approval for spending. Wars (like Syria) are now be funded by Gulf Monarchies, black ops, and black budgets.by Jackrabbit @ 26 <== Trumps orders military to take 4 million day from Syria in oil?
your observation that the money has circumvented Article I of the COUS explains why the democraps are so upset.. the wealthy democrap interest has been left to rot? Your comment suggest s mafia is in charge?

Tod @ 32 says "As soon as some money goes his way, he'll discover democracy again.
Sorry to burst you bubbles." by: Tod @ 32" <==understatement of the day.. thanks.

Bevin @ 32 says "a dialectic is at work here. Washington's support for fascism abroad has instituted fascism at home which has led in turn to the installation of fascist regimes abroad, not just occasionally but routinely. Wherever the US intervenes it leaves a fascist regime, in which socialists are banned and persecuted, behind it. this means.. the ability of the population to effect political change is cancelled" by bevin @ 33 <= yes but there is really no difference in a republic and its rule of law, and a fascist government and its military police both rule without any influential input from the governed.

michael @ 34 reaffirms "The President was the only channel of communication between the United States and foreign nations, it was from him alone 'that foreign nations or their agents are to learn what is or has been the will of the nation'" michael @ 34 well known to barflies, the design of national constitutions is at the heart of the global problem. Until constitutional powers are placed in control of the governed there will never be a change in how the constitutional powers ( in case of the USA Article II powers) are used and abused.

OutofThinAir @45 says "In general, governments are the order-providing solution for chaos and problems that only first existed inside the minds of those seeking power over others.by: OutOfThinAir @ 45" <+governments are the tools of wealth interest and the governors their hired hands.

by: War is Peace @48 " Trump is a moron, groomed by Jewish parents ( Mother was Jewish, Father buried at biggest Jewish cementary in NYC ) to be a non-Jew worked for the mob under Cohen ( lawyer for 1950's McCarthy ); Became the 'Goyim Fool" real estate developer as a cover for laundering mob money. So that it didn't appear that it was Jewish Mafia Money, so they could work with the Italian Mafia. Trump went on for his greatest role ever to be the "fool in Chief" of the USA for AIPAC. What better way to murder people, than send out a fool, it causes people to drop their guard. by War is Peace @48 <= yes this is my take, What does it mean. com suggest the global wealth interest may be planning to reprogram Trump to better protect the interest of the global wealthy.
Kiza @ 51 the reason for globalization is explained see above=> response to Babyl-on @ 8

dh @ 53 says ""The US should consider whom they are giving weapons to." by dh @53 < the USA cannot consider anything, if its foreign the POTUS (Article II) makes all decisions because Art II gives the POTUS a monopoly on talking to, and dealing with, foreign governments.

Deagel @ 56 says "The American people don't care, they're all drugged out, and shitting on the side-walks all over the USA, and sleeping in their own shit. This is the best time in USA history for the Zionists to do anything they wish." by: Deagel @ 56 <= I think you under estimate the value Americans place on democracy and human rights, until recently governed Americans believed the third party privately produced MSM delivered propaganda that nearly all overseas operations by the USA were to separate the people in those places from their despotic leaders, and to help those displaced people install Democracy.. many Americans have come to understand such is far from the case.. the situation in the Ukraine has been an eye opener for many Americans. thoughts are sizzling, talk is happening, and people are trying to shut google out of their lives. that is why i think Trump is about to be reprogrammed from elected leader to .. God in charge

wealth interest example

flankerbandit , Nov 15 2019 4:01 utc | 61
Grieved...thanks for that magnificent analysis...

I watched that Soloviev segment with Kedmi the other day...always interesting to say the least...

Btw...I'm not really up to speed on that whole Debaltsevo cauldron thing...I've heard snippets here and there...[there is a guy, Auslander, who comments on the Saker blog that seems to have excellent first hand info, but I've only caught snippets here and there]...

I hadn't heard this part of the story before about Nato contractors as bargaining chips...if you care to shed a bit more light I will be grateful...

karlof1 , Nov 15 2019 4:55 utc | 62
flankeerbandit @67--

I suggest going to The Saker Blog and enter Debaltsevo Cauldron into the site's search box and click Submit where you'll be greeted with numerous results.

Grieved @62--

Thanks for your reply and excellent recap. As I recall, Putin wants Donbass to remain in Ukraine and Ukraine to remain a whole state, although I haven't read his thoughts on the matter for quite some months as everything has revolved around implementing Minsk. The items at the Foreign Ministry I linked to are also concerned with Minsk.

The circus act in DC is trying to avoid any mention of Minsk, the coup or anything material to the gross imperial meddling done there to enrich the criminal elite, which includes Biden, Clinton, other DNC members--a whole suite of actors that omits Trump in this case, although they're trying to pin something on him. The issue being studiously ignored is Obama/Biden needed to be busted for their actions at the time, but in time-honored fashion weren't. And the huge rotted sewer of corruption related to that action and ALL that came before is the real problem at issue.

Kiza , Nov 15 2019 5:12 utc | 63
@flankerbandit 64

Typical reaction of a zelf-zentered person as evidenced by The New Yorker 737Max article in the previous thread. This good article could only be measured by how much it agrees with your own opinion that MCAS was put in to mimic the pilots' usual fly-stick feel. If anyone does his home work, such as the journalist of this article, then he must agree with you, right? With experts such as you out there, why would anyone dare apply common sense and say that it would be an unimaginably stupid idea to put in ANY AUTOMATED SYSTEM which pushes the plane's nose down during ascent (the most risky phase of a civilian flight, when almost desperately trying to get up and up and up) for any DUMBLY POSSIBLE REASON !? What could ever go wrong with such an absolutely dumbly initiated system relying on one sensor? Maybe it was a similar idea to putting a cigarette lighter right next to the car's gas tank because it lights up cigarettes better when there are gasoline vapors around. Or maybe an idea of testing the self-driving lithium battery (exploding & flammable) cars near kindergartens (of some other people's children)!?

An intelligent person would have said - whatever the reason was to put in MCAS it was a terribly dumb idea, instead of congratulating himself on understanding the "true reason".

dickr , Nov 15 2019 6:49 utc | 64
flankerbandit @18 good analysis thx.
Ike , Nov 15 2019 6:55 utc | 65
"If I were president, while I would resist gratuitous provocations, I would not publicly associate myself with the delusion that stable friendship is possible (or, frankly, desirable) with Putin's anti-American dictatorship, which runs its country like a Mafia family and is acting on its revanchist ambitions."

Really?

From what have gleaned from the alternative media available on the internet ,of which MOA is an important part. Putin and Lavrov are the two most moral and diplomatic statesmen on the world stage today Compared to Trump, Johnson, Macron, Merkel, Stoltenberg, Pompeo, Bolton and whoever else blights the international scene these days these two are colossi.

To describe them as like a Mafia family seems to me to be 180 degrees wrong. Maybe Putin overreacted, in his early days in power, to the Chechen conflict but look at the situation today.

Look at how Gorbachev and Yeltsin were played by the west. I appreciate you did not write the words quoted above but you said you agree with them and I find that startling given I am usually very admiring of your insight and knowledge of geopolitical events.

Fly , Nov 15 2019 7:14 utc | 66
According to the Impeachniks, it is Schiff's staff who decides how Schiff votes and his policies. It would be illegal for Schiff to make decisions. But Schiff's recommendation will make or break the careers of his staff, so elected Schiff has some influence. That's not true for elected Trump, because those in his service already have made careers and/or a host of outsiders looking to place them.
dickr , Nov 15 2019 7:32 utc | 67
@50 flankerbandit - wow!
QuietRebel , Nov 15 2019 8:47 utc | 68
Although, he didn't get impeached for it Obama did get criticized for not sending the aid to Ukraine. He was also criticized when he did intervene, but not fast enough for the deep state. Remember "leading from behind" in response to Libya. Obama was much more popular and circumspect than Trump, which protected him from possible impeachment when he went off the deep state's script.
Walter , Nov 15 2019 9:12 utc | 69

Discussion of the USC and the responsibilities assigned therein is probably a foolish and merely moot exercise, as law is, ultimately simply custom over time, and since '45 or so the custom has become dissociated from the documents' provisions, particularly with regard to war-making and the "licensed" import and sale of dangerous drugs, dope. The custom in place is essentially ukase - rule by decree. Many decree are secret.

I do not object, simply pointing to the obvious.

This is a public secret anybody can know. Inter alia see The Politics of Heroin in Southeast Asia (McCoy)

...........

Custom includes also permitted theft, blackmail, trafficking children and so forth.

...........

zerohedge put up some documents tying TGM Hunter B to the money from Ukraine...


................

I would not worry about the name of the person called president. The real sitrep is more like watching rape and murder from the dirty windows of a runaway train.

ralphieboy , Nov 15 2019 11:24 utc | 71
Upon the dissolution of the USSR, Ukraine was left with the fifth-largest nuclear arsenal in the world. In exchange for financial assistance in the costs of removing all the nukes, the West guaranteed to defend Ukraine's territorial integrity.

In the meantime, Russia has annexed the Crimea and rebels have taken control of parts of Eastern Ukraine. The West has not provided any direct military assistance to restore those territorial infringements.

Since the West has reneged on its end of the deal, would it not only be fair to return Ukraine's nukes so it can defend itself like the Big Boys do, namely with threat of nuclear annihilation?

Christian J Chuba , Nov 15 2019 12:36 utc | 72
Ukrainians are dying

I hate this trope. The Russian Fed. is not launching offensive operations to capture Kharkov or Kiev. Western Ukraine is shelling ethnic Russians in eastern Ukraine. What would U.S. Congressman say if these were Jews? (I would condemn that as well).

The next time someone pontificates, 'Ukrainians are dying because Trump held up aid' ask them how many. The number is ZERO. Javelins are not being used on the front line.

Seamus Padraig , Nov 15 2019 12:47 utc | 73
Wow. My opinion of Kolomoisky has just improved ... somewhat.
deschutes , Nov 15 2019 13:25 utc | 74
Mr. Kolomoisky is spot on, i.e. when he says that the Americans will only use Ukrainians as their little bitches to fight and die for America's gain against Russia. Just like the Americans fucked over the Kurds in Syria, using them as proxy fighters to do USA/Israel's dirty work. Wherever the USA shows up and starts interfering, everything turns into shit: Iraq...Afghanistan...Venezuela...Bolivia...Ukraine...Libya...Yemen...Nicaragua...Ecuador...the list is quite long. It remains to be seen if Mr. Kolomoisky can bring about rapprochement with Russia. He'd better watch his back.
William Gruff , Nov 15 2019 13:30 utc | 75
"Wow. My opinion of Kolomoisky has just improved ... somewhat." --Seamus Padraig @73

Yes, Kolomoisky has moved up a notch in my estimation as well; from the low of "monstrously inhuman spawn of satan" all the way up to "rabid dog" . That's quite the dramatic improvement, I must admit.

juliania , Nov 15 2019 14:13 utc | 76
I am very glad to see you back, Grieved, and your 'wall of ice' metaphor is indeed accurate. To me, the promising signs in Ukraine were even as here in the US when voters fought back against what b calls Deep State, which I am sure in my heart was even more of an overwhelming surge than registered - the best the corrupters of the system could do was make it close enough to be a barely legitimate win for their side, and they didn't succeed. Maybe somewhere along their line of shenanigans a small cog in the wheel got religion and didn't do their 'job'. An unsung hero who will sing when it's safe.

I hope, dearly hope, it gets safe in Ukraine very soon. They are us only further down the line than we are, but we will get there if we can't totally remove the cancer in our midst. That's our job; I wish Ukraine all the best in removing theirs.

Peter AU1 , Nov 15 2019 14:39 utc | 77
Jen 70

I believe the Russian presentation on MH17 showed a military aircraft climbing in the vicinity of, or towards MH17.

flankerbandit , Nov 15 2019 14:47 utc | 78
Jen...I should have made clear that the two aircraft picked up by Russian PRIMARY RADAR were unidentified...

The two commercial flights you mention were in the area and were known to both Russian and Ukrainian controllers by means of the SECONDARY SURVEILLANCE RADAR, which picks up the aircraft transponder signals...

However, secondary WILL NOT pick up military craft that have their transponders off...which is normal operating procedure for military craft...

So the airspace situation was this...you can see this from one of the illustrations I provided from the DSB prelim report...

You had MH17...you had that other flight coming from the opposite direction [flying west]...and you had that airplane that overtook the MH17 from behind [they were in a hurry and were going faster, so when MH17 decided to stay at FL330, they were cleared to climb to FL350 so they could safely overtake with the necessary vertical separation...]

Those three aircraft were all picked up on the Ukrainian SECONDARY [transponder] surveillance...as well as the Russians...on both their PRIMARY AND SECONDARY...

But what the Russians picked up were two craft ONLY ON THEIR PRIMARY...those would have been military aircraft flying with their transponders off [they're allowed to do that and do that most of the time in fact]...

That's why those two DIDN'T SHOW UP ON THE SECONDARY DATA HANDED OVER TO THE INVESTIGATORS BY THE UKRAINIANS...

Only primary radar would pick those up...and, very conveniently, the Dnipro primary was inop at the time...[so the data handed to investigators by the Ukrainians would have no trace of any military aircraft nearby]...

But with the Russian primary radar data, there is in fact evidence that there were military aircraft in the air at the time...just that the Dutch investigators simply decided to exclude the very vital Russian radar data on some stupid technicality...

[Really this is a very poorly done report, both prelim and final, and I've read many over the years...]

The other thing I should have emphasized more clearly is about that course deviation that controllers steered MH17 to, just seconds before it was hit...

The known traffic was those three commercial aircraft, as shown on the chart... here it is again...

Those three commercial flights are clearly labeled...and the big question is... why was MH17 DIVERTED SOUTH...OFF ITS PLANNED ROUTE...?

We can see the deviation track by the dotted red line...

Clearly there was no 'other traffic' that required MH17 to be vectored south by the controllers...

In fact we see that there was a FOURTH commercial flight [another B777] that was flying south exactly to that same waypoint that MH17 was diverted to...we see this airplane is flying west on the M70 airway and is heading to the RND waypoint...

This does not make sense...why would you divert MH17 from going to TAMAK as flight planned...in order to go south toward RND where another airplane is heading...

If nothing else this is very bad controller practice right there...yet again, the DSB [Dutch Safety Board] does not even raise this question...

Like I said, leaving aside any guesswork, these are the simple facts and they raise serious questions...both about the competence of the Dutch report, and the way the controllers handled that flight...

S , Nov 15 2019 14:53 utc | 79
Ukrainian think tank Ukrainian Institute of the Future and Ukrainian media outlet Zerkalo Nedeli (both anti-Russian, but slightly more intellectual than typical Ukrainian outlets) have contracted a Kharkov-based pollster to conduct a poll among DNR/LNR residents from October 7 to October 31 (method: face-to-face interviews at the homes of the respondents, sample size: 806 respondents in DNR and 800 respondents in LNR, margin of error: 3.2%) and published its results in an article: Тест на сумісність [Compatibility Test] (in Ukrainian).

It's a long and rambling article, interspersed with Ukrainian propagandistic clichés (perhaps to placate Ukrainian nationalists), but the numbers look solid, so I've extracted the numbers I consider important and put them in a table format. Here they are:

GENERAL INFORMATION

Gender
46.5% male
53.5% female

Age
8.3% <25 years old
91.7% ≥25 years old

Education
31.5% no vocational training or higher education
45.2% vocational training
23.3% higher education

Employment
24% public sector
24% private sector
5% NGOs
45% unemployed

Religion
57% marry and baptize their children in Ukrainian Orthodox Church (Moscow Patriarchate)
31% believe in God, but do not go to any church
12% other churches, other religions, atheists

Political activity
3% are members of parties
97% are not members of parties

Language
90% speak Russian at home
10% speak other languages at home

Nationality
55.4% consider themselves Ukrainians
44.6% do not consider themselves Ukrainians

ECONOMY

Opinion about the labor market
24.3% there are almost no jobs
39.3% high unemployment, but it's possible to find a job
15.7% there are jobs, even if temporary
17.1% key enterprises are working, those who want to work can find a job
2.9% there are not enough employees

Personal financial situation
4.9% are saving on food
36.4% enough money to buy food, but have to save money to buy clothing
43.6% enough money to buy food and clothing, but have to save money to buy a suit, a mobile phone, or a vacuum cleaner
12% enough money to buy food, clothing, and other goods, but have to save money to buy expensive goods (e.g. consumer electronics)
2.7% enough money to buy food, clothing, and expensive goods, but have to save money to buy a car or an apartment
0.4% enough money to buy anything

Personal financial situation compared to the previous year
28.4% worsened
57.3% stayed the same
14.2% improved

Personal financial situation expectations for the next year
21% will worsen
58.6% will stay the same
18.7% will improve

Opinion on the Ukraine's (sans DNR/LNR) economic situation compared to the previous year
50.3% worsened
41.4% stayed the same
6.3% improved

CITIZENSHIP

Consider themselves citizens of
57.8% the Ukraine
34.8% DNR/LNR
6.8% Russia

Russian citizenship
42.9% never thought about obtaining it
15.5% don't want to obtain it
34.2% would like to obtain it
7.4% already obtained it

Considered leaving DNR/LNR for
5.2% the Ukraine
11.1% Russia
2.9% other country
80.8% never considered leaving

Visits to the Ukraine over the past year
35.1% across the DNR/LNR–Ukraine border (overwhelming majority of them -- 32.2% of all respondents -- are pensioners who visit the Ukraine to receive their pensions)
2.6% across the Russia–Ukraine border
62.3% have not visited the Ukraine

WAR

Is the war in Donbass an internal Ukrainian conflict?
35.6% completely agree
40.5% tend to agree
14.1% tend to disagree
9.3% completely disagree

Was the war started by Moscow and pro-Russian groups?
3.1% completely agree
6.4% tend to agree
45.1% tend to disagree
44.9% completely disagree

Who must pay to rebuild DNR/LNR? (multiple answers)
63.6% the Ukraine
29.3% Ukrainian oligarchs
18.5% DNR/LNR themselves
17% the U.S.
16.5% the EU
16% Russia
13% all of the above

ZELENSKIY

Opinion about Zelenskiy
1.9% very positive
17.2% positive
49.6% negative
29.3% very negative

Has your opinion about Zelenskiy changed over the past months?
2.7% significantly improved
7.9% somewhat improved
44.8% stayed the same
22.9% somewhat worsened
20.5% significantly worsened

Will Zelenskiy be able to improve the Ukraine's economy?
1.4% highly likely
13.3% likely
55.3% unlikely
30% highly unlikely

Will Zelenskiy be able to bring peace to the region?
1.7% highly likely
12.5% likely
59% unlikely
26.5% highly unlikely

MEDIA

Where do you get your information on politics? (multiple answers)
84.3% TV
60.6% social networks
50.9% relatives, friends
45.9% websites
17.4% co-workers
10% radio
7.4% newspapers and magazines

What social networks do you use? (multiple answers)
70.7% YouTube
61% VK
52.3% Odnoklassniki
49.8% Viber
27.1% Facebook
21.4% Instagram
12.4% Twitter
11.1% Telegram

FUTURE

Desired status of DNR/LNR
5.1% part of the Ukraine
13.4% part of the Ukraine with a special status
16.2% independent state
13.4% part of Russia with a special status
50.9% part of Russia

Desired status of entire Donetsk and Lugansk oblasts
8.4% part of the Ukraine
10.8% part of the Ukraine with a special status
14.4% independent state
13.3% part of Russia with a special status
49.6% part of Russia

Really?? , Nov 15 2019 15:12 utc | 80
Just listening to a bit of the testimony of the ex-ambassador to Ukraine.

It is all BS hearsay!

Also, this lady doesn't seem to grasp that as an employee of the State Department, she answers to Trump. Trump is her boss.

The questioning is full of leading questions that contains allegations and unproved premises built into them. I can't imagine that such questioning would be allowed in a normal court of justice in the USA.

Sure, Trump is a boor. But he is still the boss and he gets to pull out ambassadors if he wants to.

This is total grandstanding.

Also, a lot of emotional stuff like "I was devastated. I was shocked. Color drained from my face as I read the telephone transcript . . . "
This is BS!

I hope it is as obvious to others as to me.

I do

Seamus Padraig , Nov 15 2019 15:28 utc | 81
@ Posted by: Jen | Nov 15 2019 10:26 utc | 70

IIRC the Russian radar showed that the two mystery planes in questions were flying in MH17's blindspot . That's way too close to be half an hour away. Also, the fact that the two planes were flying over a war zone with their transponders turned off (which is why they couldn't be conclusively identified) strongly suggests that they were military.

@ Posted by: ralphieboy | Nov 15 2019 11:24 utc | 71

When the US launched a coup in Kiev, wasn't that a violation of Ukraine's sovereignty too?

@ Posted by: Christian J Chuba | Nov 15 2019 12:36 utc | 72

You know the real reason why they have yet to deliver the javelins to Ukraine? It's because they're afraid that they'll be sold on the black market and end up in the ME somewhere targeting US tanks. That's why.

@ Posted by: William Gruff | Nov 15 2019 13:30 utc | 75

That's quite the dramatic improvement, I must admit.
Well, I did use the qualifier 'somewhat'. ;-)
Don Bacon , Nov 15 2019 15:34 utc | 82
on Yovanovitch, She added: "If our chief representative is kneecapped, it limits our effectiveness to safeguard the vital national security interests of the United States."

She wasn't fired, she was kneecapped, and Ukraine is a US vital national security interest, especially after it installed a new government with neo-fascism support.. . .Kneecapping is a form of malicious wounding, often as torture, in which the victim is injured in the knee

flankerbandit , Nov 15 2019 15:52 utc | 84
Cheeza decides to launch a personal attack...also completely off topic...
Typical reaction of a zelf-zentered person [sic]...With experts such as you out there, why would anyone dare apply common sense...an intelligent person would have said...blah blah blah...

Look man...I'm not going to take up a lot of space on this thread because it's not about the MAX...

BUT...I need to set the record straight because you are accusing me here of somehow muddying the waters on the MAX issue...

That is a complete inversion of the truth...I have been very explicit in my [professional] comments about the MAX...and it is the exact opposite of what you are trying to tar me with here...

An example of my one of my comments here...

Yes, it is important to understand these things...which is why I have made the effort to explain the issue more clearly for the layman audience...

Your pathetic attack here shows you have no shame, nor self-respect...

Let's rewind the tape here...I said that Gazprom is looking to cut supplies to Ukraine in the new 10 year deal that comes up for negotiation in January...and that they are going to be pumping much less gas through Ukraine because NS2 now allows to bypass Ukraine...

You took a run at this comment, calling it wrong, and putting up a bunch of your own hypothesizing...

I responded by linking to the Russian news report quoting officials saying exactly that...that gas to Ukraine will be greatly reduced...

Instead of responding to that by admitting you were full of shit...you decide to attack me on the MAX issue...everybody here knows my [professional] position on the MAX...and that I have said repeatedly THAT IT CANNOT BE FIXED...[which is also why I have offered detailed technical explanations...]

I'm not going to let you screw with my integrity here...everything you attributed to me on the MAX is completely FALSE and in fact turning the truth on its head...

Realist , Nov 15 2019 16:08 utc | 87
Well done Peter. You totally f'd up the thread width once again.

Thanks a lot, you selfish incompetent c**t

Peter AU1 , Nov 15 2019 16:32 utc | 91
Realist 87

If you weren't such a dickhead you would see my links dont even reach text margins.

c1ue , Nov 15 2019 16:33 utc | 92
@flankerbandit #18

As Kiza #55 noted - Nordstream 1 and 2, combined, only equal half of Ukraine's transit capacity. The primary impact is that Ukraine can't hold far Western European customer gas hostage anymore with its gas transit "negotiations" as Nordstream allows Russia to sell directly to Germany.

There can still be Russian gas sold via Ukraine, but this will be mostly to near-Ukraine neighbors: Romania, Slovakia, Austria, Czech as well as Ukraine itself.
Bulgaria, Serbia and Romania can transit from Turk Stream, but there are potential Turk (and Bulgarian) issues.

Poland is already committing to LNG in order to not be dependent on Russian gas transiting Ukraine - a double whammy. The ultimate effect is to remove Ukraine's stranglehold position over Russian gas exports, which in turn severely undercuts Ukraine's ability to both get really cheap Russian gas and additional transit fees - a major blow to their economy.

That part of your analysis is accurate.

flankerbandit , Nov 15 2019 17:13 utc | 97
A fool piped in...
Nordstream 1 and 2, combined, only equal half of Ukraine's transit capacity.

Look...I'm not going to waste more time on bullshit...where are the FACTS about what you CLAIM here...?

The two Nordstream pipes equal 110 bcm per year...plus there are other pipeline routes that do not go through Ukraine...

Here is a study of the Euro gas imports from Russia from a few months ago...

The Conclusion...page 9

Therefore, the continuation of gas transit via Ukraine in volumes greater than the 26 bcm/y suggested above will depend on the European Commission and European gas importers, and their insistence that gas transit via Ukraine continues.

Otherwise, gas transit via Ukraine will be reduced to delivering limited volumes for European storage re-fills in the 'off-peak' summer months...

This prospect will undoubtedly complicate any negotiations between Gazprom and its Ukrainian counterparty over a new contract to govern the transit of Russian gas via Ukraine, once the existing contract expires at the end of December 2019.

...Gazprom may be willing to commit to only limited annual transit volumes...

European gas importers don't give a shit about Ukraine...and they have the final word...they care only about getting the gas they need from Russia in a reliable way and at a good price...

The news report I linked to makes it perfectly clear that the Europeans are demanding that the Ukranians get their act together on the gas issue, or they will be dropped altogether...

You know...FOOL...it really makes me wonder how fools like you decide to make statements here with a very authoritative tone...when it is quite clear you are talking out your rear end...

Nobody needs that kind of bullshit here...if you don't know a subject sufficiently well, then maybe you should keep quiet...or when making a statement, phrase it as your own OPINION and nothing more...

[Nov 03, 2019] How Controlling Syria s Oil Serves Washington s Strategic Objectives by Nauman Sadiq

Highly recommended!
Notable quotes:
"... Washington's basic purpose in deploying the US forces in oil and natural gas fields of Deir al-Zor governorate is to deny the valuable source of income to its other main rival in the region, Damascus. ..."
Nov 02, 2019 | www.zerohedge.com

Authored by Nauman Sadiq,

Before the evacuation of 1,000 American troops from northern Syria to western Iraq, the Pentagon had 2,000 US forces in Syria. After the drawdown of US troops at Erdogan's insistence in order for Ankara to mount a ground offensive in northern Syria, the US has still deployed 1,000 troops, mainly in oil-rich eastern Deir al-Zor province and at al-Tanf military base.

Al-Tanf military base is strategically located in southeastern Syria on the border between Syria, Iraq and Jordan, and it straddles on a critically important Damascus-Baghdad highway, which serves as a lifeline for Damascus. Washington has illegally occupied 55-kilometer area around al-Tanf since 2016, and several hundred US Marines have trained several Syrian militant groups there.

It's worth noting that rather than fighting the Islamic State, the purpose of continued presence of the US forces at al-Tanf military base is to address Israel's concerns regarding the expansion of Iran's influence in Iraq, Syria and Lebanon.

Regarding the oil- and natural gas-rich Deir al-Zor governorate, it's worth pointing out that Syria used to produce modest quantities of oil for domestic needs before the war – roughly 400,000 barrels per day, which isn't much compared to tens of millions barrels daily oil production in the Gulf states.

Although Donald Trump crowed in a characteristic blunt manner in a tweet after the withdrawal of 1,000 American troops from northern Syria that Washington had deployed forces in eastern Syria where there was oil, the purpose of exercising control over Syria's oil is neither to smuggle oil out of Syria nor to deny the valuable source of revenue to the Islamic State.

There is no denying the fact that the remnants of the Islamic State militants are still found in Syria and Iraq but its emirate has been completely dismantled in the region and its leadership is on the run. So much so that the fugitive caliph of the terrorist organization was killed in the bastion of a rival jihadist outfit, al-Nusra Front in Idlib, hundreds of kilometers away from the Islamic State strongholds in eastern Syria.

Much like the "scorched earth" battle strategy of medieval warlords – as in the case of the Islamic State which early in the year burned crops of local farmers while retreating from its former strongholds in eastern Syria – Washington's basic purpose in deploying the US forces in oil and natural gas fields of Deir al-Zor governorate is to deny the valuable source of income to its other main rival in the region, Damascus.

After the devastation caused by eight years of proxy war, the Syrian government is in dire need of tens of billions dollars international assistance to rebuild the country. Not only is Washington hampering efforts to provide international aid to the hapless country, it is in fact squatting over Syria's own resources with the help of its only ally in the region, the Kurds.

Although Donald Trump claimed credit for expropriating Syria's oil wealth, it bears mentioning that "scorched earth" policy is not a business strategy, it is the institutional logic of the deep state. President Trump is known to be a businessman and at least ostensibly follows a non-interventionist ideology; being a novice in the craft of international diplomacy, however, he has time and again been misled by the Pentagon and Washington's national security establishment.

Regarding Washington's interest in propping up the Gulf's autocrats and fighting their wars in regional conflicts, it bears mentioning that in April 2016, the Saudi foreign minister threatened that the Saudi kingdom would sell up to $750 billion in treasury securities and other assets if the US Congress passed a bill that would allow Americans to sue the Saudi government in the United States courts for its role in the September 11, 2001 terror attack – though the bill was eventually passed, Saudi authorities have not been held accountable; even though 15 out of 19 9/11 hijackers were Saudi nationals.

Moreover, $750 billion is only the Saudi investment in the United States, if we add its investment in Western Europe and the investments of UAE, Kuwait and Qatar in the Western economies, the sum total would amount to trillions of dollars of Gulf's investments in North America and Western Europe.

Furthermore, in order to bring home the significance of the Persian Gulf's oil in the energy-starved industrialized world, here are a few stats from the OPEC data: Saudi Arabia has the world's largest proven crude oil reserves of 265 billion barrels and its daily oil production exceeds 10 million barrels; Iran and Iraq, each, has 150 billion barrels reserves and has the capacity to produce 5 million barrels per day, each; while UAE and Kuwait, each, has 100 billion barrels reserves and produces 3 million barrels per day, each; thus, all the littoral states of the Persian Gulf, together, hold 788 billion barrels, more than half of world's 1477 billion barrels of proven oil reserves.

No wonder then, 36,000 United States troops have currently been deployed in their numerous military bases and aircraft carriers in the oil-rich Persian Gulf in accordance with the Carter Doctrine of 1980, which states: "Let our position be absolutely clear: an attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America, and such an assault will be repelled by any means necessary, including military force."

Additionally, regarding the Western defense production industry's sales of arms to the Gulf Arab States, a report authored by William Hartung of the US-based Center for International Policy found that the Obama administration had offered Saudi Arabia more than $115 billion in weapons, military equipment and training during its eight-year tenure.

Similarly, the top items in Trump's agenda for his maiden visit to Saudi Arabia in May 2017 were: firstly, he threw his weight behind the idea of the Saudi-led "Arab NATO" to counter Iran's influence in the region; and secondly, he announced an unprecedented arms package for Saudi Arabia. The package included between $98 billion and $128 billion in arms sales.

Therefore, keeping the economic dependence of the Western countries on the Gulf Arab States in mind, during the times of global recession when most of manufacturing has been outsourced to China, it is not surprising that when the late King Abdullah of Saudi Arabia decided to provide training and arms to the Islamic jihadists in the border regions of Turkey and Jordan against the government of Bashar al-Assad in Syria, the Obama administration was left with no other choice but to toe the destructive policy of its regional Middle Eastern allies, despite the sectarian nature of the proxy war and its attendant consequences of breeding a new generation of Islamic jihadists who would become a long-term security risk not only to the Middle East but to the Western countries, as well.

Similarly, when King Abdullah's successor King Salman decided, on the whim of the Crown Prince Mohammad bin Salman, to invade Yemen in March 2015, once again the Obama administration had to yield to the dictates of Saudi Arabia and UAE by fully coordinating the Gulf-led military campaign in Yemen not only by providing intelligence, planning and logistical support but also by selling billions of dollars' worth of arms and ammunition to the Gulf Arab States during the conflict.

In this reciprocal relationship, the US provides security to the ruling families of the Gulf Arab states by providing weapons and troops; and in return, the Gulf's petro-sheikhs contribute substantial investments to the tune of hundreds of billions of dollars to the Western economies.

Regarding the Pax Americana which is the reality of the contemporary neocolonial order, according to a January 2017 infographic by the New York Times, 210,000 US military personnel were stationed all over the world, including 79,000 in Europe, 45,000 in Japan, 28,500 in South Korea and 36,000 in the Middle East.

Although Donald Trump keeps complaining that NATO must share the cost of deployment of US troops, particularly in Europe where 47,000 American troops are stationed in Germany since the end of the Second World War, 15,000 in Italy and 8,000 in the United Kingdom, fact of the matter is that the cost is already shared between Washington and host countries.

Roughly, European countries pay one-third of the cost for maintaining US military bases in Europe whereas Washington chips in the remaining two-third. In the Far Eastern countries, 75% of the cost for the deployment of American troops is shared by Japan and the remaining 25% by Washington, and in South Korea, 40% cost is shared by the host country and the US contributes the remaining 60%.

Whereas the oil-rich Gulf Cooperation Countries (GCC) – Saudi Arabia, UAE, Kuwait and Qatar – pay two-third of the cost for maintaining 36,000 US troops in the Persian Gulf where more than half of world's proven oil reserves are located and Washington contributes the remaining one-third.

* * *

Nauman Sadiq is an Islamabad-based attorney, columnist and geopolitical analyst focused on the politics of Af-Pak and Middle East regions, neocolonialism and petro-imperialism.


ipsprez , 8 minutes ago link

I am always amazed (and amused) at how much smarter "journalists" are than POTUS. If ONLY Mr. Trump would read more and listen to those who OBVIOUSLY are sooo much smarter!!!! Maybe then he wouldn't be cowed and bullied by Erdogan, Xi, Jung-on, Trudeau (OK so maybe that one was too far fetched) to name a few. Please note the sarcasm. Do I really need to go in to the success after success Mr. Trump's foreign policy has enjoyed? Come on Man.

OLD-Pipe , 19 minutes ago link

What a load of BOLOCKS...The ONLY, I mean The Real and True Reason for American Armored presence is one thing,,,,,,,Ready for IT ? ? ? To Steal as much OIL as Possible, AND convert the Booty into Currency, Diamonds or some other intrinsically valuable commodity, Millions of Dollars at a Time......17 Years of Shadows and Ghost Trucks and Tankers Loading and Off-Loading the Black Gold...this is what its all about......M-O-N-E-Y....... Say It With Me.... Mon-nee, Money Money Mo_on_ne_e_ey, ......

Blue Steel 309 , 5 minutes ago link

This is about Israel, not oil.

ombon , 58 minutes ago link

From the sale of US oil in Syria receive 30 million. dollars per month. Image losses are immeasurably greater. The United States put the United States as a robbery bandit. This is American democracy. The longer the troops are in Syria, the more countries will switch to settlements in national currencies.

Pandelis , 28 minutes ago link

yeah well these are mafia guys...

uhland62 , 50 minutes ago link

"Our interests", "strategic interests" is always about money, just a euphemism so it doesn't look as greedy as it is. Another euphemism is "security' ,meaning war preparations.

BobEore , 1 hour ago link

...The military power of the USA put directly in the service of "the original TM" PIRATE STATE. U are the man Norm! But wait... now things get a little hazy... in the classic... 'alt0media fake storyline' fashion!

"President Trump is known to be a businessman and at least ostensibly follows a non-interventionist ideology; being a novice in the craft of international diplomacy, however, he has time and again been misled by the Pentagon and Washington's national security establishment."

Awww! Poor "DUmb as Rocks Donnie" done been fooled agin!

...In the USA... the military men are stirring at last... having been made all too aware that their putative 'boss' has been operating on behalf of foreign powers ever since being [s]elected, that the State Dept of the once Great Republic has been in active cahoots with the jihadis ...

and that those who were sent over there to fight against the headchoppers discovered that the only straight shooters in the whole mess turned out to be the Kurds who AGENT FRIMpf THREW UNDER THE BUS ON INSTRUCTIONS FROM JIHADI HQ!

... ... ...

[Oct 23, 2019] Retired imperial soldiers still dream about the glory of empire

Oct 23, 2019 | peakoilbarrel.com

Dennis Coyne x Ignored says: 10/09/2019 at 9:55 am

Interesting piece.

https://www.msn.com/en-us/news/politics/former-national-security-officials-fight-back-as-trump-attacks-impeachment-as-deep-state-conspiracy/ar-AAIu7Ju?ocid=spartanntp

Former national security officials fight back as Trump attacks impeachment as 'deep state' conspiracy

"What is happening currently is not normal," said Andrea Kendall-Taylor, who served as a U.S. intelligence officer on Russia and Eurasia before stepping down in 2018. "This represents a deviation from the way that these institutions regularly function. And when the institutions don't work, that is a national security threat."

She was among 90 national security veterans who signed an open letter published Sunday in support of the anonymous whistleblower who filed a complaint that Trump had acted improperly in asking the Ukrainian president to investigate Biden in a July phone call.

Trump has attempted to intimidate other government officials into not cooperating by casting those who offered information to the whistleblower as "close to spies." The open letter emphasized that the whistleblower "is protected from certain egregious forms of retaliation."

[Oct 10, 2019] There is no reason that anyone should treat George Bush with respect: he is a war criminal, who escaped justice

Highly recommended!
Notable quotes:
"... George W. Bush's presidency wasn't just morally bankrupt. In a superior reality, the Hague would be sorting out whether he is guilty of war crimes. Since our international institutions have failed to punish, or even censure him, surely the only moral response from civil society should be to shun him. But here is Ellen DeGeneres hanging out with him at a Cowboys game: ..."
"... This is what we say to children who don't want to sit next to the class misfit at lunch. It is not -- or at least it should not -- be the way we talk about a man who used his immense power to illegally invade another country where we still have troops 16 years later. His feet should bleed wherever he walks and Iraqis should get to throw shoes at him until the end of his days. ..."
"... DeGeneres isn't a role model for civility. Her friendship with Bush simply embodies the grossest form of class solidarity. From a lofty enough vantage point, perhaps Bush's misdeeds really look like minor partisan differences. Perhaps Iraq seems very far away, and so do the poor of New Orleans, when the stage of your show is the closest you get to anyone without power." ..."
"... There is no reason that anyone should treat George Bush with respect. ..."
Oct 09, 2019 | economistsview.typepad.com

EMichael , October 09, 2019 at 04:05 PM

Despicable. She is actually saying Bush's actions were just a difference of opinion, as opposed to causing hundreds of thousands of deaths.

I have never watched anything she has ever done without thinking about it. Now I will never watch anything she does because of her imbecility.

Nobody Should Be Friends With George W. Bush by Sarah Jones

"Comedian Ellen DeGeneres loves to tell everyone to be kind. It's a loose word, kindness; on her show, DeGeneres customarily uses it to mean a generic sort of niceness. Don't bully. Befriend people! It's a charming thought, though it has its limits as a moral ethic. There are people in the world, after all, whom it is better not to befriend. Consider, for example, the person of George W. Bush. Tens of thousands of people are dead because his administration lied to the American public about the presence of weapons of mass destruction in Iraq, and then, based on that lie, launched a war that's now in its 16th year. After Hurricane Katrina struck and hundreds of people drowned in New Orleans, Bush twiddled his thumbs for days. Rather than fire the officials responsible for the government's life-threateningly lackluster response to the crisis, he praised them, before flying over the scene in Air Force One. He opposed basic human rights for LGBT people, and reproductive rights for women, and did more to empower the American Christian right than any president since Reagan.

George W. Bush's presidency wasn't just morally bankrupt. In a superior reality, the Hague would be sorting out whether he is guilty of war crimes. Since our international institutions have failed to punish, or even censure him, surely the only moral response from civil society should be to shun him. But here is Ellen DeGeneres hanging out with him at a Cowboys game:

And here is Ellen DeGeneres explaining why it's good and normal to share laughs, small talk, and nachos with a man who has many deaths on his conscience:

Here's the money quote from her apologia:

"We're all different. And I think that we've forgotten that that's okay that we're all different," she told her studio audience. "When I say be kind to one another, I don't mean be kind to the people who think the same way you do. I mean be kind to everyone."

This is what we say to children who don't want to sit next to the class misfit at lunch. It is not -- or at least it should not -- be the way we talk about a man who used his immense power to illegally invade another country where we still have troops 16 years later. His feet should bleed wherever he walks and Iraqis should get to throw shoes at him until the end of his days.

Nevertheless, many celebrities and politicians have hailed DeGeneres for her radical civility:

There's almost no point to rebutting anything that Chris Cillizza writes. Whatever he says is inevitably dumb and wrong, and then I get angry while I think about how much money he gets to be dumb and wrong on a professional basis. But on this occasion, I'll make an exception. The notion that DeGeneres's friendship with Bush is antithetical to Trumpism fundamentally misconstrues the force that makes Trump possible. Trump isn't a simple playground bully, he's the president. Americans grant our commanders-in-chief extraordinary deference once they leave office. They become celebrities, members of an apolitical royal class. This tendency to separate former presidents from the actions of their office, as if they were merely actors in a stage play, or retired athletes from a rival team, contributes to the atmosphere of impunity that enabled Trump. If Trump's critics want to make sure that his cruelties are sins the public and political class alike never tolerate again, our reflexive reverence for the presidency has to die.

DeGeneres isn't a role model for civility. Her friendship with Bush simply embodies the grossest form of class solidarity. From a lofty enough vantage point, perhaps Bush's misdeeds really look like minor partisan differences. Perhaps Iraq seems very far away, and so do the poor of New Orleans, when the stage of your show is the closest you get to anyone without power."

http://nymag.com/intelligencer/2019/10/ellen-degeneres-is-wrong-about-george-w-bush.html

... ... ...

...I am all in favor of Tulsi Gabbard's anti-war stance, but this comment shows me she is too childish to hold any power.

Tulsi Gabbard
‏Verified account @TulsiGabbard
22h22 hours ago

.@TheEllenShow msg of being kind to ALL is so needed right now. Enough with the divisiveness. We can't let politics tear us apart. There are things we will disagree on strongly, and things we agree on -- let's treat each other with respect, aloha, & work together for the people.

There is no reason that anyone should treat George Bush with respect.

[Jul 23, 2019] Did John Bolton Light the Fuse of the UK-Iranian Tanker Crisis

Notable quotes:
"... Contrary to the official rationale, the detention of the Iranian tanker was not consistent with the 2012 EU regulation on sanctions against the Assad government in Syria. The EU Council regulation in question specifies in Article 35 that the sanctions were to apply only within the territory of EU member states, to a national or business entity or onboard an aircraft or vessel "under the jurisdiction of a member state." ..."
"... The notice required the Gibraltar government to detain any such ship for at least 72 hours if it entered "British Gibraltar Territorial Waters." Significantly, however, the video statement by Gibraltar's chief minister Fabian Picardo on July 4 explaining the seizure of the Grace 1 made no such claim and avoided any mention of the precise location of the ship when it was seized. ..."
"... There is a good reason why the chief minister chose not to draw attention to the issue of the ship's location: it is virtually impossible that the ship was in British Gibraltar territorial waters at any time before being boarded. The UK claims territorial waters of three nautical miles from its coast, whereas the Strait of Gibraltar is 7.5 nautical miles wide at its narrowest point. That would make the limit of UK territory just north of the middle of the Strait. ..."
"... But international straits must have clearly defined and separated shipping lanes going in different directions. The Grace 1 was in the shipping lane heading east toward the Mediterranean, which is south of the lane for ships heading west toward the Atlantic and thus clearly closer to the coast of Morocco than to the coast of Gibraltar, as can be seen from this live view of typical ship traffic through the strait . So it is quite implausible that the Grace 1 strayed out of its shipping lane into British territorial waters at any time before it was boarded. ..."
"... Such a move clearly violates the global treaty governing the issue -- the United Nations Convention on the Law of the Sea . Articles 37 through 44 of that agreement, ratified by 167 states, including the UK and the European Union, establish a "regime of transit passage" for international straits like the Strait of Gibraltar that guarantees freedom of navigation for merchant ships. The rules of that regime explicitly forbid states bordering the strait from interfering with the transit passage of a merchant ship, with very narrowly defined exceptions. ..."
"... The evidence indicates, moreover, that the UK's actions were part of a broader scheme coordinated with the Trump administration to tighten pressure on Iran's economy by reducing Iran's ability to export goods. ..."
"... On July 19, Reuters London correspondent Guy Falconbridge reported , "[S]everal diplomatic sources said the United States asked the UK to seize the vessel." ..."
"... Detailed evidence of Bolton deep involvement in the British plan to seize the Iranian tanker has surfaced in reporting on the withdrawal of Panamanian flag status for the Grace 1. ..."
"... The role of Panama's National Security Council signaled Bolton's hand, since he would have been the point of contact with that body. The result of his maneuvering was to leave the Grace 1 without the protection of flag status necessary to sail or visit a port in the middle of its journey. This in conjunction with the British seizure of the ship was yet another episode in the extraordinary American effort to deprive Iran of the most basic sovereign right to participate in the global economy. ..."
"... Back in 2013 2013 there was a rumour afoot that Edward Snowden, who at the time was stuck in the Moscow airport, trapped there by the sudden cancellation mid-flight of his US passport, was going spirited away by the President of Bolivia Evo Morales aboard his private jet. So what the US apparently was lean on it European allies to stop him. This they duly and dutifully did. Spain, France, and others denied overflight rights to the Bolivian jet, forcing it to turn back and land in Austria. There was even a report that once on the ground, the Spanish ambassador to Austria showed up and asked the Bolivian president if he might come out to the plain for a coffee--and presumably to have a poke around to see he could catch Snowden in the act of vanishing into the cargo hold. ..."
"... The rumor turned out to be completely false, but it was the Europeans who wound up with the egg on their face. Not to mention the ones who broke international law. ..."
"... Bolton persuaded the British to play along with the stupid US "maximum pressure" strategy, regardless of its illegality. (Maybe the British government thought that it would placate Trump after Ambassadorgate.) And then of course Pompeo threw them under the bus. It's getting hard to be a US ally (except for Saudi Arabia and Israel.) ..."
"... Spain lodged a formal complaint about the action, because it considers the sea around Gibraltar to be part of its international waters, "We are studying the circumstances and looking at how this affects our sovereignty," Josep Borell, Spain's acting foreign minister, said. So Gibraltar or Spanish waters? Gibraltar – Territorial Waters (1 pg): ..."
"... Worse than the bad behavior of Bolton, and the poodle behavior of Britain, is the utter failure of our press to provide us a skeptical eye and honest look at events. They've been mere stenographers and megaphones for power doing wrong. ..."
"... And this just in. A UK government official has just stated, related to the Iranian tanker stopped near Gibraltar, the UK will not be part of Trump's 'maximum pressure' gambit on Iran. We shall see if Boris Johnson is for or against that policy. ..."
"... John Bolton, war criminal. ..."
"... John Bolton has been desperate for a war with Iran for decades. This is just another escalation in his desperate attempt to get one. He's the classic neocon chicken hawk who is bravely ready to risk and sacrifice other people's lives at the drop of a hat. ..."
"... Since UK is abusing its control of Gibraltar by behaving like a thug, maybe it is better for the international community to support an independent state of Gibraltar, or at least let Spain has it. It will be better for world peace. ..."
"... While I agree with the gist of the article, remember that Bolton has no authority except that which is given to him. So stop blaming Bolton. Blame Trump. ..."
"... The provocations will go on and on until Iran shoots back and then Wash. will get the war it's been trying to start for some time now to pay back all those campaign donors who will profit from another war. ..."
"... The MIC needs constant wars to use up munitions so new ones can be manufactured. It's really just about business and politicians working together for mutual benefit to keep those contributions coming in. With all the other issues facing America, a war with Iran will just add to the end of the USA which is coming faster than you think. ..."
Jul 23, 2019 | www.theamericanconservative.com

Did John Bolton Light the Fuse of the UK-Iranian Tanker Crisis? Evidence suggests he pressured the Brits to seize an Iranian ship. Why? More war. By Gareth Porter July 23, 2019

While Iran's seizure of a British tanker near the Strait of Hormuz on Friday was a clear response to the British capture of an Iranian tanker in the Strait of Gibraltar on July 4, both the UK and U.S. governments are insisting that Iran's operation was illegal while the British acted legally.

The facts surrounding the British detention of the Iranian ship, however, suggest that, like the Iranian detention of the British ship, it was an illegal interference with freedom of navigation through an international strait. And even more importantly, evidence indicates that the British move was part of a bigger scheme coordinated by National Security Advisor John Bolton.

British Foreign Secretary Jeremy Hunt called the Iran seizure of the British-flagged tanker Stena Impero "unacceptable" and insisted that it is "essential that freedom of navigation is maintained and that all ships can move safely and freely in the region."

But the British denied Iran that same freedom of navigation through the Strait of Gibraltar on July 4.

The rationale for detaining the Iranian vessel and its crew was that it was delivering oil to Syria in violation of EU sanctions. This was never questioned by Western news media. But a closer look reveals that the UK had no legal right to enforce those sanctions against that ship, and that it was a blatant violation of the clearly defined global rules that govern the passage of merchant ships through international straits.

The evidence also reveals that Bolton was actively involved in targeting the Grace 1 from the time it began its journey in May as part of the broader Trump administration campaign of "maximum pressure" on Iran.

Contrary to the official rationale, the detention of the Iranian tanker was not consistent with the 2012 EU regulation on sanctions against the Assad government in Syria. The EU Council regulation in question specifies in Article 35 that the sanctions were to apply only within the territory of EU member states, to a national or business entity or onboard an aircraft or vessel "under the jurisdiction of a member state."

The UK government planned to claim that the Iranian ship was under British "jurisdiction" when it was passing through the Strait of Gibraltar to justify its seizure as legally consistent with the EU regulation. A maritime news outlet has reported that on July 3, the day before the seizure of the ship, the Gibraltar government, which has no control over its internal security or foreign affairs, issued a regulation to provide what it would claim as a legal pretext for the operation. The regulation gave the "chief minister" of the British the power to detain any ship if there were "reasonable grounds" to "suspect" that it had been or even that it was even "likely" to be in breach of EU regulations.

The notice required the Gibraltar government to detain any such ship for at least 72 hours if it entered "British Gibraltar Territorial Waters." Significantly, however, the video statement by Gibraltar's chief minister Fabian Picardo on July 4 explaining the seizure of the Grace 1 made no such claim and avoided any mention of the precise location of the ship when it was seized.

There is a good reason why the chief minister chose not to draw attention to the issue of the ship's location: it is virtually impossible that the ship was in British Gibraltar territorial waters at any time before being boarded. The UK claims territorial waters of three nautical miles from its coast, whereas the Strait of Gibraltar is 7.5 nautical miles wide at its narrowest point. That would make the limit of UK territory just north of the middle of the Strait.

But international straits must have clearly defined and separated shipping lanes going in different directions. The Grace 1 was in the shipping lane heading east toward the Mediterranean, which is south of the lane for ships heading west toward the Atlantic and thus clearly closer to the coast of Morocco than to the coast of Gibraltar, as can be seen from this live view of typical ship traffic through the strait . So it is quite implausible that the Grace 1 strayed out of its shipping lane into British territorial waters at any time before it was boarded.

But even if the ship had done so, that would not have given the UK "jurisdiction" over the Grace 1 and allowed it to legally seize the ship. Such a move clearly violates the global treaty governing the issue -- the United Nations Convention on the Law of the Sea . Articles 37 through 44 of that agreement, ratified by 167 states, including the UK and the European Union, establish a "regime of transit passage" for international straits like the Strait of Gibraltar that guarantees freedom of navigation for merchant ships. The rules of that regime explicitly forbid states bordering the strait from interfering with the transit passage of a merchant ship, with very narrowly defined exceptions.

These articles allow coastal states to adopt regulations relating to safety of navigation, pollution control, prevention of fishing, and "loading or unloading any commodity in contravention of customs, fiscal, immigration or sanitary laws and regulations" of bordering states -- but for no other reason. The British seizure and detention of the Grace 1 was clearly not related to any of these concerns and thus a violation of the treaty.

The evidence indicates, moreover, that the UK's actions were part of a broader scheme coordinated with the Trump administration to tighten pressure on Iran's economy by reducing Iran's ability to export goods.

The statement by Gibraltar's chief minister said the decision to seize the ship was taken after the receipt of "information" that provided "reasonable grounds" for suspicion that it was carrying oil destined for Syria's Banyas refinery. That suggested the intelligence had come from a government that neither he nor the British wished to reveal.

BBC defense correspondent Jonathan Beale reported: "[I]t appears the intelligence came from the United States." Acting Spanish Foreign Minister Joseph Borrell commented on July 4 that the British seizure had followed "a demand from the United States to the UK." On July 19, Reuters London correspondent Guy Falconbridge reported , "[S]everal diplomatic sources said the United States asked the UK to seize the vessel."

Detailed evidence of Bolton deep involvement in the British plan to seize the Iranian tanker has surfaced in reporting on the withdrawal of Panamanian flag status for the Grace 1.

Panama was the flag state for many of the Iranian-owned vessels carrying various items exported by Iran. But when the Trump administration reinstated economic sanctions against Iran in October 2018, it included prohibitions on industry services such as insurance and reinsurance. This decision was accompanied by political pressure on Panama to withdraw Panamanian flag status from 59 Iranian vessels, many of which were owned by Iranian state-affiliated companies. Without such flag status, the Iranian-owned vessels could not get insurance for shipments by freighter.

That move was aimed at discouraging ports, canal operators, and private firms from allowing Iranian tankers to use their facilities. The State Department's Brian Hook, who is in charge of the sanctions, warned those entities last November that the Trump administration believed they would be responsible for the costs of an accident involving a self-insured Iranian tanker.

But the Grace 1 was special case, because it still had Panamanian flag status when it began its long journey around the Southern tip of Africa on the way to the Mediterranean. That trip began in late May, according to Automatic Identification System data cited by Riviera Maritime Media . It was no coincidence that the Panamanian Maritime Authority delisted the Grace 1 on May 29 -- just as the ship was beginning its journey. That decision came immediately after Panama's National Security Council issued an alert claiming that the Iranian-owned tanker "may be participating in terrorism financing in supporting the destabilization activities of some regimes led by terrorist groups."

The Panamanian body did not cite any evidence that the Grace 1 had ever been linked to terrorism.

The role of Panama's National Security Council signaled Bolton's hand, since he would have been the point of contact with that body. The result of his maneuvering was to leave the Grace 1 without the protection of flag status necessary to sail or visit a port in the middle of its journey. This in conjunction with the British seizure of the ship was yet another episode in the extraordinary American effort to deprive Iran of the most basic sovereign right to participate in the global economy.

Now that Iran has detained a British ship in order to force the UK to release the Grace 1, the British Foreign Ministry will claim that its seizure of the Iranian ship was entirely legitimate. The actual facts, however, put that charge under serious suspicion.

Gareth Porter is an investigative reporter and regular contributor to The American Conservative . He is also the author of Manufactured Crisis: The Untold Story of the Iran Nuclear Scare.


john 17 hours ago

Honestly the Brits are such idiots, we lied them into a war once. They knew we were lying and went for it anyway. Now the are falling for it again. Maybe it is May's parting gift to Boris?
kouroi 17 hours ago
Same EU legislation only forbids Syria exporting oil and not EU entities selling to Syria (albeit with some additional paperwork). However, it doesn't forbid other non-EU states to sell oil to Syria. They are not behaving like the US. And this is also not UN sanctioned. In fact, UK is also acting against the spirit of JPCOA towards Iran. Speak about Perfidious Albion (others would say US lapdog).
Stephen54321 15 hours ago • edited
This story has certain familiar elements to it.

Back in 2013 2013 there was a rumour afoot that Edward Snowden, who at the time was stuck in the Moscow airport, trapped there by the sudden cancellation mid-flight of his US passport, was going spirited away by the President of Bolivia Evo Morales aboard his private jet. So what the US apparently was lean on it European allies to stop him. This they duly and dutifully did. Spain, France, and others denied overflight rights to the Bolivian jet, forcing it to turn back and land in Austria. There was even a report that once on the ground, the Spanish ambassador to Austria showed up and asked the Bolivian president if he might come out to the plain for a coffee--and presumably to have a poke around to see he could catch Snowden in the act of vanishing into the cargo hold.

The rumor turned out to be completely false, but it was the Europeans who wound up with the egg on their face. Not to mention the ones who broke international law.

Now we find that once again a European country had (apparently) gone out on a limb for the US--and wound up with egg on its face for trying to show its loyalty to the US in an all-too-slavish fashion by doing America's dirty work.

When will they learn?

Geoff Arnold 15 hours ago
Bolton persuaded the British to play along with the stupid US "maximum pressure" strategy, regardless of its illegality. (Maybe the British government thought that it would placate Trump after Ambassadorgate.) And then of course Pompeo threw them under the bus. It's getting hard to be a US ally (except for Saudi Arabia and Israel.)
cka2nd 14 hours ago
Does the British establishment have any self-respect at all, or do they really enjoy playing lapdog for the USA?
JPH 11 hours ago • edited
The very fact that the UK tried to present its hijack of Iran Oil as an implementation of EU sanctions dovetail well with Bolton's objective of creating another of those "international coalitions" without a UN mandate engaging in 'Crimes of Aggression".

The total lack of support from the EU for this UK hijack signals another defeat to both the UK and the neocons of America.

chris chuba 10 hours ago
Too bad there isn't an international version of the ACLU to argue Iran's legal case before the EU body. What typically happens is that Iran will refuse to send representation because that would in effect, acknowledge their authority. The EU will have a Kangaroo court and enter a vacant decision. This has happened numerous times in the U.S.

Would anyone in the U.S. or EU recognize an Iranian court making similar claims? Speaking of which, the entire point of UN treaties and international law is to prevent individual countries from passing special purpose legislation targeting specific countries. Why couldn't Iran pass a law sanctioning EU vessels that tried to use their territorial waters, what is so special about the EU, because it is an acronym?

britbob 9 hours ago
Spain lodged a formal complaint about the action, because it considers the sea around Gibraltar to be part of its international waters, "We are studying the circumstances and looking at how this affects our sovereignty," Josep Borell, Spain's acting foreign minister, said. So Gibraltar or Spanish waters? Gibraltar – Territorial Waters (1 pg): https://www.academia.edu/30...
Mark Thomason 8 hours ago
Worse than the bad behavior of Bolton, and the poodle behavior of Britain, is the utter failure of our press to provide us a skeptical eye and honest look at events. They've been mere stenographers and megaphones for power doing wrong.
JeffK from PA 5 hours ago
Fake News! Fake News! Fake News! <sarcasm off="">

Thanks for the investigative reporting. Trump has lied almost 11,000 times, so I think nobody expects the truth from The Trump Administration anytime soon. Especially if it goes against the narrative.

JeffK from PA 5 hours ago
And this just in. A UK government official has just stated, related to the Iranian tanker stopped near Gibraltar, the UK will not be part of Trump's 'maximum pressure' gambit on Iran. We shall see if Boris Johnson is for or against that policy.
EmpireLoyalist 4 hours ago
Job number one for Johnson - even before Brexit - must be to purge the neo-con globalists and anybody under their influence from Government.
Fran Macadam 4 hours ago
John Bolton, war criminal.
HenionJD Fran Macadam 2 hours ago
To be considered as such he would have to actually have been involved in a war. Give him a few more weeks and your charge will be valid.
Sid Finster 3 hours ago
OK, so why did the Brits go along with it? Are they so stupid as to not figure out that Iran might respond in kind, or did the Brits not also want war?
LFC 3 hours ago
John Bolton has been desperate for a war with Iran for decades. This is just another escalation in his desperate attempt to get one. He's the classic neocon chicken hawk who is bravely ready to risk and sacrifice other people's lives at the drop of a hat.
david 3 hours ago
Since UK is abusing its control of Gibraltar by behaving like a thug, maybe it is better for the international community to support an independent state of Gibraltar, or at least let Spain has it. It will be better for world peace.
Sid Finster 2 hours ago
While I agree with the gist of the article, remember that Bolton has no authority except that which is given to him. So stop blaming Bolton. Blame Trump.
Zsuzsi Kruska 2 hours ago
The provocations will go on and on until Iran shoots back and then Wash. will get the war it's been trying to start for some time now to pay back all those campaign donors who will profit from another war.

The MIC needs constant wars to use up munitions so new ones can be manufactured. It's really just about business and politicians working together for mutual benefit to keep those contributions coming in. With all the other issues facing America, a war with Iran will just add to the end of the USA which is coming faster than you think.

[Jul 17, 2019] Oil Is Driving the Iran Crisis by Michael T. Klare

Highly recommended!
Washington's aggression is part of a decades-long quest to control the spigot in the Persian Gulf.
Notable quotes:
"... As it happens, the world economy -- of which the United States is the leading beneficiary (despite President Trump's self-destructive trade wars) -- relies on an uninterrupted flow of oil from the Persian Gulf to keep energy prices low. By continuing to serve as the principal overseer of that flow, Washington enjoys striking geopolitical advantages that its foreign policy elites would no more abandon than they would their country's nuclear supremacy. ..."
"... True, Washington fought wars in the Middle East when the American economy was still deeply vulnerable to any disruption in the flow of imported oil. In 1990, this was the key reason President George H.W. Bush gave for his decision to evict Iraqi troops from Kuwait after Saddam Hussein's invasion of that land. "Our country now imports nearly half the oil it consumes and could face a major threat to its economic independence," he told a nationwide TV audience. ..."
"... All told, 33.6 percent of world energy consumption last year was made up of oil, 27.2 percent of coal (itself a global disgrace), 23.9 percent of natural gas, 6.8 percent of hydro-electricity, 4.4 percent of nuclear power, and a mere 4 percent of renewables. ..."
"... Concluding that the increased demand for oil in Asia, in particular, will outweigh reduced demand elsewhere, the IEA calculated in its 2017 World Energy Outlook that oil will remain the world's dominant source of energy in 2040, accounting for an estimated 27.5 percent of total global energy consumption. That will indeed be a smaller share than in 2018, but because global energy consumption as a whole is expected to grow substantially during those decades, net oil production could still rise -- from an estimated 100 million barrels a day in 2018 to about 105 million barrels in 2040. ..."
"... More dramatic yet is the growing centrality of the Asia-Pacific region to the global flow of petroleum. In 2000, that region accounted for only 28 percent of world consumption; in 2040, its share is expected to stand at 44 percent, thanks to the growth of China, India, and other Asian countries, whose newly affluent consumers are already buying cars, trucks, motorcycles, and other oil-powered products. ..."
"... To lend muscle to what would soon be dubbed the "Carter Doctrine," the president created a new US military organization, the Rapid Deployment Joint Task Force (RDJTF), and obtained basing facilities for it in the Gulf region. Ronald Reagan, who succeeded Carter as president in 1981, made the RDJTF into a full-scale "geographic combatant command," dubbed Central Command, or CENTCOM, which continues to be tasked with ensuring American access to the Gulf today (as well as overseeing the country's never-ending wars in the Greater Middle East). ..."
"... When ordering US forces into combat in the Gulf, American presidents have always insisted that they were acting in the interests of the entire West. In advocating for the "reflagging" mission of 1987, for instance, Secretary of Defense Caspar Weinberger argued (as he would later recall in his memoir Fighting for Peace ), "The main thing was for us to protect the right of innocent, nonbelligerent and extremely important commerce to move freely in international open waters -- and, by our offering protection, to avoid conceding the mission to the Soviets." Though rarely so openly acknowledged, the same principle has undergirded Washington's strategy in the region ever since: The United States alone must be the ultimate guarantor of unimpeded oil commerce in the Persian Gulf. ..."
"... Look closely and you can find this principle lurking in every fundamental statement of US policy related to that region and among the Washington elite more generally. My own personal favorite, when it comes to pithiness, is a sentence in a report on the geopolitics of energy issued in 2000 by the Center for Strategic and International Studies , a Washington-based think tank well-populated with former government officials (several of whom contributed to the report): "As the world's only superpower, [the United States] must accept its special responsibilities for preserving access to [the] worldwide energy supply." You can't get much more explicit than that. ..."
"... As things stand today, any Iranian move in the Strait of Hormuz that can be portrayed as a threat to the "free flow of commerce" (that is, the oil trade) represents the most likely trigger for direct US military action. Yes, Tehran's pursuit of nuclear weapons and its support for radical Shiite movements throughout the Middle East will be cited as evidence of its leadership's malevolence, but its true threat will be to American dominance of the oil lanes, a danger Washington will treat as the offense of all offenses to be overcome at any cost. ..."
Jan 11, 2019 | thenation.com

EDITOR'S NOTE: This article originally appeared at TomDispatch.com .

It's always the oil. While President Trump was hobnobbing with Saudi Crown Prince Mohammed bin Salman at the G-20 summit in Japan, brushing off a recent UN report about the prince's role in the murder of Washington Post columnist Jamal Khashoggi, Secretary of State Mike Pompeo was in Asia and the Middle East, pleading with foreign leaders to support "Sentinel." The aim of that administration plan: to protect shipping in the Strait of Hormuz and the Persian Gulf.

Both Trump and Pompeo insisted that their efforts were driven by concern over Iranian misbehavior in the region and the need to ensure the safety of maritime commerce. Neither, however, mentioned one inconvenient three-letter word -- O-I-L -- that lay behind their Iranian maneuvering (as it has impelled every other American incursion in the Middle East since World War II).

Now, it's true that the United States no longer relies on imported petroleum for a large share of its energy needs. Thanks to the fracking revolution , the country now gets the bulk of its oil -- approximately 75 percent -- from domestic sources. (In 2008, that share had been closer to 35 percent.) Key allies in NATO and rivals like China, however, continue to depend on Middle Eastern oil for a significant proportion of their energy needs.

As it happens, the world economy -- of which the United States is the leading beneficiary (despite President Trump's self-destructive trade wars) -- relies on an uninterrupted flow of oil from the Persian Gulf to keep energy prices low. By continuing to serve as the principal overseer of that flow, Washington enjoys striking geopolitical advantages that its foreign policy elites would no more abandon than they would their country's nuclear supremacy.

This logic was spelled out clearly by President Barack Obama in a September 2013 address to the UN General Assembly in which he declared that "the United States of America is prepared to use all elements of our power, including military force, to secure our core interests" in the Middle East. He then pointed out that, while the United States was steadily reducing its reliance on imported oil, "the world still depends on the region's energy supply and a severe disruption could destabilize the entire global economy."

Accordingly, he concluded, "We will ensure the free flow of energy from the region to the world." To some Americans, that dictum -- and its continued embrace by President Trump and Secretary of State Pompeo -- may seem anachronistic. True, Washington fought wars in the Middle East when the American economy was still deeply vulnerable to any disruption in the flow of imported oil. In 1990, this was the key reason President George H.W. Bush gave for his decision to evict Iraqi troops from Kuwait after Saddam Hussein's invasion of that land. "Our country now imports nearly half the oil it consumes and could face a major threat to its economic independence," he told a nationwide TV audience.

But talk of oil soon disappeared from his comments about what became Washington's first (but hardly last) Gulf War after his statement provoked widespread public outrage . ("No Blood for Oil" became a widely used protest sign then.) His son, the second President Bush, never even mentioned that three-letter word when announcing his 2003 invasion of Iraq. Yet, as Obama's UN speech made clear, oil remained, and still remains, at the center of US foreign policy. A quick review of global energy trends helps explain why this has continued to be so.

THE WORLD'S UNDIMINISHED RELIANCE ON PETROLEUM

Despite all that's been said about climate change and oil's role in causing it -- and about the enormous progress being made in bringing solar and wind power online -- we remain trapped in a remarkably oil-dependent world. To grasp this reality, all you have to do is read the most recent edition of oil giant BP's "Statistical Review of World Energy," published this June. In 2018, according to that report, oil still accounted for by far the largest share of world energy consumption, as it has every year for decades. All told, 33.6 percent of world energy consumption last year was made up of oil, 27.2 percent of coal (itself a global disgrace), 23.9 percent of natural gas, 6.8 percent of hydro-electricity, 4.4 percent of nuclear power, and a mere 4 percent of renewables.

Most energy analysts believe that the global reliance on petroleum as a share of world energy use will decline in the coming decades, as more governments impose restrictions on carbon emissions and as consumers, especially in the developed world, switch from oil-powered to electric vehicles. But such declines are unlikely to prevail in every region of the globe and total oil consumption may not even decline. According to projections from the International Energy Agency (IEA) in its " New Policies Scenario " (which assumes significant but not drastic government efforts to curb carbon emissions globally), Asia, Africa, and the Middle East are likely to experience a substantially increased demand for petroleum in the years to come, which, grimly enough, means global oil consumption will continue to rise.

Concluding that the increased demand for oil in Asia, in particular, will outweigh reduced demand elsewhere, the IEA calculated in its 2017 World Energy Outlook that oil will remain the world's dominant source of energy in 2040, accounting for an estimated 27.5 percent of total global energy consumption. That will indeed be a smaller share than in 2018, but because global energy consumption as a whole is expected to grow substantially during those decades, net oil production could still rise -- from an estimated 100 million barrels a day in 2018 to about 105 million barrels in 2040.

Of course, no one, including the IEA's experts, can be sure how future extreme manifestations of global warming like the severe heat waves recently tormenting Europe and South Asia could change such projections. It's possible that growing public outrage could lead to far tougher restrictions on carbon emissions between now and 2040. Unexpected developments in the field of alternative energy production could also play a role in changing those projections. In other words, oil's continuing dominance could still be curbed in ways that are now unpredictable.

In the meantime, from a geopolitical perspective, a profound shift is taking place in the worldwide demand for petroleum. In 2000, according to the IEA, older industrialized nations -- most of them members of the Organization for Economic Cooperation and Development (OECD) -- accounted for about two-thirds of global oil consumption; only about a third went to countries in the developing world. By 2040, the IEA's experts believe that ratio will be reversed, with the OECD consuming about one-third of the world's oil and non-OECD nations the rest.

More dramatic yet is the growing centrality of the Asia-Pacific region to the global flow of petroleum. In 2000, that region accounted for only 28 percent of world consumption; in 2040, its share is expected to stand at 44 percent, thanks to the growth of China, India, and other Asian countries, whose newly affluent consumers are already buying cars, trucks, motorcycles, and other oil-powered products.

Where will Asia get its oil? Among energy experts, there is little doubt on this matter. Lacking significant reserves of their own, the major Asian consumers will turn to the one place with sufficient capacity to satisfy their rising needs: the Persian Gulf. According to BP, in 2018, Japan already obtained 87 percent of its oil imports from the Middle East, India 64 percent, and China 44 percent. Most analysts assume these percentages will only grow in the years to come, as production in other areas declines.

This will, in turn, lend even greater strategic importance to the Persian Gulf region, which now possesses more than 60 percent of the world's untapped petroleum reserves, and to the Strait of Hormuz, the narrow passageway through which approximately one-third of the world's seaborne oil passes daily. Bordered by Iran, Oman, and the United Arab Emirates, the Strait is perhaps the most significant -- and contested -- geostrategic location on the planet today.

CONTROLLING THE SPIGOT

When the Soviet Union invaded Afghanistan in 1979, the same year that militant Shiite fundamentalists overthrew the US-backed Shah of Iran, US policy-makers concluded that America's access to Gulf oil supplies was at risk and a US military presence was needed to guarantee such access. As President Jimmy Carter would say in his State of the Union Address on January 23, 1980,

The region which is now threatened by Soviet troops in Afghanistan is of great strategic importance: It contains more than two thirds of the world's exportable oil. The Soviet effort to dominate Afghanistan has brought Soviet military forces to within 300 miles of the Indian Ocean and close to the Strait of Hormuz, a waterway through which most of the world's oil must flow. Let our position be absolutely clear: an attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America, and such an assault will be repelled by any means necessary, including military force.

To lend muscle to what would soon be dubbed the "Carter Doctrine," the president created a new US military organization, the Rapid Deployment Joint Task Force (RDJTF), and obtained basing facilities for it in the Gulf region. Ronald Reagan, who succeeded Carter as president in 1981, made the RDJTF into a full-scale "geographic combatant command," dubbed Central Command, or CENTCOM, which continues to be tasked with ensuring American access to the Gulf today (as well as overseeing the country's never-ending wars in the Greater Middle East).

Reagan was the first president to activate the Carter Doctrine in 1987 when he ordered Navy warships to escort Kuwaiti tankers, " reflagged " with the stars and stripes, as they traveled through the Strait of Hormuz. From time to time, such vessels had been coming under fire from Iranian gunboats, part of an ongoing " Tanker War ," itself part of the Iran-Iraq War of those years. The Iranian attacks on those tankers were meant to punish Sunni Arab countries for backing Iraqi autocrat Saddam Hussein in that conflict. The American response, dubbed Operation Earnest Will , offered an early model of what Secretary of State Pompeo is seeking to establish today with his Sentinel program.

Operation Earnest Will was followed two years later by a massive implementation of the Carter Doctrine, President Bush's 1990 decision to push Iraqi forces out of Kuwait. Although he spoke of the need to protect US access to Persian Gulf oil fields, it was evident that ensuring a safe flow of oil imports wasn't the only motive for such military involvement. Equally important then (and far more so now): the geopolitical advantage controlling the world's major oil spigot gave Washington.

When ordering US forces into combat in the Gulf, American presidents have always insisted that they were acting in the interests of the entire West. In advocating for the "reflagging" mission of 1987, for instance, Secretary of Defense Caspar Weinberger argued (as he would later recall in his memoir Fighting for Peace ), "The main thing was for us to protect the right of innocent, nonbelligerent and extremely important commerce to move freely in international open waters -- and, by our offering protection, to avoid conceding the mission to the Soviets." Though rarely so openly acknowledged, the same principle has undergirded Washington's strategy in the region ever since: The United States alone must be the ultimate guarantor of unimpeded oil commerce in the Persian Gulf.

Look closely and you can find this principle lurking in every fundamental statement of US policy related to that region and among the Washington elite more generally. My own personal favorite, when it comes to pithiness, is a sentence in a report on the geopolitics of energy issued in 2000 by the Center for Strategic and International Studies , a Washington-based think tank well-populated with former government officials (several of whom contributed to the report): "As the world's only superpower, [the United States] must accept its special responsibilities for preserving access to [the] worldwide energy supply." You can't get much more explicit than that.

Of course, along with this "special responsibility" comes a geopolitical advantage: By providing this service, the United States cements its status as the world's sole superpower and places every other oil-importing nation -- and the world at large -- in a condition of dependence on its continued performance of this vital function.

Originally, the key dependents in this strategic equation were Europe and Japan, which, in return for assured access to Middle Eastern oil, were expected to subordinate themselves to Washington. Remember, for example, how they helped pay for Bush the elder's Iraq War (dubbed Operation Desert Storm). Today, however, many of those countries, deeply concerned with the effects of climate change, are seeking to lessen oil's role in their national fuel mixes. As a result, in 2019, the countries potentially most at the mercy of Washington when it comes to access to Gulf oil are economically fast-expanding China and India, whose oil needs are only likely to grow. That, in turn, will further enhance the geopolitical advantage Washington enjoyed as long as it remains the principal guardian of the flow of oil from the Persian Gulf. How it may seek to exploit this advantage remains to be seen, but there is no doubt that all parties involved, including the Chinese, are well aware of this asymmetric equation, which could give the phrase "trade war" a far deeper and more ominous meaning.

THE IRANIAN CHALLENGE AND THE SPECTER OF WAR

From Washington's perspective, the principal challenger to America's privileged status in the Gulf is Iran. By reason of geography, that country possesses a potentially commanding position along the northern Gulf and the Strait of Hormuz, as the Reagan administration learned in 1987–88 when it threatened American oil dominance there. About this reality President Reagan couldn't have been clearer. "Mark this point well: The use of the sea lanes of the Persian Gulf will not be dictated by the Iranians," he declared in 1987 -- and Washington's approach to the situation has never changed.

In more recent times, in response to US and Israeli threats to bomb their nuclear facilities or, as the Trump administration has done, impose economic sanctions on their country, the Iranians have threatened on numerous occasions to block the Strait of Hormuz to oil traffic, squeeze global energy supplies, and precipitate an international crisis. In 2011, for example, Iranian Vice President Mohammad Reza Rahimi warned that should the West impose sanctions on Iranian oil, "not even one drop of oil can flow through the Strait of Hormuz." In response, US officials have vowed ever since to let no such thing happen, just as Secretary of Defense Leon Panetta did in response to Rahimi at that time. "We have made very clear," he said , "that the United States will not tolerate blocking of the Strait of Hormuz." That, he added, was a "red line for us."

It remains so today. Hence, the present ongoing crisis in the Gulf, with fierce US sanctions on Iranian oil sales and threatening Iranian gestures toward the regional oil flow in response. "We will make the enemy understand that either everyone can use the Strait of Hormuz or no one," said Mohammad Ali Jafari, commander of Iran's elite Revolutionary Guards, in July 2018. And attacks on two oil tankers in the Gulf of Oman near the entrance to the Strait of Hormuz on June 13 could conceivably have been an expression of just that policy, if -- as claimed by the United States -- they were indeed carried out by members of the Revolutionary Guards. Any future attacks are only likely to spur US military action against Iran in accordance with the Carter Doctrine. As Pentagon spokesperson Bill Urban put it in response to Jafari's statement, "We stand ready to ensure the freedom of navigation and the free flow of commerce wherever international law allows."

As things stand today, any Iranian move in the Strait of Hormuz that can be portrayed as a threat to the "free flow of commerce" (that is, the oil trade) represents the most likely trigger for direct US military action. Yes, Tehran's pursuit of nuclear weapons and its support for radical Shiite movements throughout the Middle East will be cited as evidence of its leadership's malevolence, but its true threat will be to American dominance of the oil lanes, a danger Washington will treat as the offense of all offenses to be overcome at any cost.

If the United States goes to war with Iran, you are unlikely to hear the word "oil" uttered by top Trump administration officials, but make no mistake: That three-letter word lies at the root of the present crisis, not to speak of the world's long-term fate.

Michael T. Klare The Nation 's defense correspondent, is professor emeritus of peace and world-security studies at Hampshire College and senior visiting fellow at the Arms Control Association in Washington, DC. His newest book, All Hell Breaking Loose: The Pentagon's Perspective on Climate Change , will be published this fall.

[Jul 06, 2019] Why is Iran such a high priority for US elite? Because Iran successfully booted out the CIA and CIA-imposed regime out of their country and successfully remained independent since then

Highly recommended!
Notable quotes:
"... There is at present no other powerful leadership group that is so adamantly unwilling to compromise with the U.S. The potential loss of U.S. control over Middle East oil being at the root of it. ..."
"... The Saudis et al have it, and Israel is a forward operating base for protecting it. The Saudi royal family rightly fear an Iran-inspired popular uprising against them and Israel fears the loss of lands granted to them by their invisible friend as related in a popular fairy tale. ..."
"... Iran is a relatively large country with a semi independent foreign policy and banking,/ financial system, and they want to control their own resources independent of western dictates about opening up their system to the neo liberal system. ..."
"... Because Iran successfully booted out the CIA and CIA-imposed regime out of their country and successfully remained independent since then. ..."
"... Iran was after WW2 a client state of both the US and the UK, the latter installing the Shah as a ruler. Iran was important for the US and the UK through its oil resources and its border with the USSR. ..."
"... Iran is still a major player when it comes to oil, but contrary to the Shah years quite hostile to the aspirations of Israel to become the “western” power in the middle east. ..."
"... The enmity clearest showed up when Israel and the USA supplied Saddam Hussein with intelligence and Germany and France with the capability to produce chemical weapons during the Iraq/Iran war. ..."
"... America essentially followed the old British approach towards Iran: keep it semi-alive so that it can put up enough resistance to the USSR until America’s more important and intrinsic interests, such as those in the Persian Gulf, were safeguarded. But Washington never wanted to turn Iran into a strong ally that one day might be capable of challenging America. ..."
"... By changing the international balance of power and removing the risk of Soviet penetration, the USSR’s fall eliminated Iran’s value to the United States even as a buffer state. In fact, the fundamental shift to a US approach based on the principle of no compromise, can be traced to 1987, when Gorbachev’s reforms began. ..."
"... Since then, the United States has refused to accept any solution to the Iran problem that has not involved the country’s absolute capitulation. ..."
"... For instance, in 2003, Iran offered to put all the outstanding issues between the two countries on the table for negotiations, but the US refused. ..."
"... Because Iran refuses to be a second-class citizen in its own neighborhood. Theirs is an ancient culture whose legacy to the world is enormous, their history is the stuff of legend, and they are the geopolitical power player in the region, not to mention the most powerful Shia Muslim nation. ..."
Jul 06, 2019 | www.nakedcapitalism.com

Joe Well, July 5, 2019 at 11:47 am

>>US President Donald Trump’s ruthless use of the centrality of his country’s financial system and the dollar to force economic partners to abide by his unilateral sanctions on Iran has forced the world to recognise the political price of asymmetric economic interdependence.

Why is Iran such a high priority for so many US elites?

Lee, July 5, 2019 at 12:28 pm

Just spit-balling here: The Iranian leadership, with good cause, wants to diminish or eliminate the U.S. grip on the region and this subversive, potentially destabilizing sentiment resonates among the citizenry of various Middle Eastern countries.

There is at present no other powerful leadership group that is so adamantly unwilling to compromise with the U.S. The potential loss of U.S. control over Middle East oil being at the root of it.

The Saudis et al have it, and Israel is a forward operating base for protecting it. The Saudi royal family rightly fear an Iran-inspired popular uprising against them and Israel fears the loss of lands granted to them by their invisible friend as related in a popular fairy tale.

This is hardly definitive and I’m sure others could elaborate.

workingclasshero, July 5, 2019 at 12:53 pm

Iran is a relatively large country with a semi independent foreign policy and banking,/ financial system, and they want to control their own resources independent of western dictates about opening up their system to the neo liberal system.

I’m sure this is obvious to most people at this kind of web site and is overly simplistic but i sense sometimes some people are shocked about the conflict with Iran and don’t get that basic dynamic of this conflict.

Underdog Revolutions, July 5, 2019 at 1:34 pm

Because Iran successfully booted out the CIA and CIA-imposed regime out of their country and successfully remained independent since then.

US elites never forgave them for it. Same reason they hate and punish Cuba, another country that poses no threat to anyone but its own citizens.

Peter Moritz, July 5, 2019 at 1:46 pm

Why is Iran such a high priority for so many US elites?

Iran was after WW2 a client state of both the US and the UK, the latter installing the Shah as a ruler. Iran was important for the US and the UK through its oil resources and its border with the USSR.

Mossadegh, by nationalising the oil supply until, played against the status and he was overthrown in a MI/CIA sponsored coup in 1953, leaving the Shah as the sole ruler in Iran till the revolution of 1979 when Iran came under theocratic rule and basically diminished the power the US had throughout the years of the Shah’s rule.

The US was also shown to be quite powerless -- short of an invasion -- to deal with the hostage crisis in the US embassy, which was finally after more than a year resolved with the help of Canada.

Iran is still a major player when it comes to oil, but contrary to the Shah years quite hostile to the aspirations of Israel to become the “western” power in the middle east.

The enmity clearest showed up when Israel and the USA supplied Saddam Hussein with intelligence and Germany and France with the capability to produce chemical weapons during the Iraq/Iran war.

Here is a more in-depth look:

https://lobelog.com/the-real-causes-of-americas-troubled-relations-with-iran/

This U.S. approach towards Iran has been the result of its lack of an intrinsic interest in the country. The same was true of Britain. The late Sir Denis Right, the UK’s ambassador to Iran in the 1960s, put it best by writing that Britain never considered Iran of sufficient value to colonize it. But it found Iran useful as a buffer against the competing great power, the Russian Empire. Thus, British policy towards Iran was to keep it moribund but not dead, at least not as long as the Russian threat persisted.

America essentially followed the old British approach towards Iran: keep it semi-alive so that it can put up enough resistance to the USSR until America’s more important and intrinsic interests, such as those in the Persian Gulf, were safeguarded. But Washington never wanted to turn Iran into a strong ally that one day might be capable of challenging America.

By changing the international balance of power and removing the risk of Soviet penetration, the USSR’s fall eliminated Iran’s value to the United States even as a buffer state. In fact, the fundamental shift to a US approach based on the principle of no compromise, can be traced to 1987, when Gorbachev’s reforms began.

Since then, the United States has refused to accept any solution to the Iran problem that has not involved the country’s absolute capitulation.

For instance, in 2003, Iran offered to put all the outstanding issues between the two countries on the table for negotiations, but the US refused.

ChiGal in Carolina, July 5, 2019 at 6:38 pm

Because Iran refuses to be a second-class citizen in its own neighborhood. Theirs is an ancient culture whose legacy to the world is enormous, their history is the stuff of legend, and they are the geopolitical power player in the region, not to mention the most powerful Shia Muslim nation.

[Jul 05, 2019] The World Bank and IMF 2019 by Michael Hudson and Bonnie Faulkner

Highly recommended!
Notable quotes:
"... The purpose of a military conquest is to take control of foreign economies, to take control of their land and impose tribute. The genius of the World Bank was to recognize that it's not necessary to occupy a country in order to impose tribute, or to take over its industry, agriculture and land. Instead of bullets, it uses financial maneuvering. As long as other countries play an artificial economic game that U.S. diplomacy can control, finance is able to achieve today what used to require bombing and loss of life by soldiers ..."
"... It was set up basically by the United States in 1944, along with its sister institution, the International Monetary Fund (IMF). Their purpose was to create an international order like a funnel to make other countries economically dependent on the United States ..."
"... American diplomats insisted on the ability to veto any action by the World Bank or IMF. The aim of this veto power was to make sure that any policy was, in Donald Trump's words, to put America first. "We've got to win and they've got to lose." ..."
"... The World Bank was set up from the outset as a branch of the military, of the Defense Department. John J. McCloy (Assistant Secretary of War, 1941-45), was the first full-time president ..."
"... Many countries had two rates: one for goods and services, which was set normally by the market, and then a different exchange rate that was managed for capital movements. That was because countries were trying to prevent capital flight. They didn't want their wealthy classes or foreign investors to make a run on their own currency – an ever-present threat in Latin America. ..."
"... The IMF and the World Bank backed the cosmopolitan classes, the wealthy. Instead of letting countries control their capital outflows and prevent capital flight, the IMF's job is to protect the richest One Percent and foreign investors from balance-of-payments problems ..."
"... The IMF enables its wealthy constituency to move their money out of the country without taking a foreign-exchange loss ..."
"... Wall Street speculators have sold the local currency short to make a killing, George-Soros style. ..."
"... When the debtor-country currency collapses, the debts that these Latin American countries owe are in dollars, and now have to pay much more in their own currency to carry and pay off these debts. ..."
"... Local currency is thrown onto the foreign-exchange market for dollars, lowering the exchange rate. That increases import prices, raising a price umbrella for domestic products. ..."
"... Instead, the IMF says just the opposite: It acts to prevent any move by other countries to bring the debt volume within the ability to be paid. It uses debt leverage as a way to control the monetary lifeline of financially defeated debtor countries. ..."
"... This control by the U.S. financial system and its diplomacy has been built into the world system by the IMF and the World Bank claiming to be international instead of an expression of specifically U.S. New Cold War nationalism. ..."
"... The same thing happened in Greece a few years ago, when almost all of Greece's foreign debt was owed to Greek millionaires holding their money in Switzerland ..."
"... The IMF could have seized this money to pay off the bondholders. Instead, it made the Greek economy pay. It found that it was worth wrecking the Greek economy, forcing emigration and wiping out Greek industry so that French and German bondholding banks would not have to take a loss. That is what makes the IMF so vicious an institution. ..."
"... America was able to grab all of Iran's foreign exchange just by the banks interfering. The CIA has bragged that it can do the same thing with Russia. If Russia does something that U.S. diplomats don't like, the U.S. can use the SWIFT bank payment system to exclude Russia from it, so the Russian banks and the Russian people and industry won't be able to make payments to each other. ..."
"... You can't create the money, especially if you're running a balance of payments deficit and if U.S. foreign policy forces you into deficit by having someone like George Soros make a run on your currency. Look at the Asia crisis in 1997. Wall Street funds bet against foreign currencies, driving them way down, and then used the money to pick up industry cheap in Korea and other Asian countries. ..."
"... This was also done to Russia's ruble. The only country that avoided this was Malaysia, under Mohamed Mahathir, by using capital controls. Malaysia is an object lesson in how to prevent a currency flight. ..."
"... Client kleptocracies take their money and run, moving it abroad to hard currency areas such as the United States, or at least keeping it in dollars in offshore banking centers instead of reinvesting it to help the country catch up by becoming independent agriculturally, in energy, finance and other sectors. ..."
"... But in shaping the World Trade Organization's rules, the United States said that all countries had to promote free trade and could not have government support, except for countries that already had it. We're the only country that had it. That's what's called "grandfathering". ..."
Jul 05, 2019 | www.unz.com

"The purpose of a military conquest is to take control of foreign economies, to take control of their land and impose tribute. The genius of the World Bank was to recognize that it's not necessary to occupy a country in order to impose tribute, or to take over its industry, agriculture and land. Instead of bullets, it uses financial maneuvering. As long as other countries play an artificial economic game that U.S. diplomacy can control, finance is able to achieve today what used to require bombing and loss of life by soldiers."

I'm Bonnie Faulkner. Today on Guns and Butter: Dr. Michael Hudson. Today's show: The IMF and World Bank: Partners In Backwardness . Dr. Hudson is a financial economist and historian. He is President of the Institute for the Study of Long-Term Economic Trend, a Wall Street Financial Analyst, and Distinguished Research Professor of Economics at the University of Missouri, Kansas City.

His most recent books include " and Forgive them Their Debts: Lending, Foreclosure and Redemption from Bronze Age Finance to the Jubilee Year "; Killing the Host: How Financial Parasites and Debt Destroy the Global Economy , and J Is for Junk Economics: A Guide to Reality in an Age of Deception . He is also author of Trade, Development and Foreign Debt , among many other books.

We return today to a discussion of Dr. Hudson's seminal 1972 book, Super Imperialism: The Economic Strategy of American Empire , a critique of how the United States exploited foreign economies through the IMF and World Bank, with a special emphasis on food imperialism.

... ... ...

Bonnie Faulkner : In your seminal work form 1972, Super-Imperialism: The Economic Strategy of American Empire , you write: "The development lending of the World Bank has been dysfunctional from the outset." When was the World Bank set up and by whom?

Michael Hudson : It was set up basically by the United States in 1944, along with its sister institution, the International Monetary Fund (IMF). Their purpose was to create an international order like a funnel to make other countries economically dependent on the United States. To make sure that no other country or group of countries – even all the rest of the world – could not dictate U.S. policy. American diplomats insisted on the ability to veto any action by the World Bank or IMF. The aim of this veto power was to make sure that any policy was, in Donald Trump's words, to put America first. "We've got to win and they've got to lose."

The World Bank was set up from the outset as a branch of the military, of the Defense Department. John J. McCloy (Assistant Secretary of War, 1941-45), was the first full-time president. He later became Chairman of Chase Manhattan Bank (1953-60). McNamara was Secretary of Defense (1961-68), Paul Wolfowitz was Deputy and Under Secretary of Defense (1989-2005), and Robert Zoellick was Deputy Secretary of State. So I think you can look at the World Bank as the soft shoe of American diplomacy.

Bonnie Faulkner : What is the difference between the World Bank and the International Monetary Fund, the IMF? Is there a difference?

Michael Hudson : Yes, there is. The World Bank was supposed to make loans for what they call international development. "Development" was their euphemism for dependency on U.S. exports and finance. This dependency entailed agricultural backwardness – opposing land reform, family farming to produce domestic food crops, and also monetary backwardness in basing their monetary system on the dollar.

The World Bank was supposed to provide infrastructure loans that other countries would go into debt to pay American engineering firms, to build up their export sectors and their plantation sectors by public investment roads and port development for imports and exports. Essentially, the Bank financed long- investments in the foreign trade sector, in a way that was a natural continuation of European colonialism.

In 1941, for example, C. L. R. James wrote an article on "Imperialism in Africa" pointing out the fiasco of European railroad investment in Africa: "Railways must serve flourishing industrial areas, or densely populated agricult5ural regions, or they must open up new land along which a thriving population develops and provides the railways with traffic. Except in the mining regions of South Africa, all these conditions are absent. Yet railways were needed, for the benefit of European investors and heavy industry." That is why, James explained "only governments can afford to operate them," while being burdened with heavy interest obligations. [1] What was "developed" was Africa's mining and plantation export sector, not its domestic economies. The World Bank followed this pattern of "development" lending without apology.

The IMF was in charge of short-term foreign currency loans. Its aim was to prevent countries from imposing capital controls to protect their balance of payments. Many countries had a dual exchange rate: one for trade in goods and services, the other rate for capital movements. The function of the IMF and World Bank was essentially to make other countries borrow in dollars, not in their own currencies, and to make sure that if they could not pay their dollar-denominated debts, they had to impose austerity on the domestic economy – while subsidizing their import and export sectors and protecting foreign investors, creditors and client oligarchies from loss.

The IMF developed a junk-economics model pretending that any country can pay any amount of debt to the creditors if it just impoverishes its labor enough. So when countries were unable to pay their debt service, the IMF tells them to raise their interest rates to bring on a depression – austerity – and break up the labor unions. That is euphemized as "rationalizing labor markets." The rationalizing is essentially to disable labor unions and the public sector. The aim – and effect – is to prevent countries from essentially following the line of development that had made the United States rich – by public subsidy and protection of domestic agriculture, public subsidy and protection of industry and an active government sector promoting a New Deal democracy. The IMF was essentially promoting and forcing other countries to balance their trade deficits by letting American and other investors buy control of their commanding heights, mainly their infrastructure monopolies, and to subsidize their capital flight.

BONNIE FAULKNER : Now, Michael, when you began speaking about the IMF and monetary controls, you mentioned that there were two exchange rates of currency in countries. What were you referring to?

MICHAEL HUDSON : When I went to work on Wall Street in the '60s, I was balance-of-payments economist for Chase Manhattan, and we used the IMF's monthly International Financial Statistics every month. At the top of each country's statistics would be the exchange-rate figures. Many countries had two rates: one for goods and services, which was set normally by the market, and then a different exchange rate that was managed for capital movements. That was because countries were trying to prevent capital flight. They didn't want their wealthy classes or foreign investors to make a run on their own currency – an ever-present threat in Latin America.

The IMF and the World Bank backed the cosmopolitan classes, the wealthy. Instead of letting countries control their capital outflows and prevent capital flight, the IMF's job is to protect the richest One Percent and foreign investors from balance-of-payments problems.

The World Bank and American diplomacy have steered them into a chronic currency crisis. The IMF enables its wealthy constituency to move their money out of the country without taking a foreign-exchange loss. It makes loans to support capital flight out of domestic currencies into the dollar or other hard currencies. The IMF calls this a "stabilization" program. It is never effective in helping the debtor economy pay foreign debts out of growth. Instead, the IMF uses currency depreciation and sell-offs of public infrastructure and other assets to foreign investors after the flight capital has left and currency collapses. Wall Street speculators have sold the local currency short to make a killing, George-Soros style.

When the debtor-country currency collapses, the debts that these Latin American countries owe are in dollars, and now have to pay much more in their own currency to carry and pay off these debts. We're talking about enormous penalty rates in domestic currency for these countries to pay foreign-currency debts – basically taking on to finance a non-development policy and to subsidize capital flight when that policy "fails" to achieve its pretended objective of growth.

All hyperinflations of Latin America – Chile early on, like Germany after World War I – come from trying to pay foreign debts beyond the ability to be paid. Local currency is thrown onto the foreign-exchange market for dollars, lowering the exchange rate. That increases import prices, raising a price umbrella for domestic products.

A really functional and progressive international monetary fund that would try to help countries develop would say: "Okay, banks and we (the IMF) have made bad loans that the country can't pay. And the World Bank has given it bad advice, distorting its domestic development to serve foreign customers rather than its own growth. So we're going to write down the loans to the ability to be paid." That's what happened in 1931, when the world finally stopped German reparations payments and Inter-Ally debts to the United States stemming from World War I.

Instead, the IMF says just the opposite: It acts to prevent any move by other countries to bring the debt volume within the ability to be paid. It uses debt leverage as a way to control the monetary lifeline of financially defeated debtor countries. So if they do something that U.S. diplomats don't approve of, it can pull the plug financially, encouraging a run on their currency if they act independently of the United States instead of falling in line. This control by the U.S. financial system and its diplomacy has been built into the world system by the IMF and the World Bank claiming to be international instead of an expression of specifically U.S. New Cold War nationalism.

BONNIE FAULKNER : How do exchange rates contribute to capital flight?

MICHAEL HUDSON : It's not the exchange rate that contributes. Suppose that you're a millionaire, and you see that your country is unable to balance its trade under existing production patterns. The money that the government has under control is pesos, escudos, cruzeiros or some other currency, not dollars or euros. You see that your currency is going to go down relative to the dollar, so you want to get our money out of the country to preserve your purchasing power.

This has long been institutionalized. By 1990, for instance, Latin American countries had defaulted so much in the wake of the Mexico defaults in 1982 that I was hired by Scudder Stevens, to help start a Third World Bond Fund (called a "sovereign high-yield fund"). At the time, Argentina and Brazil were running such serious balance-of-payments deficits that they were having to pay 45 percent per year interest, in dollars, on their dollar debt. Mexico, was paying 22.5 percent on its tesobonos .

Scudders' salesmen went around to the United States and tried to sell shares in the proposed fund, but no Americans would buy it, despite the enormous yields. They sent their salesmen to Europe and got a similar reaction. They had lost their shirts on Third World bonds and couldn't see how these countries could pay.

Merrill Lynch was the fund's underwriter. Its office in Brazil and in Argentina proved much more successful in selling investments in Scudder's these offshore fund established in the Dutch West Indies. It was an offshore fund, so Americans were not able to buy it. But Brazilian and Argentinian rich families close to the central bank and the president became the major buyers. We realized that they were buying these funds because they knew that their government was indeed going to pay their stipulated interest charges. In effect, the bonds were owed ultimately to themselves. So these Yankee dollar bonds were being bought by Brazilians and other Latin Americans as a vehicle to move their money out of their soft local currency (which was going down), to buy bonds denominated in hard dollars.

BONNIE FAULKNER : If wealthy families from these countries bought these bonds denominated in dollars, knowing that they were going to be paid off, who was going to pay them off? The country that was going broke?

MICHAEL HUDSON : Well, countries don't pay; the taxpayers pay, and in the end, labor pays. The IMF certainly doesn't want to make its wealthy client oligarchies pay. It wants to squeeze ore economic surplus out of the labor force. So countries are told that the way they can afford to pay their enormously growing dollar-denominated debt is to lower wages even more.

Currency depreciation is an effective way to do this, because what is devalued is basically labor's wages. Other elements of exports have a common world price: energy, raw materials, capital goods, and credit under the dollar-centered international monetary system that the IMF seeks to maintain as a financial strait jacket.

According to the IMF's ideological models, there's no limit to how far you can lower wages by enough to make labor competitive in producing exports. The IMF and World Bank thus use junk economics to pretend that the way to pay debts owed to the wealthiest creditors and investors is to lower wages and impose regressive excise taxes, to impose special taxes on necessities that labor needs, from food to energy and basic services supplied by public infrastructure.

BONNIE FAULKNER: So you're saying that labor ultimately has to pay off these junk bonds?

MICHAEL HUDSON: That is the basic aim of IMF. I discuss its fallacies in my Trade Development and Foreign Debt , which is the academic sister volume to Super Imperialism . These two books show that the World Bank and IMF were viciously anti-labor from the very outset, working with domestic elites whose fortunes are tied to and loyal to the United States.

BONNIE FAULKNER : With regard to these junk bonds, who was it or what entity

MICHAEL HUDSON : They weren't junk bonds. They were called that because they were high-interest bonds, but they weren't really junk because they actually were paid. Everybody thought they were junk because no American would have paid 45 percent interest. Any country that really was self-reliant and was promoting its own economic interest would have said, "You banks and the IMF have made bad loans, and you've made them under false pretenses – a trade theory that imposes austerity instead of leading to prosperity. We're not going to pay." They would have seized the capital flight of their comprador elites and said that these dollar bonds were a rip-off by the corrupt ruling class.

The same thing happened in Greece a few years ago, when almost all of Greece's foreign debt was owed to Greek millionaires holding their money in Switzerland. The details were published in the "Legarde List." But the IMF said, in effect that its loyalty was to the Greek millionaires who ha their money in Switzerland. The IMF could have seized this money to pay off the bondholders. Instead, it made the Greek economy pay. It found that it was worth wrecking the Greek economy, forcing emigration and wiping out Greek industry so that French and German bondholding banks would not have to take a loss. That is what makes the IMF so vicious an institution.

BONNIE FAULKNER : So these loans to foreign countries that were regarded as junk bonds really weren't junk, because they were going to be paid. What group was it that jacked up these interest rates to 45 percent?

MICHAEL HUDSON : The market did. American banks, stock brokers and other investors looked at the balance of payments of these countries and could not see any reasonable way that they could pay their debts, so they were not going to buy their bonds. No country subject to democratic politics would have paid debts under these conditions. But the IMF, U.S. and Eurozone diplomacy overrode democratic choice.

Investors didn't believe that the IMF and the World Bank had such a strangle hold over Latin American, Asian, and African countries that they could make the countries act in the interest of the United States and the cosmopolitan finance capital, instead of in their own national interest. They didn't believe that countries would commit financial suicide just to pay their wealthy One Percent.

They were wrong, of course. Countries were quite willing to commit economic suicide if their governments were dictatorships propped up by the United States. That's why the CIA has assassination teams and actively supports these countries to prevent any party coming to power that would act in their national interest instead of in the interest of a world division of labor and production along the lines that the U.S. planners want for the world. Under the banner of what they call a free market, you have the World Bank and the IMF engage in central planning of a distinctly anti-labor policy. Instead of calling them Third World bonds or junk bonds, you should call them anti-labor bonds, because they have become a lever to impose austerity throughout the world.

BONNIE FAULKNER : Well, that makes a lot of sense, Michael, and answers a lot of the questions I've put together to ask you. What about Puerto Rico writing down debt? I thought such debts couldn't be written down.

MICHAEL HUDSON : That's what they all said, but the bonds were trading at about 45 cents on the dollar, the risk of their not being paid. The Wall Street Journal on June 17, reported that unsecured suppliers and creditors of Puerto Rico, would only get nine cents on the dollar. The secured bond holders would get maybe 65 cents on the dollar.

The terms are being written down because it's obvious that Puerto Rico can't pay, and that trying to do so is driving the population to move out of Puerto Rico to the United States. If you don't want Puerto Ricans to act the same way Greeks did and leave Greece when their industry and economy was shut down, then you're going to have to provide stability or else you're going to have half of Puerto Rico living in Florida.

BONNIE FAULKNER : Who wrote down the Puerto Rican debt?

MICHAEL HUDSON : A committee was appointed, and it calculated how much Puerto Rico can afford to pay out of its taxes. Puerto Rico is a U.S. dependency, that is, an economic colony of the United States. It does not have domestic self-reliance. It's the antithesis of democracy, so it's never been in charge of its own economic policy and essentially has to do whatever the United States tells it to do. There was a reaction after the hurricane and insufficient U.S. support to protect the island and the enormous waste and corruption involved in the U.S. aid. The U.S. response was simply: "We won you fair and square in the Spanish-American war and you're an occupied country, and we're going to keep you that way." Obviously this is causing a political resentment.

BONNIE FAULKNER : You've already touched on this, but why has the World Bank traditionally been headed by a U.S. secretary of defense?

MICHAEL HUDSON : Its job is to do in the financial sphere what, in the past, was done by military force. The purpose of a military conquest is to take control of foreign economies, to take control of their land and impose tribute. The genius of the World Bank was to recognize that it's not necessary to occupy a country in order to impose tribute, or to take over its industry, agriculture and land. Instead of bullets, it uses financial maneuvering. As long as other countries play an artificial economic game that U.S. diplomacy can control, finance is able to achieve today what used to require bombing and loss of life by soldiers.

In this case the loss of life occurs in the debtor countries. Population growth shrinks, suicides go up. The World Bank engages in economic warfare that is just as destructive as military warfare. At the end of the Yeltsin period Russia's President Putin said that American neoliberalism destroyed more of Russia's population than did World War II. Such neoliberalism, which basically is the doctrine of American supremacy and foreign dependency, is the policy of the World Bank and IMF.

BONNIE FAULKNER : Why has World Bank policy since its inception been to provide loans for countries to devote their land to export crops instead of giving priority to feeding themselves? And if this is the case, why do countries want these loans?

MICHAEL HUDSON : One constant of American foreign policy is to make other countries dependent on American grain exports and food exports. The aim is to buttress America's agricultural trade surplus. So the first thing that the World Bank has done is not to make any domestic currency loans to help food producers. Its lending has steered client countries to produce tropical export crops, mainly plantation crops that cannot be grown in the United States. Focusing on export crops leads client countries to become dependent on American farmers – and political sanctions.

In the 1950s, right after the Chinese revolution, the United States tried to prevent China from succeeding by imposing grain export controls to starve China into submission by putting sanctions on exports. Canada was the country that broke these export controls and helped feed China.

The idea is that if you can make other countries export plantation crops, the oversupply will drive down prices for cocoa and other tropical products, and they won't feed themselves. So instead of backing family farms like the American agricultural policy does, the World Bank backed plantation agriculture. In Chile, which has the highest natural supply of fertilizer in the world from its guano deposits, exports guano instead of using it domestically. It also has the most unequal land distribution, blocking it from growing its own grain or food crops. It's completely dependent on the United States for this, and it pays by exporting copper, guano and other natural resources.

The idea is to create interdependency – one-sided dependency on the U.S. economy. The United States has always aimed at being self-sufficient in its own essentials, so that no other country can pull the plug on our economy and say, "We're going to starve you by not feeding you." Americans can feed themselves. Other countries can't say, "We're going to let you freeze in the dark by not sending you oil," because America's independent in energy. But America can use the oil control to make other countries freeze in the dark, and it can starve other countries by food-export sanctions.

So the idea is to give the United States control of the key interconnections of other economies, without letting any country control something that is vital to the working of the American economy.

There's a double standard here. The United States tells other countries: "Don't do as we do. Do as we say." The only way it can enforce this is by interfering in the politics of these countries, as it has interfered in Latin America, always pushing the right wing. For instance, when Hillary's State Department overthrew the Honduras reformer who wanted to undertake land reform and feed the Hondurans, she said: "This person has to go." That's why there are so many Hondurans trying to get into the United States now, because they can't live in their own country.

The effect of American coups is the same in Syria and Iraq. They force an exodus of people who no longer can make a living under the brutal dictatorships supported by the United States to enforce this international dependency system.

BONNIE FAULKNER : So when I asked you why countries would want these loans, I guess you're saying that they wouldn't, and that's why the U.S. finds it necessary to control them politically.

MICHAEL HUDSON : That's a concise way of putting it Bonnie.

BONNIE FAULKNER : Why are World Bank loans only in foreign currency, not in the domestic currency of the country to which it is lending?

MICHAEL HUDSON : That's a good point. A basic principle should be to avoid borrowing in a foreign currency. A country can always pay the loans in its own currency, but there's no way that it can print dollars or euros to pay loans denominated in these foreign currencies.

Making the dollar central forces other countries to interface with the U.S. banking system. So if a country decides to go its own way, as Iran did in 1953 when it wanted to take over its oil from British Petroleum (or Anglo Iranian Oil, as it was called back then), the United States can interfere and overthrow it. The idea is to be able to use the banking system's interconnections to stop payments from being made.

After America installed the Shah's dictatorship, they were overthrown by Khomeini, and Iran had run up a U.S. dollar debt under the Shah. It had plenty of dollars. I think Chase Manhattan was its paying agent. So when its quarterly or annual debt payment came due, Iran told Chase to draw on its accounts and pay the bondholders. But Chase took orders from the State Department or the Defense Department, I don't know which, and refused to pay. When the payment was not made, America and its allies claimed that Iran was in default. They demanded the entire debt to be paid, as per the agreement that the Shah's puppet government had signed. America simply grabbed the deposits that Iran had in the United States. This is the money that was finally returned to Iran without interest under the agreement of 2016.

America was able to grab all of Iran's foreign exchange just by the banks interfering. The CIA has bragged that it can do the same thing with Russia. If Russia does something that U.S. diplomats don't like, the U.S. can use the SWIFT bank payment system to exclude Russia from it, so the Russian banks and the Russian people and industry won't be able to make payments to each other.

This prompted Russia to create its own bank-transfer system, and is leading China, Russia, India and Pakistan to draft plans to de-dollarize.

BONNIE FAULKNER : I was going to ask you, why would loans in a country's domestic currency be preferable to the country taking out a loan in a foreign currency? I guess you've explained that if they took out a loan in a domestic currency, they would be able to repay it.

MICHAEL HUDSON : Yes.

BONNIE FAULKNER : Whereas a loan in a foreign currency would cripple them.

MICHAEL HUDSON : Yes. You can't create the money, especially if you're running a balance of payments deficit and if U.S. foreign policy forces you into deficit by having someone like George Soros make a run on your currency. Look at the Asia crisis in 1997. Wall Street funds bet against foreign currencies, driving them way down, and then used the money to pick up industry cheap in Korea and other Asian countries.

This was also done to Russia's ruble. The only country that avoided this was Malaysia, under Mohamed Mahathir, by using capital controls. Malaysia is an object lesson in how to prevent a currency flight.

But for Latin America and other countries, much of their foreign debt is held by their own ruling class. Even though it's denominated in dollars, Americans don't own most of this debt. It's their own ruling class. The IMF and World Bank dictate tax policy to Latin America – to un-tax wealth and shift the burden onto labor. Client kleptocracies take their money and run, moving it abroad to hard currency areas such as the United States, or at least keeping it in dollars in offshore banking centers instead of reinvesting it to help the country catch up by becoming independent agriculturally, in energy, finance and other sectors.

BONNIE FAULKNER : You say that: "While U.S. agricultural protectionism has been built into the postwar global system at its inception, foreign protectionism is to be nipped in the bud." How has U.S. agricultural protectionism been built into the postwar global system?

MICHAEL HUDSON : Under Franklin Roosevelt the Agricultural Adjustment Act of 1933 called for price supports for crops so that farmers could earn enough to invest in equipment and seeds. The Agriculture Department was a wonderful department in spurring new seed varieties, agricultural extension services, marketing and banking services. It provided public support so that productivity in American agriculture from the 1930s to '50s was higher over a prolonged period than that of any other sector in history.

But in shaping the World Trade Organization's rules, the United States said that all countries had to promote free trade and could not have government support, except for countries that already had it. We're the only country that had it. That's what's called "grandfathering". The Americans said: "We already have this program on the books, so we can keep it. But no other country can succeed in agriculture in the way that we have done. You must keep your agriculture backward, except for the plantation crops and growing crops that we can't grow in the United States." That's what's so evil about the World Bank's development plan.

BONNIE FAULKNER : According to your book: "Domestic currency is needed to provide price supports and agricultural extension services such as have made U.S. agriculture so productive." Why can't infrastructure costs be subsidized to keep down the economy's overall cost structure if IMF loans are made in foreign currency?

MICHAEL HUDSON : If you're a farmer in Brazil, Argentina or Chile, you're doing business in domestic currency. It doesn't help if somebody gives you dollars, because your expenses are in domestic currency. So if the World Bank and the IMF can prevent countries from providing domestic currency support, that means they're not able to give price supports or provide government marketing services for their agriculture.

America is a mixed economy. Our government has always subsidized capital formation in agriculture and industry, but it insists that other countries are socialist or communist if they do what the United States is doing and use their government to support the economy. So it's a double standard. Nobody calls America a socialist country for supporting its farmers, but other countries are called socialist and are overthrown if they attempt land reform or attempt to feed themselves.

This is what the Catholic Church's Liberation Theology was all about. They backed land reform and agricultural self-sufficiency in food, realizing that if you're going to support population growth, you have to support the means to feed it. That's why the United States focused its assassination teams on priests and nuns in Guatemala and Central America for trying to promote domestic self-sufficiency.

BONNIE FAULKNER : If a country takes out an IMF loan, they're obviously going to take it out in dollars. Why can't they take the dollars and convert them into domestic currency to support local infrastructure costs?

MICHAEL HUDSON : You don't need a dollar loan to do that. Now were getting in to MMT. Any country can create its own currency. There's no reason to borrow in dollars to create your own currency. You can print it yourself or create it on your computers.

BONNIE FAULKNER: Well, exactly. So why don't these countries simply print up their own domestic currency?

MICHAEL HUDSON : Their leaders don't want to be assassinated. More immediately, if you look at the people in charge of foreign central banks, almost all have been educated in the United States and essentially brainwashed. It's the mentality of foreign central bankers. The people who are promoted are those who feel personally loyal to the United States, because they that that's how to get ahead. Essentially, they're opportunists working against the interests of their own country. You won't have socialist central bankers as long as central banks are dominated by the International Monetary Fund and the Bank for International Settlements.

BONNIE FAULKNER : So we're back to the main point: The control is by political means, and they control the politics and the power structure in these countries so that they don't rebel.

MICHAEL HUDSON : That's right. When you have a dysfunctional economic theory that is destructive instead of productive, this is never an accident. It is always a result of junk economics and dependency economics being sponsored. I've talked to people at the U.S. Treasury and asked why they all end up following the United States. Treasury officials have told me: "We simply buy them off. They do it for the money." So you don't need to kill them. All you need to do is find people corrupt enough and opportunist enough to see where the money is, and you buy them off.

BONNIE FAULKNER : You write that "by following U.S. advice, countries have left themselves open to food blackmail." What is food blackmail?

MICHAEL HUDSON : If you pursue a foreign policy that we don't like -- for instance, if you trade with Iran, which we're trying to smash up to grab its oil -- we'll impose financial sanctions against you. We won't sell you food, and you can starve. And because you've followed World Bank advice and not grown your own food, you will starve, because you're dependent on us, the United States and our Free World Ó allies. Canada will no longer follow its own policy independently of the United States, as it did with China in the 1950s when it sold it grain. Europe also is falling in line with U.S. policy.

BONNIE FAULKNER : You write that: "World Bank administrators demand that loan recipients pursue a policy of economic dependency above all on the United States as food supplier." Was this done to support U.S. agriculture? Obviously it is, but were there other reasons as well?

MICHAEL HUDSON : Certainly the agricultural lobby was critical in all of this, and I'm not sure at what point this became thoroughly conscious. I knew some of the World Bank planners, and they had no anticipation that this dependency would be the result. They believed the free-trade junk economics that's taught in the schools' economics departments and for which Nobel prizes are awarded.

When we're dealing with economic planners, we're dealing with tunnel-visioned people. They stayed in the discipline despite its unreality because they sort of think that abstractly it makes sense. There's something autistic about most economists, which is why the French had their non-autistic economic site for many years. The mentality at work is that every country should produce what it's best at – not realizing that nations also need to be self-sufficient in essentials, because we're in a real world of economic and military warfare.

BONNIE FAULKNER : Why does the World Bank prefer to perpetrate world poverty instead of adequate overseas capacity to feed the peoples of developing countries?

MICHAEL HUDSON : World poverty is viewed as solution , not a problem. The World Bank thinks of poverty as low-priced labor, creating a competitive advantage for countries that produce labor-intensive goods. So poverty and austerity for the World Bank and IMF is an economic solution that's built into their models. I discuss these in my Trade, Development and Foreign Debt book. Poverty is to them the solution, because it means low-priced labor, and that means higher profits for the companies bought out by U.S., British, and European investors. So poverty is part of the class war: profits versus poverty.

BONNIE FAULKNER : In general, what is U.S. food imperialism? How would you characterize it?

MICHAEL HUDSON : Its aim is to make America the producer of essential foods and other countries producing inessential plantation crops, while remaining dependent on the United States for grain, soy beans and basic food crops.

BONNIE FAULKNER : Does World Bank lending encourage land reform in former colonies?

MICHAEL HUDSON : No. If there is land reform, the CIA sends its assassination teams in and you have mass murder, as you had in Guatemala, Ecuador, Central America and Columbia. The World Bank is absolutely committed against land reform. When the Forgash Plan for a World Bank for Economic Acceleration was proposed in the 1950s to emphasize land reform and local-currency loans, a Chase Manhattan economist to whom the plan was submitted warned that every country that had land reform turned out to be anti-American. That killed any alternative to the World Bank.

BONNIE FAULKNER : Does the World Bank insist on client governments privatizing their public domain? If so, why, and what is the effect?

MICHAEL HUDSON : It does indeed insist on privatization, pretending that this is efficient. But what it privatizes are natural monopolies – the electrical system, the water system and other basic needs. Foreigners take over, essentially finance them with foreign debt, build the foreign debt that they build into the cost structure, and raise the cost of living and doing business in these countries, thereby crippling them economically. The effect is to prevent them from competing with the United States and its European allies.

BONNIE FAULKNER : Would you say then that it is mainly America that has been aided, not foreign economies that borrow from the World Bank?

MICHAEL HUDSON : That's why the United States is the only country with veto power in the IMF and World Bank – to make sure that what you just described is exactly what happens.

BONNIE FAULKNER : Why do World Bank programs accelerate the exploitation of mineral deposits for use by other nations?

MICHAEL HUDSON : Most World Bank loans are for transportation, roads, harbor development and other infrastructure needed to export minerals and plantation crops. The World Bank doesn't make loans for projects that help the country develop in its own currency. By making only foreign currency loans, in dollars or maybe euros now, the World Bank says that its clients have to repay by generating foreign currency. The only way they can repay the dollars spent on American engineering firms that have built their infrastructure is to export – to earn enough dollars to pay back for the money that the World Bank or IMF have lent.

This is what John Perkins' book about being an economic hit man for the World Bank is all about. He realized that his job was to get countries to borrow dollars to build huge projects that could only be paid for by the country exporting more – which required breaking its labor unions and lowering wages so that it could be competitive in the race to the bottom that the World Bank and IMF encourage.

BONNIE FAULKNER : You also point out in Super Imperialism that mineral resources represent diminishing assets, so these countries that are exporting mineral resources are being depleted while the importing countries aren't.

MICHAEL HUDSON : That's right. They'll end up like Canada. The end result is going to be a big hole in the ground. You've dug up all your minerals, and in the end you have a hole in the ground and a lot of the refuse and pollution – the mining slag and what Marx called the excrements of production.

This is not a sustainable development. The World Bank only promotes the U.S. pursuit of sustainable development. So naturally, they call their "Development," but their focus is on the United States, not the World Bank's client countries.

BONNIE FAULKNER : When Super Imperialism: The Economic Strategy of American Empire was originally published in 1972, how was it received?

MICHAEL HUDSON : Very positively. It enabled my career to take off. I received a phone call a month later by someone from the Bank of Montreal saying they had just made $240 million on the last paragraph of my book. They asked what it would cost to have me come up and give a lecture. I began lecturing once a month at $3,500 a day, moving up to $6,500 a day, and became the highest-paid per diem economist on Wall Street for a few years.

I was immediately hired by the Hudson Institute to explain Super Imperialism to the Defense Department. Herman Kahn said I showed how U.S. imperialism ran rings around European imperialism. They gave the Institute an $85,000 grant to have me go to the White House in Washington to explain how American imperialism worked. The Americans used it as a how-to-do-it book.

The socialists, whom I expected to have a response, decided to talk about other than economic topics. So, much to my surprise, it became a how-to-do-it book for imperialists. It was translated by, I think, the nephew of the Emperor of Japan into Japanese. He then wrote me that the United States opposed the book being translated into Japanese. It later was translated. It was received very positively in China, where I think it has sold more copies than in any other country. It was translated into Spanish, and most recently it was translated into German, and German officials have asked me to come and discuss it with them. So the book has been accepted all over the world as an explanation of how the system works.

BONNIE FAULKNER : In closing, do you really think that the U.S. government officials and others didn't understand how their own system worked?

MICHAEL HUDSON : Many might not have understood in 1944 that this would be the consequence. But by the time 50 years went by, you had an organization called "Fifty Years Is Enough." And by that time everybody should have understood. By the time Joe Stiglitz became the World Bank's chief economist, there was no excuse for not understanding how the system worked. He was amazed to find that indeed it didn't work as advertised, and resigned. But he should have known at the very beginning what it was all about. If he didn't understand how it was until he actually went to work there, you can understand how hard it is for most academics to get through the vocabulary of junk economics, the patter-talk of free trade and free markets to understand how exploitative and destructive the system is.

BONNIE FAULKNER : Michael Hudson, thank you very much.

MICHAEL HUDSON : It's always good to be here, Bonnie. I'm glad you ask questions like these.

I've been speaking with Dr. Michael Hudson. Today's show has been: The IMF and World Bank: Partners in Backwardness. Dr. Hudson is a financial economist and historian. He is president of the Institute for the Study of Long-Term Economic Trend, a Wall Street financial analyst and Distinguished Research Professor of Economics at the University of Missouri, Kansas City. His 1972 book, Super Imperialism : The Economic Strategy of American Empire , a critique of how the United States exploited foreign economies through the IMF and World Bank, the subject of today's broadcast, is posted in PDF format on his website at michael-hudson.com. He is also author of Trade, Development and Foreign Debt , which is the academic sister volume to Super Imperialism. Dr. Hudson acts as an economic advisor to governments worldwide on finance and tax law. Visit his website at michael-hudson.com.

Guns and Butter is produced by Bonnie Faulkner, Yarrow Mahko and Tony Rango. Visit us at gunsandbutter.org to listen to past programs, comment on shows, or join our email list to receive our newsletter that includes recent shows and updates. Email us at [email protected] . Follow us on Twitter at #gandbradio.

[Jun 29, 2019] John Bolton is that you? on ZH? cooool, maybe pompeo will show up later?

Jun 29, 2019 | www.zerohedge.com

LaugherNYC , 2 hours ago link

You gotta love the SCI. This shallowly-disguised Russian propaganda arm writes in the most charming awkward idiomatic English, bouncing from a "false neutral" tone to a jingoistic Amercia-phobic argot to produce its hit pieces.

Russian propaganda acts like Claude Raines in "Casablanca" : "i am shocked, shocked to discover (geopolitics) going on here!" Geeeee, Europe and the US are in a struggle to avoid Europe relying on Russia for strategic necessities like fuel, even if it imposes costs on European consumers. If you have a dangerous disease, and your pharmacist is known for cutting off their customers' vital drugs to extort them, you might consider using another provider who not only doesn't cut off supplies, but also provides the police department that protects you from your pharmacist's thugs who are known to invade customers' homes using the profits from their own business.

The US provides the protective umbrella that limits Putin's adventurism. Russia cuts of Ukraine's gas supplies in winter to force them into submission. Gasprom is effectively an arm of the Russian military, weaponizing Russia's only product as a geopolitical taser. Sure, it costs more to transport LNG across the Atlantic and convert it back to gas, but the profits from that business are routinely funneled back to Europe in the form of US trade, contributions to NATO, and the provision of the nuclear umbrella that protects Europeans from the man who has publicly lamented the fall of the Soviet Union, called for the return of the former SSRs, and violated the IRM treaty to place nuclear capable intermediate-range missiles and cruise missiles within range of Europe and boasted about his new hypersonic weapons' theoretic capability to decapitate NATO and American decision-making within a few minutes of launch.

... ... ...

Anonymous IX , 2 hours ago link

Oh, for pity's sake, Laugher. Everything...absolutely everything you attribute to Russia in your post can be said of the U.S. I'm not much of a Wiki fan, but for expediency, here's their view on military bases.

The establishment of military bases abroad enables a country to project power , e.g. to conduct expeditionary warfare , and thereby influence events abroad. Depending on their size and infrastructure, they can be used as staging areas or for logistical, communications and intelligence support. Many conflicts throughout modern history have resulted in overseas military bases being established in large numbers by world powers and the existence of bases abroad has served countries having them in achieving political and military goals.

And this link will provide you with countries worldwide and their bases.

https://en.wikipedia.org/wiki/List_of_countries_with_overseas_military_bases

Note that Russia, in this particular list, has eight bases all contiguous to Russia. The U.S. has 36 listed here with none of them contiguous to the U.S.' borders.

[Jun 29, 2019] Latest Weapon Of US Imperialism Liquified Natural Gas

Highly recommended!
See better discussion at platts.com "But US LNG could face problems of its own – the current low prices are forcing ever growing numbers of US producers into bankruptcy. According to a recent report by Haynes and Boone, 90 gas and oil producers in the US and Canada have filed for bankruptcy between January 2015 and the start of August 2016." So $2 price at Henry Hub should rise to at least $4 for companies to stay in business.
Notable quotes:
"... Less than half of the gas necessary for Europe is produced domestically, the rest being imported from Russia (39%), Norway (30%) and Algeria (13%). In 2017, gas imports from outside of the EU reached 14%. Spain led with imports of 31%, followed by France with 20% and Italy with 15%. ..."
"... The South Stream project, led by Eni, Gazprom, EDF and Wintershall, should have increased the capacity of the Russian Federation to supply Europe with 63 billion cubic meters annually, positively impacting the economy with cheap supplies of gas to Bulgaria, Greece, Italy, Serbia, Hungary, Austria and Slovenia. Due to the restrictions imposed by the European Union on Russian companies like Gazprom, and the continuing pressure from Washington to abandon the project and embrace imports from the US, the construction of the pipeline have slowed down and generated tensions between Europe and the US. Washington is piling on pressure on Germany to derail Nord Stream 2 and stop the construction of this important energy linkage. ..."
"... Further tension has been added since ENI, an Italian company that is a leader in the LNG sector, recently discovered off-shore in Egypt one of the largest gas fields in the world, with an estimated total capacity of 850 billion cubic meters. To put this in perspective, all EU countries demand is about 470 billion cubic meters of gas in 2017. ..."
"... s mentioned, LNG imported to Europe from the US costs about 20% more than gas traditionally received through pipelines. This is without including all the investment necessary to build regasification plants in countries destined to receive this ship-borne gas. Europe currently does not have the necessary facilities on its Atlantic coast to receive LNG from the US, introduce it into its energy networks, and simultaneously decrease demand from traditional sources. ..."
"... This situation could change in the future, with LNG from the US seeing a sharp increase recently. In 2010, American LNG exports to Europe were at 10%; the following year they rose to 11%; and in the first few months of 2019, they jumped to 35%. A significant decrease in LNG exports to Asian countries, which are less profitable, offers an explanation for this corresponding increase in Europe. ..."
"... Washington, with its LNG ships, has no capacity to compete in Asia against Qatar and Australia, who have the lion's share of the market, with Moscow's pipelines taking up the rest. The only large remaining market lies in Europe, so it is therefore not surprising that Donald Trump has decided to weaponize LNG, a bit as he has the US dollar . This has only driven EU countries to seek energy diversification in the interests of security. ..."
"... The European countries do not appear to be dragging their feet at the prospect of swapping to US LNG, even though there is no economic advantage to doing so. As has been evident of late, whenever Washington says, "Jump!", European allies respond, "How high?" ..."
"... The generalized hysteria against the Russian Federation, together with the cutting off of Iranian oil imports at Washington's behest, limit the room for maneuver of European countries, in addition to costing European taxpayers a lot. ..."
Jun 29, 2019 | www.zerohedge.com
Authored by Federico Pieraccini via The Strategic Culture Foundation,

One of the most important energy battles of the future will be fought in the field of liquid natural gas (LNG). Suggested as one of the main solutions to pollution , LNG offers the possibility of still managing to meet a country's industrial needs while ameliorating environmental concerns caused by other energy sources. At the same time, a little like the US dollar, LNG is becoming a tool Washington intends to use against Moscow at the expense of Washington's European allies.

To understand the rise of LNG in global strategies, it is wise to look at a graph (page 7) produced by the International Gas Union (IGU) where the following four key indicators are highlighted: global regasification capacities; total volumes of LNG exchanged; exporting countries; and importing countries.

From 1990 to today, the world has grown from 220 million tons per annum (MTPA) to around 850 MTPA of regasification capacity. The volume of trade increased from 20-30 MTPA to around 300 MTPA. Likewise, the number of LNG-importing countries has increased from just over a dozen to almost 40 over the course of 15 years, while the number of producers has remained almost unchanged, except for a few exceptions like the US entering the LNG market in 2016.

There are two methods used to transport gas.

The first is through pipelines, which reduce costs and facilitate interconnection between countries, an important example of this being seen in Europe's importation of gas. The four main pipelines for Europe come from four distinct geographical regions: the Middle East, Africa, Northern Europe and Russia.

The second method of transporting gas is by sea in the form of LNG, which in the short term is more expensive, complex and difficult to implement on a large scale. Gas transported by sea is processed to be cooled so as to reduce its volume, and then liquified again to allow storage and transport by ship. This process adds 20% to costs when compared to gas transported through pipelines.

Less than half of the gas necessary for Europe is produced domestically, the rest being imported from Russia (39%), Norway (30%) and Algeria (13%). In 2017, gas imports from outside of the EU reached 14%. Spain led with imports of 31%, followed by France with 20% and Italy with 15%.

The construction of infrastructure to accommodate LNG ships is ongoing in Europe, and some European countries already have a limited capacity to accommodate LNG and direct it to the national and European network or act as an energy hub to ship LNG to other ports using smaller ships.

According to King & Spalding :

"All of Europe's LNG terminals are import facilities, with the exception of (non-EU) Norway and Russia which export LNG. There are currently 28 large-scale LNG import terminals in Europe (including non-EU Turkey). There are also 8 small-scale LNG facilities in Europe (in Finland, Sweden, Germany, Norway and Gibraltar). Of the 28 large-scale LNG import terminals, 24 are in EU countries (and therefore subject to EU regulation) and 4 are in Turkey, 23 are land-based import terminals, and 4 are floating storage and regasification units (FSRUs), and the one import facility in Malta comprises a Floating Storage Unit (FSU) and onshore regasification facilities."

The countries currently most involved in the export of LNG are Qatar (24.9%), Australia (21.7%), Malaysia (7.7%), the US (6.7%), Nigeria (6.5%) and Russia (6%).

Europe is one of the main markets for gas, given its strong demand for clean energy for domestic and industrial needs. For this reason, Germany has for years been engaged in the Nord Stream 2 project, which aims to double the transport capacity of gas from Russia to Germany. Currently the flow of the Nord Stream is 55 billion cubic meters of gas. With the new Nord Stream 2, the capacity will double to 110 billion cubic meters per year.

The South Stream project, led by Eni, Gazprom, EDF and Wintershall, should have increased the capacity of the Russian Federation to supply Europe with 63 billion cubic meters annually, positively impacting the economy with cheap supplies of gas to Bulgaria, Greece, Italy, Serbia, Hungary, Austria and Slovenia. Due to the restrictions imposed by the European Union on Russian companies like Gazprom, and the continuing pressure from Washington to abandon the project and embrace imports from the US, the construction of the pipeline have slowed down and generated tensions between Europe and the US. Washington is piling on pressure on Germany to derail Nord Stream 2 and stop the construction of this important energy linkage.

Further tension has been added since ENI, an Italian company that is a leader in the LNG sector, recently discovered off-shore in Egypt one of the largest gas fields in the world, with an estimated total capacity of 850 billion cubic meters. To put this in perspective, all EU countries demand is about 470 billion cubic meters of gas in 2017.

ENI's discovery has generated important planning for the future of LNG in Europe and in Italy.

Problems have arisen ever since Donald Trump sought to oblige Europeans to purchase LNG from the US in order to reduce the trade deficit and benefit US companies at the expense of other gas-exporting countries like Algeria, Russia and Norway. As mentioned, LNG imported to Europe from the US costs about 20% more than gas traditionally received through pipelines. This is without including all the investment necessary to build regasification plants in countries destined to receive this ship-borne gas. Europe currently does not have the necessary facilities on its Atlantic coast to receive LNG from the US, introduce it into its energy networks, and simultaneously decrease demand from traditional sources.

This situation could change in the future, with LNG from the US seeing a sharp increase recently. In 2010, American LNG exports to Europe were at 10%; the following year they rose to 11%; and in the first few months of 2019, they jumped to 35%. A significant decrease in LNG exports to Asian countries, which are less profitable, offers an explanation for this corresponding increase in Europe.

But Europe finds itself in a decidedly uncomfortable situation that cannot be easily resolved. The anti-Russia hysteria drummed up by the Euro-Atlantic globalist establishment aides Donald Trump's efforts to economically squeeze as much as possible out of European allies, hurting European citizens in the process who will have to pay more for American LNG, which costs about a fifth more than gas from Russian, Norwegian or Algerian sources.

Projects to build offshore regasifiers in Europe appear to have begun and seem unlikely to be affected by future political vagaries, given the investment committed and planning times involved:

"There are currently in the region of 22 large-scale LNG import terminals considered as planned in Europe, except for the planned terminals in Ukraine (Odessa FSRU LNG), Russia (Kaliningrad LNG), Albania (Eagle LNG) – Albania being a candidate for EU membership – and Turkey (FSRU Iskenderun and FSRU Gulf of Saros).

Many ofthese planned terminals, including Greece (where one additional import terminal is planned – Alexandroupolis), Italy (which is considering or planning two additional terminals – Porto Empedocle in Sicily and Gioia Tauro LNG in Calabria) , Poland (FSRU Polish Baltic Sea Coast), Turkey (two FSRUs) and the UK (which is planning the Port Meridian FSRU LNG project and UK Trafigura Teesside LNG). LNG import terminal for Albania (Eagle LNG), Croatia (Krk Island), Cyprus (Vassiliko FSRU), Estonia (Muuga (Tallinn) LNG and Padalski LNG), Germany ( Brunsbüttel LNG), Ireland (Shannon LNG and Cork LNG), Latvia (Riga LNG), Romania (Constanta LNG), Russia (Kaliningrad LNG) and Ukraine (Odessa).

Nine of the planned terminals are FSRUs: Albania, Croatia, Cyprus, Greece, Ireland, Poland, Russia, Ukraine and the UK. "In addition, there are numerous plans for expansion of existing terminals, including in Belgium, France, Greece, Italy, the Netherlands, Poland, Spain, Turkey and the UK."

Washington, with its LNG ships, has no capacity to compete in Asia against Qatar and Australia, who have the lion's share of the market, with Moscow's pipelines taking up the rest. The only large remaining market lies in Europe, so it is therefore not surprising that Donald Trump has decided to weaponize LNG, a bit as he has the US dollar . This has only driven EU countries to seek energy diversification in the interests of security.

The European countries do not appear to be dragging their feet at the prospect of swapping to US LNG, even though there is no economic advantage to doing so. As has been evident of late, whenever Washington says, "Jump!", European allies respond, "How high?" This, however, is not the case with all allies. Germany is not economically able to interrupt Nord Stream 2. And even though the project has many high-level sponsors, including former chancellor Gerhard Schröder, the project constantly seems to be on the verge of being stopped – at least in Washington's delusions.

Even Eni's discovery of the gas field in Egypt has annoyed the US, which wants less competition (even when illegal, as in the case of Huawei) and wants to be able to force its exports onto Europeans while maintaining the price of the LNG in dollars, thereby further supporting the US dollar as the world's reserve currency in the same manner as the petrodollar .

The generalized hysteria against the Russian Federation, together with the cutting off of Iranian oil imports at Washington's behest, limit the room for maneuver of European countries, in addition to costing European taxpayers a lot. The Europeans appear prepared to set whatever course the US has charted them, one away from cheaper gas sources to the more expensive LNG supplied from across the Atlantic. Given the investments already committed to receive this LNG, it seems unlikely that the course set for the Europeans will be changed.


Sputternik , 1 hour ago link

I live in Europe. I can honestly say that the people I know here prefer Russian gas. People are very ticked off about how the US meddled in their gas supply and the structuring of the pipelines. Most feel that even if US LNG WAS competitive with Russian gas price for now, that the US would in some way either increase prices or use it in some other way to control or manipulate the EU. And sentiment towards USA tends toward resentment and distrust. That's not to say they are necessarily pro-Russia, but definitely a wave of anti US is present.

phaedrus1952 , 46 minutes ago link

US LNG pricing is based on Henry Hub which today is under $2.30/mmbtu.

Even adding in liquefaction and shipping costs, the price to the end user is extremely low.

Henry hub is projected to be sub $3 for DECADES!

Combine the low price with spot deliveries (pipe usually demands long term contracting commitments), and US LNG actually has strong rationale for being accepted.

The statement above that US LNG cannot compete against Australia in Asia is preposterously false due to the VERY high buildout costs of the Aussie LNG infrastructure.

Next year, Oz's first LNG IMPORT terminal at Port Kembla may well be supplied with US LNG.

jaxville , 44 minutes ago link

The US has shown itself to be unreliable as a supplier of anything. Political posturing will always take precedence over any international transaction.

Anonymous IX , 2 hours ago link

Oh, for pity's sake, Laugher. Everything...absolutely everything you attribute to Russia in your post can be said of the U.S. I'm not much of a Wiki fan, but for expediency, here's their view on military bases.

The establishment of military bases abroad enables a country to project power , e.g. to conduct expeditionary warfare , and thereby influence events abroad. Depending on their size and infrastructure, they can be used as staging areas or for logistical, communications and intelligence support. Many conflicts throughout modern history have resulted in overseas military bases being established in large numbers by world powers and the existence of bases abroad has served countries having them in achieving political and military goals.

And this link will provide you with countries worldwide and their bases.

https://en.wikipedia.org/wiki/List_of_countries_with_overseas_military_bases

Note that Russia, in this particular list, has eight bases all contiguous to Russia. The U.S. has 36 listed here with none of them contiguous to the U.S.' borders.

FormerTurbineGuy , 2 hours ago link

Whilst the left wants to go full throttle towards Wind and Solar, no one knows that the natural gas lobby is behind these sources because both sources need a backup. While everyone talks "carbon footprint" they never discusses plant efficiency ( or in the terms of engines brake specific fuel consumption and turbine specific fuel consumption ) in terms of thermal efficiency. You know the boring stuff that plant operators stress over to make sure when your wife wakes up @ 3 in the morning to feed the baby, the lights do go on, and they are creating that wattage in an cost affective manner. With that said, the king of thermal efficiency i.e. burning a fuel to create electricity, is the Combined Cycle Natural Gas Power Plant. These plants combines a stationary gas turbine buring natural gas to spin a generator and a boiler on the back side capture the waste heat to create steam to spin a turbine to again add an input to the generator for a current state of the art of 61% efficiency . That means only 39% going up the stack or for steam cooling to get your "Delta T" for the steam cycle to work. This 61% is vs maybe in the mid 40's for a coal, oil plant or in the case of Nuclear just waste heat with nothing going out a stack. The greater wattage per fuel burned, and the modularization of these Combined Cycle Plants aka have a series of 100mw turbines and bring them on line as needed, make this a win-win IMHO for a massive refurbishing of our Utility base, with a host of benefits, before Gen 3 & Gen 4 Nuclear truly take off again. These plants could be a great stop gap before Gen 3 & 4 are a reality. All the macinations towards wind and solar and their disavantages aka being bird vegamatics, vistas being spoiled and huge swaths of land being used for panels make no sense vs energy density of efficient plants. We are the Natural Gas King, lets not flare it anymore, and really, really leverage it here, help allies, and use it for bringing bad behaving children of the world to the table ifyou will, if you want the candy, behave....

Anonymous IX , 1 hour ago link

Why do we have to treat other countries like we're the parent? We aren't. They are equal and fully functioning countries quite capable of determining their own political and economic future...which may involve not trading or interacting with the U.S. Particularly if we demand of them conditions we ourselves would never accede.

JeanTrejean , 3 hours ago link

To get cheap energy, is an advantage for the European Industry.

Why should we use expensiver energy ?

And, as I read ZH, the future of the US shale gas is far to be assured.

SoDamnMad , 3 hours ago link

The Lithuanian FSRU "Independence" which was delivered from Hyundai Heavy Industries in 2014 to the port of Klaipeda drove energy costs for heating through the roof and perhaps is one of the reasons the Prime Minister at the time only came in third in the latest presidential elections. You can stay reasonably warm, eat or have money for medicine and other necessities. Pick 2 ONLY. Thank you USSA

tuetenueggel , 3 hours ago link

Brainsick as Pompeo the US Pork without character.

As Long as Russia dlivery theier gas constantly and for a much better price then Us-Shale idiots, the ziocons only can lose. We Europeans are not very impressed.

Arising , 3 hours ago link

The biggest Capitalist economy on the planet needs to use mob tactics to push its over priced wares- seems 'long term' is not part of their hit-and-run operation.

Call me Al , 3 hours ago link

LNG = Liquefied natural gas, not liquid.

Now as for the article; apart from a few Eastern European Countries (The Ukraine, Poland etc.), I have seen no proof whatsoever, that Europe is shifting to US LNG.

As for "As has been evident of late, whenever Washington says, "Jump!", European allies respond, "How high?""; I am sorry, but I think those days are over..... this can be seen in our Iranian stance, the 2 Russian pipelines - 1 being Nordstream II and the other Turk-stream, increased trade with Russia, joining the the Asian Infrastructure Investment Bank (AIIB) and so on and so on......

Kirk2NCC1701 , 3 hours ago link

Call me AI, both terms are acceptable.

Liquified refers to the processing.

Liquid refers to the state of the gas after processing.

earleflorida , 2 hours ago link

thankyou :)

tuetenueggel , 3 hours ago link

yeah, vasalls are not jumping any longer.

libfrog88 , 3 hours ago link

Slowly but surely the anti-Russia propaganda is dying. You can fool all the people some of the time, you can fool some people all of the time (libtards), but you can't fool all the people all of the time. Europeans (the citizens) will question why they should pay 20-30% more for their natural gas just to please America. Politicians better have an answer or change of policy if they want to be reelected.

[Jun 28, 2019] What's wrong with America

Notable quotes:
"... "Violence is the last refuge of the incompetent." Isaac Asimov ..."
Jun 28, 2019 | peakoilbarrel.com

Carlos Diaz says: 06/23/2019 at 2:37 pm

What's wrong with America, that believes the solution to any international problem is war?

"Violence is the last refuge of the incompetent." Isaac Asimov

[Jun 22, 2019] I was shocked -- but not surprised -- to see visibly-pained CBS Pentagon flack David Martin on the boob tube this morning. Thank you, Vasili Arkhipov

Notable quotes:
"... Thank you, Vasili Arkhipov, for getting cold-feet, too! Madness, our nation is afflicted with madness. ..."
Jun 22, 2019 | turcopolier.typepad.com

Widowson , 21 June 2019 at 02:41 PM

I was shocked-- but not surprised-- to see visibly-pained CBS Pentagon flack David Martin on the boob tube this morning quoting an unnamed source that speculated that the reason Trump cancelled the bombing of Iran was that he got "cold-feet."

Thank you, Vasili Arkhipov, for getting cold-feet, too! Madness, our nation is afflicted with madness.

[Jun 22, 2019] Why a U.S.-Iran War Could End Up Being a Historic Disaster by Doug Bandow

Highly recommended!
The current conflict is about the US hegemony in the region, not anything else.
The analysis is really good. I especially like "The Trump administration is essentially a one-trick pony when it comes to foreign policy toward hostile states. The standard quo is to apply massive economic pressure and demand surrender"
That means that Doug Bandow proposals while good are completely unrealistic.
Notable quotes:
"... Sixteen years ago, the George W. Bush administration manipulated intelligence to scare the public into backing an aggressive war against Iraq. The smoking gun mushroom clouds that National Security Advisor Condoleezza Rice warned against didn’t exist, but the invasion long desired by neoconservatives and other hawks proceeded. Liberated Iraqis rejected U.S. plans to create an American puppet state on the Euphrates and the aftermath turned into a humanitarian and geopolitical catastrophe which continues to roil the Middle East. ..."
"... Now the Trump administration appears to be following the same well-worn path. The president has fixated on Iran, tearing up the nuclear accord with Tehran and declaring economic war on it—as well as anyone dealing with Iran. He is pushing America toward war even as he insists that he wants peace. How stupid does he believe we are? ..."
"... Washington did much to encourage a violent, extremist revolution in Tehran. The average Iranian could be forgiven for viewing America as a virulently hostile power determined to do his or her nation ill at almost every turn. ..."
"... The Shah was ousted in 1979. Following his departure the Reagan administration backed Iraq’s Saddam Hussein when he invaded Iran, triggering an eight-year war which killed at least half a million people. Washington reflagged Kuwaiti oil tankers to protect revenue subsequently lent to Baghdad, provided Iraq with intelligence for military operations, and supplied components for chemical weapons employed against Iranian forces. In 1988 the U.S. Navy shot down an Iranian civilian airliner in international airspace. ..."
"... Economic sanctions were first imposed on Iran in 1979 and regularly expanded thereafter. Washington forged a close military partnership with Iran’s even more repressive rival, Saudi Arabia. In the immediate aftermath of its 2003 victory over Saddam Hussein, the Bush administration rejected Iran’s offer to negotiate; neoconservatives casually suggested that “real men” would conquer Tehran as well. Even the Obama administration threatened to take military action against Iran. ..."
"... Contrary to the common assumption in Washington that average Iranians would love the United States for attempting to destroy their nation’s economy, the latest round of sanctions apparently triggered a notable rise in anti-American sentiment. Nationalism trumped anti-clericalism. ..."
"... Iran also has no desire for war, which it would lose. However, Washington’s aggressive economic and military policies create pressure on Tehran to respond. Especially since administration policy—sanctions designed to crash the economy, military moves preparing for war — almost certainly have left hardliners, including the Islamic Revolutionary Guard Corps, who opposed negotiations with Washington, ascendant in Tehran. ..."
"... Europeans also point to Bush administration lies about Iraq and the fabricated 1964 Tonkin Gulf incident used to justify America’s entry into the Vietnam War. Even more important, the administration ostentatiously fomented the current crisis by trashing the JCPOA, launching economic war against Iran, threatening Tehran’s economic partners, and insisting on Iran’s submission. A cynic might reasonably conclude that the president and his aides hoped to trigger a violent Iranian response. ..."
"... Indeed, a newspaper owned by the Saudi royal family recently called for U.S. strikes on Iran. One or the reasons Al Qaeda launched the 9/11 attacks was to trigger an American military response against a Muslim nation. A U.S.-Iran war would be the mother of all Mideast conflagrations. ..."
"... In parallel, Washington should propose negotiations to lower tensions in other issues. But there truly should be no preconditions, requiring the president to consign the Pompeo list to a White House fireplace. In return for Iranian willingness to drop confrontational behavior in the region, the U.S. should offer to reciprocate—for instance, indicate a willingness to cut arms sales to the Saudis and Emiratis, end support for the Yemen war, and withdraw American forces from Syria and Iraq. ..."
"... Most important, American policymakers should play the long-game. Rather than try to crash the Islamic Republic and hope for the best, Washington should encourage Iran to open up, creating more opportunity and influence for a younger generation that desires a freer society. ..."
Jun 22, 2019 | nationalinterest.org

Sixteen years ago, the George W. Bush administration manipulated intelligence to scare the public into backing an aggressive war against Iraq. The smoking gun mushroom clouds that National Security Advisor Condoleezza Rice warned against didn’t exist, but the invasion long desired by neoconservatives and other hawks proceeded. Liberated Iraqis rejected U.S. plans to create an American puppet state on the Euphrates and the aftermath turned into a humanitarian and geopolitical catastrophe which continues to roil the Middle East.

Thousands of dead Americans, tens of thousands of wounded and maimed U.S. personnel, hundreds of thousands of dead Iraqis, and millions of Iraqis displaced. There was the sectarian conflict, destruction of the historic Christian community, the creation of Al Qaeda in Iraq—which morphed into the far deadlier Islamic State—and the enhanced influence of Iran. The prime question was how could so many supposedly smart people be so stupid?

Now the Trump administration appears to be following the same well-worn path. The president has fixated on Iran, tearing up the nuclear accord with Tehran and declaring economic war on it—as well as anyone dealing with Iran. He is pushing America toward war even as he insists that he wants peace. How stupid does he believe we are?

The Iranian regime is malign. Nevertheless, despite being under almost constant siege it has survived longer than the U.S.-crafted dictatorship which preceded the Islamic Republic. And the latter did not arise in a vacuum. Washington did much to encourage a violent, extremist revolution in Tehran. The average Iranian could be forgiven for viewing America as a virulently hostile power determined to do his or her nation ill at almost every turn.

In 1953 the United States backed a coup against democratically selected prime minister, Mohammad Mosaddegh. Washington then aided the Shah in consolidating power, including the creation of the secret police, known as SAVAK. He forcibly modernized Iran’s still conservative Islamic society, while his corrupt and repressive rule united secular and religious Iranians against him.

The Shah was ousted in 1979. Following his departure the Reagan administration backed Iraq’s Saddam Hussein when he invaded Iran, triggering an eight-year war which killed at least half a million people. Washington reflagged Kuwaiti oil tankers to protect revenue subsequently lent to Baghdad, provided Iraq with intelligence for military operations, and supplied components for chemical weapons employed against Iranian forces. In 1988 the U.S. Navy shot down an Iranian civilian airliner in international airspace.

Economic sanctions were first imposed on Iran in 1979 and regularly expanded thereafter. Washington forged a close military partnership with Iran’s even more repressive rival, Saudi Arabia. In the immediate aftermath of its 2003 victory over Saddam Hussein, the Bush administration rejected Iran’s offer to negotiate; neoconservatives casually suggested that “real men” would conquer Tehran as well. Even the Obama administration threatened to take military action against Iran.

As Henry Kissinger reportedly once said, even a paranoid can have enemies. Contrary to the common assumption in Washington that average Iranians would love the United States for attempting to destroy their nation’s economy, the latest round of sanctions apparently triggered a notable rise in anti-American sentiment. Nationalism trumped anti-clericalism.

The hostile relationship with Iran also has allowed Saudi Arabia, which routinely undercuts American interests and values, to gain a dangerous stranglehold over U.S. policy. To his credit President Barack Obama attempted to rebalance Washington’s Mideast policy. The result was the multilateral Joint Comprehensive Plan of Action. It provided for an intrusive inspection regime designed to discourage any future Iranian nuclear weapons program—which U.S. intelligence indicated had been inactive since 2003.

However, candidate Donald Trump had an intense and perverse desire to overturn every Obama policy. His tight embrace of Israeli prime minister Benjamin Netanyahu, who ignored the advice of his security chiefs in denouncing the accord, and the Saudi royals, who Robert Gates once warned would fight Iran to the last American, also likely played an important role.

Last year the president withdrew from the accord and followed with a declaration of economic war. He then declared the Iranian Revolutionary Guard Corps, a military organization, to be a terrorist group. (Washington routinely uses the “terrorist” designation for purely political purposes.) Finally, there are reports, officially denied by Washington, that U.S. forces, allied with Islamist radicals—the kind of extremists responsible for most terrorist attacks on Americans—have been waging a covert war against Iranian smuggling operations.

The president claimed that he wanted to negotiate: “We aren’t looking for regime change,” he said. “We are looking for no nuclear weapons.” But that is what the JCPOA addressed. His policy is actually pushing Tehran to expand its nuclear program. Moreover, last year Secretary of State Mike Pompeo gave a speech that the Washington Post’s Jason Rezaian, who spent more than a year in Iranian prison, called “silly” and “completely divorced from reality.”

In a talk to an obsequious Heritage Foundation audience, Pompeo set forth the terms of Tehran’s surrender: Iran would be expected to abandon any pretense of maintaining an independent foreign policy and yield its deterrent missile capabilities, leaving it subservient to Saudi Arabia, with the latter’s U.S.-supplied and -trained military. Tehran could not even cooperate with other governments, such as Syria, at their request. The only thing missing from Pompeo’s remarks was insistence that Iran accept an American governor-general in residence.

The proposal was a nonstarter and looked like the infamous 1914 Austro-Hungarian ultimatum to Serbia, which was intended to be rejected and thereby justify war. After all, National Security Advisor John Bolton expressed his policy preference in a 2015 New York Times op-ed titled: “To Stop Iran’s Bomb, Bomb Iran.” Whatever the president’s true intentions, Tehran can be forgiven for seeing Washington’s position as one of regime change, by war if necessary.

The administration apparently assumed that new, back-breaking sanctions would either force the regime to surrender at the conference table or collapse amid political and social conflict. Indeed, when asked if he really believed sanctions would change Tehran’s behavior, Pompeo answered that “what can change is, the people can change the government.” Both Reuel Marc Gerecht of the Foundation for the Defense of Democracies and Ray Takeyh of the Council on Foreign Relations have recently argued that the Islamic Republic is an exhausted regime, one that is perhaps on its way to extinction.

However, Rezaian says “there is nothing new” about Tehran’s difficult Iranian economic problems. “Assuming that this time around the Iranian people can compel their government to bend to America’s will seems—at least to anyone who has spent significant time in Iran in recent decades—fantastical,” he said. Gerecht enthusiasm for U.S. warmaking has led to mistakes in the past. He got Iraq wrong seventeen years ago when he wrote that “a war with Iraq might not shake up the Middle East much at all.

Today the administration is using a similar strategy against Russia, North Korea, Cuba, and Venezuela. The citizens of these countries have not risen against their oppressors to establish a new, democratic, pro-American regime. Numerous observers wrongly predicted that the Castro regime would die after the end of Soviet subsidies and North Korea’s inevitable fall in the midst of a devastating famine. Moreover, regime collapse isn’t likely to yield a liberal, democratic republic when the most radical, authoritarian elites remain best-armed.

... ... ...

More important, Washington does not want to go to war with Iran, which is larger than Iraq, has three times the population, and is a real country. The regime, while unpopular with many Iranians, is much better rooted than Saddam Hussein’s dictatorship. Tehran possesses unconventional weapons, missiles, and allies which could spread chaos throughout the region. American forces in Syria and Iraq would be vulnerable, while Baghdad’s stability could be put at risk. If Americans liked the Iraq debacle, then they would love the chaos likely to result from attempting to violently destroy the Iranian state. David Frum, one of the most avid neoconservative advocates of the Iraq invasion, warned that war with Iran would repeat Iraqi blunders on “a much bigger sale, without allies, without justification, and without any plan at all for what comes next.”

Iran also has no desire for war, which it would lose. However, Washington’s aggressive economic and military policies create pressure on Tehran to respond. Especially since administration policy—sanctions designed to crash the economy, military moves preparing for war — almost certainly have left hardliners, including the Islamic Revolutionary Guard Corps, who opposed negotiations with Washington, ascendant in Tehran.

Carefully calibrated military action, such as tanker attacks, might be intended to show “resolve” to gain credibility. Washington policymakers constantly justify military action as necessary to demonstrate that they are willing to take military action. Doing so is even more important for a weaker power. Moreover, observed the Eurasia Group, Iranian security agencies “have a decades-long history of conducting attacks and other operations aimed precisely at undermining the diplomatic objectives of a country’s elected representatives.” If Iran is responsible, observed Ali Vaez of the International Crisis Group, then administration policy perversely “is rendering Iran more aggressive, not less,” thereby making the Mideast more, not less dangerous

Of course, Tehran has denied any role in the attacks and there is good reason to question unsupported Trump administration claims of Iranian guilt. The president’s indifferent relationship to the truth alone raises serious questions. Europeans also point to Bush administration lies about Iraq and the fabricated 1964 Tonkin Gulf incident used to justify America’s entry into the Vietnam War. Even more important, the administration ostentatiously fomented the current crisis by trashing the JCPOA, launching economic war against Iran, threatening Tehran’s economic partners, and insisting on Iran’s submission. A cynic might reasonably conclude that the president and his aides hoped to trigger a violent Iranian response.

Other malicious actors also could be responsible for tanker attacks. Saudi Arabia, United Arab Emirates, Israel, ISIS, and Al Qaeda all likely believe they would benefit from an American war on Tehran and might decide to speed the process along by fomenting an incident. Indeed, a newspaper owned by the Saudi royal family recently called for U.S. strikes on Iran. One or the reasons Al Qaeda launched the 9/11 attacks was to trigger an American military response against a Muslim nation. A U.S.-Iran war would be the mother of all Mideast conflagrations.

Rather than continue a military spiral upward, Washington should defuse Gulf tensions. The administration brought the Middle East to a boil. It can calm the waters. Washington should stand down its military, offering to host multilateral discussions with oil consuming nations, energy companies, and tanker operators over establishing shared naval security in sensitive waterways, including in the Middle East. Given America’s growing domestic energy production, the issue no longer should be considered Washington’s responsibility. Other wealthy industrialized states should do what is necessary for their economic security.

The administration also should make a serious proposal for talks. It won’t be easy. Iran’s Supreme Leader Ayatollah Ali Khamenei declared “negotiation has no benefit and carries harm.” He further argued that “negotiations are a tactic of this pressure,” which is the ultimate “strategic aim.” Even President Hassan Rouhani rejected contact without a change in U.S. policy. “Whenever they lift the unjust sanctions and fulfill their commitments and return to the negotiations table, which they left themselves, the door is not closed,” he said. In back channel discussions Iranians supposedly suggested that the U.S. reverse the latest sanctions, at least on oil sales, ending attempts to wreck Iran’s economy.

If the president seriously desires talks with Tehran, then he should demonstrate that he does not expect preemptive surrender. The administration should suspend its “maximum pressure” campaign and propose multilateral talks on tightening the nuclear agreement in return for additional American and allied concessions, such as further sanctions relief.

In parallel, Washington should propose negotiations to lower tensions in other issues. But there truly should be no preconditions, requiring the president to consign the Pompeo list to a White House fireplace. In return for Iranian willingness to drop confrontational behavior in the region, the U.S. should offer to reciprocate—for instance, indicate a willingness to cut arms sales to the Saudis and Emiratis, end support for the Yemen war, and withdraw American forces from Syria and Iraq. Tehran has far greater interest in neighborhood security than the United States, which Washington must respect if the latter seeks to effectively disarm Iran. The administration should invite the Europeans to join such an initiative, since they have an even greater reason to worry about Iranian missiles and more.

Most important, American policymakers should play the long-game. Rather than try to crash the Islamic Republic and hope for the best, Washington should encourage Iran to open up, creating more opportunity and influence for a younger generation that desires a freer society. That requires greater engagement, not isolation. Washington’s ultimate objective should be the liberal transformation of Iran, freeing an ancient civilization to regain its leading role in today’s world, which would have a huge impact on the region.

The Trump administration is essentially a one-trick pony when it comes to foreign policy toward hostile states. The standard quo is to apply massive economic pressure and demand surrender. This approach has failed in every case. Washington has caused enormous economic hardship, but no target regime has capitulated. In Iran, like North Korea, U.S. policy sharply raised tensions and the chances of conflict.

War would be a disaster. Instead, the administration must, explained James Fallows, “through bluff and patience, change the actions of a government whose motives he does not understand well, and over which his influence is limited.” Which requires the administration to adopt a new, more serious strategy toward Tehran, and quickly.

Doug Bandow is a senior fellow at the Cato Institute and a former special assistant to President Ronald Reagan. He is the author of Foreign Follies: America’s New Global Empire.

[Jun 21, 2019] Russia accuses U.S. of pushing Iran situation to brink of war RIA - Reuters

Highly recommended!
Did Putin called Trump about the attack ?
Full scale war might also complicate Trump chances for re-election.
Jun 21, 2019 | www.reuters.com

Deputy Foreign Minister Sergei Ryabkov called on Washington to weigh the possible consequences of conflict with Iran and said a report in the New York Times showed the situation was extremely dangerous.

U.S. President Donald Trump approved military strikes against Iran in retaliation for the downing of a U.S. surveillance drone, but called off the attacks at the last minute, the report said.

[Jun 20, 2019] The Trump regime wants another pointless war by Ryan Cooper

Highly recommended!
A very good analysis. Trump essentially morphed into Hillary or worse. Essentially the same type of warmonger and compulsive liar.
Notable quotes:
"... The American people appear largely uninterested in this idea. But unless some real mass pressure is mounted against it, there is a good chance Trump will launch the U.S. into another pointless, disastrous war. ..."
"... At time of writing, the Washington Post has counted 10,796 false or misleading claims from Trump himself since taking office. Abject up-is-down lying is basically the sine qua non of modern conservative politics. ..."
"... Pompeo insists " there is no doubt " that Iran carried out the attacks -- the exact same words that Vice President Dick Cheney said in 2002 about Saddam Hussein's possession of weapons of mass destruction and his intention to use them on the United States, neither of which were true. (This is no doubt why several U.S. allies reacted skeptically to Trump's claims.) ..."
"... What's more, the downside risk here is vastly larger than tax policy. A great big handout to the rich might be socially costly in many ways, but it won't cause tens of thousands of violent deaths in a matter of days. War with Iran could easily do that -- or worse . ..."
"... Who else might have done the attacks? Saudi Arabia springs to mind. ..."
"... At a minimum, anybody with half a brain would want to be extremely certain about what actually happened before taking any rash actions. It's clear that Bolton and company, by contrast, just want a pretext to ratchet up pressure on Iran even further. ..."
"... On the other hand, sinking Iran's navy, as Stephens suggests in his column, would likely be a lot more dangerous than he thinks. Americans have long been fed a lot of hysterical nationalist propaganda from neocons like him about the invincibility of the U.S. military, and the ease with which any possible threat could be defeated. But while U.S. forces are indeed powerful, there is a very real risk that Iran's navy -- which is full of fast-attack boats, mini-subs, and disguised civilian vessels specifically designed to take out large ships with swarm attacks -- could inflict significant damage. Just a few lucky hits could kill thousands of sailors and cause tens of billions of dollars in damage. This is before you even get to the primary lesson of the Iraq War which is that an initial military victory is completely useless and probably counterproductive without a plan for what comes next. ..."
"... Finally, attacking Iran would be illegal. It would violate U.S. treaties , and thus the Constitution. The only justification is the claim that the 2001 authorization to attack Al Qaeda covers an attack on Iran . This is utterly preposterous -- akin to arguing it covers attacking New Zealand to roll back their gun control efforts -- but may explain Pompeo's equally preposterous attempt to blame Iran for a Taliban attack in Afghanistan. ..."
"... Pompeo and Bolton are clearly hell-bent on war. But Trump himself seems somewhat hesitant , sensing (probably accurately) that starting another war of aggression would tank his popularity even further. It's high time for everyone from ordinary citizens up to Nancy Pelosi to demand this rush to war be stopped. ..."
Jun 18, 2019 | theweek.com

The Trump regime is attempting to gin up a war with Iran. First Trump reneged on Obama's nuclear deal with the country for no reason, then he slapped them with more economic sanctions for no reason, and then, pushed by National Security Adviser John Bolton and Secretary of State Mike Pompeo, he moved massive military forces onto Iran's doorstep to heighten tensions further. Now, after a series of attacks on oil tankers in the Gulf of Oman -- none of which were American -- that the administration blames on Iran, Pompeo says the U.S. is "considering a full range of options," including war. (Iran has categorically denied any involvement.)

The American people appear largely uninterested in this idea. But unless some real mass pressure is mounted against it, there is a good chance Trump will launch the U.S. into another pointless, disastrous war.

The New York Times ' Bret Stephens, for all his #NeverTrump pretensions, provides a good window into the absolute witlessness of the pro-war argument . He takes largely at face value the Trump administration's accusations against Iran -- "Trump might be a liar, but the U.S. military isn't," he writes -- and blithely suggests Trump should announce an ultimatum demanding further attacks cease, then sink Iran's navy if they don't comply.

Let me take these in turn. For one thing, any statement of any kind coming out of a Republican's mouth should be viewed with extreme suspicion. Two years ago, the party passed a gigantic tax cut for the rich which they swore up and down would " pay for itself " with increased growth. To precisely no one's surprise, this did not happen . Senator Josh Hawley (R-Mo.) was just one flagrant example of many who got elected in 2016 while lying through their teeth about their party's efforts to destroy ObamaCare and its protections for preexisting conditions.

At time of writing, the Washington Post has counted 10,796 false or misleading claims from Trump himself since taking office. Abject up-is-down lying is basically the sine qua non of modern conservative politics.

Republican accusations of foreign aggression should be subjected to an even higher burden of proof. The Trump regime has provided no evidence of Iranian culpability aside from a video of a ship the Pentagon says is Iranians removing something they say is a mine from an oil tanker -- but a Japanese ship owner reported at least one attack came from a " flying object ," not a mine. Pompeo insists " there is no doubt " that Iran carried out the attacks -- the exact same words that Vice President Dick Cheney said in 2002 about Saddam Hussein's possession of weapons of mass destruction and his intention to use them on the United States, neither of which were true. (This is no doubt why several U.S. allies reacted skeptically to Trump's claims.)

What's more, the downside risk here is vastly larger than tax policy. A great big handout to the rich might be socially costly in many ways, but it won't cause tens of thousands of violent deaths in a matter of days. War with Iran could easily do that -- or worse .

And though this may be a shock to Troop Respecters like Bret Stephens, the military's record of scrupulous honesty is not exactly spotless. It has lied continually about the state of the Afghanistan occupation, just as it did in Vietnam . It lied about the effects of Agent Orange on U.S. troops and Vietnamese civilians. It lied about Pat Tillman being killed by friendly fire. Military recruiters even sometimes lie about enlistment benefits to meet their quotas.

Who else might have done the attacks? Saudi Arabia springs to mind. False flag attacks on its own oil tankers sound outlandish, but we're talking about a ruthless dictatorship run by a guy who had a Washington Post columnist murdered and chopped into pieces because he didn't like his takes. And the Saudis have already been conducting a years-long war in Yemen with catastrophic humanitarian outcomes in order to stop an Iran-allied group from coming to power. It's by no means certain, but hardly outside the realm of possibility.

At a minimum, anybody with half a brain would want to be extremely certain about what actually happened before taking any rash actions. It's clear that Bolton and company, by contrast, just want a pretext to ratchet up pressure on Iran even further.

But let's grant for the sake of argument that some Iranian forces actually did carry out some or all of these attacks. That raises the immediate question of why. One very plausible reason is that all of Trump's provocations have strengthened the hand of Iran's conservative hard-liners, who are basically the mirror image of Pompeo and Bolton. "It is sort of a toxic interaction between hard-liners on both sides because for domestic political reasons they each want greater tension," as Jeremy Shapiro of the European Council on Foreign Relations told the New York Times . This faction might have concluded that the U.S. is run by deranged fanatics, and the best way to protect Iran is to demonstrate they could choke off oil shipping from the Persian Gulf if the U.S. attacks.

This in turn raises the question of the appropriate response if Iran is actually at fault here. It would be one thing if these attacks came out of a clear blue sky. But America is very obviously the aggressor here. Iran was following its side of the nuclear deal to the letter before Trump reneged, and continued to do so as of February . So far the European Union (which is still party to the deal) has been unwilling to sidestep U.S. sanctions, prompting Iran to threaten to restart uranium enrichment . So Iran is a medium-sized country with a faltering economy, hemmed in on all sides by U.S. aggression. Backing off the threats and chest-thumping might easily strengthen the hand of Iranian moderates, and cause them to respond in kind.

On the other hand, sinking Iran's navy, as Stephens suggests in his column, would likely be a lot more dangerous than he thinks. Americans have long been fed a lot of hysterical nationalist propaganda from neocons like him about the invincibility of the U.S. military, and the ease with which any possible threat could be defeated. But while U.S. forces are indeed powerful, there is a very real risk that Iran's navy -- which is full of fast-attack boats, mini-subs, and disguised civilian vessels specifically designed to take out large ships with swarm attacks -- could inflict significant damage. Just a few lucky hits could kill thousands of sailors and cause tens of billions of dollars in damage. This is before you even get to the primary lesson of the Iraq War which is that an initial military victory is completely useless and probably counterproductive without a plan for what comes next.

Taken together, these factors strongly militate towards de-escalation and diplomacy even if Iran did carry out these attacks, which again, is not at all proven. The current standoff is almost entirely our fault, and Iranian forces are far from defenseless. America has a lot better things to do than indulge the deluded jingoist fantasies of a handful of armchair generals who want lots of other people to die in battle.

Finally, attacking Iran would be illegal. It would violate U.S. treaties , and thus the Constitution. The only justification is the claim that the 2001 authorization to attack Al Qaeda covers an attack on Iran . This is utterly preposterous -- akin to arguing it covers attacking New Zealand to roll back their gun control efforts -- but may explain Pompeo's equally preposterous attempt to blame Iran for a Taliban attack in Afghanistan.

Pompeo and Bolton are clearly hell-bent on war. But Trump himself seems somewhat hesitant , sensing (probably accurately) that starting another war of aggression would tank his popularity even further. It's high time for everyone from ordinary citizens up to Nancy Pelosi to demand this rush to war be stopped.

[Jun 20, 2019] The Trump-Bolton Duo Is Just Like the Bush-Cheney Duo Warmongers Using Lies to Start Illegal Wars by Prof Rodrigue Tremblay

Highly recommended!
Notable quotes:
"... [Definition: A 'false flag operation' is a horrific, staged event -- blamed on a political enemy -- and used as pretext to start a war or to enact draconian laws in the name of national security]. ..."
"... " Definition of reverse projection: attributing to others what you are doing yourself as the reason for attacking them ." John McMurtry (1939- ), Canadian philosopher, (in 'The Moral Decoding of 9-11: Beyond the U.S. Criminal State', Journal of 9/11 Studies, Feb.2013). ..."
Jun 18, 2019 | www.globalresearch.ca
[False flag operations:] "The powers-that-be understand that to create the appropriate atmosphere for war, it's necessary to create within the general populace a hatred, fear or mistrust of others regardless of whether those others belong to a certain group of people or to a religion or a nation." James Morcan (1978- ), New Zealander-born Australian writer.

[Definition: A 'false flag operation' is a horrific, staged event -- blamed on a political enemy -- and used as pretext to start a war or to enact draconian laws in the name of national security].

" Almost all wars begin with false flag operations ." Larry Chin (d. of b. unknown), North American author, (in 'False Flagging the World towards War. The CIA Weaponizes Hollywood', Dec. 27, 2014).

" Definition of reverse projection: attributing to others what you are doing yourself as the reason for attacking them ." John McMurtry (1939- ), Canadian philosopher, (in 'The Moral Decoding of 9-11: Beyond the U.S. Criminal State', Journal of 9/11 Studies, Feb.2013).

" That there are men in all countries who get their living by war, and by keeping up the quarrels of nations, is as shocking as it is true; but when those who are concerned in the government of a country, make it their study to sow discord, and cultivate prejudices between nations, it becomes the more unpardonable ." Thomas Paine (1737-1809), American Founding father, pamphleteer, (in 'The Rights of Man', c. 1792).

" I was the CIA director. We lied, we cheated, and we stole . It was like -- we had entire training courses. It reminds you of the glory of the American experiment." Mike Pompeo (1963- ), former CIA director and now Secretary of State in the Trump administration, (in April 2019, while speaking at Texas A&M University.)

***

History repeats itself. Indeed, those who live by war are at it again. Their crime: starting illegal wars by committing false flag attacks and blaming other countries for their own criminal acts. On this, the Donald Trump-John Bolton duo is just like the George W. Bush-Dick Cheney duo. It is amazing that in an era of 24-hour news, this could still going on.

We recall that in 2002-2003, the latter duo, with the help of U.K.'s Tony Blair, lied their way into a war of aggression against Iraq, by pretending that Saddam Hussein had a massive stockpile of " weapons of mass destruction "and that he was ready to attack the United States proper. On October 6, 2002, George W. Bush scared Americans with his big Mushroom Cloud analogy. -- It was all bogus. -- It was a pure fabrication that the gullible (!) U.S. Congress, the corporate media, and most of the American public, swallowed hook, line and sinker.

John Pilger: On the Dangers of Nuclear War

Now, in 2019, a short sixteen years later, the same stratagem seems to being used to start another illegal war of aggression, this time against the country of Iran. The masters of deception are at it again. Their secret agents and those of their Israeli and Saudi allies, in the Middle East, seem to have just launched an unprovoked attack, in international waters, against a Japanese tanker, and they have rushed to the cameras to accuse Iran. They claim that the latter country used mines to attack the tanker.

This time, they were unlucky. -- The owner of the Japanese tanker , the Kokuka Courageous, immediately rebuked that "official" version. Yutaka Katada , president of the Kokuka Sangyo shipping company, declared that the attack came from a bombing from above the water. Indeed, Mr. Katada told reporters:

Source: The Washington Post

" The crew are saying it was hit with a flying object. They say something came flying toward them, then there was an explosion, then there was a hole in the vessel ."

His company issued a statement saying that " the hull (of the ship) has been breached above the waterline on the starboard side ", and it was not hit by a mine below the waterline, as the Trump administration has insinuated. -- [N. B.: There was also a less serious attack on a Norwegian ship, the Front Altair.]

Thus, this time the false flag makers have not succeeded. But, you can be sure that they will be back at it, sooner or later, just as they, and their well financed al-Qaeda allies, launched a few false flag "chemical" attacks in Syria, and blamed them on the Syrian Assad government.

Donald Trump has too much to gain personally from a nice little war to distract the media and the public from the Mueller report and from all his mounting political problems. In his case, he surely would benefit from a "wag-the-dog" scenario that John Bolton and his friends in the Middle East could easily invent. As a matter of fact, two weeks ago, warmonger John Bolton was coincidently in the Middle East, in the United Arab Emirates, just before the attacks!

Besides the Japanese ship owner's denial, it is important to point out that at the moment of the attack on the Japanese tanker, the Japanese Prime Minister, Mr. Shinzo Abe , was in Iran, having talks with the Iranian government about economic cooperation between the two countries about oil shipments. Since Iran is the victim of unilateral U. S. economic sanctions, to derail such an economic cooperation between Japan and Iran could have been the triggered motivation to launch a false flag operation. It did not work. But you can be sure that the responsible party will not be prosecuted.

Conclusion

We live in an era when people with low morals, sponsored by people with tons of money, can gain power and do a lot of damage. How our democracies can survive in such a context remains an open question.

International economist Dr. Rodrigue Tremblay is the author of the book "The Code for Global Ethics, Ten Humanist Principles" , of the book "The New American Empire" , and the recent book, in French " La régression tranquille du Québec, 1980-2018 ". He is a Research Associate of the Centre for Research on Globalization (CRG). The original source of this article is Global Research Copyright © Prof Rodrigue Tremblay , Global Research, 2019

[May 31, 2019] US energy department rebrands fossil fuels as 'molecules of freedom'...and this is in The Guardian and not The Onion

Highly recommended!
This is similar to renaming "French fries" to "freedom fries" after 9/11. You can't overestimate stupidity of government bureaucrats. They now exceeded the USSR level.
May 31, 2019 | www.moonofalabama.org

Victor , May 30, 2019 3:12:19 PM | 10

US energy department rebrands fossil fuels as 'molecules of freedom'...and this is in The Guardian and not The Onion:

https://tinyurl.com/y5uyb28ghttps://www.moonofalabama.org/2019/05/open-thread-2019-30.html?cid=6a00d8341c640e53ef0240a48ab852200d#c6a00d8341c640e53ef0240a48ab852200d

[Apr 29, 2019] OPEC vs AIPAC

Apr 26, 2019 | peakoilbarrel.com

Energy News : 04/26/2019 at 10:03 am

It seems President Trump called on OPEC to bring down oil prices
Reuters headline https://pbs.twimg.com/media/D5FZA8VW4AA6QNI.png
GuyM : 04/26/2019 at 11:52 am
I can't imagine that moron influencing much.
Ron Patterson : 04/26/2019 at 12:03 pm
He called OPEC? Just whom at OPEC did he speak with? OPEC is a group of oil exporting nations. They meet once every six months or so to decide what they will do, if anything.

No one can just call OPEC and OPEC will decide to produce more oil. They have to meet, talk it over, and decide what to do.

This just shows what a fucking liar Trump really is.

Iron Mike : 04/26/2019 at 12:35 pm
Trump probably just called his employer .AIPAC.

[Apr 27, 2019] Trump called OPEC?

Apr 27, 2019 | peakoilbarrel.com

Ron Patterson x Ignored says: 04/26/2019 at 12:03 pm

He called OPEC? Just whom at OPEC did he speak with? OPEC is a group of oil exporting nations. They meet once every six months or so to decide what they will do, if anything.
No one can just call OPEC and OPEC will decide to produce more oil. They have to meet, talk it over, and decide what to do.

This just shows what a fucking liar Trump really is.

Iron Mike x Ignored says: 04/26/2019 at 12:35 pm
Trump probably just called his employer .AIPAC.
GuyM x Ignored says: 04/26/2019 at 1:40 pm
He probably did call someone, and the conversation went kinda like this:
This is Donald Trump.
Aren't you the guy who owns all those hotels?
Yes, but I am also the President of the United States.
I'm sorry to hear that, what can I do for you?
We need for you to pump more oil, and lower gasoline prices.
Why? They are not high enough, yet.
We think they are, and if you don't get pumping I will agree to Nopec.
Then, we will no longer use the dollar to trade with, and you can watch the value of your currency plummet.
Don't you realize who you are talking to? I am the President of the United States!
Oh yeah. The US, we used to trade with you. Good luck, and good bye!
Energy News x Ignored says: 04/26/2019 at 1:40 pm
President Trump didn't say who he had spoken to. Various OPEC officials say that they haven't spoken to him

Wall Street Journal: OPEC Chief Barkindo Has Not Spoken to President Trump -- Source
Saudi officials: President Trump Has Not Discussed Lowering Oil Prices With Saudis

Ron Patterson x Ignored says: 04/26/2019 at 2:24 pm
OPEC and Saudis both deny speaking with Trump about lowering oil prices

Trump said he called OPEC
One of the reasons oil prices sank today was because Trump said he "called OPEC" and asked them to lower oil prices.

OPEC Chief Barkindo said he hasn't spoke with Trump, according to a report. Saudi officials also say they haven't discussed lowering oil prices with Trump.

Update: Trump is now back and saying he spoke to Saudi Arabia and others about oil prices.

Lies just roll off Trump's tongue. He thinks people will believe everything he says without checking anything. What a blooming idiot.

Fell off the peak x Ignored says: 04/26/2019 at 1:59 pm
OPEC must have put Trump on hold as gas price is still the same in my neck of the woods. Laughed like hell when I saw the headline earlier today. Probably eighty percent of folks believe he can actually do that. The heads of the OPEC countries probably laughed so hard they spit out their dentures. Difficult to satirize this guy as he does a stellar job of it himself!

[Apr 22, 2019] Our Iran Policy Is Run By Fanatics

Apr 22, 2019 | www.theamericanconservative.com

The Trump administration won't be issuing any more waivers to importers of Iranian oil:

The Trump administration is poised to tell five nations, including allies Japan, South Korea and Turkey, that they will no longer be exempt from U.S. sanctions if they continue to import oil from Iran.

U.S. officials say Secretary of State Mike Pompeo plans to announce on Monday that the administration will not renew sanctions waivers for the five countries when they expire on May 2.

Refusing to offer new sanctions waivers is the latest sign that Trump is once again giving in to the most extreme Iran hawks. When sanctions on Iran's oil sector went into effect last November, the administration initially granted waivers to the top importers of Iranian oil to avoid a spike in the price of oil, but that is now coming to an end. The economic war that the U.S. has been waging against Iran over the last year is about to expand to include some of the world's biggest economies and some of America's leading trading partners. It is certain to inflict more hardship on the Iranian people, and it will damage relations between the U.S. and other major economic powers, including China and India, but it will have no discernible effect on the Iranian government's behavior and policies. India, China, and Turkey are practically guaranteed to ignore U.S. demands that they eliminate all Iranian oil imports.

Josh Rogin reported on the same story:

The decision to end waivers has implications for world oil markets, which have been eagerly anticipating President Trump's decision on whether to extend waivers. The officials said market disruption should be minimal for two reasons: supply is now greater than demand and Pompeo is also set to announce offsets through commitments from other suppliers such as Saudi Arabia and the United Arab Emirates. Trump spoke about the issue Thursday with the UAE's Crown Prince Mohammed bin Zayed al-Nahyan.

Between the administration's Venezuela and Iran oil sanctions and increased instability in Libya (also supported by the Trump administration), oil prices are nonetheless likely to rise. Even if they don't, Trump's Iran obsession is causing significant economic dislocation for no good reason as part of a regime change policy that can't and won't succeed. It cannot be emphasized enough that the reimposition of sanctions on Iran is completely unwarranted and represents a betrayal of previous U.S. commitments to Iran and our allies under the Joint Comprehensive Plan of Action. The decision to refuse any new sanctions waivers is a clear sign that the most fanatical members of the Trump administration have prevailed in internal debates and U.S. Iran policy is held hostage to their whims.


liberal, says: April 21, 2019 at 11:44 pm

Maybe Trump will reap the benefits of this if oil prices go up a lot and it torpedos his reelection in 2020.

One thing I'm really not clear on how are these proposed sanctions against third parties (e.g. Japan, etc etc) not a violation of trade agreements? Are there escape clauses in those agreements that allow the US to do these things, or is it merely that these other countries are (usually) not willing to rely on the trade agreements' protections because, at the end of the day, it would mean a trade war with the US, which they're not willing to countenance?

JR , says: April 22, 2019 at 6:27 am
One would be naive to expect any truth from Pompeo. Self satisfied creature considers this funny too. How deep can one sink..

https://www.youtube.com/embed/tsnAR3yqfQ0?version=3&rel=1&fs=1&autohide=2&showsearch=0&showinfo=1&iv_load_policy=1&wmode=transparent

cosmo , says: April 22, 2019 at 7:19 am
Iran policy ??? What about foreign policy in general ?? Interventionism is NOT what Americans want, or can afford! No more lives & limbs (and dollars) for foreign countries!!
Dry Dock , says: April 22, 2019 at 8:34 am
"Between the administration's Venezuela and Iran oil sanctions and increased instability in Libya (also supported by the Trump administration), oil prices are nonetheless likely to rise. Even if they don't, Trump's Iran obsession is causing significant economic dislocation for no good reason "

But there is a good reason. Forcing up oil prices is a shot in the arm for the Saudi economy. Remember "Israel first, and Saudi Arabia second". That formula explains most of Trump's foreign policy, the rest being a jumble of random impulses and the consequences of infighting among his advisors.

KXB , says: April 22, 2019 at 10:24 am
Gas is already $3.20 in the Chicago suburbs, and we are not into the summer driving season yet. Overseas – India is going to the poll. India imports most of its oil, and Iran is a major supplier. Yes, the Saudis have been trying to get India to switch over to more Saudi imports – but it would look like "strong" Modi is giving in to Trump and MBS.
TheSnark , says: April 22, 2019 at 10:59 am
We are going to sanction China for buying Iranian oil? Does anyone seriously think they are going to submit to that gracefully? Japan and Korea might, they are much smaller and stuck with us. But China?

And I seriously doubt that sanctioning India for buying Iranian oil will advance our strategic alliance with them, either.

[Apr 22, 2019] Current Neo-McCarthyism hysteria as a smoke screen of the UK and the USA intent to dominate European geopolitics and weaken Russia and Germany

Highly recommended!
Notable quotes:
"... North Stream is a problem as the goal is to economically weaken Russia, tie the EU to the USA via energy supplies and support our new client state -- Ukraine. ..."
"... But this is also related to attempts to prevent/weaken the alliance of Russia and China. As geopolitical consequences of this alliance for the USA-led neoliberal empire are very bad ..."
Jul 24, 2018 | angrybearblog.com

likbez , July 24, 2018 12:23 am

@run75441 July 23, 2018 2:02 pm

Best bet is for Russia to want to trade with the US and Europe. The gas pipeline will not be enough leverage on Germany as it provides 9% of their needs.

Yes. And that's against the USA interests (or more correctly the US-led neoliberal empire interests). North Stream is a problem as the goal is to economically weaken Russia, tie the EU to the USA via energy supplies and support our new client state -- Ukraine.

As you know, nothing was proven yet in Russiagate (and DNC hacks looks more and more like a false flag operation, especially this Guccifer 2.0 personality ), but sanctions were already imposed. And when the US government speaks "Russia" in most cases they mean "China+Russia" ;-). Russia is just a weaker link in this alliance and, as such, it is attacked first. Russiagate is just yet another pretext after MH17, Magnitsky and such.

To me the current Anti-Russian hysteria is mainly a smokescreen to hide attempt to cement cracks in the façade of the USA neoliberal society that Trump election revealed (including apparent legitimization of ruling neoliberal elite represented by Hillary).

And a desperate attempt to unite the society using (false) war propaganda which requires demonization of the "enemy of the people" and neo-McCarthyism.

But this is also related to attempts to prevent/weaken the alliance of Russia and China. As geopolitical consequences of this alliance for the USA-led neoliberal empire are very bad (for example, military alliance means the end of the USA global military domination; energy alliance means that is now impossible to impose a blockade on China energy supplies from Middle East even if Iran is occupied)

In this sense the recent descent into a prolonged fit of vintage Cold War jingoistic paranoia is quite understandable. While, at the same time, totally abhorrent. My feeling is that unless Russia folds, which is unlikely, the side effects/externalities of this posture can be very bad for the USA. In any case, the alliance of Russia and China which Obama administration policies forged spells troubles to the global neoliberal empire dominated by the USA.

Trump rejection of existing forms of neoliberal globalization is one sign that this process already started and some politicians already are trying to catch the wind and adapt to a "new brave world" by using preemptive adjustments.

Which is why all this Trump-Putin summit hysteria is about.

Neither hard, nor soft neoliberals want any adjustments. They are ready to fight for the US-led neoliberal empire till the last American (excluding, of course, themselves and their families)

[Apr 21, 2019] Psywar: Propaganda during Iraq war and beyond

Highly recommended!
Powerful video about US propaganda machine. Based on Iraq War propaganda efforts. This is a formidable machine.
Shows quite vividly that most US politicians of Bush era were war criminal by Nuremberg Tribunal standards. Starting with Bush, Cheney and Rumsfeld. They planned the war of aggression against Iraq long before 9/11.
Apr 21, 2019 | www.moonofalabama.org
Desolation Row , Apr 20, 2019 10:21:11 PM | link

Desolation Row | Apr 20, 2019 10:09:06 PM | 41

Psywar

Source: https://vimeo.com/14772678 @ 48:15

[Apr 16, 2019] The incompetent, the corrupt, the treacherous -- not just walking free, but with reputations intact, fat bank balances, and flourishing careers. Now they re angling for war with Iran.

Highly recommended!
Apr 15, 2019 | www.theamericanconservative.com

Return of the Just April 14, 2019 at 10:46 am

You're right. I see people like Robert Kagan's opinions being respectfully asked on foreign affairs, John Bolton and Elliott Abrams being hired to direct our foreign policy.

The incompetent, the corrupt, the treacherous -- not just walking free, but with reputations intact, fat bank balances, and flourishing careers. Now they're angling for war with Iran.

It's preposterous and sickening. And it can't be allowed to stand, so you can't just stand off and say you're "wrecked". Keep fighting, as you're doing. I will fight it until I can't fight anymore.

Ken Zaretzke , says: April 14, 2019 at 3:38 pm
Fact-bedeviled JohnT: “McCain was a problem for this nation? Sweet Jesus! There quite simply is no rational adult on the planet who buys that nonsense.”

McCain had close ties to the military-industrial complex. He was a backer of post-Cold War NATO. He was a neoconservative darling. He never heard of a dictator that he didn’t want to depose with boots on the ground, with the possible exception of various Saudi dictators (the oil-weaponry-torture nexus). He promoted pseudo-accountability of government in campaign finance but blocked accountability for the Pentagon and State Department when he co-chaired the United States Senate Select Committee on POW/MIA Affairs with John Kerry.

And, perhaps partly because of the head trauma and/or emotional wounds he suffered at the hands of Chinese-backed Commies, it’s plausible to think he was regarded by the willy-nilly plotters of the deep state as a manipulable, and thus useful, conduit of domestic subversion via the bogus Steele dossier.

Unfortunately, the episode that most defines McCain’s life is the very last one–his being a pawn of M-16 in the the deep state’s years-long attempt to derail the presidency of Donald Trump.

Joe Dokes , says: April 14, 2019 at 11:55 pm
Measuring success means determining goals. The goals of most wars is to enrich the people in charge. So, by this metric, the war was a success. The rest of it is just props and propaganda.
Andrew Stergiou , says: April 15, 2019 at 5:11 am
“Pyrrhic Victory” look it up the Roman Empire Won but lost if the US is invaded and the government does not defend it I would like to start my own defense: But the knee jerk politics that stirs America’s cannon fodder citizens is a painful reminder of a history of jingoist lies where at times some left and right agree at least for a short moment before the rich and powerful push their weight to have their way.

If All politics is relative Right wingers are the the left of what? Nuclear destruction? or Slavery?

Peter Smith , says: April 15, 2019 at 5:13 am
My goodness! I am also a veteran, but of the Vietnam war, and my father was a career officer from 1939-1961 as a paratrooper first, and later as an intelligence officer. He argued vigorously against our Vietnam involvement, and was cashiered for his intellectual honesty. A combat veteran’s views are meaningless when the political winds are blowing.

Simply put, we have killed thousands of our kids in service of the colonial empires left to us by the British and the French after WWII. More practice at incompetent strategies and tactics does not make us more competent–it merely extends the blunders and pain; viz the French for two CENTURIES against the Britsh during the battles over Normandy while the Planagenet kings worked to hold their viking-won inheritance.

At least then, kings risked their own lives. Generals fight because the LIKE it…a lot. Prior failures are only practice to the, regardless of the cost in lives of the kids we tried to raise well, and who were slaughtered for no gain.

We don’t need the empire, and we certainly shouldn’t fight for the corrupt businessmen who have profited from the never-ending conflicts. Let’s spend those trillions at home, so long as we also police our government to keep both Democrat and Republican politicians from feathering their own nests. Term limits and prosecutions will help us, but only if we are vigilant. Wars distract our attention while corruption is rampant at home.

Fayez Abedaziz , says: April 12, 2019 at 12:25 am
Thanks, I appreciate this article.
I’ll make two points, my own opinion:
it’s the same story as Vietnam, the bull about how the politicians or anti-war demonstrators tied the military ‘hand,’ blah, blah.
Nonsense. Invading a nation and slaughtering people in their towns, houses…gee…what’s wrong with that, eh?
The average American has a primitive mind when it comes to such matters.
Second point I have, is that both Bushes, Clinton, Obama, Hillary and Trump should be dragged to a world court, given a fair trial and locked up for life with hard labor… oh, and Cheney too,for all those families, in half a dozen nations, especially the children overseas that suffered/died from these creeps.
And, the families of dead or maimed American troops should be apologized to and compensation paid by several million dollars to each.
The people I named above make me sick, because I have feelings and a conscience. Can you dig?
kingdomofgodflag.info , says: April 12, 2019 at 8:19 am
Though there is a worldly justification for killing to obtain or maintain freedoms, there is no Christian justification for it. Which suggests that Christians who die while doing it, die in vain.

America’s wars are prosecuted by a military that includes Christians. They seldom question the killing their country orders them to do, as though the will of the government is that of the will of God. Is that a safe assumption for them to make? German Christian soldiers made that assumption regarding their government in 1939. Who was there to tell them otherwise? The Church failed, including the chaplains. (The Southern Baptist Convention declared the invasion of Iraq a just war in 2003.) These wars need to be assessed by Just War criteria. Christian soldiers need to know when to exercise selective conscientious objection, for it is better to go to prison than to kill without God’s approval. If Just War theory is irrelevant, the default response is Christian Pacifism.

Mark Thomason , says: April 12, 2019 at 10:43 am
“has gone un-investigated, unheard of, or unpunished.”

The one guy who did tell us has just been arrested for doing exactly that.

The arrest is cheered by those who fantasize about Russiagate, but it is expressly FOR telling us about these things.

Stephen J. , says: April 12, 2019 at 10:51 am
“Iraq Wrecked” a lot of innocent people. Millions are dead, cities reduced to rubble, homes and businesses destroyed and it was all a damned lie. And the perpetrators are Free.
Now there is sectarian violence too, where once there was a semblance of harmony amongst various denominations. See article link below.

“Are The Christians Slaughtered in The Middle East Victims of the Actions of Western War Criminals and Their Terrorist Supporting NATO ‘Allies’”?

http://graysinfo.blogspot.com/2017/04/are-christians-slaughtered-in-middle.html

the the , says: April 12, 2019 at 11:53 am
We are a globalist open borders and mass immigration nation. We stand for nothing. To serve in this nation’s military is very stupid. You aren’t defending anything. You are just a tool of globalism. Again, we don’t secure our borders. That’s a very big give away to what’s going on.
the the , says: April 12, 2019 at 11:57 am
If our nation’s military really was an American military concerned with our security we would have secured our border after 9/11, reduced all immigration, deported ALL muslims, and that’s it. Just secure the borders and expel Muslims! That’s all we needed to do.

Instead we killed so many people and imported many many more Muslims! And we call this compassion. Its insane.

Kouros , says: April 12, 2019 at 12:02 pm
Maybe if Talibans get back in power they will destroy the opium. You know, like they did when they were first in power…. It seems that wherever Americans get involved, drugs follow…
JohnT , says: April 12, 2019 at 2:03 pm
“Yet, we must not fail to comprehend its grave implications. Our toil, resources, and livelihood are all involved. So is the very structure of our society. In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex.” In Eisenhower’s televised farewell address January 17, 1961.
Rational thought would lead one to believe such words from a fellow with his credentials would have had a useful effect. But it didn’t. In point of fact, in the likes of Eric Prince and his supporters the notion of war as a profit center is quite literally a family affair.
Ken Zaretzke , says: April 12, 2019 at 2:10 pm
The military-industrial complex couldn’t accomplish this all by its lonesome self. The deep state was doing its thing. The two things overlap but aren’t the same. The deep state is not only or mainly about business profits, but about power. Power in the world means empire, which requires a military-industrial complex but is not reducible to it.

We now have a rare opportunity to unveil the workings of the deep state, but it will require a special counsel, and a lengthy written report, on the doings in the 2016 election of the FBI (Comey, Strzok, et. al.), and collaterally the CIA and DIA (Brennan and Clapper). Also the British government (M-16), John McCain, and maybe Bush and Obama judges on the FISA courts.

[Apr 07, 2019] There is no doubt the tight rock structures which are much more difficult to extract oil from than sandstone reservoir can be stimulated in different ways with good result. But that costs a lot of money.

Highly recommended!
Edited for clatiry
Notable quotes:
"... Better propant , longer laterals , some improvement of fluid , improved rigs and pads enable to drill several laterals simultaneously have made the improvement they call shale revolution. ..."
Apr 07, 2019 | peakoilbarrel.com

Freddy says: 04/06/2019 at 5:26 pm

There is no doubt the tight rock structures which are much more difficult to extract oil from than sandstone reservoir can be stimulated in different ways with good result. But that costs a lot of money.

As I read fracking uses a very high hydraulic pressure open up the tight rock layers and until a few years ago the oil flow dropped at a very early stage because the overlaying weight and beacuse the oil flow carries with with itself particles that block the fraction.

Later it followed a propant research that was done before but again this gave improvement and could hold the fracs open for longer.

Than there was research on chemical injected that should reduce friction between oil flow and rock. There is also lots of other factores like gazes, metal that in certain pressures, temperatures might react and create pollutant as happened lately when oil cargo was sent back from Asia.

Better propant , longer laterals , some improvement of fluid , improved rigs and pads enable to drill several laterals simultaneously have made the improvement they call shale revolution.

Still very few are able to earn money to pay dividend, loan, interest and finance expansion with WTI 60 USD.

Now number of rigs increasing again, but why when there are so many DUCS? Probably because investors tells the business shall be cash neutral. Could it be the DUCS are so closely spaced that using along with the existing wells might be not profitable because of interference with nearby wells.

[Mar 30, 2019] The US desperately needs Venezuelan oil

Highly recommended!
Mar 30, 2019 | www.moonofalabama.org

dh-mtl , Mar 30, 2019 5:00:04 PM | link

The U.S. desperately needs Venezuelan oil.

They lost control of Saudi Arabia, after trying to take down MBS and then betraying him by unexpectedly allowing waivers on Iranian oil in November.

The U.S. cannot take down Iran without Venezuelan oil. What is worse, right now they don't have access to enough heavy oil to meet their own needs.

Controlling the world oil trade is central to Trump's strategy for the U.S. to continue its empire. Without Venezuelan oil, the U.S. is a bit player in the energy markets, and will remain so.

Having Russia block the U.S. in Venezuela adds insult to injury. After Crimea and Syria, now Venezuela, Russia exposes the U.S. as a loud mouthed-bully without the capacity to back up its threats, a 'toothless tiger', an 'emperor without clothes'.

If the U.S. cannot dislodge Russia from Venezuela, its days as 'global hegemon' are finished. For this reason the U.S. will continue escalating the situation with ever-riskier actions, until it succeeds or breaks.

In the same manor, if Russia backs off, its resistance to the U.S. is finished. And the U.S. will eventually move to destroy Russia, like it has been actively trying to do for the past 30 years. Russia cannot and will not back off.

Venezuela thus becomes the stage where the final act in the clash of empires plays out. Will the world become a multi-polar world, in which the U.S. becomes a relatively isolated and insignificant pole? Or will the world become more fully dominated by a brutal, erratic hegemon?

All options are on the table. For both sides!

[Mar 16, 2019] (Global) peak oil comes in phases. As Art Berman said, shale oil is oil's retirement party.

Highly recommended!
Mar 16, 2019 | peakoilbarrel.com

Matt Mushalik x Ignored says: 03/14/2019 at 5:06 pm

(Global) peak oil comes in phases. The 1st phase 2005-2008 caused the 2008 oil price shock and the financial crisis. Money printing was used to keep the system afloat and finance the US shale oil boom. The resulting high debt levels are now limiting economic activities. A lot of the problems we see in the world come from this chain of events.

I warned the Australian Prime Minister John Howard in 2004/05 but he did not want to listen.

Howard's Energy Policy Failure 2004
http://crudeoilpeak.info/howards-energy-policy-failure-2004

As a result, Australia has built a lot of additional oil dependent infrastructure. Even Sydney's new metro projects don't replace car traffic:

11/3/2019
Sydney's Immigration Metros (Part 1)
http://crudeoilpeak.info/sydneys-immigration-metros-part-1

Carlos Diaz x Ignored says: 03/14/2019 at 7:26 pm
As Art Berman said, shale oil is oil's retirement party.

When we are down to fracturing rocks and drilling tens of thousands of horizontal wells that produce tiny streams of oil that decline by 70% in just three years we should instinctively know that we are reaching the bottom of the proverbial barrel, literally. Amazing how most people think just the opposite .

[Feb 15, 2019] Consumption of liquid fuels grows over the next decade, before broadly plateauing in the 2030s

Highly recommended!
How they can claim that US tight oil will be produced in larger quantities if they predict stagnant oil prices and at those price the US production is unprofitable.
So from now on it's all condensate, and very little heavy and medium oil.
I like BP propaganda: "The abundance of oil resources, and risk that large quantities of recoverable oil will never be extracted, may prompt low-cost producers to use their comparative advantage to expand their market share in order to help ensure their resources are produced." That's not only stupid but also gives up the intent...
Notable quotes:
"... In the ET scenario, global demand for liquid fuels – crude and condensates, natural gas liquids (NGLs), and other liquids – increases by 10 Mb/d, plateauing around 108 Mb/d in the 2030s. ..."
"... All of the demand growth comes from developing economies, driven by the burgeoning middle class in developing Asian economies. Consumption of liquid fuels within the OECD resumes its declining trend. ..."
"... The increase in liquid fuels supplies is set to be dominated by increases in NGLs and biofuels, with only limited growth in crude ..."
www.bp.com

In the ET scenario, global demand for liquid fuels – crude and condensates, natural gas liquids (NGLs), and other liquids – increases by 10 Mb/d, plateauing around 108 Mb/d in the 2030s.

All of the demand growth comes from developing economies, driven by the burgeoning middle class in developing Asian economies. Consumption of liquid fuels within the OECD resumes its declining trend. The growth in demand is initially met from non-OPEC producers, led by US tight oil. But as US tight oil production declines in the final decade of the Outlook, OPEC becomes the main source of incremental supply. OPEC output increases by 4 Mb/d over the Outlook, with all of this growth concentrated in the 2030s. Non-OPEC supply grows by 6 Mb/d, led by the US (5 Mb/d), Brazil (2 Mb/d) and Russia (1 Mb/d) offset by declines in higher-cost, mature basins.

Consumption of liquid fuels grows over the next decade, before broadly plateauing in the 2030s

Demand for liquid fuels looks set to expand for a period before gradually plateauing as efficiency improvements in the transport sector accelerate. In the ET scenario, consumption of liquid fuels increases by 10 Mb/d (from 98 Mb/d to 108 Mb/d), with the majority of that growth happening over the next 10 years or so. The demand for liquid fuels continues to be dominated by the transport sector, with its share of liquids consumption remaining around 55%. Transport demand for liquid fuels increases from 56 Mb/d to 61 Mb/d by 2040, with this expansion split between road (2 Mb/d) (divided broadly equally between cars, trucks, and 2/3 wheelers) and aviation/marine (3 Mb/d). But the impetus from transport demand fades over the Outlook as the pace of vehicle efficiency improvements quicken and alternative sources of energy penetrate the transport system . In contrast, efficiency gains when using oil for non-combusted uses, especially as a feedstock in petrochemicals, are more limited. As a result, the non-combusted use of oil takes over as the largest source of demand growth over the Outlook, increasing by 7 Mb/d to 22 Mb/d by 2040.

The outlook for oil demand is uncertain but looks set to play a major role in global energy out to 2040

Although the precise outlook is uncertain, the world looks set to consume significant amounts of oil (crude plus NGLs) for several decades, requiring substantial investment. This year's Energy Outlook considers a range of scenarios for oil demand, with the timing of the peak in demand varying from the next few years to beyond 2040. Despite these differences, the scenarios share two common features. First, all the scenarios suggest that oil will continue to play a significant role in the global energy system in 2040, with the level of oil demand in 2040 ranging from around 80 Mb/d to 130 Mb/d. In all scenarios, trillions of dollars of investment in oil is needed Second, significant levels of investment are required for there to be sufficient supplies of oil to meet demand in 2040. If future investment was limited to developing existing fields and there was no investment in new production areas, global production would decline at an average rate of around 4.5% p.a. (based on IEA's estimates), implying global oil supply would be only around 35 Mb/d in 2040. Closing the gap between this supply profile and any of the demand scenarios in the Outlook would require many trillions of dollars of investment over the next 20 years.

Growth in liquids supply is initially dominated by US tight oil, with OPEC production increasing only as US tight oil declines

Growth in global liquids production is dominated in the first part of the Outlook by US tight oil, with OPEC production gaining in importance further out. In the ET scenario, total US liquids production accounts for the vast majority of the increase in global supplies out to 2030, driven by US tight oil and NGLs. US tight oil increases by almost 6 Mb/d in the next 10 years, peaking at close to 10.5 Mb/d in the late 2020s, before falling back to around 8.5 Mb/d by 2040. The strong growth in US tight oil reinforces the US's position as the world's largest producer of liquid fuels. As US tight oil declines, this space is filled by OPEC production, which more than accounts for the increase in liquid supplies in the final decade of the Outlook.

The increase in OPEC production is aided by OPEC members responding to the increasing abundance of global oil resources by reforming their economies and reducing their dependency on oil, allowing them gradually to adopt a more competitive strategy of increasing their market share. The speed and extent of this reform is a key uncertainty affecting the outlook for global oil markets (see pp 88-89).

The stalling in OPEC production during the first part of the Outlook causes OPEC's share of global liquids production to fall to its lowest level since the late 1980s before recovering towards the end of the Outlook.

Low-cost producers: Saudi Arabia, UAE, Kuwait, Iraq and Russia

Oil demand
Download chart and data Download this chart pdf / 64.6 KB Download this data xlsx / 10.1 KB
Excluding GTLs and CTLs

The abundance of oil resources, and risk that large quantities of recoverable oil will never be extracted, may prompt low-cost producers to use their comparative advantage to expand their market share in order to help ensure their resources are produced.

The extent to which low-cost producers can sustainably adopt such a 'higher production, lower price' strategy depends on their progress in reforming their economies, reducing their dependence on oil revenues.

In the ET scenario, low-cost producers are assumed to make some progress in the second half of the Outlook, but the structure of their economies still acts as a material constraint on their ability to exploit fully their low-cost barrels.

The alternative 'Greater reform' scenario assumes a faster pace of economic reform, allowing low-cost producers to increase their market share. The extent to which low-cost producers can increase their market share depends on: the time needed to increase production capacity; and on the ability of higher-cost producers to compete, by either reducing production costs or varying fiscal terms.

The lower price environment associated with this more competitive market structure boosts demand, with the consumption of oil growing throughout the Outlook.

Growth in liquid fuels supplies is driven by NGLs and biofuels, with only limited growth in crude oil production

The increase in liquid fuels supplies is set to be dominated by increases in NGLs and biofuels, with only limited growth in crude.

[Feb 15, 2019] You can see how the definitions are going to blur and they're going to allow declaring oil production numbers to be anything that they want them to be.

Highly recommended!
Notable quotes:
"... I have been suspicious for some time that production numbers can be corrupted by fuzzy definitions. ..."
"... You can see how the definitions are going to blur and they're going to allow declaring oil production numbers to be anything that they want them to be. ..."
Feb 15, 2019 | peakoilbarrel.com

Watcher: 02/15/2019 at 4:24 am

I have been suspicious for some time that production numbers can be corrupted by fuzzy definitions. Iran is being sanctioned, but Iran shares that enormous gas field under the Persian Gulf with Qatar. Gas production yields condensate and it yields NGLs.

High vapor pressure NGLs get labeled liquefied petroleum gas, and that is used for transportation fuel in India. Pentane Plus is used or called something akin to natural gasoline.

You can see how the definitions are going to blur and they're going to allow declaring oil production numbers to be anything that they want them to be. Iran is using this to dodge sanctions, or they did use it when condensate was not restricted. Don't recall if that loophole was closed in the current sanctions. That would be a good thing to know.

The same thing can happen with shale. We hear all sorts of talk about how much gas is being flared and how much gas is being captured, and you know perfectly well there has to be condensate involved. There was an article a year or so ago about NGL capture in the Bakken, but I don't recall any follow-up. It shouldn't take too much of a stretch on the part of state regulators to find a way to count the high vapor pressure portion of NGL as oil.

likbez: 02/15/2019 at 7:27 pm

You can see how the definitions are going to blur and they're going to allow declaring oil production numbers to be anything that they want them to be.

Exactly. And this, in turn, allows Wall Street to suppress the price of "prime oil" using fake production numbers, fake storage glut (which is essentially condensate glut) and similar tricks. Please note that the US refineries consume mainly "prime oil" while the USA mainly produces (and tries to export at a discount) "subprime oil."

Pretty polished and sophisticated racket. It might well be that shale oil companies are partially financed from those Wall Street profits as nobody in serious mind expect those loans to be ever repaid.

So OPEC cuts are the only weapon that OPEC countries have against this racket.

In any case, I think all those nice charts now need to be split into "prime oil" and subprime oil parts and analyzed separately. In the current conditions, treating "heavy oil" and condensate as a single commodity looks to me like pseudoscience.

[Feb 03, 2019] Neoliberalism and Christianity

Highly recommended!
Money quote: " neoliberalism is the fight of finance to subdue society at large, and to make the bankers and creditors today in the position that the landlords were under feudalism."
Notable quotes:
"... ... if you take the Bible literally, it's the fight in almost all of the early books of the Old Testament, the Jewish Bible, all about the fight over indebtedness and debt cancellation. ..."
"... neoliberalism is the fight of finance to subdue society at large,and to make the bankers and creditors today in the position that the landlords were under feudalism. ..."
"... They call themselves free marketers, but they realize that you cannot have neoliberalism unless you're willing to murder and assassinate everyone who promotes an alternative ..."
"... Just so long as you remember that most of the strongest and most moving condemnations of greed and money in the ancient and (today) western world are also Jewish--i.e. Isaiah, Jeremiah, Micah, the Gospels, Letter of James, etc. ..."
"... The history of Jewish banking after the fall or Rome is inextricable from cultural anti-judaism of Christian west and east and de facto marginalization/ghettoization of Jews from most aspects of social life. The Jewish lending of money on interest to gentiles was both necessary for early mercantilist trade and yet usury was prohibited by the church. So Jewish money lenders were essential to and yet ostracized within European economies for centuries. ..."
"... Now Christianity has itself long given up on the tradition teaching against usury of course. ..."
"... In John, for instance most of the references to what in English is translated as "the Jews" are in Greek clearly references to "the Judaeans"--and especially to the ruling elite among the southern tribe in bed with the Romans. ..."
May 02, 2018 | www.moonofalabama.org

karlof1 , May 1, 2018 2:27:06 PM | 13

Just finished reading the fascinating Michael Hudson interview I linked to on previous thread; but since we're discussing Jews and their religion in a tangential manner, I think it appropriate to post here since the history Hudson explains is 100% key to the ongoing pain us humans feel and inflict. My apologies in advance, but it will take this long excerpt to explain what I mean:

"Tribes: When does the concept of a general debt cancellation disappear historically?

"Michael: I guess in about the second or third century AD it was downplayed in the Bible. After Jesus died, you had, first of all, St Paul taking over, and basically Christianity was created by one of the most evil men in history, the anti-Semite Cyril of Alexandria. He gained power by murdering his rivals, the Nestorians, by convening a congress of bishops and killing his enemies. Cyril was really the Stalin figure of Christianity, killing everybody who was an enemy, organizing pogroms against the Jews in Alexandria where he ruled.

"It was Cyril that really introduced into Christianity the idea of the Trinity. That's what the whole fight was about in the third and fourth centuries AD. Was Jesus a human, was he a god? And essentially you had the Isis-Osiris figure from Egypt, put into Christianity. The Christians were still trying to drive the Jews out of Christianity. And Cyril knew the one thing the Jewish population was not going to accept would be the Isis figure and the Mariolatry that the church became. And as soon as the Christian church became the establishment rulership church, the last thing it wanted in the West was debt cancellation.

"You had a continuation of the original Christianity in the Greek Orthodox Church, or the Orthodox Church, all the way through Byzantium. And in my book And Forgive Them Their Debts, the last two chapters are on the Byzantine echo of the original debt cancellations, where one ruler after another would cancel the debts. And they gave very explicit reason for it: if we don't cancel the debts, we're not going to be able to field an army, we're not going to be able to collect taxes, because the oligarchy is going to take over. They were very explicit, with references to the Bible, references to the jubilee year. So you had Christianity survive in the Byzantine Empire. But in the West it ended in Margaret Thatcher. And Father Coughlin.

"Tribes: He was the '30s figure here in the States.

"Michael: Yes: anti-Semite, right-wing, pro-war, anti-labor. So the irony is that you have the people who call themselves fundamentalist Christians being against everything that Jesus was fighting for, and everything that original Christianity was all about."

Hudson says debt forgiveness was one of the central tenets of Judaism: " ... if you take the Bible literally, it's the fight in almost all of the early books of the Old Testament, the Jewish Bible, all about the fight over indebtedness and debt cancellation. "

Looks like I'll be purchasing Hudson's book as he's essentially unveiling a whole new, potentially revolutionary, historical interpretation.

psychohistorian , May 1, 2018 3:31:50 PM | 26
@ karlof1 with the Michale Hudson link....thanks!!

Here is the quote that I really like from that interview
"
Michael: No. You asked what is the fight about? The fight is whether the state will be taken over, essentially to be an extension of Wall Street if you do not have government planning. Every economy is planned. Ever since the Neolithic (era), you've had to have (a form of) planning. If you don't have a public authority doing the planning, then the financial authority becomes the planners. So globalism is in the financial interest –Wall Street and the City of London, doing the planning, not governments. They will do the planning in their own interest. So neoliberalism is the fight of finance to subdue society at large,and to make the bankers and creditors today in the position that the landlords were under feudalism.
"

karlof1, please email me as I would like to read the book as well and maybe we can share a copy.

And yes, it is relevant to Netanyahoo and his ongoing passel of lies because humanity has been told and been living these lives for centuries...it is time to stop this shit and grow up/evolve

james , May 1, 2018 10:30:01 PM | 96
@13 / 78 karlof1... thanks very much for the links to michael hudson, alastair crooke and the bruno maraces articles...

they were all good for different reasons, but although hudson is being criticized for glossing over some of his talking points, i think the main thrust of his article is very worthwhile for others to read! the quote to end his article is quite good "The question is, who do you want to run the economy? The 1% and the financial sector, or the 99% through politics? The fight has to be in the political sphere, because there's no other sphere that the financial interests cannot crush you on."

it seems to me that the usa has worked hard to bad mouth or get rid of government and the concept of government being involved in anything.. of course everything has to be run by a 'private corp' - ie corporations must run everything.. they call them oligarchs when talking about russia, lol - but they are corporations when they are in the usa.. slight rant..

another quote i especially liked from hudson.. " They call themselves free marketers, but they realize that you cannot have neoliberalism unless you're willing to murder and assassinate everyone who promotes an alternative ." that sounds about right...

@ 84 juliania.. aside from your comments on hudsons characterization of st paul "the anti-Semite Cyril of Alexandria" further down hudson basically does the same with father coughlin - https://en.wikipedia.org/wiki/Charles_Coughlin.. he gets the anti-semite tag as well.. i don't know much about either characters, so it's mostly greek to me, but i do find some of hudsons views especially appealing - debt forgiveness being central to the whole article as i read it...

it is interesting my own view on how money is so central to the world and how often times I am incapable of avoiding the observation of the disproportionate number of Jewish people in banking.. I guess that makes me anti-semite too, but i don't think of myself that way.. I think the obsession with money is killing the planet.. I don't care who is responsible for keeping it going, it is killing us...

WJ | May 1, 2018 10:48:58 PM | 100

James @96,

Just so long as you remember that most of the strongest and most moving condemnations of greed and money in the ancient and (today) western world are also Jewish--i.e. Isaiah, Jeremiah, Micah, the Gospels, Letter of James, etc.

The history of Jewish banking after the fall or Rome is inextricable from cultural anti-judaism of Christian west and east and de facto marginalization/ghettoization of Jews from most aspects of social life. The Jewish lending of money on interest to gentiles was both necessary for early mercantilist trade and yet usury was prohibited by the church. So Jewish money lenders were essential to and yet ostracized within European economies for centuries.

Now Christianity has itself long given up on the tradition teaching against usury of course.

WJ , May 1, 2018 8:23:40 PM | 88
Juliana @84,

I too greatly admire the work of Hudson but he consistently errs and oversimplifies whenever discussing the beliefs of and the development of beliefs among preNicene followers of the way (as Acts puts is) or Christians (as they came to be known in Antioch within roughly eight or nine decades after Jesus' death.) Palestinian Judaism in the time of Jesus was much more variegated than scholars even twenty years ago had recognized. The gradual reception and interpretation of the Dead Sea Scrolls in tandem with renewed research into Phili of Alexandria, the Essenes, the so-called Sons of Zadok, contemporary Galilean zealot movements styles after the earlier Maccabean resistance, the apocalyptism of post exilic texts like Daniel and (presumably) parts of Enoch--all paint a picture of a highly diverse group of alternatives to the state-Church once known as Second Temple Judaism that has been mistaken as undisputed Jewish "orthodoxy" since the advent of historical criticism.

The Gospel of John, for example, which dates from betweeen 80-120 and is the record of a much earlier oral tradition, is already explicitly binitarian, and possibly already trinitarian depending on how one understands the relationship between the Spirit or Advocate and the Son. (Most ante-Nicene Christians understood the Spirit to be *Christ's* own spirit in distributed form, and they did so by appeal to a well-developed but still largely under recognized strand in Jewish angelology.)

The "theological" development of Christianity occurred much sooner that it has been thought because it emerged from an already highly theologized strand or strands of Jewish teaching that, like Christianity itself, privileged the Abrahamic covenant over the Mosaic Law, the testament of grace over that of works, and the universal scope of revelation and salvation as opposed to any political or ethnic reading of the "Kingdom."

None of these groups were part of the ruling class of Judaean priests and levites and their hangers on the Pharisees.

In John, for instance most of the references to what in English is translated as "the Jews" are in Greek clearly references to "the Judaeans"--and especially to the ruling elite among the southern tribe in bed with the Romans.

So the anti-Judaism/Semiti of John's Gispel largely rests on a mistranslation. In any event, everything is much more complex than Hudson makes it out to be. Christian economic radicalism is alive and well in the thought of Gregory of Nysa and Basil the Great, who also happened to be Cappadocian fathers highly influential in the development of "orthodox" Trinitarianism in the fourth century.

I still think that Hudson's big picture critique of the direction later Christianity took is helpful and necessary, but this doesn't change the fact that he simplifies the origins, development, and arguably devolution of this movement whenever he tries to get specific. It is a worthwhile danger given the quality of his work in historical economics, but still one has to be aware of.

[Jan 24, 2019] Max Boot Is Sorry for Backing the GOP and Iraq War by Peter Maass

Neocons are "enemies of the people" independent of their party affiliation. Nuremberg principles were written not for nothing.
Notable quotes:
"... he thought Ahmed Chalabi was "the most unfairly maligned man on the planet" long after the Iraqi exile's dissembling was apparent to everyone except the staff of Commentary magazine; and as Boot notes in his mea culpa, he totally failed to notice the dark side of the GOP. "It's amazing how little you can see when your eyes are closed," he squeaks. ..."
"... The problem here isn't really Boot. It's the eternal forgiveness that journalists and intellectuals bestow upon colleagues who should be cast out for errors of immense and tragic consequence. ..."
Oct 13, 2018 | theintercept.com

There is an unforgettable passage in Graham Greene's classic "The Quiet American" in which the title character, a CIA agent named Alden Pyle, admits that Vietnam is much more complicated than he'd imagined. "I had not realized how tribal politics was and how divorced it could be from principles or conviction," Pyle says. Surveying the wreckage of the American war effort, he adds, "Looking back with greater introspection and humility after the passage of more than fifteen years, I can finally acknowledge the obvious: it was all a big mistake."

Greene's admirers will recognize that these lines do not actually come from his 1955 novel. They are from Max Boot's new book, " The Corrosion of Conservatism: Why I Left the Right ." Boot, a leading intellectual in the conservative movement for the past two decades, is now apologizing for nearly everything he has done and abided. He is denouncing not just Donald Trump, but the Republican Party as a whole. "Upon closer examination," he writes in his 260-page atonement, "it's obvious that the whole history of modern conservatism is permeated with racism, extremism, conspiracy-mongering, ignorance, isolationism, and know-nothingism."

The temptation is to say, Bravo, here at last is a Republican willing to admit the emperor has no clothes. That's the reaction of lots of journalists and pundits who have flipped through Boot's book. Jacob Heilbrunn wrote in the Washington Monthly that Boot's "readiness to reexamine his old convictions is admirable." Adam Serwer, writer at The Atlantic, tweeted , "You don't want to punish people for getting the right answer." Boot is no longer a Republican (he quit the party after Trump's election) but he is hardly an outcast in the political world -- he is a Washington Post columnist, a senior fellow at the Council on Foreign Relations, and a CNN analyst. Such is the sweet life of a born-again intellectual.

It's easy to understand why a penitent like Boot appeals to liberals and other members of the Trump resistance. He ratifies their sense of having been correct from the start, and his confession is enunciated in perfect sound bites, with just the right dose of abasement. Boot is an irresistible spectacle -- the sinner with tears running down his cheeks dropping to his knees at the altar of all that is good, proclaiming that he has seen the light and wants to join the army of righteousness. But here's the thing: Boot is only half-apologizing. And because he's been wrong so many times and with so many ill consequences, he should be provided with nothing more than a polite handshake as he's led out of the sanctuary of politics, forever.

When I say wrong, I mean Guinness World Records wrong. In his first book, " Out of Order ," Boot argued that the Supreme Court erred when it ruled in Brown v. Board of Education that school segregation violated the Constitution ("I am not proud of 'Out of Order,'" he now says); he was a key proponent of the invasion of Iraq ("Once we have deposed Saddam, we can impose an American-led, international regency in Baghdad, to go along with the one in Kabul," he proclaimed in 2001);

he thought John Bolton was treated unfairly when Democrats opposed his 2005 nomination for ambassador to the United Nations ("He seems like a good choice to help drain the U.N. cesspool of corrupt bureaucrats and self-serving tyrants");

he thought Ahmed Chalabi was "the most unfairly maligned man on the planet" long after the Iraqi exile's dissembling was apparent to everyone except the staff of Commentary magazine; and as Boot notes in his mea culpa, he totally failed to notice the dark side of the GOP. "It's amazing how little you can see when your eyes are closed," he squeaks.

That's a lot of wrong. It's so much wrong that I can't imagine how or why anyone could look at Boot and think, "Ah, here's a man we should listen to." I can pre-empt Boot's response to this -- in his book, he complains that "doctrinaire leftists" will be satisfied with nothing less than his "ritual suicide" for the war crimes he's committed. I've exchanged a few cordial emails with Boot (we both graduated from the University of California, Berkeley, a few years apart, and worked at its student newspaper, the Daily Californian ), and I can honestly say he seems a nice and bright enough fellow to whom I wish no physical harm. But like Alden Pyle, he has helped create so much havoc, he has been wrong so completely, that it would be the definition of insanity to treat his ideas as fodder for anything other than a shredder. Here's a real line from "The Quiet American," spoken about Pyle by the novel's weary narrator, that suits Boot perfectly: "I never knew a man who had better motives for all the trouble he caused." Pyle's innocence, the book explains, "is like a dumb leper who has lost his bell, wandering the world, meaning no harm."

The problem here isn't really Boot. It's the eternal forgiveness that journalists and intellectuals bestow upon colleagues who should be cast out for errors of immense and tragic consequence.

Boot is a perfect example, because he has been wrong so many times in such major ways and is actually willing to admit it. But there are vast numbers of pundits , masters of spin , and alleged intellectuals who have been wrong enough on enough big things (not just war, but climate change and more) to merit laughter rather than praise. Yet there they are, stroking their chins on our finest op-ed pages and cable news channels. Mutual forgiveness is a necessity among pundits who are stuffed with nonsense much of the time; without mercy on demand, they might all be out of jobs.

It's no surprise that Boot's book arrives with admiring blurbs from D.C. heavyweights James Fallows, Jon Meacham, and David Corn, among others.

[Jan 14, 2019] Something about MIC gargantuan appetites: the cost of running Texas Railroad Commsion (RRC) for year are less that one half of the cost of (mostly useless) F35 not including fuel

Jan 14, 2019 | peakoilbarrel.com

GuyM x Ignored says: 01/13/2019 at 8:26 pm

In support of RRC, I looked up their agency expenses, and found they are less than $50 million. That's to pay for keeping up with almost a half million oil and gas wells, thousands of operators, and multiple other duties, including taking care of a significant amount of State income. There is a grand total of about 725 employees. Hats off!
Longtimber x Ignored says: 01/14/2019 at 8:24 pm
Could have 1/2 of a F35 not including Fuel.

[Jan 13, 2019] Catherine Austin Fitts – Federal Government Running Secret Open Bailout

Highly recommended!
Questionable, but still interesting perspective. Ignore marketing crap -- clearly there is marketing push within this presentation -- she wants your subscriptions. "This is Main Street vs Wall Street" dichotomy sounds plausible. Neoliberalism is, in essence, is the restoration of power of financial oligarchy.
But the idea of secret open bailout might explain why shale oil became so prominent despite high cost of producing it: Wall Street was subsidised via backchannels for bringing price downand supporting shale companies by the US goverment
Jan 12, 2019 | www.youtube.com

$21 trillion in "missing money" at the DOD and HUD that was discovered by Dr. Mark Skidmore and Catherine Austin Fitts in 2017 has now become a national security issue. The federal government is not talking or answering questions, even though the DOD recently failed its first ever audit.

Fitts says, "This is basically an open running bailout. Under this structure, you can transfer assets out of the federal government into private ownership, and nobody will know and nobody can stop it. There is no oversight whatsoever. You can't even know who is doing it. I'm telling you they just took the United States government, they just changed the governance model by accounting policy to a fascist government. If you are an investor, you don't know who owns those assets, and there is no evidence that you do. . . . If the law says you have to produce audited financial statements and you refuse to do so for 20 years, and then when somebody calls you on it, you proceed to change the accounting laws that say you can now run secret books for all the agencies and over 100 related entities."

In closing, Fitts says, "We cannot sit around and passively depend on a guy we elected President. The President cannot fix this. We need to fix this. . . . This is Main Street versus Wall Street. This is honest books versus dirty books. If you want the United States in 10 years to resemble anything what it looked like 20 years ago, you are going to have to do it, and there is no one else who can do it. You have to first get the intelligence to know what is happening."

Join Greg Hunter as he goes One-on-One with Catherine Austin Fitts, Publisher of "The Solari Report." Donations: https://usawatchdog.com/donations/

Stay in contact with USAWatchdog.com: https://usawatchdog.com/join/

All links can be found on USAWatchdog.com: https://usawatchdog.com/secret-money-...

Bob T 20 hours ago

Greg, with all due respect I don't you understand what CAF is saying. Forget about a dollar reset. The fascists, using the Treasury, Exchange Stabilization Fund, HUD, DOD and any agency they choose, have turned the US government into a gigantic money laundering operation. And they maintain two sets of books - the public numbers are a complete sham. Any paper assets held by private citizens are not secure, are likely rehypothecated, and when convenient can be frozen or siezed by these fascists in Washington. There is no limit to how many dollars the FED can create secretly and funnel out through the ESF/Treasury to prop up and bail out any bank, black ops, pet project, mercenary army or paper assets they choose. The missing $21 trillion is probably a drop in the bucket as there is no audit and no honest books for us to examine. In sum, all paper asset pricing in dollars is a fraud and a sham. Any paper assets you think you own, whether it be stocks, bonds, or real estate are pure illusion: they can be repriced or stolen at any time; in reality, you own nothing. To the man and woman on the street I say this: get out of paper, get out of these markets and convert to tangibles in your physical possession - and do it secretly and privately, avoid insurances, records, paper trails. This mass defrauding of the American people by this corrupt government in Washington will come crashing down when the US dollar is displaced from reserve status; this is what China and Russia and the BRICS are setting the stage for: world trade without the US dollar. When this happens, your dollars will become virtual toilet paper and all of your paper assets will go poof.

D Loydel 18 hours ago (edited)

"We have to fix this". Ok how does the individual fix this? Private armies are running around doing whatever private armies do and I, the one man, is suppose to fix this. Please, will someone tell us what we are suppose to do, specific instructions not a mix of large words that say " we must fix this", damn, we need a leader. Greg you ask almost every person you interview what the middle class should be doing to protect themselves and you never get a "real" answer, just a dance around. Also you ask numerous people what this coming change is going to look like and again, just silence or dance music, no answers. Damn we need a leader. Your trying very hard to give us information that will help us weather the coming storm, so thank you for all you do, and you do more than anyone else out there.

Forrest Byers 19 hours ago

Question, why in part do I feel I am being lied to? Is it subscription hustle or is it, don't you believe your lying eyes!

Without knowing exactly what is what, anyone who would've watched Herbert Walker Bush's funeral with reactions from those who received cards, whether they be Bush family, the Clintons, the Obamas and entourage. Jeb Bush went from being proud and patriotic to panic like the funeral that he was at was for the whole family.

Joe Biden looked like he had a major personal accident and no way to get to the bathroom for cleanup.

George W. Bush after being asked a question, of which the answer was, "Yep" then proceeded to appear resigned and stoic! What ever was on those cards essentially amounted to, for all those receiving a card, "the gig is up" and it appears they all damn well knew it.

So, Catherine Austin Fitts, explain your, "Trump is colluding with the Bushies," I would say, that Canary in this mine of inquiry is dead. I'm just an old disabled Vietnam vet of plebeian background and certainly not a revolving door Washington DC Beltway patrician, so any explanation needs to be delivered in slow, logical step-by-step progression for I have not mastered the art of selling the sizzle in hopes that the dupes will later pay for the steak. I prefer, Greg, when you actually get more combative with Ms. Fitts. Make America, great again and do so, in the name of the Lord Jesus Christ, Amen.

sell siliconvalley 19 hours ago

35 min: Fitts gives a great synopsis of the problem. She never deviates in all of her interviews. greg doesn't seem to understand at all. She repeats herself MULTIPLE TIMES and greg is still asking the same irrelevant PREPPER questions. IT DOES NOT MATTER WHAT ASSETS YOU HOLD GREG, AND THAT INCLUDES GOLD!!!! WHEN YOU'RE EXISTING IN A TYRANNICAL SYSTEM THAT STEALS AT WILL FROM ITS' CONSTITUENCY YOU CAN'T actually OWN ANYTHING!!!! lord! only so many ways to say

Andy Mak 17 hours ago

She lost credibility when she said Trump has "made a deal with the Bushes." That defies logic. The Bushes made a deal with Trump! Trump has gained full control of the military with a $ 1 1/2 trillion war chest. Trump and Putin are putting the China toothpaste back in the tube.

Karen Lydon 19 hours ago

This woman clearly knows nothing about the plan..she has not even mentioned that the world bank president has resigned who was appointed by obumma. And that is HUGE. She was in government in the corruption, but she doesn't know how things will be fixed..she's not in that loop of current things in the new reset..shes coming from her own perceptions

A T 20 hours ago

This woman always make me sick to my stomach. She comes out and says a bunch of scary stuff and offers no solution. If it's too much for just one person, then we the people need to take control. We don't need a central bank. We need local and state banks like the Bank of North Dakota then we can migrate over to them and then shut down the Fed.

[Dec 09, 2018] Pompeo is a Deep State Israel-firster with a nasty neocon agenda

Trump lost control of foreign policy, when he appointed Pompeo. US voters might elect Hillary with the same effect on foreign policy as Pompeo.
Notable quotes:
"... It is to Trump's disgrace that he chose Pompeo and the abominable Bolton. At least Trump admits the ME invasions are really about Israel. ..."
"... Energy dominance, lebensraum for Israel and destroying the current Iran are all objectives that fit into one neat package. Those plans look to be coming apart at the moment so it remains to be seen how fanatical Trump is on Israel and MAGA. MAGA as US was at the collapse of the Soviet Union. ..."
"... As for pulling out of the Middle East Bibi must have had a good laugh. Remember when he said he wanted out of Syria. My money is on the US to be in Yemen before too long to protect them from the Saudis (humanitarian) and Iranian backed Houthis, while in reality it will be to secure the enormous oil fields in the North. ..."
"... The importance of oil is not to supply US markets its to deny it to enemies and control oil prices in order to feed international finance/IMF. ..."
Nov 30, 2018 | www.moonofalabama.org

jim slim | Nov 29, 2018 4:04:44 AM | 24

Pompeo is a Deep State Israel-firster with a nasty neocon agenda. It is to Trump's disgrace that he chose Pompeo and the abominable Bolton. At least Trump admits the ME invasions are really about Israel.

Peter AU 1 , Nov 28, 2018 9:44:50 PM | link

Pompeo is a Deep State Israel-firster with a nasty neocon agenda. It is to Trump's disgrace that he chose Pompeo and the abominable Bolton. At least Trump admits the ME invasions are really about Israel.

Trump, Israel and the Sawdi's. US no longer needs middle east oil for strategic supply. Trump is doing away with the petro-dollar as that scam has run its course and maintenance is higher than returns. Saudi and other middle east oil is required for global energy dominance.

Energy dominance, lebensraum for Israel and destroying the current Iran are all objectives that fit into one neat package. Those plans look to be coming apart at the moment so it remains to be seen how fanatical Trump is on Israel and MAGA. MAGA as US was at the collapse of the Soviet Union.

Pft , Nov 29, 2018 1:15:05 AM | link

As for pulling out of the Middle East Bibi must have had a good laugh. Remember when he said he wanted out of Syria. My money is on the US to be in Yemen before too long to protect them from the Saudis (humanitarian) and Iranian backed Houthis, while in reality it will be to secure the enormous oil fields in the North.

Perhaps this was what the Khashoggi trap was all about. The importance of oil is not to supply US markets its to deny it to enemies and control oil prices in order to feed international finance/IMF.

[Nov 11, 2018] Trump's Iran Policy Cannot Succeed Without Allies The National Interest by James Clapper & Thomas Pickering

Highly recommended!
It's interesting that Clapper is against abandoned by Trump Iran deal.
Tramp administration is acting more like Israeli marionette here, because while there a strategic advantage in crushing the Iranian regime for the USA and making a county another Us vassal in the middle East, the cost for the country might be way to high (especially if we count in the cost of additional antagonizing Russia and China). Trump might jump into the second Afghanistan, which would really brake the back of US military -- crushing Iran military is one thing, but occupying such a county is a very costly task. And that might well doom Israel in the long run as settlers policies now created really antagonized, unrecognizable minority with a high birth rate.
Vanishing one-by-one of partners are given due to collapse of neoliberalism as an ideology. Nobody believes that neoliberalism is the future, like many believed in 80th and early 90th. This looks more and more like a repetion of the path of the USSR after 1945, when communist ideology was discredited and communist elite slowly fossilized. In 46 years from its victory in WWII the USSR was dissolved. The same might happen with the USA in 50 years after winning the Cold War.
Notable quotes:
"... a vanishing one by one of American partners who were previously supportive of U.S. leadership in curbing Iran, particularly its nuclear program. ..."
"... The United States risks losing the cooperation of historic and proven allies in the pursuit of other U.S. national security interests around the world, far beyond Iran. ..."
Nov 09, 2018 | nationalinterest.org

Only well calibrated multilateral political, economic and diplomatic pressure brought to bear on Iran with many and diverse partners will produce the results we seek.

"Then there were none" was Agatha Christie's most memorable mystery about a house party in which each guest was killed off one by one. Donald Trump's policy toward Iran has resulted in much the same: a vanishing one by one of American partners who were previously supportive of U.S. leadership in curbing Iran, particularly its nuclear program.

Dozens of states, painstakingly cultivated over decades of American leadership in blocking Iran's nuclear capability, are now simply gone. One of America's three remaining allies on these issues, Saudi Arabia, has become a central player in American strategy throughout the Middle East region. But the Saudis, because of the Jamal Khashoggi killing and other reasons, may have cut itself out of the action. The United Arab Emirates, so close to the Saudis, may also fall away.

Such paucity of international support has left the Trump administration dangerously isolated. "America First" should not mean America alone. The United States risks losing the cooperation of historic and proven allies in the pursuit of other U.S. national security interests around the world, far beyond Iran.

... ... ...

European allies share many of our concerns about Iran's regional activities, but they strongly oppose U.S. reinstitution of secondary sanctions against them. They see the Trump administration's new sanctions as a violation of the nuclear agreement and UN Security Council resolutions and as undermining efforts to influence Iranian behavior. The new sanctions and those applied on November 5 only sap European interest in cooperating to stop Iran.

... ... ...

The United States cannot provoke regime change in Iran any more than it has successfully in other nations in the region. And, drawing on strategies used to topple governments in Iraq and Afghanistan, the United States should be wary of launching or trying to spur a military invasion of Iran.

Lt. Gen. James Clapper (USAF, ret.) is the former Director of National Intelligence. Thomas R. Pickering is a former U.S. ambassador to the United Nations, Russia and India.

[Sep 09, 2018] A country where an immigrant Sikh girl can become a neocon ambassador

Notable quotes:
"... We Americans are totally subject to ziocon propaganda when it comes to Middle East affairs. Anyone that disagrees with that viewpoint is immediately labeled anti-semitic and now banned from social media and of course from the TV talk shows. ..."
"... Jack posed an interesting question, how does someone like Putin respond to an irrational US who in their delusions can easily escalate military conflict if their ego gets bruised when it is shown that they don't have the unilateral power of a hegemon? ..."
"... Always thought that Nikki Haley was the price Donald Trump had to pay to get Sheldon Adelson's large campaign contributions in 2016. Adelson was Trump's second biggest contributor. So was recognition of Jerusalem as the Israeli capital. Sheldon got his money's worth. https://www.investopedia.co... ..."
"... Nikki Haley's Sikh origins may have something to do with her anti-Muslim feelings. ..."
"... it is hypocritical in the extreme for the U.S. to be criticising anyone for killing people anywhere after what they have been doing in the Middle East. According to Professor Gideon Polya the total avoidable deaths in Afghanstan alone since 2001 under ongoing war and occupation-imposed deprivation amount to around three million people, about 900,000 of whom are infants under the age of five (see Professor Gideon Polya at La Trobe University in Melbourne book, 'Body Count: Global Avoidable Mortality Since 1950' and Washington DC-based Physicians for Social Responsibility study: http://www.psr.org/assets/p... . ..."
"... Is it in our DNA that we can't learn lessons from our interventionist experience in the Middle East? Looks like Iraq is spinning out of control once again. I'm sure many including the Shia may reminisce favorably to the Sadam years despite his tyranny. https://ejmagnier.com/2018/... ..."
"... We are indoctrinated with the idea that all people are basically the same. In fact this is only true at the level of basics like shelter, food, sex, etc. We refuse to really believe in the reality of widely varying cultures. It makes us incapable, as a group, of understanding people who do not share our outlook. i have been dealing with this all my life as a delegated "ambassador" to the "others." ..."
"... In this context, if you were Vladimir Putin and knowing that President Trump is completely ignorant when it comes to history and policy details and has surrounded himself with neocons as far as foreign policy is concerned and Bibi has him eating out of his hands, how would you deal with him if he starts to get belligerent in Syria and Ukraine? ..."
"... Did the Syrians get upset by General Sherman's destructive march through South Carolina? No. It was a mistake for the US ever getting involved in Syria, with forming, equipping and training foreign armies and shadow governments including replacement prime ministers, all in violation of the UN Charter. ..."
"... Trump is more savagely and ignorantly aggressive. ..."
"... Trump, Nikki and Bolton have been tweeting warnings about the Idlib offensive and already accusing Assad if there are any chemical attacks. Wonder why? Lavrov has also made comments that he expects a chemical use false flag. Not sure about this post on Zerohedge, but if it has any credibility then it would appear that the US military is getting ready for some kind of provocation. ..."
Sep 08, 2018 | turcopolier.typepad.com

"In her statement during the UN Security Council briefing, Haley said that Syrian President Bashar al-Assad and its "enablers," Russia and Iran have a playbook for the war in Syria. First, they surround a civilian area. Next, they make the "preposterous claim that everyone in the area is a terrorist," thus making all civilians targets. That is followed by a "starve and surrender" campaign, during which Syrian security forces keep attacking until the people no longer have food, clean water, or shelter. "It's a playbook of death. The Assad regime has spent the last seven years refining it with Russia and Iran's help."

According to her it has happened many times before, in July 2018 it happened in Dara'a and the southwest of Syria, where Syrian forces "trapped and besieged civilians." In February 2018, it was Ghouta. In 2017 it was Aleppo, and prior to that places like Madaya and Hama.

According to her, Assad's government has left the country in ruins. "The atrocities committed by Assad will be a permanent stain on history and a black mark for this Council -- which was blocked over and over by Russia from taking action to help," Nikki Haley said." SF

------------

Well, strictly speaking, her parents were immigrants, not she. She was born in Bamberg, South Carolina, a little town in the Piedmont that is majority Black. Her parents were professional people at Amritsar in the Punjab. Haley is the surname of her husband. Nikki is a nickname by which she has long been known. As governor, she was in favor of flying the Confederate flag on the Statehouse grounds before the Charleston massacre of Black Christians at a Bible study session. They were killed by an unstable white teen aged misfit whom they had invited to join their worship. After that Nikki discovered that the Confederate flag was a bad and disruptive symbol. It was a popular position across the country and Nikki became an instant "hit," the flavor of the month so to speak.

I suppose that she was supposed to be an interesting and decorative figure as UN ambassador. She is quite pretty and the South Carolina accent adds to the effect.

The positions she has taken at the UN with regard to the ME are similar to those expressed by her boss, President Trump. They are largely reflections of images projected by the popular and mass media operating as Zionist propaganda machines. I don't believe that the State Department's INR analytic bureau believes the crapola that she spouts with such hysteric fervor. I don't believe that my former friend David Satterfield believes the crapola. So, where does she get ideas like the ones quoted above? IMO she is trying to out-Trump Trump. DJT is a remarkably ignorant man concerning the geo-politics of just about everything in the ME. He appears to have once seen the film, "Exodus" and to have decided on the basis of Paul Newman's performance as Begin that the situation was and is quite simple - Israel good! Everyone else bad! Nikki's depth of knowledge appears to be just about the same.

She also appears to me to be in receipt of a stream of opinion from various Zionist and anti-Muslim groups probably related to the anti-Muslim ravings of Maronite and other Christian ME extremists.

These groups cannot seem to understand that alliances shift as does policy. They don't seem to understand that Israel's policy in Syria is no longer regime change. They never seem to have understood that the Syrian government is the protector of the religious minorities against Sunni jihadi fanatics.

They don't seem to understand that the Syrian government has no choice but to recover Idlib Province, a piece of Syria's heartland. pl

https://southfront.org/us-ambassador-to-un-goes-wild-claims-russia-syria-iran-seek-to-kill-civilians-destroy-schools-and-hospitals-in-idlib/

https://en.wikipedia.org/wiki/Nikki_Haley

Posted at 10:31 AM in As The Borg Turns , government , Iran , Middle East , Politics , Russia , Syria , Turkey | Permalink | 2 Comments


Don Bacon , 19 hours ago

Haley's "playbook" is used by the US but not by Russia & Iran as she claims, with all civilians being targeted. Instead, Russia & Iran have taken warfare to a higher and better level, allowing the armed factions to surrender their arms and get on a bus or be killed, and many of them took the bus to preserve their lives until the final offensive. A third option, which many of them took, was to join the SAA and fight against their former comrades. All of this statecraft was revolutionary, and was not at all as Haley described, including the crocodile tears over Syrian lives which has never been honest especially considering the level of support Assad has within Syria.
Jaime -> Don Bacon , 16 hours ago
I agree it is revolutionary, at least in modern times in the western world. I wonder if it will set a "trend": a more humane way to wage war. I am sure it will be studied in war colleges.
Jonathan A. Goff , a day ago
Pat,

One observation I had while thinking about the Ambassador Haley quote you provided (which I think supports the point you were making in your post):

When the US was in a somewhat similar situation during the occupation of Iraq, where Sunni militants were in open rebellion and controlling towns like Fallujah, our response wasn't wildly different to the Syrian government's response. The US gov't at the time typically labeled any armed resistance "terrorists", and while they might acknowledge that there were civilians in those territories in addition to terrorists, they were just "human shields" and "regrettable collateral damage". Did the US try a little harder, and have a bit better of technology, training, etc, and do a little bit better of trying to limit damage to civilians when crushing those uprisings? Yes. But we're mostly talking modest quantitative differences in response, not fundamentally morally superior qualitative differences. I bet you if you took pictures of towns like Fallujah, Sadr City, etc, after US counter-insurgency operations, and mixed them in with pictures of trashed Syrian towns that had just been liberated from rebel groups, and showed them to Nikki Haley, or frankly any neocon, they'd have a hard time telling the difference.

~Jon

Biggee Mikeee -> Jonathan A. Goff , 21 hours ago
As I was reading this topic Raqqa and Fallujah came to mind. In the case of Fallujah I don't recall if the civilians were given an opportunity to evacuate. They were not in ISIS controlled Raqqa. In any event Haley's blather at the UN is for the consumption of the rubes.
O rly -> Biggee Mikeee , 18 hours ago
as far as i recall in the battle for fallujah, only women and children were permitted to leave during the siege.and during the siege of Mosul they were dropping leaflets telling people not to try and leave.
Jonathan A. Goff -> Biggee Mikeee , 19 hours ago
And giving civilians a chance to evacuate doesn't help as much as one would think if the insurgents/rebels really do want to use them as human shields.

~Jon

stevenwithavee -> Jonathan A. Goff , 16 hours ago
Speaking to young marines in the aftermath of the second assault on Fallujah I learned that although women and children were allowed to pass the checkpoints but men of fighting age (also known as the father, brother or husband who was driving the families out of the city) were sent back into the city.
jdledell , 16 hours ago
In talking with people here in the U.S. about Syria there is the total lack of understanding of Assad's Alawite government. There are a couple million Christians in Syria and it is Assad's government that protects them from the Saudi sponsored Sunni headchoppers who would like to eliminate Christians, Jews, and Shia from the Middle East. Perhaps, the Alawites being an offshoot of Shia makes them sensitive to minority religions. However, mentioning Assad evokes strong negative reaction among U.S. Christians, similar to Trumps "lets kill them all". On my one visit to Damascus, traveling on my U.S. Passport rather than my Israeli one, The Christians I met were uniformly positive about Assad and the need for Assad to control the ENTIRE country.
blue peacock -> jdledell , 15 hours ago
Thank you for providing your direct experience of the views of Christian Syrians you met there.

Unfortunately none of those views ever make it to either to our print or broadcast media. We Americans are totally subject to ziocon propaganda when it comes to Middle East affairs. Anyone that disagrees with that viewpoint is immediately labeled anti-semitic and now banned from social media and of course from the TV talk shows.

Jack posed an interesting question, how does someone like Putin respond to an irrational US who in their delusions can easily escalate military conflict if their ego gets bruised when it is shown that they don't have the unilateral power of a hegemon?

Bag Man , 17 hours ago
Always thought that Nikki Haley was the price Donald Trump had to pay to get Sheldon Adelson's large campaign contributions in 2016. Adelson was Trump's second biggest contributor. So was recognition of Jerusalem as the Israeli capital. Sheldon got his money's worth. https://www.investopedia.co...
Pat Lang Mod , 20 hours ago
Somebody said that Nikki's nonsense is for "the rubes." Nah, you town people are just as gullible.
ex-PFC Chuck , 17 hours ago
There's a disturbing piece up today at WaPo by Karen De Young asserting the USA is doubling down in Syria. From the piece, emphasis by ex-PFC Chuck:
"We've started using new language," [James] Jeffrey said, referring to previous warnings against the use of chemical weapons. Now, he said, the United States will not tolerate "an attack. Period." "Any offensive is to us objectionable as a reckless escalation" he said. "You add to that, if you use chemical weapons, or create refu­gee flows or attack innocent civilians," and "the consequences of that are that we will shift our positions and use all of our tools to make it clear that we'll have to find ways to achieve our goals that are less reliant on the goodwill of the Russians."

Jeffrey is said to be Pompeo's point person on Syria. Do any of you with ears closer to the ground than those of us in flyover land know anything about this change of tune?

Biggee Mikeee , 19 hours ago
.Iraq PM urged to quit as key ally deserts him over unrest.

Iraqi Prime Minister Haider Al-Abadi faced calls to resign yesterday as his alliance with a populist cleric who won May elections crumbled over deadly unrest shaking the country's south. The two leading groups in parliament called on Abadi to step down, after lawmakers held an emergency meeting on the public anger boiling over in the southern city of Basra.,...

The Conquest Alliance of pro-Iranian former paramilitary fighters was "on the same wavelength" as Sadr's Marching Towards Reform list and they would work together to form a new government, Assadi said. Abadi, whose grouping came third in the May polls, defended his record in parliament, describig the unrest as "political sabotage" and saying the crisis over public services was being exploited for political ends. http://news.kuwaittimes.net...

Has McGurk been outmaneuvered by the Iranians?

The Beaver -> Biggee Mikeee , 18 hours ago
According to Elijah Magnier :
Soleimani 1- Brett McGurk 0
Matina Zia , 20 hours ago
Nikki Haley's Sikh origins may have something to do with her anti-Muslim feelings. According to J. D Cunningham, author of 'History of the Sikhs (Appendix XX)' included among the injunctions ordained by Guru Gobind Singh, the tenth guru, 'a Khalsa (true Sikh) proves himself if he mounts a warhorse; is always waging war; kills a Khan (Muslim) and slays the Turks (Muslims).'

Aside from this, it is hypocritical in the extreme for the U.S. to be criticising anyone for killing people anywhere after what they have been doing in the Middle East. According to Professor Gideon Polya the total avoidable deaths in Afghanstan alone since 2001
under ongoing war and occupation-imposed deprivation amount to around three million people, about 900,000 of whom are infants under the age of five (see Professor Gideon Polya at La Trobe University in Melbourne book, 'Body Count: Global Avoidable Mortality Since 1950' and Washington DC-based Physicians for Social Responsibility study: http://www.psr.org/assets/p... .

Pat Lang Mod -> Matina Zia , 20 hours ago
I really doubt your numbers. What is your stake in this discussion?
Fred -> Matina Zia , 12 hours ago
Your good professor sounds like a great piece of work. "Body Count. Global avoidable mortality since 1950" Perhaps we should have stopped all that foreign aid in the '50s.
stevenwithavee -> Matina Zia , 15 hours ago
The under five mortality figures from Afghanistan (1 in 5) are a problem that preceded our involvement by many years. However, the failure of the international community to make any significant progress over the last 17 years would be a legitimate criticism.
Jack , 20 hours ago
Sir

Is it in our DNA that we can't learn lessons from our interventionist experience in the Middle East? Looks like Iraq is spinning out of control once again. I'm sure many including the Shia may reminisce favorably to the Sadam years despite his tyranny. https://ejmagnier.com/2018/...

Pat Lang Mod -> Jack , 19 hours ago
We are indoctrinated with the idea that all people are basically the same. In fact this is only true at the level of basics like shelter, food, sex, etc. We refuse to really believe in the reality of widely varying cultures. It makes us incapable, as a group, of understanding people who do not share our outlook. i have been dealing with this all my life as a delegated "ambassador" to the "others."
Jack -> Pat Lang , 19 hours ago
Thank you, Sir. It makes perfect sense with the End if History and all those beliefs.

In this context, if you were Vladimir Putin and knowing that President Trump is completely ignorant when it comes to history and policy details and has surrounded himself with neocons as far as foreign policy is concerned and Bibi has him eating out of his hands, how would you deal with him if he starts to get belligerent in Syria and Ukraine?

Barbara Ann -> Jack , 4 hours ago
Jack

You may be interested in a recent article in Unz by SST's own 'smoothieX12' in response to Paul Craig Roberts asking how long Russia should continue to turn the other cheek: http://www.unz.com/article/...

Biggee Mikeee -> Jack , 19 hours ago
Earlier today, the two leading groups in Parliament called on Abadi to step down. http://news.kuwaittimes.net...
Don Bacon , 21 hours ago
Did the Syrians get upset by General Sherman's destructive march through South Carolina? No. It was a mistake for the US ever getting involved in Syria, with forming, equipping and training foreign armies and shadow governments including replacement prime ministers, all in violation of the UN Charter.

A new PM was at the top of H.Clinton's to-do list as Secretary of State. My favorite Assad replacement candidate was Ghassan Hitto from Murphy Texas, but he only lasted a couple months. here

GreenZoneCafe , 21 hours ago
I don't trust converts except for the adjustment from Protestant to Catholic or vice versa. I suppose shifts from one madhab to another, or between Buddhist schools are also ok.

Sad that in a moment of crisis,so many of the rising political stars of both parties are so hollow to the point of dangerousness.

blue peacock , 21 hours ago
Col. Lang

Has anything really changed much with our policies in the ME in the past 50+ years? Haven't we been deeply influenced/controlled by Israeli interests in this period, maybe even beyond if the attacks on USS Liberty are taken into account? Is the Trump administration just following in the traditions of Reagan, Bush Père et fils, Clinton and Obama, or is there a qualitative difference?

Pat Lang Mod -> blue peacock , 21 hours ago
Trump is more savagely and ignorantly aggressive.
GreenZoneCafe -> Pat Lang , 20 hours ago
Trump talks tough but has an aversion to military action. Is that real aggression, or just bullshit for the Bubbas?

North Korea, Syria are examples. He's left the door open to talking to Iran.

Trump won the Republican primaries calling out the Iraq war as a mistake!

Relative to others, dovishness is a Trump virtue. The Tucker Carlson line.

Contrast with Obama, who bombed Libya and pumped weapons into Syria. We'd probably be at war with Russia in Syria and Ukraine if Hillary had won.

blue peacock -> GreenZoneCafe , 19 hours ago
Trump, Nikki and Bolton have been tweeting warnings about the Idlib offensive and already accusing Assad if there are any chemical attacks. Wonder why? Lavrov has also made comments that he expects a chemical use false flag. Not sure about this post on Zerohedge, but if it has any credibility then it would appear that the US military is getting ready for some kind of provocation.

https://www.zerohedge.com/n...

Maybe this is all just "positioning" and "messaging" but maybe not. With Bibi, Nikki, Bolton and Pompeo as THE advisors, does anyone have a clue what Trump decides, when, not if, the jihadi White Helmets stage their chemical event in Idlib?

GreenZoneCafe -> blue peacock , 17 hours ago
We'll see. The most I expect is another cruise missile attack to the same empty coordinate.
Pat Lang Mod -> GreenZoneCafe , 17 hours ago
That will be true if trump sees Nikki and her real bosses for what they are.
Biggee Mikeee , a day ago
I think they understand. I think they view this as a temporary setback.

[Jun 28, 2018] Oil will never be above $44 WTI in my lifetime.

Jun 28, 2018 | peakoilbarrel.com

shallow sand x Ignored says: 06/27/2018 at 2:29 pm

"Oil will never be above $44 WTI in my lifetime."

Dennis Gartman.

[May 27, 2018] Northwestern University roundtable discusses regime change in Russia Defend Democracy Press

Highly recommended!
Notable quotes:
"... By Marcus Day and Kristina Betinis ..."
"... Washington Post ..."
"... The panel showcased the institute's first "Distinguished Visitor," Strobe Talbott, former deputy secretary of state in the Clinton administration, president of the Brookings Institution think tank from 2002 to 2017, and a key architect of US imperialist strategy in relation to the breakup of the USSR in the 1990s. ..."
"... obe Talbott outlined three main challenges faced by the current Russian government: its internal problems, including economic and demographic decline; the "threat from the Islamic world, it's the southern belly and it's very vulnerable;" and finally, potential conflict with China over access to natural resources. "They know Russia has resource wealth and human poverty that could spell trouble down the line," Talbott said. ..."
"... Read also: Is (or can be) the western Far (Hard) Right a friend of Russia? The Ukrainian Test ..."
"... To the question, "Do we have another Cold War?" Talbott answered, "Yes, we've got a Cold War. It's the old McCarthy line: If it quacks like a duck, and it walks like a duck, it's a Cold War." ..."
"... Historian John Bushnell raised only one objection against the panel's official State Department line. Referring to the 2014 US-German-led coup in Ukraine, he said, "The Russians, I think with some justification, point out that John McCain didn't need to show up in Kiev. There was no reason for a top State Department official [Victoria Nuland] to be caught giving advice, deciding who would sit in the next Ukrainian cabinet. There clearly was a direct American intervention in Ukrainian politics. ..."
"... Kelly emphasized at different points in the discussion that there is no plan for succession in Russia after Putin. He said, "There really is no succession plan. And in many ways, that is absolutely terrifying. Because if everything does depend on one man, do we really want to push Russia to the edge with more sanctions, and try and undermine their regime? Because if there is no successor, then you have a similar situation without any kind of management of the transition that we had in '91, with a country that has thousands of nuclear weapons and chaos." ..."
"... The WSWS wrote in 2016 that the establishment of the Buffett Institute at Northwestern -- with the assistance of a $101 million donation from Roberta Buffett Elliott, the sister of billionaire Warren Buffett -- was part of an international effort of the capitalist elite to transform leading universities into ideological centers of imperialist military strategy. ..."
www.defenddemocracy.press
By Marcus Day and Kristina Betinis
25 May 2018

The Northwestern University Buffett Institute for Global Studies hosted a roundtable event in the Chicago area on May 23 titled, "The Kremlin's Global Reach," moderated by Medill journalism professor and Washington Post veteran Peter Slevin. The panel showcased the institute's first "Distinguished Visitor," Strobe Talbott, former deputy secretary of state in the Clinton administration, president of the Brookings Institution think tank from 2002 to 2017, and a key architect of US imperialist strategy in relation to the breakup of the USSR in the 1990s.

Also present were political science professor Jordan Gans-Morse, public opinion pollster Dina Smeltz, lecturer and former US ambassador to Georgia Ian Kelly and historian John Bushnell.

The event took place amid a steady escalation of US militarism against Syria, Iran and Russia. Just two days earlier, Secretary of State Mike Pompeo delivered an ultimatum to Iran demanding a capitulation to the US in the face of additional sanctions. This followed on the heels of the Trump administration's scrapping of a nuclear agreement reached in 2015 between Iran and the P5+1 group, the US, UK, France, Germany, China and Russia. Earlier this month, the US relaunched a naval force, the Second Fleet, in the North Atlantic in preparation for military confrontation with Russia.

The political perspective of the event was clear from Slevin's opening questions: "What is to be done? How do you solve a problem like Vladimir Putin?"

Str obe Talbott outlined three main challenges faced by the current Russian government: its internal problems, including economic and demographic decline; the "threat from the Islamic world, it's the southern belly and it's very vulnerable;" and finally, potential conflict with China over access to natural resources. "They know Russia has resource wealth and human poverty that could spell trouble down the line," Talbott said.

Read also: Is (or can be) the western Far (Hard) Right a friend of Russia? The Ukrainian Test

To the question, "Do we have another Cold War?" Talbott answered, "Yes, we've got a Cold War. It's the old McCarthy line: If it quacks like a duck, and it walks like a duck, it's a Cold War."

In line with this reactionary narrative, Talbott presented the conflict between the US and Russia as one between "democracy" and "tyranny," while some of the other panelists admitted that is not the way the conflict is viewed in Russia and Europe.

Later, Talbott emphasized the challenge to US hegemony posed by the Balkans, particularly Serbia, citing their cultural and religious affinities with Russia. In 2015, Montenegro entered NATO.

Historian John Bushnell raised only one objection against the panel's official State Department line. Referring to the 2014 US-German-led coup in Ukraine, he said, "The Russians, I think with some justification, point out that John McCain didn't need to show up in Kiev. There was no reason for a top State Department official [Victoria Nuland] to be caught giving advice, deciding who would sit in the next Ukrainian cabinet. There clearly was a direct American intervention in Ukrainian politics. "

A number of the panelists interrupted at this point, some laughing nervously, others strongly protesting.

Slevin, in concluding the discussion, posed the question of regime change in Russia, stating, "How does this end? How does Putin fall? Retire? Get replaced? What is the fate of Vladimir Putin?"

The main obstacle to regime change in Russia was, according to the panelists, the chaos it would inevitably unleash. Kelly emphasized at different points in the discussion that there is no plan for succession in Russia after Putin. He said, "There really is no succession plan. And in many ways, that is absolutely terrifying. Because if everything does depend on one man, do we really want to push Russia to the edge with more sanctions, and try and undermine their regime? Because if there is no successor, then you have a similar situation without any kind of management of the transition that we had in '91, with a country that has thousands of nuclear weapons and chaos."

Read also: Breakdown in North Korea Talks Sounds Alarms on Capitol Hill

However, expressing the position of significant sections of the Democratic Party, aligned with the US state-military-intelligence apparatus, Talbott concluded, "Putin has presided over Russia in a way that is very, very much like the Soviet Union. That didn't work. This won't work. He will be an aberration. It would also help if we had a different president in the United States."

A notable feature of the event was its casual militarism. In introducing himself, Kelly noted that the US has recently provided both Georgia and Ukraine with Javelin anti-tank weaponry.

In line with the propaganda pumped out about the US media and political establishment, the panel speakers presented a picture of reality turned upside down: Russia was presented as an aggressive, expansionist power, and a growing threat to the American way of life. In fact, it is the US government and its imperialist allies which have increasingly encircled Russia via NATO expansion, crippled its economy with sanctions and sought to provoke a military conflict.

As US Defense Secretary James Mattis noted in releasing the Pentagon's new National Security Strategy, "Great power competition -- not terrorism -- is now the primary focus of US national security."

Before the audience assembled by this national security institute, which appeared to include only a handful of undergraduate students, these leading political figures spoke more bluntly about imperialist foreign policy than they would normally do on national television or in supposedly democratic arenas like the US Congress.

The WSWS wrote in 2016 that the establishment of the Buffett Institute at Northwestern -- with the assistance of a $101 million donation from Roberta Buffett Elliott, the sister of billionaire Warren Buffett -- was part of an international effort of the capitalist elite to transform leading universities into ideological centers of imperialist military strategy.

Read also: Exxon Mobil Exits Joint Oil Ventures With Russia Due to Sanctions

At the time of the Buffett Institute's founding, university students and faculty protested the appointment as its head of former the US commander in Afghanistan, Lt. Gen. Karl Eikenberry, whose qualifications were based on military rank and bellicose politics, rather than any academic credentials. Northwestern faculty members charged that he "advocates instrumentalizing the humanities and social sciences research to advance US soft power."

The International Youth and Students for Social Equality are leading the opposition internationally to the transformation of colleges and universities into think tanks for imperialism and militarism. Contact the Socialist Equality Party to start an IYSSE chapter on your campus.

SOURCE www.wsws.org

[Apr 11, 2018] Samantha Power Liberal War Hawk by Robert Parry

There is a special breed or neocon female warmonger in the USA -- chickenhawks who feed from crumbs of military industrial complex.
Is not Haley a replays of Samantha Powell ? The article remains mostly right is you simply replace the names...
Of cause, Haley is a little bit more obnoxious and has no respect for truth whatsoever. she can call while to be black with straight face.
Notable quotes:
"... Though Power is a big promoter of the "responsibility to protect" or "R2P" she operates with glaring selectivity in deciding who deserves protection as she advances a neocon/liberal interventionist agenda. She is turning "human rights" into an excuse not to resolve conflicts but rather to make them bloodier. ..."
"... Thus, in Power's view, the overthrow and punishment of Syria's President Bashar al-Assad takes precedence over shielding Alawites and other minorities from the likely consequence of Sunni-extremist vengeance. And she has sided with the ethnic Ukrainians in their slaughter of ethnic Russians in eastern Ukraine. ..."
"... For instance, in a March 10, 2003 debate on MSNBC's "Hardball" show -- just nine days before the invasion -- Power said, "An American intervention likely will improve the lives of the Iraqis. Their lives could not get worse, I think it's quite safe to say." However, the lives of Iraqis actually did get worse. Indeed, hundreds of thousands stopped living altogether and a sectarian war continues to tear the country apart to this day. ..."
"... Similarly, regarding Libya, Power was one of the instigators of the U.S.-supported military intervention in 2011 which was disguised as an "R2P" mission to protect civilians in eastern Libya where dictator Muammar Gaddafi had identified the infiltration of terrorist groups. ..."
"... Urged on by then-National Security Council aide Power and Secretary of State Hillary Clinton, Obama agreed to support a military mission that quickly morphed into a "regime change" operation. Gaddafi's troops were bombed from the air and Gaddafi was eventually hunted down, tortured and murdered. ..."
"... Ukraina po-nad u-se! ..."
Jun 15, 2015 | consortiumnews.com

32 Comments

Exclusive: Liberal interventionist Samantha Power along with neocon allies appears to have prevailed in the struggle over how President Obama will conduct his foreign policy in his last months in office, promoting aggressive strategies that will lead to more death and destruction, writes Robert Parry.

Propaganda and genocide almost always go hand in hand, with the would-be aggressor stirring up resentment often by assuming the pose of a victim simply acting in self-defense and then righteously inflicting violence on the targeted group.

U.S. Ambassador to the United Nations Samantha Power understands this dynamic having written about the 1994 genocide in Rwanda where talk radio played a key role in getting Hutus to kill Tutsis. Yet, Power is now leading propaganda campaigns laying the groundwork for two potential ethnic slaughters: against the Alawites, Shiites, Christians and other minorities in Syria and against the ethnic Russians of eastern Ukraine.

Though Power is a big promoter of the "responsibility to protect" or "R2P" she operates with glaring selectivity in deciding who deserves protection as she advances a neocon/liberal interventionist agenda. She is turning "human rights" into an excuse not to resolve conflicts but rather to make them bloodier.

Thus, in Power's view, the overthrow and punishment of Syria's President Bashar al-Assad takes precedence over shielding Alawites and other minorities from the likely consequence of Sunni-extremist vengeance. And she has sided with the ethnic Ukrainians in their slaughter of ethnic Russians in eastern Ukraine.

In both cases, Power spurns pragmatic negotiations that could avert worsening violence as she asserts a black-and-white depiction of these crises. More significantly, her strident positions appear to have won the day with President Barack Obama, who has relied on Power as a foreign policy adviser since his 2008 campaign.

Power's self-righteous approach to human rights deciding that her side wears white hats and the other side wears black hats is a bracing example of how "human rights activists" have become purveyors of death and destruction or what some critics have deemed " the weaponization of human rights. "

We saw this pattern in Iraq in 2002-03 when many "liberal humanitarians" jumped on the pro-war bandwagon in favoring an invasion to overthrow dictator Saddam Hussein. Power herself didn't support the invasion although she was rather mealy-mouthed in her skepticism and sought to hedge her career bets amid the rush to war.

For instance, in a March 10, 2003 debate on MSNBC's "Hardball" show -- just nine days before the invasion -- Power said, "An American intervention likely will improve the lives of the Iraqis. Their lives could not get worse, I think it's quite safe to say." However, the lives of Iraqis actually did get worse. Indeed, hundreds of thousands stopped living altogether and a sectarian war continues to tear the country apart to this day.

Power in Power

Similarly, regarding Libya, Power was one of the instigators of the U.S.-supported military intervention in 2011 which was disguised as an "R2P" mission to protect civilians in eastern Libya where dictator Muammar Gaddafi had identified the infiltration of terrorist groups.

Urged on by then-National Security Council aide Power and Secretary of State Hillary Clinton, Obama agreed to support a military mission that quickly morphed into a "regime change" operation. Gaddafi's troops were bombed from the air and Gaddafi was eventually hunted down, tortured and murdered.

The result, however, was not a bright new day of peace and freedom for Libyans but the disintegration of Libya into a failed state with violent extremists, including elements of the Islamic State, seizing control of swaths of territory and murdering civilians. It turns out that Gaddafi was not wrong about some of his enemies.

Today, Power is a leading force opposing meaningful negotiations over Syria and Ukraine, again staking out "moralistic" positions rejecting possible power-sharing with Assad in Syria and blaming the Ukraine crisis entirely on the Russians. She doesn't seem all that concerned about impending genocides against Assad's supporters in Syria or ethnic Russians in eastern Ukraine.

In 2012, at a meeting hosted by the United States Holocaust Memorial Museum in Washington, former U.S. Ambassador Peter W. Galbraith predicted "the next genocide in the world will likely be against the Alawites in Syria" -- a key constituency behind Assad's secular regime. But Power has continued to insist that the top priority is Assad's removal.

Similarly, Power has shown little sympathy for members of Ukraine's ethnic Russian minority who saw their elected President Viktor Yanukovych overthrown in a Feb. 22, 2014 coup spearheaded by neo-Nazis and other right-wing nationalists who had gained effective control of the Maidan protests. Many of these extremists want an ethnically pure Ukrainian state.

Since then, neo-Nazi units, such as the Azov battalion, have been Kiev's tip of the spear in slaughtering thousands of ethnic Russians in the east and driving millions from their homes, essentially an ethnic-cleansing campaign in eastern Ukraine.

A Propaganda Speech

Yet, Power traveled to Kiev to deliver a one-sided propaganda speech on June 11, portraying the post-coup Ukrainian regime simply as a victim of "Russian aggression."

Despite the key role of neo-Nazis acknowledged even by the U.S. House of Representatives Power uttered not one word about Ukrainian military abuses which have included reports of death squad operations targeting ethnic Russians and other Yanukovych supporters.

Skipping over the details of the U.S.-backed and Nazi-driven coup of Feb. 22, 2014, Power traced the conflict instead to "February 2014, when Russia's little green men first started appearing in Crimea." She added that the United Nations' "focus on Ukraine in the Security Council is important, because it gives me the chance on behalf of the United States to lay out the mounting evidence of Russia's aggression, its obfuscation, and its outright lies. America is clear-eyed when it comes to seeing the truth about Russia's destabilizing actions in your country."

Power continued: "The message of the United States throughout this Moscow-manufactured conflict and the message you heard from President Obama and other world leaders at last week's meeting of the G7 has never wavered: if Russia continues to disregard the sovereignty and territorial integrity of Ukraine; and if Russia continues to violate the rules upon which international peace and security rest then the United States will continue to raise the costs on Russia.

"And we will continue to rally other countries to do the same, reminding them that their silence or inaction in the face of Russian aggression will not placate Moscow, it will only embolden it.

"But there is something more important that is often lost in the international discussion about Russia's efforts to impose its will on Ukraine. And that is you the people of Ukraine and your right to determine the course of your own country's future. Or, as one of the great rallying cries of the Maidan put it: Ukraina po-nad u-se! Ukraine above all else!" [Applause.]

Power went on: "Let me begin with what we know brought people out to the Maidan in the first place. We've all heard a good number of myths about this. One told by the Yanukovych government and its Russian backers at the time was that the Maidan protesters were pawns of the West, and did not speak for the 'real' Ukraine.

"A more nefarious myth peddled by Moscow after Yanukovych's fall was that Euromaidan had been engineered by Western capitals in order to topple a democratically-elected government."

Of course, neither of Power's points was actually a "myth." For instance, the U.S.-funded National Endowment for Democracy was sponsoring scores of anti-government activists and media operations -- and NED President Carl Gershman had deemed Ukraine "the biggest prize," albeit a stepping stone toward ousting Russian President Vladimir Putin. [See Consortiumnews.com's " A Shadow US Foreign Policy ."]

Assistant Secretary of State for European Affairs Victoria Nuland was collaborating with U.S. Ambassador Geoffrey Pyatt how to "midwife" the change in government with Nuland picking the future leaders of Ukraine "Yats is the guy" referring to Arseniy Yatsenyuk who was installed as prime minister after the coup. [See Consortiumnews.com's " The Neocons: Masters of Chaos ."]

The coup itself occurred after Yanukovych pulled back the police to prevent worsening violence. Armed neo-Nazi and right-wing militias, organized as "sotins" or 100-man units, then took the offensive and overran government buildings. Yanukovych and other officials fled for their lives, with Yanukovych narrowly avoiding assassination. In the days following the coup, armed thugs essentially controlled the government and brutally intimidated any political resistance.

Inventing 'Facts'

But that reality had no place in Power's propaganda speech. Instead, she said:

"The facts tell a different story. As you remember well, then-President Yanukovych abandoned Kyiv of his own accord, only hours after signing an agreement with opposition leaders that would have led to early elections and democratic reforms.

"And it was only after Yanukovych fled the capital that 328 of the 447 members of the democratically-elected Rada voted to strip him of his powers including 36 of the 38 members of his own party in parliament at the time. Yanukovych then vanished for several days, only to eventually reappear little surprise in Russia.

"As is often the case, these myths reveal more about the myth makers than they do about the truth. Moscow's fable was designed to airbrush the Ukrainian people and their genuine aspirations and demands out of the Maidan, by claiming the movement was fueled by outsiders.

"Yet, as you all know by living through it and as was clear even to those of us watching your courageous stand from afar the Maidan was made in Ukraine. A Ukraine of university students and veterans of the Afghan war. Of Ukrainian, Russian, and Tatar speakers. Of Christians, Muslims, and Jews. "

Power went on with her rhapsodic version of events: "Given the powerful interests that benefited from the corrupt system, achieving a full transformation was always going to be an uphill battle. And that was before Russian troops occupied Crimea, something the Kremlin denied at the time, but has since admitted; and it was before Russia began training, arming, bankrolling, and fighting alongside its separatist proxies in eastern Ukraine, something the Kremlin continues to deny.

"Suddenly, the Ukrainian people faced a battle on two fronts: combating corruption and overhauling broken institutions on the inside; while simultaneously defending against aggression and destabilization from the outside.

"I don't have to tell you the immense strain that these battles have placed upon you. You feel it in the young men and women, including some of your family members and friends, who have volunteered or been drafted into the military people who could be helping build up their nation, but instead are risking their lives to defend it against Russian aggression.

"You feel it in the conflict's impact on your country's economy as instability makes it harder for Ukrainian businesses to attract foreign investment, deepens inflation, and depresses families' wages. It is felt in the undercurrent of fear in cities like Kharkiv where citizens have been the victims of multiple bomb attacks, the most lethal of which killed four people, including two teenage boys, at a rally celebrating the first anniversary of Euromaidan.

"And the impact is felt most directly by the people living in the conflict zone. According to the UN, at least 6,350 people have been killed in the violence driven by Russia and the separatists including 625 women and children and an additional 1,460 people are missing; 15,775 people have been wounded. And an estimated 2 million people have been displaced by this conflict. And the real numbers of killed, missing, wounded, and displaced are likely higher, according to the UN, due to its limited access to areas controlled by the separatists."

One-Sided Account

Pretty much everything in Power's propaganda speech was blamed on the Russians along with the ethnic Russians and other Ukrainians resisting the imposition of the new U.S.-backed order. She also ignored the will of the people of Crimea who voted overwhelmingly in a referendum to secede from Ukraine and rejoin Russia.

The closest she came to criticizing the current regime in Kiev was to note that "investigations into serious crimes such as the violence in the Maidan and in Odessa have been sluggish, opaque, and marred by serious errors suggesting not only a lack of competence, but also a lack of will to hold the perpetrators accountable."

Yet, even there, Power failed to note the growing evidence that the neo-Nazis were likely behind the crucial sniper attacks on Feb. 20, 2014, that killed both police and protesters and touched off the chaos that led to the coup two days later. [A worthwhile documentary on this mystery is " Maidan Massacre ."]

Nor, did Power spell out that neo-Nazis from the Maidan set fire to the Trade Union Building in Odessa on May 2, 2014, burning alive scores of ethnic Russians while spray-painting the building with pro-Nazi graffiti, including hailing the "Galician SS," the Ukrainian auxiliary that helped Adolf Hitler's SS carry out the Holocaust in Ukraine.

Listening to Power's speech you might not even have picked up that she was obliquely criticizing the U.S.-backed regime in Kiev.

Also, by citing a few touching stories of pro-coup Ukrainians who had died in the conflict, Power implicitly dehumanized the far larger number of ethnic Russians who opposed the overthrow of their elected president and have been killed by Kiev's brutal "anti-terrorism operation."

Use of Propaganda

In my nearly four decades covering Washington, I have listened to and read many speeches like the one delivered by Samantha Power. In the 1980s, President Ronald Reagan would give similar propaganda speeches justifying the slaughter of peasants and workers in Nicaragua, El Salvador and Guatemala, where the massacres of Mayan Indians were later deemed a "genocide." [See Consortiumnews.com's " How Reagan Promoted Genocide ."]

Regardless of the reality on the ground, the speeches always made the U.S.-backed side the "good guys" and the other side the "bad guys" even when "our side" included CIA-affiliated "death squads" and U.S.-equipped military forces slaughtering tens of thousands of civilians.

During the 1990s, more propaganda speeches were delivered by President George H.W. Bush regarding Panama and Iraq and by President Bill Clinton regarding Kosovo and Yugoslavia. Then, last decade, the American people were inundated with more propaganda rhetoric from President George W. Bush justifying the invasion of Iraq and the expansion of the endless "war on terror."

Generally speaking, during much of his first term, Obama was more circumspect in his rhetoric, but he, too, has slid into propaganda-speak in the latter half of his presidency as he shed his "realist" foreign policy tendencies in favor of "tough-guy/gal" rhetoric favored by "liberal interventionists," such as Power, and neoconservatives, such as Nuland and her husband Robert Kagan (whom a chastened Obama invited to a White House lunch last year).

But the difference between the propaganda of Reagan, Bush-41, Clinton and Bush-43 was that it focused on conflicts in which the Soviet Union or Russia might object but would likely not be pushed to the edge of nuclear war, nothing as provocative as what the Obama administration has done in Ukraine, now including dispatching U.S. military advisers.

The likes of Power, Nuland and Obama are not just justifying wars that leave devastation, death and disorder in their wake in disparate countries around the world, but they are fueling a war on Russia's border.

That was made clear by the end of Power's speech in which she declared: "Ukraine, you may still be bleeding from pain. An aggressive neighbor may be trying to tear your nation to pieces. Yet you are strong and defiant. You, Ukraine, are standing tall for your freedom. And if you stand tall together no kleptocrat, no oligarch, and no foreign power can stop you."

There is possibly nothing more reckless than what has emerged as Obama's late-presidential foreign policy, what amounts to a plan to destabilize Russia and seek "regime change" in the overthrow of Russian President Putin.

Rather than take Putin up on his readiness to cooperate with Obama in trouble spots, such as the Syrian civil war and Iran's nuclear program, "liberal interventionist" hawks like Power and neocons like Nuland with Obama in tow have chosen confrontation and have used extreme propaganda to effectively shut the door on negotiation and compromise.

Yet, as with previous neocon/liberal-interventionist schemes, this one lacks on-the-ground realism. Even if it were possible to so severely damage the Russian economy and to activate U.S.-controlled "non-governmental organizations" to help drive Putin from office, that doesn't mean a Washington-friendly puppet would be installed in the Kremlin.

Another possible outcome would be the emergence of an extreme Russian nationalist suddenly controlling the nuclear codes and willing to use them. So, when ambitious ideologues like Power and Nuland get control of U.S. foreign policy in such a sensitive area, what they're playing with is the very survival of life on planet Earth the ultimate genocide.

Investigative reporter Robert Parry broke many of the Iran-Contra stories for The Associated Press and Newsweek in the 1980s. You can buy his latest book, America's Stolen Narrative, either in print here or as an e-book (from Amazon and barnesandnoble.com ). You also can order Robert Parry's trilogy on the Bush Family and its connections to various right-wing operatives for only $34. The trilogy includes America's Stolen Narrative. For details on this offer, click here .


incontinent reader , June 15, 2015 at 6:14 pm

It's too bad that people like Nuland and Power have not not been subjected to a retributive justice in which they would be forced to feel the same pain that they inflict, or, if that is too much to ask, then just to 'disappear (quietly) in the sands of time' to save their victims from more misery.

Roberto , June 15, 2015 at 10:03 pm

These dopes have no idea that the compensation is forthcoming.

Debbie Menon , June 17, 2015 at 4:04 pm

I would like to propose a new lobby that would also be based on a non-address, X Street.

X Street recognizes that the wars fought by the United States since 2001 have brought no benefit to the American people and have only resulted in financial ruin,

NATO no longer has any raison d’etre and is needlessly provoking the Russians through its expansion. X Street calls on the United States to dissolve the alliance.

X Street recognizes that America’s lopsided support of the state of Israel has made the United States a target of terrorism, has weakened the US’s international standing and damaged its reputation, and has negatively impacted on the American economy.

Washington will no longer use its veto power to protect Israeli interests in the UN and other international bodies.

The United States will publicly declare its knowledge that Israel has a nuclear arsenal and will ask the Israeli government to join the NPT regime and subject its program to IAEA inspection.

X Street believes that nation building and democracy promotion by the United States have been little more than CIA/MOSSAD covert actions by another name that have harmed America’s reputation and international standing.

The National Endowment for Democracy should be abolished immediately.

MikeH , June 16, 2015 at 7:12 pm

I would think that most people have heard of near death experiences.

One feature of such experiences which has sometimes been reported, and which I find very interesting, is that of the life review, which focuses on the deeds a person has done throughout his or her life, the motives of the deeds, and the effects of the deeds on others. It has been reported, for instance, that people have re-experienced their deeds not only from their own perspective but from the perspective of others whom one's deeds have affected.

There is a youtube video about this, titled The Golden Rule Dramatically Illustrated, and featuring NDE researcher Dr. Kenneth Ring.

https://www.youtube.com/watch?v=1tiKsKy7lFw

Anonymous , June 20, 2015 at 10:23 pm

There are no such thing as "liberal war hawks", their policies simply based on idiocy where as the result they need to be called "liberals", depending on kind of government that govern a corrupt and bankrupt system. American capitalism is one of those system. These people simply lacking a vision for their understanding that they are "liberal". They might be a social liberalists when it come to people's rights in living the way of life they chose, otherwise it was Bill Clinton who used such "liberal" idea by politicalizing using liberalism for his gain, these people follow the same path, but they will backstab people as they have in the past and as they do now.

michael , June 15, 2015 at 6:26 pm

If a coup had not been instigated by the west on Russia's border, installing Nazis a different more positive outcome might be available, I am quite sure there are Ukrainians who did not want this and wanted a more independent Ukraine, but that is not what happened! How were the Russians supposed to react? The United States has 1000 military bases around the world, border most countries, completely encircle Iran, press right up to Russia's borders and encircle China. Again how are the Russians supposed to React? If this was Mexico the place would be decimated by the Americans and laid to waste just like Iraq!

hbm , June 15, 2015 at 6:41 pm

Looney bleeding-heart Irishwoman with husband Arch-Neocon lunatic Cass Sunstein shaping her opinions and directing her fanaticism.

That's all one really needs to know.

Nibs , June 16, 2015 at 12:28 pm

Exactly, everywhere there is a goy neocon, just look a little further for the malign influence. You can always find it. Soros was here too, also in the attempted "colour revolution" in Macedonia. They intend to make out like bandits, big big money. Of course, as mentioned elsewhere, they are physical cowards and prefer to send ordinary Americans to do their fighting and bleeding for them.
It's somewhat startling after Iraq that they are still there.
But, and forgive the conspiracy angle, I don't believe this is unconnected to the Epstein sex scandal: just see who visited and is therefore target of blackmail.

Paulrevere01 , June 15, 2015 at 6:50 pm

and this warmonger-doppleganger-to-Nuland-Kagen is married to Grand-Censor-Cass-des-Hubris-Sunstein more black eyes for Yale and Harvard.

dahoit , June 16, 2015 at 11:12 am

Yes,the Zionist poison ivy league strikes again,with more Zionist stool pigeons to come.Close down education for sale vs.for knowledge,it produces zombie quislings.

Larry , June 15, 2015 at 7:12 pm

. and even if the U.S. neocon policy in Ukraine succeeds and a shooting war with Russia is somehow avoided, then the American neocons will still neither be sated or placated. Like the bloodthirsty jackals they are, these neocons will be only emboldened, and their next coup in Russia's natural security sphere will be the straw that breaks the nuclear camels' backs. They must be deterred or stopped.

Debbie Menon , June 19, 2015 at 12:33 am

In some tabulations the neocon hijacking of US policy on behalf of Israel has resulted in American gifts to Iran of Iraq, Afghanistan, Pakistan, Syria, Lebanon, and quite likely Israel. And that's for starters. The rest will implode and do we then have a Persian Empire.

It looks like a lot of clouds gathering on the horizon, and I cannot say that I find much fault with Pillar's assessment.

The stakes are too high and for all the macho talk all are rightfully very weary of lighting the match.

I rather doubt that there would be much left for anyone to add to their empire. Miles of ruins and deserts, glazed by nuclear fires do not make for very useful Imperial digs.

I just pray that we are both wrong.

Abe , June 15, 2015 at 7:58 pm

Liberal interventionism is simply left-wing neocon thinking.

The Ambassador from Hell returns to the scene of the crime:
Remarks at the October Palace in Kyiv, Ukraine (June 11, 2015)
http://usun.state.gov/briefing/statements/243583.htm

“Many eyewitnesses among the Maidan protesters reported snipers firing from the Hotel Ukraina during the massacre of the protesters, specifically, about killing eight of them. Bullet holes in trees and electricity poles on the site of the massacre and on the walls of Zhovtnevyi Palace indicate that shots came from the direction of the hotel. There are several similar recorded testimonies of the eyewitnesses among the protesters about shooters in October Palace and other Maidan-controlled buildings.â€

The “Snipers’ Massacre†on the Maidan in Ukraine
By Ivan Katchanovski, Ph.D.

Boris M Garsky , June 15, 2015 at 8:06 pm

There is nothing to say about Powers; no doubt where she gets her marching orders and script. However, there is no excuse for being ignorant on the topic of her rantings. I challenge anyone, anywhere to spontaneously assemble and move 100,000 people, even a few blocks, on 24 hours notice. If you can do it, you are the court magician exemplar. Can't be done. Never has been done; it takes months to years of preparations and organization before implementation. Yanuckovich was the target of assassination; they weren't taking chances. No doubt that the Russians told him to skedaddle; that his life was in danger. Doesn't sound spontaneous to me; sounds like a well planned operation gone wrong- right initially, but wrong eventually. I think that Obama is simply posturing until the west can figure out how to extricate themselves from another fine mess they got themselves into- AGAIN!

F. G. Sanford , June 15, 2015 at 8:26 pm

I remember during my college days watching "student government" personalities – usually rich kids with no real problems – hurl themselves into impassioned frenzies over some issue or another. Usually, they were political science(sic) or psychology majors who were also active in the Speech and Theater Department. The defining characteristic of their existence was to obtain a podium from which to make impassioned pleas to their fellow students in an effort to demonstrate a proclivity for "leadership". Almost any issue would do. Samantha Power reminds me of one of those students – ostensibly seeking a role which, if she could have her way, would make her the prime catalyst in a pivotal issue at the epicenter of a maelstrom that steers the course of human history. That kind of learned, practiced, studied and rehearsed narcissism doesn't always work out so well. Maybe because the most successful examples are actually clinical sufferers of…real narcissism. When Power's 'facts' are compared to reality, the obvious conclusions suggest a range of interpretations from delusional psychosis to criminal perjury. Or, is this a carefully crafted strategy? "Yats" has recently resorted to the last rabbit he can pull out of a hat: he's turned on the printing presses to pay the bills, and a currency collapse is imminent. The Nazi factions are impatient with the regime's lack of progress, the people are disgruntled, those two million refugees have mostly fled to Russia for protection, Northern Europe is being inundated with prostitutes, drug dealers and the creme de la creme of organized crime from the former Warsaw Pact countries, and in the South, refugees from NATO destabilizations in North Africa and the Middle East have become an explosive issue. Racism, nationalism and the resurgence of openly fascist political activity is burgeoning. Europe is boiling with rage. Has Power actually seen the writing on the wall? If so, why not an impassioned campaign to remind the Ukrainians they have broken institutions, corrupt oligarchs, unscrupulous kleptocrats, internal corruption and foreign aggression working against them? And by the way, they've failed to adequately investigate those Nazi atrocities. None of this could POSSIBLY be the fault of U.S. meddling or failed diplomacy. Nope, they brought it on themselves, but we did everything we could to try and help. The makings of TOTAL collapse are at hand, and one little fillip could bring down the whole house of cards. So, "You Ukrainians need to stand tall for your freedoms", and if anything goes wrong, you have nobody to blame but yourselves. Maybe Sammy isn't so delusional after all.

Gregory Kruse , June 16, 2015 at 1:01 pm

She's not delusional, she's just channeling Aleksander Mikhaajlovich Bezobrazov. I guess that does make Obama the Tsar.

Mark , June 15, 2015 at 8:53 pm

All anyone needs to understand about American foreign policy is that anything, including genocide, is not only acceptable but promoted if it serves "America's corporate or favored campaign funding special interests". The only real principle in play for all colluding parties -- corporate, mass media, complicit foreign governments (sycophants) and both major domestic political parties -- is to "win" by compromising or sacrificing everything and everyone required to serve the insatiable hunger for ungodley wealth and (abusive) power accumulation.

The entire American culture has been corrupted by propaganda and what is irrational human nature and instinct concerning these matters -- to be accepted among our peers by following the heard -- this reality is being used by the "ruling class" to play the public like a disposable three dollar fiddle, while they, our "rulers", impose death and destruction along with economic and military tyranny, directly or by proxy, wherever and whenever they can get away with it.

Bob Loblaw , June 15, 2015 at 9:41 pm

Two words
Electromagnetic Pulse
One well placed warhead will cripple us to the point that we destroy ourselves.

While crude islamists can't pull it off a Russian device is within reach.

Abe , June 15, 2015 at 10:48 pm

As a human-rights entrepreneur who is also a tireless advocate of war, Samantha Power is not aberrant. Elite factions of the human-rights industry were long ago normalized within the tightly corseted spectrum of American foreign policy.

Samantha Power and the Weaponization of Human Rights
by Chase Madar
http://www.counterpunch.org/2009/09/10/samantha-power-and-the-weaponization-of-human-rights/

ltr , June 16, 2015 at 11:04 am

Thank you for this important reference.

Abe , June 15, 2015 at 10:58 pm

Power advocates for what she calls "tough, principled, and engaged diplomacy." A more accurate set of adjectives would be "belligerent, hypocritical, and domineering." The thrust of her work is to make perpetual war possible by designating genocide – real or merely ideologically constructed – the supreme international crime, instead of war itself. (Under current international law war itself is the "supreme international crime.") That way the U.S. can perpetually make war for the noblest of purposes without regard for anachronisms like national sovereignty. Is it any wonder Democrats love her?

A Diplomat From Hell: Samantha Power and The Quest For Eternal War
By Michael Smith
http://legalienate.blogspot.com/2013/06/samantha-power-and-imperial-delusion.html

Abe , June 16, 2015 at 12:14 am

The military deployment of US-NATO forces coupled with “non-conventional warfare†â€"including covert intelligence operations, economic sanctions and the thrust of “regime changeâ€â€" is occurring simultaneously in several regions of the world.

Central to an understanding of war, is the media campaign which grants it legitimacy in the eyes of public opinion. War has been provided with a humanitarian mandate under NATO’s “Responsibility to Protect†(R2P). The victims of U.S. led wars are presented as the perpetrators of war.

The Globalization of War
By Michel Chossudovsky
https://www.youtube.com/watch?t=74&v=34j2Rf-IvJQ

onno , June 16, 2015 at 5:35 am

It sounds to me that these neocons have 2 things in common. They were all born post WW II and have not experienced any war at home and grew up in a nice suburban area without street crimes. They NEVER were confronted with families who lost their loved ones in US 'lost' wars in Vietnam, Iraq, Afghanistan that were initiated WITHOUT UN approval and brought home young soldiers who had lost their limps and were handicapped for the rest of their lives. But just to keep US defence industry turning out hefty profits.

Secondly, they have watched to many Hollywood movies showing the superior US army beating the 'evil' empire (Reagan) meaning Soviet Union. USA never honoured their agreements with Gorbachev to keep NATO out of Eastern Europe. President Putin learned his lessons, he built a strong military with technological advanced equipment so his country will NOT be run over again by the West such as Napoleon and Hitler did murdering 25 million Russians. President Putin and the Russians want to live in peace they have suffered too much in the past.

It's US and its vassal NATO aggression in the World and now in Ukraine that make the Russian show their power and demonstrating 'don't fool with us' . US MSM propaganda in Europe is losing its effects and people realizing US geopolitical or colonization aggression in the world while losing US dominance as well. Like Abraham Lincoln said: You can lie to some people all the time and you can lie to all the people some time, but you cannot lie to all the people all the time! However with today's powerful media TV and radio it will take some more time. But Russia's RT News is changing this and gives the audience News contradicting US MSM propaganda such as NYT and WP which have been brainwashing the public for so long at the discretion of Washington's neocons. And US taxpayers are paying the bill, wake up America!

Peter Loeb , June 16, 2015 at 6:46 am

DISTRACTION FROM PALESTINIAN/ISRAELI CONFLICT

Excellent profiles and analyses by Mr. Parry as we have all come
to expect.

"[Power] added that the United Nations focus on Ukraine in the
Security Council.." from Parry above.

Here one MUST add the unsaid "and never, never on Palestine/
Israel"! After all, the US has continued time and again to block
investigation by the Security Council of Israeli actions in that
sphere. Evidently Israel maintains according to Power and
many others that Israel with US support are by definition exempt
from any and all rules of international law, application to save
lives in Palestine, attempts to establish a Mideast Nuclear
Free Zone and much much more. The distraction provided
by Ukraine is not only significant for the people of Ukraine but
is cleverly designed to distract all world and domestic opinion
from the atrocities carried on daily by Israel in Palestine both
past, present and future.

-- -Peter Loeb, Boston, MA, USA

Gregory Kruse , June 16, 2015 at 10:28 am

She's like John Bolton in drag.

Abe , June 16, 2015 at 5:52 pm

She is the walrus, goo goo g'joob.

Sammy too "seems averse to compromise, and is apparently committed to the belief that the U.N. and international law undermine U.S. interests" (aka Israeli interests)
http://www.newyorker.com/magazine/2005/03/21/boltonism

"“Remarks such as the references to the 1967 borders show Obama’s continuing lack of real appreciation for Israel’s security.†-- Bolton, 2011, interview for National Review online

"There will never be a sunset on America’s commitment to Israel’s security. Never.†-- Power, 2015, speech at American Israel Public Affairs Committee (AIPAC) conference

ltr , June 16, 2015 at 11:02 am

What a thoroughly amoral person Samantha Power is, all pretense, all hypocrisy, all for selectively determining which lives are worth allowing.

Wm. Boyce , June 16, 2015 at 11:14 am

Another example of the lack of differences between Democrats and Republicans when it comes to the empire's foreign policy. It's all about controlling regions and resources, and fueling the U.S. arms industry.

Brendan , June 16, 2015 at 4:29 pm

Samantha Power: "The facts tell a different story. As you remember well, then-President Yanukovych abandoned Kyiv of his own accord, only hours after signing an agreement with opposition leaders that would have led to early elections and democratic reforms."

There are some glaring omissions in Power's 'facts'. She doesn't explain why Yanukovych suddenly fled Kyiv, so soon after an agreement with opposition leaders that allowed him to remain as president for several more months.

She didn't mention the rejection of that agreement by the far-right militias who threatened to remove Yanukovych from office by force if he did not resign by 10 am that day.

That threat might explain his sudden departure. It also might also indicate that his departure wasn't really "of his own accord".

Brendan , June 16, 2015 at 4:34 pm

Samantha Power: "And it was only after Yanukovych fled the capital that 328 of the 447 members of the democratically-elected Rada voted to strip him of his powers "

The problem with that was that the members of parliament did not have any authority to strip the president of his powers in the way they did. The only possible conditions to remove a presidential from office are listed in the Ukrainian constitution:

Article 108. The President of Ukraine shall exercise his powers until the assumption of office by the newly elected President of Ukraine.
The authority of the President of Ukraine shall be subject to an early termination in cases of:
1) resignation;
2) inability to exercise presidential authority for health reasons;
3) removal from office by the procedure of impeachment;
4) his/her death.

Yanukovych was not dead and neither was he unable to exercise his presidential authority due to health reasons. He never resigned, and in fact continued to state that he was the only legitimate president.

He was not removed from office by the procedure of impeachment, which includes a number of stages, as described in Article 111 of the constitution (see link below). The decision on the impeachment must be adopted by at least three-quarters of the members of parliament. The number given by Samantha Power was less than three-quarters.

Samantha Power, along with the vast majority of the western media, described the overthrow of President Yanukovych as a normal democratic vote by parliament. To use Mrs Power's words, "The facts tell a different story". The facts say that it was an unconstitutional coup.

http://web.archive.org/web/20140321165941/http://www.president.gov.ua/en/content/chapter05.html
http://web.archive.org/web/20140405140914/http://www.president.gov.ua/en/news/30130.html

cathy , June 22, 2015 at 1:29 am

All of these conflicts seem to be designed to clean out, not only the people, but entire cultures in the regions.

Americans should take heed. What we see the oligarchic criminals in the U.S. doing overseas, is coming to a town near you, or maybe your own town. Why else do you think they have been dismantling the Constitution and militarizing communities? It looks like it will be sooner than expected, too.

hammersmith , June 23, 2015 at 10:31 pm

The Bush administration was "little boys on Big Wheels," as one former member described it; The Obama administration is little girls on Big Wheels.

Roberto , June 15, 2015 at 10:03 pm

These dopes have no idea that the compensation is forthcoming.

Debbie Menon , June 17, 2015 at 4:04 pm

I would like to propose a new lobby that would also be based on a non-address, X Street.

X Street recognizes that the wars fought by the United States since 2001 have brought no benefit to the American people and have only resulted in financial ruin,

NATO no longer has any raison d’etre and is needlessly provoking the Russians through its expansion. X Street calls on the United States to dissolve the alliance.

X Street recognizes that America’s lopsided support of the state of Israel has made the United States a target of terrorism, has weakened the US’s international standing and damaged its reputation, and has negatively impacted on the American economy.

Washington will no longer use its veto power to protect Israeli interests in the UN and other international bodies.

The United States will publicly declare its knowledge that Israel has a nuclear arsenal and will ask the Israeli government to join the NPT regime and subject its program to IAEA inspection.

X Street believes that nation building and democracy promotion by the United States have been little more than CIA/MOSSAD covert actions by another name that have harmed America’s reputation and international standing.

The National Endowment for Democracy should be abolished immediately.

MikeH , June 16, 2015 at 7:12 pm

I would think that most people have heard of near death experiences.

One feature of such experiences which has sometimes been reported, and which I find very interesting, is that of the life review, which focuses on the deeds a person has done throughout his or her life, the motives of the deeds, and the effects of the deeds on others. It has been reported, for instance, that people have re-experienced their deeds not only from their own perspective but from the perspective of others whom one's deeds have affected.

There is a youtube video about this, titled The Golden Rule Dramatically Illustrated, and featuring NDE researcher Dr. Kenneth Ring.

https://www.youtube.com/watch?v=1tiKsKy7lFw

Anonymous , June 20, 2015 at 10:23 pm

There are no such thing as "liberal war hawks", their policies simply based on idiocy where as the result they need to be called "liberals", depending on kind of government that govern a corrupt and bankrupt system. American capitalism is one of those system. These people simply lacking a vision for their understanding that they are "liberal". They might be a social liberalists when it come to people's rights in living the way of life they chose, otherwise it was Bill Clinton who used such "liberal" idea by politicalizing using liberalism for his gain, these people follow the same path, but they will backstab people as they have in the past and as they do now.

michael , June 15, 2015 at 6:26 pm

If a coup had not been instigated by the west on Russia's border, installing Nazis a different more positive outcome might be available, I am quite sure there are Ukrainians who did not want this and wanted a more independent Ukraine, but that is not what happened! How were the Russians supposed to react? The United States has 1000 military bases around the world, border most countries, completely encircle Iran, press right up to Russia's borders and encircle China. Again how are the Russians supposed to React? If this was Mexico the place would be decimated by the Americans and laid to waste just like Iraq!

hbm , June 15, 2015 at 6:41 pm

Looney bleeding-heart Irishwoman with husband Arch-Neocon lunatic Cass Sunstein shaping her opinions and directing her fanaticism.

That's all one really needs to know.

Nibs , June 16, 2015 at 12:28 pm

Exactly, everywhere there is a goy neocon, just look a little further for the malign influence. You can always find it. Soros was here too, also in the attempted "colour revolution" in Macedonia. They intend to make out like bandits, big big money. Of course, as mentioned elsewhere, they are physical cowards and prefer to send ordinary Americans to do their fighting and bleeding for them.
It's somewhat startling after Iraq that they are still there.
But, and forgive the conspiracy angle, I don't believe this is unconnected to the Epstein sex scandal: just see who visited and is therefore target of blackmail.

Paulrevere01 , June 15, 2015 at 6:50 pm

and this warmonger-doppleganger-to-Nuland-Kagen is married to Grand-Censor-Cass-des-Hubris-Sunstein more black eyes for Yale and Harvard.

dahoit , June 16, 2015 at 11:12 am

Yes,the Zionist poison ivy league strikes again,with more Zionist stool pigeons to come.Close down education for sale vs.for knowledge,it produces zombie quislings.

Larry , June 15, 2015 at 7:12 pm

. and even if the U.S. neocon policy in Ukraine succeeds and a shooting war with Russia is somehow avoided, then the American neocons will still neither be sated or placated. Like the bloodthirsty jackals they are, these neocons will be only emboldened, and their next coup in Russia's natural security sphere will be the straw that breaks the nuclear camels' backs. They must be deterred or stopped.

Debbie Menon , June 19, 2015 at 12:33 am

In some tabulations the neocon hijacking of US policy on behalf of Israel has resulted in American gifts to Iran of Iraq, Afghanistan, Pakistan, Syria, Lebanon, and quite likely Israel. And that's for starters. The rest will implode and do we then have a Persian Empire.

It looks like a lot of clouds gathering on the horizon, and I cannot say that I find much fault with Pillar's assessment.

The stakes are too high and for all the macho talk all are rightfully very weary of lighting the match.

I rather doubt that there would be much left for anyone to add to their empire. Miles of ruins and deserts, glazed by nuclear fires do not make for very useful Imperial digs.

I just pray that we are both wrong.

Abe , June 15, 2015 at 7:58 pm

Liberal interventionism is simply left-wing neocon thinking.

The Ambassador from Hell returns to the scene of the crime:
Remarks at the October Palace in Kyiv, Ukraine (June 11, 2015)
http://usun.state.gov/briefing/statements/243583.htm

“Many eyewitnesses among the Maidan protesters reported snipers firing from the Hotel Ukraina during the massacre of the protesters, specifically, about killing eight of them. Bullet holes in trees and electricity poles on the site of the massacre and on the walls of Zhovtnevyi Palace indicate that shots came from the direction of the hotel. There are several similar recorded testimonies of the eyewitnesses among the protesters about shooters in October Palace and other Maidan-controlled buildings.â€

The “Snipers’ Massacre†on the Maidan in Ukraine
By Ivan Katchanovski, Ph.D.

Boris M Garsky , June 15, 2015 at 8:06 pm

There is nothing to say about Powers; no doubt where she gets her marching orders and script. However, there is no excuse for being ignorant on the topic of her rantings. I challenge anyone, anywhere to spontaneously assemble and move 100,000 people, even a few blocks, on 24 hours notice. If you can do it, you are the court magician exemplar. Can't be done. Never has been done; it takes months to years of preparations and organization before implementation. Yanuckovich was the target of assassination; they weren't taking chances. No doubt that the Russians told him to skedaddle; that his life was in danger. Doesn't sound spontaneous to me; sounds like a well planned operation gone wrong- right initially, but wrong eventually. I think that Obama is simply posturing until the west can figure out how to extricate themselves from another fine mess they got themselves into- AGAIN!

F. G. Sanford , June 15, 2015 at 8:26 pm

I remember during my college days watching "student government" personalities – usually rich kids with no real problems – hurl themselves into impassioned frenzies over some issue or another. Usually, they were political science(sic) or psychology majors who were also active in the Speech and Theater Department. The defining characteristic of their existence was to obtain a podium from which to make impassioned pleas to their fellow students in an effort to demonstrate a proclivity for "leadership". Almost any issue would do. Samantha Power reminds me of one of those students – ostensibly seeking a role which, if she could have her way, would make her the prime catalyst in a pivotal issue at the epicenter of a maelstrom that steers the course of human history. That kind of learned, practiced, studied and rehearsed narcissism doesn't always work out so well. Maybe because the most successful examples are actually clinical sufferers of…real narcissism. When Power's 'facts' are compared to reality, the obvious conclusions suggest a range of interpretations from delusional psychosis to criminal perjury. Or, is this a carefully crafted strategy? "Yats" has recently resorted to the last rabbit he can pull out of a hat: he's turned on the printing presses to pay the bills, and a currency collapse is imminent. The Nazi factions are impatient with the regime's lack of progress, the people are disgruntled, those two million refugees have mostly fled to Russia for protection, Northern Europe is being inundated with prostitutes, drug dealers and the creme de la creme of organized crime from the former Warsaw Pact countries, and in the South, refugees from NATO destabilizations in North Africa and the Middle East have become an explosive issue. Racism, nationalism and the resurgence of openly fascist political activity is burgeoning. Europe is boiling with rage. Has Power actually seen the writing on the wall? If so, why not an impassioned campaign to remind the Ukrainians they have broken institutions, corrupt oligarchs, unscrupulous kleptocrats, internal corruption and foreign aggression working against them? And by the way, they've failed to adequately investigate those Nazi atrocities. None of this could POSSIBLY be the fault of U.S. meddling or failed diplomacy. Nope, they brought it on themselves, but we did everything we could to try and help. The makings of TOTAL collapse are at hand, and one little fillip could bring down the whole house of cards. So, "You Ukrainians need to stand tall for your freedoms", and if anything goes wrong, you have nobody to blame but yourselves. Maybe Sammy isn't so delusional after all.

Gregory Kruse , June 16, 2015 at 1:01 pm

She's not delusional, she's just channeling Aleksander Mikhaajlovich Bezobrazov. I guess that does make Obama the Tsar.

Mark , June 15, 2015 at 8:53 pm

All anyone needs to understand about American foreign policy is that anything, including genocide, is not only acceptable but promoted if it serves "America's corporate or favored campaign funding special interests". The only real principle in play for all colluding parties -- corporate, mass media, complicit foreign governments (sycophants) and both major domestic political parties -- is to "win" by compromising or sacrificing everything and everyone required to serve the insatiable hunger for ungodley wealth and (abusive) power accumulation.

The entire American culture has been corrupted by propaganda and what is irrational human nature and instinct concerning these matters -- to be accepted among our peers by following the heard -- this reality is being used by the "ruling class" to play the public like a disposable three dollar fiddle, while they, our "rulers", impose death and destruction along with economic and military tyranny, directly or by proxy, wherever and whenever they can get away with it.

Bob Loblaw , June 15, 2015 at 9:41 pm

Two words
Electromagnetic Pulse
One well placed warhead will cripple us to the point that we destroy ourselves.

While crude islamists can't pull it off a Russian device is within reach.

Abe , June 15, 2015 at 10:48 pm

As a human-rights entrepreneur who is also a tireless advocate of war, Samantha Power is not aberrant. Elite factions of the human-rights industry were long ago normalized within the tightly corseted spectrum of American foreign policy.

Samantha Power and the Weaponization of Human Rights
by Chase Madar
http://www.counterpunch.org/2009/09/10/samantha-power-and-the-weaponization-of-human-rights/

ltr , June 16, 2015 at 11:04 am

Thank you for this important reference.

Abe , June 15, 2015 at 10:58 pm

Power advocates for what she calls "tough, principled, and engaged diplomacy." A more accurate set of adjectives would be "belligerent, hypocritical, and domineering." The thrust of her work is to make perpetual war possible by designating genocide – real or merely ideologically constructed – the supreme international crime, instead of war itself. (Under current international law war itself is the "supreme international crime.") That way the U.S. can perpetually make war for the noblest of purposes without regard for anachronisms like national sovereignty. Is it any wonder Democrats love her?

A Diplomat From Hell: Samantha Power and The Quest For Eternal War
By Michael Smith
http://legalienate.blogspot.com/2013/06/samantha-power-and-imperial-delusion.html

Abe , June 16, 2015 at 12:14 am

The military deployment of US-NATO forces coupled with “non-conventional warfare†â€"including covert intelligence operations, economic sanctions and the thrust of “regime changeâ€â€" is occurring simultaneously in several regions of the world.

Central to an understanding of war, is the media campaign which grants it legitimacy in the eyes of public opinion. War has been provided with a humanitarian mandate under NATO’s “Responsibility to Protect†(R2P). The victims of U.S. led wars are presented as the perpetrators of war.

The Globalization of War
By Michel Chossudovsky
https://www.youtube.com/watch?t=74&v=34j2Rf-IvJQ

onno , June 16, 2015 at 5:35 am

It sounds to me that these neocons have 2 things in common. They were all born post WW II and have not experienced any war at home and grew up in a nice suburban area without street crimes. They NEVER were confronted with families who lost their loved ones in US 'lost' wars in Vietnam, Iraq, Afghanistan that were initiated WITHOUT UN approval and brought home young soldiers who had lost their limps and were handicapped for the rest of their lives. But just to keep US defence industry turning out hefty profits.

Secondly, they have watched to many Hollywood movies showing the superior US army beating the 'evil' empire (Reagan) meaning Soviet Union. USA never honoured their agreements with Gorbachev to keep NATO out of Eastern Europe. President Putin learned his lessons, he built a strong military with technological advanced equipment so his country will NOT be run over again by the West such as Napoleon and Hitler did murdering 25 million Russians. President Putin and the Russians want to live in peace they have suffered too much in the past.

It's US and its vassal NATO aggression in the World and now in Ukraine that make the Russian show their power and demonstrating 'don't fool with us' . US MSM propaganda in Europe is losing its effects and people realizing US geopolitical or colonization aggression in the world while losing US dominance as well. Like Abraham Lincoln said: You can lie to some people all the time and you can lie to all the people some time, but you cannot lie to all the people all the time! However with today's powerful media TV and radio it will take some more time. But Russia's RT News is changing this and gives the audience News contradicting US MSM propaganda such as NYT and WP which have been brainwashing the public for so long at the discretion of Washington's neocons. And US taxpayers are paying the bill, wake up America!

Peter Loeb , June 16, 2015 at 6:46 am

DISTRACTION FROM PALESTINIAN/ISRAELI CONFLICT

Excellent profiles and analyses by Mr. Parry as we have all come
to expect.

"[Power] added that the United Nations focus on Ukraine in the
Security Council.." from Parry above.

Here one MUST add the unsaid "and never, never on Palestine/
Israel"! After all, the US has continued time and again to block
investigation by the Security Council of Israeli actions in that
sphere. Evidently Israel maintains according to Power and
many others that Israel with US support are by definition exempt
from any and all rules of international law, application to save
lives in Palestine, attempts to establish a Mideast Nuclear
Free Zone and much much more. The distraction provided
by Ukraine is not only significant for the people of Ukraine but
is cleverly designed to distract all world and domestic opinion
from the atrocities carried on daily by Israel in Palestine both
past, present and future.

-- -Peter Loeb, Boston, MA, USA

Gregory Kruse , June 16, 2015 at 10:28 am

She's like John Bolton in drag.

Abe , June 16, 2015 at 5:52 pm

She is the walrus, goo goo g'joob.

Sammy too "seems averse to compromise, and is apparently committed to the belief that the U.N. and international law undermine U.S. interests" (aka Israeli interests)
http://www.newyorker.com/magazine/2005/03/21/boltonism

"“Remarks such as the references to the 1967 borders show Obama’s continuing lack of real appreciation for Israel’s security.†-- Bolton, 2011, interview for National Review online

"There will never be a sunset on America’s commitment to Israel’s security. Never.†-- Power, 2015, speech at American Israel Public Affairs Committee (AIPAC) conference

ltr , June 16, 2015 at 11:02 am

What a thoroughly amoral person Samantha Power is, all pretense, all hypocrisy, all for selectively determining which lives are worth allowing.

Wm. Boyce , June 16, 2015 at 11:14 am

Another example of the lack of differences between Democrats and Republicans when it comes to the empire's foreign policy. It's all about controlling regions and resources, and fueling the U.S. arms industry.

Brendan , June 16, 2015 at 4:29 pm

Samantha Power: "The facts tell a different story. As you remember well, then-President Yanukovych abandoned Kyiv of his own accord, only hours after signing an agreement with opposition leaders that would have led to early elections and democratic reforms."

There are some glaring omissions in Power's 'facts'. She doesn't explain why Yanukovych suddenly fled Kyiv, so soon after an agreement with opposition leaders that allowed him to remain as president for several more months.

She didn't mention the rejection of that agreement by the far-right militias who threatened to remove Yanukovych from office by force if he did not resign by 10 am that day.

That threat might explain his sudden departure. It also might also indicate that his departure wasn't really "of his own accord".

Brendan , June 16, 2015 at 4:34 pm

Samantha Power: "And it was only after Yanukovych fled the capital that 328 of the 447 members of the democratically-elected Rada voted to strip him of his powers "

The problem with that was that the members of parliament did not have any authority to strip the president of his powers in the way they did. The only possible conditions to remove a presidential from office are listed in the Ukrainian constitution:

Article 108. The President of Ukraine shall exercise his powers until the assumption of office by the newly elected President of Ukraine.
The authority of the President of Ukraine shall be subject to an early termination in cases of:
1) resignation;
2) inability to exercise presidential authority for health reasons;
3) removal from office by the procedure of impeachment;
4) his/her death.

Yanukovych was not dead and neither was he unable to exercise his presidential authority due to health reasons. He never resigned, and in fact continued to state that he was the only legitimate president.

He was not removed from office by the procedure of impeachment, which includes a number of stages, as described in Article 111 of the constitution (see link below). The decision on the impeachment must be adopted by at least three-quarters of the members of parliament. The number given by Samantha Power was less than three-quarters.

Samantha Power, along with the vast majority of the western media, described the overthrow of President Yanukovych as a normal democratic vote by parliament. To use Mrs Power's words, "The facts tell a different story". The facts say that it was an unconstitutional coup.

http://web.archive.org/web/20140321165941/http://www.president.gov.ua/en/content/chapter05.html
http://web.archive.org/web/20140405140914/http://www.president.gov.ua/en/news/30130.html

cathy , June 22, 2015 at 1:29 am

All of these conflicts seem to be designed to clean out, not only the people, but entire cultures in the regions.

Americans should take heed. What we see the oligarchic criminals in the U.S. doing overseas, is coming to a town near you, or maybe your own town. Why else do you think they have been dismantling the Constitution and militarizing communities? It looks like it will be sooner than expected, too.

hammersmith , June 23, 2015 at 10:31 pm

The Bush administration was "little boys on Big Wheels," as one former member described it; The Obama administration is little girls on Big Wheels.

[Mar 23, 2018] So on the 15th anniversary of the Iraq debacle, a neocon who cheered it on is rewarded with a national security post where he can cue up the attack on Iran that was always the ultimate prize for Israel's US stooges?

Mar 22, 2018 | www.nakedcapitalism.com


Jim Haygood , , March 22, 2018 at 7:31 pm

So on the 15th anniversary of the Iraq debacle, a neocon who cheered it on is rewarded with a national security post where he can cue up the attack on Iran that was always the ultimate prize for Israel's US stooges?

Guess we'll be out marching again, just like last time. Bolton's walrus mustache is the 21st century version of Adolph H's toothbrush mustache. Down with the Persian Untermenschen! /sarc

Carolinian , , March 22, 2018 at 8:50 pm

Of course while working for Cheney Bolton was pretty confident about getting Dubya to start a war with Iran and that didn't happen. Here's a backgrounder that suggests that Bolton is tight with both Adelson and the Mossad so one way of looking at this has Russia fading as a target and Iran falling under the bulls eye. Trump's recent friendly phone call with Putin was contrary to instructions from his NSC and therefore presumably McMaster.

http://www.theamericanconservative.com/articles/why-a-john-bolton-appointment-is-scarier-than-you-think-mcmaster-trump/

Looked at optimistically it could be out of the frying pan and into a smaller frying pan (for us if not for Iran but that remains to be seen).

Of course looked at pessimistically it's terrible news but if the public and Congress are afraid of Trump gratuitously starting a new war then perhaps they should take away his power to do so. Seems the Constitution did have something to say about that.

barrisj , , March 22, 2018 at 10:21 pm

Tol'ja so these miserable wretches simply cannot die resurrection a promise any time a misfit administration takes power all that audition time on FoxNews paid off Trump stripping the cable channels of right-wing bloviators "best people for the jawb", don't you know.

[Feb 20, 2018] For the life of me I cannot figure why Americans want a war/conflict with Russia

Highly recommended!
This post summaries several "alternative" views that many suspect, but can't express as clearly as here.
Feb 20, 2018 | www.moonofalabama.org

Palloy | Feb 20, 2018 8:52:02 PM | 34

@4 "For the life of me I cannot figure why Americans want a war/conflict with Russia."

Ever since US Crude Oil peaked its production in 1970, the US has known that at some point the oil majors would have their profitability damaged, "assets" downgraded, and borrowing capacity destroyed. At this point their shares would become worthless and they would become bankrupt. The contagion from this would spread to transport businesses, plastics manufacture, herbicides and pesticide production and a total collapse of Industrial Civilisation.

In anticipation of increasing Crude Oil imports, Nixon stopped the convertibility of Dollars into Gold, thus making the Dollar entirely fiat, allowing them to print as much of the currency as they needed.

They also began a system of obscuring oil production data, involving the DoE's EIA and the OECD's IEA, by inventing an ever-increasing category of Undiscovered Oilfields in their predictions, and combining Crude Oil and Condensate (from gas fields) into one category (C+C) as if they were the same thing. As well the support of the ethanol-from-corn industry began, even though it was uneconomic. The Global Warming problem had to be debunked, despite its sound scientific basis. Energy-intensive manufacturing work was off-shored to cheap labour+energy countries, and Just-in-Time delivery systems were honed.

In 2004 the price of Crude Oil rose from $28 /barrel up to $143 /b in mid-2008. This demonstrated that there is a limit to how much business can pay for oil (around $100 /b). Fracking became marginally economic at these prices, but the frackers never made a profit as over-production meant prices fell to about $60 /b. The Government encourages this destructive industry despite the fact it doesn't make any money, because the alternative is the end of Industrial Civilisation.

Eventually though, there must come a time when there is not enough oil to power all the cars and trucks, bulldozers, farm tractors, airplanes and ships, as well as manufacture all the wind turbines and solar panels and electric vehicles, as well as the upgraded transmission grid. At that point, the game will be up, and it will be time for WW3. So we need to line up some really big enemies, and develop lots of reasons to hate them.

Thus you see the demonisation of Russia, China, Iran and Venezuela for reasons that don't make sense from a normal perspective.

[Feb 03, 2018] JP Morgan Oil Could Hit $78 Within Months

Highly recommended!
Feb 03, 2018 | oilprice.com

J.P. Morgan beat all other investment banks in their forecasts for the price of Brent crude this year, setting its projection at US$70 a barrel. To compare, the second most bullish forecast on Brent is from Bank of America at US$64 a barrel, while Goldman is even more cautious and has not yet upgraded its Brent price forecast from its US$62 a barrel prediction.

J.P. Morgan's reasoning is the same as the other banks': the global economy will continue to expand, which will stimulate growth in oil demand and healthy prices. This dynamic will also drive WTI prices higher, with the average for the year seen at US$65.63 a barrel by J.P. Morgan's oil analysts.

Despite the upbeat mood, the investment bank's analysts do recognize the danger of growing U.S. and other non-OPEC production. So, while their price forecasts are for the average level of Brent and WTI this year, the bank's senior oil analyst Abhishek Deshpande noted in an interview with CNBC that "This 2018 is going to be a year of two halves. The first half is going to be a ... half of demand, and the second half is more about supply, which is coming back in reaction to the higher oil prices." The first half of the year will be so strong, Deshpande believes, that Brent could hit US$78 a barrel in the first or the second quarter. Yet in the second half of the year, drillers will increase their production in response to the higher prices, and this higher production may weigh on the benchmarks.

There is also something else that may occur before too long: a price correction resulting from the record-high bullish positions on the six most popular oil-related futures contracts. In his latest column , Reuters' John Kemp warned that despite the already record number of long bets on these six contracts, money managers are continuing to place more, with the number of net long bets on Brent alone rising by an equivalent of 14 million barrels in the week to January 23. In total, net long bets on the six contracts swelled by 44 million barrels to 1.484 billion barrels. More Top Reads From Oilprice.com:

Mamdouh G Salameh on January 30 2018 said:
The positive oil fundamentals of the global oil market can easily support an oil price ranging from $70-$75 a barrel in 2018. If similar positive market conditions continue into 2019, then we can see oil prices rising to $80/barrel or even higher in 2019 and hitting $100 or higher by 2020. A $70/barrel will be the for for Brent oil prices in 2018.

Prices will also be supported by a fast re-balancing of the market and also by an understanding between Saudi Arabia and Russia to maintain the OPEC/non-OPEC production cut agreement well beyond 2018 with some adjustments to reflect changing market conditions.

On the supply side, the global oil market will ignore exaggerated claims by the EIA and IEA about US shale oil production averaging 10.3 million barrels a day (mbd) in 2018 and rising to 11 mbd by 2019. My projection for US shale oil production in 2018 is 9.25 mbd made up of 5.10 mbd of shale oil and 4.15 mbd of conventional oil. My projection allows for a 5% depletion in US conventional wells.

The oil price has to rise beyond $100/barrel before one can talk about a price correction. I have always expressed the view that a fair price is $100-$130/barrel. Such a price will provide a great impetus to the global economy.

Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London

Citizen Oil on January 30 2018 said:
The daily oil prediction nonsense. Wasn't it just a few months ago the daily nonsense was "lower for longer" LOL Haven't heard that one for a while. Predictions we'd be in a $ 40 to $ 50 oil environment for years if not decades . Oh yeah, then we'd be at $ 10 when everyone drives an EV.

[Dec 22, 2017] Beyond Cynicism America Fumbles Towards Kafka s Castle by James Howard Kunstler

Highly recommended!
Notable quotes:
"... With the election of 2016, symptoms of the long emergency seeped into the political system. Disinformation rules. There is no coherent consensus about what is happening and no coherent proposals to do anything about it. The two parties are mired in paralysis and dysfunction and the public's trust in them is at epic lows. Donald Trump is viewed as a sort of pirate president, a freebooting freak elected by accident, "a disrupter" of the status quo at best and at worst a dangerous incompetent playing with nuclear fire. A state of war exists between the White House, the permanent D.C. bureaucracy, and the traditional news media. Authentic leadership is otherwise AWOL. Institutions falter. The FBI and the CIA behave like enemies of the people. ..."
"... They chatter about electric driverless car fleets, home delivery drone services, and as-yet-undeveloped modes of energy production to replace problematic fossil fuels, while ignoring the self-evident resource and capital constraints now upon us and even the laws of physics -- especially entropy , the second law of thermodynamics. Their main mental block is their belief in infinite industrial growth on a finite planet, an idea so powerfully foolish that it obviates their standing as technocrats. ..."
"... The universities beget a class of what Nassim Taleb prankishly called "intellectuals-yet-idiots," hierophants trafficking in fads and falsehoods, conveyed in esoteric jargon larded with psychobabble in support of a therapeutic crypto-gnostic crusade bent on transforming human nature to fit the wished-for utopian template of a world where anything goes. In fact, they have only produced a new intellectual despotism worthy of Stalin, Mao Zedong, and Pol Pot. ..."
"... Until fairly recently, the Democratic Party did not roll that way. It was right-wing Republicans who tried to ban books, censor pop music, and stifle free expression. If anything, Democrats strenuously defended the First Amendment, including the principle that unpopular and discomforting ideas had to be tolerated in order to protect all speech. Back in in 1977 the ACLU defended the right of neo-Nazis to march for their cause (National Socialist Party of America v. Village of Skokie, 432 U.S. 43). ..."
"... This is the recipe for what we call identity politics, the main thrust of which these days, the quest for "social justice," is to present a suit against white male privilege and, shall we say, the horse it rode in on: western civ. A peculiar feature of the social justice agenda is the wish to erect strict boundaries around racial identities while erasing behavioral boundaries, sexual boundaries, and ethical boundaries. Since so much of this thought-monster is actually promulgated by white college professors and administrators, and white political activists, against people like themselves, the motives in this concerted campaign might appear puzzling to the casual observer. ..."
"... The evolving matrix of rackets that prompted the 2008 debacle has only grown more elaborate and craven as the old economy of stuff dies and is replaced by a financialized economy of swindles and frauds . Almost nothing in America's financial life is on the level anymore, from the mendacious "guidance" statements of the Federal Reserve, to the official economic statistics of the federal agencies, to the manipulation of all markets, to the shenanigans on the fiscal side, to the pervasive accounting fraud that underlies it all. Ironically, the systematic chiseling of the foundering middle class is most visible in the rackets that medicine and education have become -- two activities that were formerly dedicated to doing no harm and seeking the truth ! ..."
"... Um, forgotten by Kunstler is the fact that 1965 was also the year when the USA reopened its doors to low-skilled immigrants from the Third World – who very quickly became competitors with black Americans. And then the Boom ended, and corporate American, influenced by thinking such as that displayed in Lewis Powell's (in)famous 1971 memorandum, decided to claw back the gains made by the working and middle classes in the previous 3 decades. ..."
"... "Wow – is there ever negative!" ..."
"... You also misrepresent reality to your readers. No, the black underclass is not larger, more dysfunctional, and more alienated now than in the 1960's, when cities across the country burned and machine guns were stationed on the Capitol steps. The "racial divide" is not "starker now than ever"; that's just preposterous to anyone who was alive then. And nobody I've ever known felt "shame" over the "outcome of the civil rights campaign". I know nobody who seeks to "punish and humiliate" the 'privileged'. ..."
"... My impression is that what Kunstler is doing here is diagnosing the long crisis of a decadent liberal post-modernity, and his stance is not that of either of the warring sides within our divorced-from-reality political establishment, neither that of the 'right' or 'left.' Which is why, logically, he published it here. National Review would never have accepted this piece ..."
"... "Globalization has acted, meanwhile, as a great leveler. It destroyed what was left of the working class -- the lower-middle class -- which included a great many white Americans who used to be able to support a family with simple labor." ..."
"... Young black people are told by their elders how lucky they are to grow up today because things are much better than when grandpa was our age and we all know this history.\ ..."
"... It's clear that this part of the article was written from absolute ignorance of the actual black experience with no interest in even looking up some facts. Hell, Obama even gave a speech at Howard telling graduates how lucky they were to be young and black Today compared to even when he was their age in the 80's! ..."
"... E.g. Germany. Germany is anything but perfect and its recent government has screwed up with its immigration policies. But Germany has a high standard of living, an educated work force (including unions and skilled crafts-people), a more rational distribution of wealth and high quality universal health care that costs 47% less per capita than in the U.S. and with no intrinsic need to maraud around the planet wasting gobs of taxpayer money playing Global Cop. ..."
"... The larger subtext is that the U.S. house of cards was planned out and constructed as deliberately as the German model was. Only the objective was not to maximize the health and happiness of the citizenry, but to line the pockets of the parasitic Elites. (E.g., note that Mitch McConnell has been a government employee for 50 years but somehow acquired a net worth of over $10 Million.) ..."
Dec 12, 2017 | www.theamericanconservative.com

On America's 'long emergency' of recession, globalization, and identity politics.

Can a people recover from an excursion into unreality? The USA's sojourn into an alternative universe of the mind accelerated sharply after Wall Street nearly detonated the global financial system in 2008. That debacle was only one manifestation of an array of accumulating threats to the postmodern order, which include the burdens of empire, onerous debt, population overshoot, fracturing globalism, worries about energy, disruptive technologies, ecological havoc, and the specter of climate change.

A sense of gathering crisis, which I call the long emergency , persists. It is systemic and existential. It calls into question our ability to carry on "normal" life much farther into this century, and all the anxiety that attends it is hard for the public to process. It manifested itself first in finance because that was the most abstract and fragile of all the major activities we depend on for daily life, and therefore the one most easily tampered with and shoved into criticality by a cadre of irresponsible opportunists on Wall Street. Indeed, a lot of households were permanently wrecked after the so-called Great Financial Crisis of 2008, despite official trumpet blasts heralding "recovery" and the dishonestly engineered pump-up of capital markets since then.

With the election of 2016, symptoms of the long emergency seeped into the political system. Disinformation rules. There is no coherent consensus about what is happening and no coherent proposals to do anything about it. The two parties are mired in paralysis and dysfunction and the public's trust in them is at epic lows. Donald Trump is viewed as a sort of pirate president, a freebooting freak elected by accident, "a disrupter" of the status quo at best and at worst a dangerous incompetent playing with nuclear fire. A state of war exists between the White House, the permanent D.C. bureaucracy, and the traditional news media. Authentic leadership is otherwise AWOL. Institutions falter. The FBI and the CIA behave like enemies of the people.

Bad ideas flourish in this nutrient medium of unresolved crisis. Lately, they actually dominate the scene on every side. A species of wishful thinking that resembles a primitive cargo cult grips the technocratic class, awaiting magical rescue remedies that promise to extend the regime of Happy Motoring, consumerism, and suburbia that makes up the armature of "normal" life in the USA. They chatter about electric driverless car fleets, home delivery drone services, and as-yet-undeveloped modes of energy production to replace problematic fossil fuels, while ignoring the self-evident resource and capital constraints now upon us and even the laws of physics -- especially entropy , the second law of thermodynamics. Their main mental block is their belief in infinite industrial growth on a finite planet, an idea so powerfully foolish that it obviates their standing as technocrats.

The non-technocratic cohort of the thinking class squanders its waking hours on a quixotic campaign to destroy the remnant of an American common culture and, by extension, a reviled Western civilization they blame for the failure in our time to establish a utopia on earth. By the logic of the day, "inclusion" and "diversity" are achieved by forbidding the transmission of ideas, shutting down debate, and creating new racially segregated college dorms. Sexuality is declared to not be biologically determined, yet so-called cis-gendered persons (whose gender identity corresponds with their sex as detected at birth) are vilified by dint of not being "other-gendered" -- thereby thwarting the pursuit of happiness of persons self-identified as other-gendered. Casuistry anyone?

The universities beget a class of what Nassim Taleb prankishly called "intellectuals-yet-idiots," hierophants trafficking in fads and falsehoods, conveyed in esoteric jargon larded with psychobabble in support of a therapeutic crypto-gnostic crusade bent on transforming human nature to fit the wished-for utopian template of a world where anything goes. In fact, they have only produced a new intellectual despotism worthy of Stalin, Mao Zedong, and Pol Pot.

In case you haven't been paying attention to the hijinks on campus -- the attacks on reason, fairness, and common decency, the kangaroo courts, diversity tribunals, assaults on public speech and speakers themselves -- here is the key take-away: it's not about ideas or ideologies anymore; it's purely about the pleasures of coercion, of pushing other people around. Coercion is fun and exciting! In fact, it's intoxicating, and rewarded with brownie points and career advancement. It's rather perverse that this passion for tyranny is suddenly so popular on the liberal left.

Until fairly recently, the Democratic Party did not roll that way. It was right-wing Republicans who tried to ban books, censor pop music, and stifle free expression. If anything, Democrats strenuously defended the First Amendment, including the principle that unpopular and discomforting ideas had to be tolerated in order to protect all speech. Back in in 1977 the ACLU defended the right of neo-Nazis to march for their cause (National Socialist Party of America v. Village of Skokie, 432 U.S. 43).

The new and false idea that something labeled "hate speech" -- labeled by whom? -- is equivalent to violence floated out of the graduate schools on a toxic cloud of intellectual hysteria concocted in the laboratory of so-called "post-structuralist" philosophy, where sundry body parts of Michel Foucault, Jacques Derrida, Judith Butler, and Gilles Deleuze were sewn onto a brain comprised of one-third each Thomas Hobbes, Saul Alinsky, and Tupac Shakur to create a perfect Frankenstein monster of thought. It all boiled down to the proposition that the will to power negated all other human drives and values, in particular the search for truth. Under this scheme, all human relations were reduced to a dramatis personae of the oppressed and their oppressors, the former generally "people of color" and women, all subjugated by whites, mostly males. Tactical moves in politics among these self-described "oppressed" and "marginalized" are based on the credo that the ends justify the means (the Alinsky model).

This is the recipe for what we call identity politics, the main thrust of which these days, the quest for "social justice," is to present a suit against white male privilege and, shall we say, the horse it rode in on: western civ. A peculiar feature of the social justice agenda is the wish to erect strict boundaries around racial identities while erasing behavioral boundaries, sexual boundaries, and ethical boundaries. Since so much of this thought-monster is actually promulgated by white college professors and administrators, and white political activists, against people like themselves, the motives in this concerted campaign might appear puzzling to the casual observer.

I would account for it as the psychological displacement among this political cohort of their shame, disappointment, and despair over the outcome of the civil rights campaign that started in the 1960s and formed the core of progressive ideology. It did not bring about the hoped-for utopia. The racial divide in America is starker now than ever, even after two terms of a black president. Today, there is more grievance and resentment, and less hope for a better future, than when Martin Luther King made the case for progress on the steps of the Lincoln Memorial in 1963. The recent flash points of racial conflict -- Ferguson, the Dallas police ambush, the Charleston church massacre, et cetera -- don't have to be rehearsed in detail here to make the point that there is a great deal of ill feeling throughout the land, and quite a bit of acting out on both sides.

The black underclass is larger, more dysfunctional, and more alienated than it was in the 1960s. My theory, for what it's worth, is that the civil rights legislation of 1964 and '65, which removed legal barriers to full participation in national life, induced considerable anxiety among black citizens over the new disposition of things, for one reason or another. And that is exactly why a black separatism movement arose as an alternative at the time, led initially by such charismatic figures as Malcolm X and Stokely Carmichael. Some of that was arguably a product of the same youthful energy that drove the rest of the Sixties counterculture: adolescent rebellion. But the residue of the "Black Power" movement is still present in the widespread ambivalence about making covenant with a common culture, and it has only been exacerbated by a now long-running "multiculturalism and diversity" crusade that effectively nullifies the concept of a national common culture.

What follows from these dynamics is the deflection of all ideas that don't feed a narrative of power relations between oppressors and victims, with the self-identified victims ever more eager to exercise their power to coerce, punish, and humiliate their self-identified oppressors, the "privileged," who condescend to be abused to a shockingly masochistic degree. Nobody stands up to this organized ceremonial nonsense. The punishments are too severe, including the loss of livelihood, status, and reputation, especially in the university. Once branded a "racist," you're done. And venturing to join the oft-called-for "honest conversation about race" is certain to invite that fate.

Globalization has acted, meanwhile, as a great leveler. It destroyed what was left of the working class -- the lower-middle class -- which included a great many white Americans who used to be able to support a family with simple labor. Hung out to dry economically, this class of whites fell into many of the same behaviors as the poor blacks before them: absent fathers, out-of-wedlock births, drug abuse. Then the Great Financial Crisis of 2008 wiped up the floor with the middle-middle class above them, foreclosing on their homes and futures, and in their desperation many of these people became Trump voters -- though I doubt that Trump himself truly understood how this all worked exactly. However, he did see that the white middle class had come to identify as yet another victim group, allowing him to pose as their champion.

The evolving matrix of rackets that prompted the 2008 debacle has only grown more elaborate and craven as the old economy of stuff dies and is replaced by a financialized economy of swindles and frauds . Almost nothing in America's financial life is on the level anymore, from the mendacious "guidance" statements of the Federal Reserve, to the official economic statistics of the federal agencies, to the manipulation of all markets, to the shenanigans on the fiscal side, to the pervasive accounting fraud that underlies it all. Ironically, the systematic chiseling of the foundering middle class is most visible in the rackets that medicine and education have become -- two activities that were formerly dedicated to doing no harm and seeking the truth !

Life in this milieu of immersive dishonesty drives citizens beyond cynicism to an even more desperate state of mind. The suffering public ends up having no idea what is really going on, what is actually happening. The toolkit of the Enlightenment -- reason, empiricism -- doesn't work very well in this socioeconomic hall of mirrors, so all that baggage is discarded for the idea that reality is just a social construct, just whatever story you feel like telling about it. On the right, Karl Rove expressed this point of view some years ago when he bragged, of the Bush II White House, that "we make our own reality." The left says nearly the same thing in the post-structuralist malarkey of academia: "you make your own reality." In the end, both sides are left with a lot of bad feelings and the belief that only raw power has meaning.

Erasing psychological boundaries is a dangerous thing. When the rackets finally come to grief -- as they must because their operations don't add up -- and the reckoning with true price discovery commences at the macro scale, the American people will find themselves in even more distress than they've endured so far. This will be the moment when either nobody has any money, or there is plenty of worthless money for everyone. Either way, the functional bankruptcy of the nation will be complete, and nothing will work anymore, including getting enough to eat. That is exactly the moment when Americans on all sides will beg someone to step up and push them around to get their world working again. And even that may not avail.

James Howard Kunstler's many books include The Geography of Nowhere, The Long Emergency, Too Much Magic: Wishful Thinking, Technology, and the Fate of the Nation , and the World Made by Hand novel series. He blogs on Mondays and Fridays at Kunstler.com .

Whine Merchant December 20, 2017 at 10:49 pm

Wow – is there ever negative!
Celery , says: December 20, 2017 at 11:33 pm
I think I need to go listen to an old-fashioned Christmas song now.

The ability to be financially, or at least resource, sustaining is the goal of many I know since we share a lack of confidence in any of our institutions. We can only hope that God might look down with compassion on us, but He's not in the practical plan of how to feed and sustain ourselves when things play out to their inevitable end. Having come from a better time, we joke about our dystopian preparations, self-conscious about our "overreaction," but preparing all the same.

Merry Christmas!

Fran Macadam , says: December 20, 2017 at 11:55 pm
Look at it this way: Germany had to be leveled and its citizens reduced to abject penury, before Volkswagen could become the world's biggest car company, and autobahns built throughout the world. It will be darkest before the dawn, and hopefully, that light that comes after, won't be the miniature sunrise of a nuclear conflagration.
KD , says: December 21, 2017 at 6:02 am
Eat, Drink, and be Merry, you can charge it on your credit card!
Rock Stehdy , says: December 21, 2017 at 6:38 am
Hard words, but true. Kunstler is always worth reading for his common-sense wisdom.
Helmut , says: December 21, 2017 at 7:04 am
An excellent summary and bleak reminder of what our so-called civilization has become. How do we extricate ourselves from this strange death spiral?
I have long suspected that we humans are creatures of our own personal/group/tribal/national/global fables and mythologies. We are compelled by our genes, marrow, and blood to tell ourselves stories of our purpose and who we are. It is time for new mythologies and stories of "who we are". This bizarre hyper-techno all-for-profit world needs a new story.
Liam , says: December 21, 2017 at 7:38 am
"The black underclass is larger, more dysfunctional, and more alienated than it was in the 1960s. My theory, for what it's worth, is that the civil rights legislation of 1964 and '65, which removed legal barriers to full participation in national life, induced considerable anxiety among black citizens over the new disposition of things, for one reason or another."

Um, forgotten by Kunstler is the fact that 1965 was also the year when the USA reopened its doors to low-skilled immigrants from the Third World – who very quickly became competitors with black Americans. And then the Boom ended, and corporate American, influenced by thinking such as that displayed in Lewis Powell's (in)famous 1971 memorandum, decided to claw back the gains made by the working and middle classes in the previous 3 decades.

Peter , says: December 21, 2017 at 8:34 am
I have some faith that the American people can recover from an excursion into unreality. I base it on my own survival to the end of this silly rant.
SteveM , says: December 21, 2017 at 9:08 am
Re: Whine Merchant, "Wow – is there ever negative!"

Can't argue with the facts

P.S. Merry Christmas.

Dave Wright , says: December 21, 2017 at 9:22 am
Hey Jim, I know you love to blame Wall Street and the Republicans for the GFC. I remember back in '08 you were urging Democrats to blame it all on Republicans to help Obama win. But I have news for you. It wasn't Wall Street that caused the GFC. The crisis actually had its roots in the Clinton Administration's use of the Community Reinvestment Act to pressure banks to relax mortgage underwriting standards. This was done at the behest of left wing activists who claimed (without evidence, of course) that the standards discriminated against minorities. The result was an effective repeal of all underwriting standards and an explosion of real estate speculation with borrowed money. Speculation with borrowed money never ends well.

I have to laugh, too, when you say that it's perverse that the passion for tyranny is popular on the left. Have you ever heard of the French Revolution? How about the USSR? Communist China? North Korea? Et cetera.

Leftism is leftism. Call it Marxism, Communism, socialism, liberalism, progressivism, or what have you. The ideology is the same. Only the tactics and methods change. Destroy the evil institutions of marriage, family, and religion, and Man's innate goodness will shine forth, and the glorious Godless utopia will naturally result.

Of course, the father of lies is ultimately behind it all. "He was a liar and a murderer from the beginning."

When man turns his back on God, nothing good happens. That's the most fundamental problem in Western society today. Not to say that there aren't other issues, but until we return to God, there's not much hope for improvement.

NoahK , says: December 21, 2017 at 10:15 am
It's like somebody just got a bunch of right-wing talking points and mashed them together into one incohesive whole. This is just lazy.
Andrew Imlay , says: December 21, 2017 at 10:36 am
Hmm. I just wandered over here by accident. Being a construction contractor, I don't know enough about globalization, academia, or finance to evaluate your assertions about those realms. But being in a biracial family, and having lived, worked, and worshiped equally in white and black communities, I can evaluate your statements about social justice, race, and civil rights. Long story short, you pick out fringe liberal ideas, misrepresent them as mainstream among liberals, and shoot them down. Casuistry, anyone?

You also misrepresent reality to your readers. No, the black underclass is not larger, more dysfunctional, and more alienated now than in the 1960's, when cities across the country burned and machine guns were stationed on the Capitol steps. The "racial divide" is not "starker now than ever"; that's just preposterous to anyone who was alive then. And nobody I've ever known felt "shame" over the "outcome of the civil rights campaign". I know nobody who seeks to "punish and humiliate" the 'privileged'.

I get that this column is a quick toss-off before the holiday, and that your strength is supposed to be in your presentation, not your ideas. For me, it's a helpful way to rehearse debunking common tropes that I'll encounter elsewhere.

But, really, your readers deserve better, and so do the people you misrepresent. We need bad liberal ideas to be critiqued while they're still on the fringe. But by calling fringe ideas mainstream, you discredit yourself, misinform your readers, and contribute to stereotypes both of liberals and of conservatives. I'm looking for serious conservative critiques that help me take a second look at familiar ideas. I won't be back.

peter in boston , says: December 21, 2017 at 10:48 am
Love Kunstler -- and love reading him here -- but he needs a strong editor to get him to turn a formless harangue into clear essay.
Someone in the crowd , says: December 21, 2017 at 11:07 am
I disagree, NoahK, that the whole is incohesive, and I also disagree that these are right-wing talking points.

The theme of this piece is the long crisis in the US, its nature and causes. At no point does this essay, despite it stream of consciousness style, veer away from that theme. Hence it is cohesive.

As for the right wing charge, though it is true, to be sure, that Kunstler's position is in many respects classically conservative -- he believes for example that there should be a national consensus on certain fundamentals, such as whether or not there are two sexes (for the most part), or, instead, an infinite variety of sexes chosen day by day at whim -- you must have noticed that he condemned both the voluntarism of Karl Rove AND the voluntarism of the post-structuralist crowd.

My impression is that what Kunstler is doing here is diagnosing the long crisis of a decadent liberal post-modernity, and his stance is not that of either of the warring sides within our divorced-from-reality political establishment, neither that of the 'right' or 'left.' Which is why, logically, he published it here. National Review would never have accepted this piece. QED.

Jon , says: December 21, 2017 at 11:10 am
This malaise is rooted in human consciousness that when reflecting on itself celebrating its capacity for apperception suffers from the tension that such an inquiry, such an inward glance produces. In a word, the capacity for the human being to be aware of his or herself as an intelligent being capable of reflecting on aspects of reality through the artful manipulation of symbols engenders this tension, this angst.

Some will attempt to extinguish this inner tension through intoxication while others through the thrill of war, and it has been played out since the dawn of man and well documented when the written word emerged.

The malaise which Mr. Kunstler addresses as the problem of our times is rooted in our existence from time immemorial. But the problem is not only existential but ontological. It is rooted in our being as self-aware creatures. Thus no solution avails itself as humanity in and of itself is the problem. Each side (both right and left) seeks its own anodyne whether through profligacy or intolerance, and each side mans the barricades to clash experiencing the adrenaline rush that arises from the perpetual call to arms.

Joe the Plutocrat , says: December 21, 2017 at 11:27 am
"Globalization has acted, meanwhile, as a great leveler. It destroyed what was left of the working class -- the lower-middle class -- which included a great many white Americans who used to be able to support a family with simple labor."

And to whom do we hand the tab for this? Globalization is a word. It is a concept, a talking point. Globalization is oligarchy by another name. Unfortunately, under-educated, deplorable, Americans; regardless of party affiliation/ideology have embraced. And the most ironic part?

Russia and China (the eventual surviving oligarchies) will eventually have to duke it out to decide which superpower gets to make the USA it's b*tch (excuse prison reference, but that's where we're headed folks).

And one more irony. Only in American, could Christianity, which was grew from concepts like compassion, generosity, humility, and benevolence; be re-branded and 'weaponized' to further greed, bigotry, misogyny, intolerance, and violence/war. Americans fiddled (over same sex marriage, abortion, who has to bake wedding cakes, and who gets to use which public restroom), while the oligarchs burned the last resources (natural, financial, and even legal).

The scientist 880 , says: December 21, 2017 at 11:48 am
"Today, there is more grievance and resentment, and less hope for a better future, than when Martin Luther King made the case for progress on the steps of the Lincoln Memorial in 1963."

Spoken like a white guy who has zero contact with black people. I mean, even a little bit of research and familiarity would give lie to the idea that blacks are more pessimistic about life today than in the 1960's.

Black millenials are the most optimistic group of Americans about the future. Anyone who has spent any significant time around older black people will notice that you don't hear the rose colored memories of the past. Black people don't miss the 1980's, much less the 1950's. Young black people are told by their elders how lucky they are to grow up today because things are much better than when grandpa was our age and we all know this history.\

It's clear that this part of the article was written from absolute ignorance of the actual black experience with no interest in even looking up some facts. Hell, Obama even gave a speech at Howard telling graduates how lucky they were to be young and black Today compared to even when he was their age in the 80's!

Here is the direct quote;

"In my inaugural address, I remarked that just 60 years earlier, my father might not have been served in a D.C. restaurant -- at least not certain of them. There were no black CEOs of Fortune 500 companies. Very few black judges. Shoot, as Larry Wilmore pointed out last week, a lot of folks didn't even think blacks had the tools to be a quarterback. Today, former Bull Michael Jordan isn't just the greatest basketball player of all time -- he owns the team. (Laughter.) When I was graduating, the main black hero on TV was Mr. T. (Laughter.) Rap and hip hop were counterculture, underground. Now, Shonda Rhimes owns Thursday night, and Beyoncé runs the world. (Laughter.) We're no longer only entertainers, we're producers, studio executives. No longer small business owners -- we're CEOs, we're mayors, representatives, Presidents of the United States. (Applause.)

I am not saying gaps do not persist. Obviously, they do. Racism persists. Inequality persists. Don't worry -- I'm going to get to that. But I wanted to start, Class of 2016, by opening your eyes to the moment that you are in. If you had to choose one moment in history in which you could be born, and you didn't know ahead of time who you were going to be -- what nationality, what gender, what race, whether you'd be rich or poor, gay or straight, what faith you'd be born into -- you wouldn't choose 100 years ago. You wouldn't choose the fifties, or the sixties, or the seventies. You'd choose right now. If you had to choose a time to be, in the words of Lorraine Hansberry, "young, gifted, and black" in America, you would choose right now. (Applause.)"

https://www.politico.com/story/2016/05/obamas-howard-commencement-transcript-222931

https://www.google.com/amp/s/m.huffpost.com/us/entry/us_58cf1d9ae4b0ec9d29dcf283/amp

Adam , says: December 21, 2017 at 11:57 am
I love reading about how the Community Reinvestment Act was the catalyst of all that is wrong in the world. As someone in the industry the issue was actually twofold. The Commodities Futures Modernization Act turned the mortgage securities market into a casino with the underlying actual debt instruments multiplied through the use of additional debt instruments tied to the performance but with no actual underlying value. These securities were then sold around the world essentially infecting the entire market. In order that feed the beast, these NON GOVERNMENT loans had their underwriting standards lowered to rediculous levels. If you run out of qualified customers, just lower the qualifications. Government loans such as FHA, VA, and USDA were avoided because it was easier to qualify people with the new stuff. And get paid. The short version is all of the incentives that were in place at the time, starting with the Futures Act, directly led to the actions that culminated in the Crash. So yes, it was the government, just a different piece of legislation.
SteveM , says: December 21, 2017 at 12:29 pm
Kunstler itemizing the social and economic pathologies in the United States is not enough. Because there are other models that demonstrate it didn't have to be this way.

E.g. Germany. Germany is anything but perfect and its recent government has screwed up with its immigration policies. But Germany has a high standard of living, an educated work force (including unions and skilled crafts-people), a more rational distribution of wealth and high quality universal health care that costs 47% less per capita than in the U.S. and with no intrinsic need to maraud around the planet wasting gobs of taxpayer money playing Global Cop.

The larger subtext is that the U.S. house of cards was planned out and constructed as deliberately as the German model was. Only the objective was not to maximize the health and happiness of the citizenry, but to line the pockets of the parasitic Elites. (E.g., note that Mitch McConnell has been a government employee for 50 years but somehow acquired a net worth of over $10 Million.)

P.S. About the notionally high U.S. GDP. Factor out the TRILLIONS inexplicably hoovered up by the pathological health care system, the metastasized and sanctified National Security State (with its Global Cop shenanigans) and the cronied-up Ponzi scheme of electron-churn financialization ginned up by Goldman Sachs and the rest of the Banksters, and then see how much GDP that reflects the actual wealth of the middle class is left over.

One Guy , says: December 21, 2017 at 1:10 pm
Right-Wing Dittoheads and Fox Watchers love to blame the Community Reinvestment Act. It allows them to blame both poor black people AND the government. The truth is that many parties were to blame.
LouB , says: December 21, 2017 at 1:14 pm
One of the things I love about this rag is that almost all of the comments are included. You may be sure that similar commenting privilege doesn't exist most anywhere else.

Any disfavor regarding the supposed bleakness with the weak hearted souls aside, Mr K's broadside seems pretty spot on to me.

tzx4 , says: December 21, 2017 at 1:57 pm
I think the author overlooks the fact that government over the past 30 to 40 years has been tilting the playing field ever more towards the uppermost classes and against the middle class. The evisceration of the middle class is plain to see.

If the the common man had more money and security, lots of our current intrasocial conflicts would be far less intense.

Jeeves , says: December 21, 2017 at 2:09 pm
Andrew Imlay: You provide a thoughtful corrective to one of Kunstler's more hyperbolic claims. And you should know that his jeremiad doesn't represent usual fare at TAC. So do come back.

Whether or not every one of Kunstler's assertions can withstand a rigorous fact-check, he is a formidable rhetorician. A generous serving of Weltschmerz is just what the season calls for.

Wezz , says: December 21, 2017 at 2:44 pm
America is stupefied from propaganda on steroids for, largely from the right wing, 25? years of Limbaugh, Fox, etc etc etc Clinton hate x 10, "weapons of mass destruction", "they hate us because we are free", birtherism, death panels, Jade Helm, pedophile pizza, and more Clinton hate porn.

Americans have been taught to worship the wealthy regardless of how they got there. Americans have been taught they are "Exceptional" (better, smarter, more godly than every one else) in spite of outward appearances. Americans are under educated and encouraged to make decisions based on emotion from constant barrage of extra loud advertising from birth selling illusion.

Americans brain chemistry is most likely as messed up as the rest of their bodies from junk or molested food. Are they even capable of normal thought?

Donald Trump has convinced at least a third of Americans that only he, Fox, Breitbart and one or two other sources are telling the Truth, every one else is lying and that he is their friend.

Is it possible we are just plane doomed and there's no way out?

John Blade Wiederspan , says: December 21, 2017 at 4:26 pm
I loathe the cotton candy clown and his Quislings; however, I must admit, his presence as President of the United States has forced everyone (left, right, religious, non-religious) to look behind the curtain. He has done more to dis-spell the idealism of both liberal and conservative, Democrat and Republican, rich and poor, than any other elected official in history. The sheer amount of mind-numbing absurdity resulting from a publicity stunt that got out of control ..I am 70 and I have seen a lot. This is beyond anything I could ever imagine. America is not going to improve or even remain the same. It is in a 4 year march into worse, three years to go.
EarlyBird , says: December 21, 2017 at 5:23 pm
Sheesh. Should I shoot myself now, or wait until I get home?
dvxprime , says: December 21, 2017 at 5:46 pm
Mr. Kuntzler has an honest and fairly accurate assessment of the situation. And as usual, the liberal audience that TAC is trying so hard to reach, is tossing out their usual talking points whilst being in denial of the situation.

The Holy Bible teaches us that repentance is the first crucial step on the path towards salvation. Until the progressives, from their alleged "elite" down the rank and file at Kos, HuffPo, whatever, take a good, long, hard look at the current national dumpster fire and start claiming some responsibility, America has no chance of solving problems or fixing anything.

Slooch , says: December 21, 2017 at 7:03 pm
Kunstler must have had a good time writing this, and I had a good time reading it. Skewed perspective, wild overstatement, and obsessive cherry-picking of the rare checkable facts are mixed with a little eye of newt and toe of frog and smothered in a oar and roll of rhetoric that was thrilling to be immersed in. Good work!
jp , says: December 21, 2017 at 8:09 pm
aah, same old Kunstler, slightly retailored for the Trump years.

for those of you familiar with him, remember his "peak oil" mania from the late 00s and early 2010s? every blog post was about it. every new year was going to be IT: the long emergency would start, people would be Mad Maxing over oil supplies cos prices at the pump would be $10 a gallon or somesuch.

in this new rant, i did a control-F for "peak oil" and hey, not a mention. I guess even cranks like Kunstler know when to give a tired horse a rest.

c.meyer , says: December 21, 2017 at 8:30 pm
So what else is new. Too 'clever', overwritten, no new ideas. Can't anyone move beyond clichés?
Active investor , says: December 22, 2017 at 12:35 am
Kunstler once again waxes eloquent on the American body politic. Every word rings true, except when it doesn't. At times poetic, at other times paranoid, Kunstler does us a great service by pointing a finger at the deepest pain points in America, any one of which could be the geyser that brings on catastrophic failure.

However, as has been pointed out, he definitely does not hang out with black people. For example, the statement:

But the residue of the "Black Power" movement is still present in the widespread ambivalence about making covenant with a common culture, and it has only been exacerbated by a now long-running "multiculturalism and diversity" crusade that effectively nullifies the concept of a national common culture.

The notion of a 'national common culture' is interesting but pretty much a fantasy that never existed, save colonial times.

Yet Kunstler's voice is one that must be heard, even if he is mostly tuning in to the widespread radicalism on both ends of the spectrum, albeit in relatively small numbers. Let's face it, people are in the streets marching, yelling, and hating and mass murders keep happening, with the regularity of Old Faithful. And he makes a good point about academia loosing touch with reality much of the time. He's spot on about the false expectations of what technology can do for the economy, which is inflated with fiat currency and God knows how many charlatans and hucksters. And yes, the white working class is feeling increasingly like a 'victim group.'

While Kunstler may be more a poet than a lawyer, more songwriter than historian, my gut feeling is that America had better take notice of him, as The American ship of state is being swept by a ferocious tide and the helmsman is high on Fentanyl (made in China).

JonF , says: December 22, 2017 at 9:52 am
Re: The crisis actually had its roots in the Clinton Administration's use of the Community Reinvestment Act

Here we go again with this rotting zombie which rises from its grave no matter how many times it has been debunked by statisticians and reputable economists (and no, not just those on the left– the ranks include Bruce Bartlett for example, a solid Reaganist). To reiterate again : the CRA played no role in the mortgage boom and bust. Among other facts in the way of that hypothesis is the fact that riskiest loans were being made by non-bank lenders (Countrywide) who were not covered by the CRA which only applied to actual banks– and the banks did not really get into the game full tilt, lowering their lending standards, until late in the game, c. 2005, in response to their loss of business to the non-bank lenders. Ditto for the GSEs, which did not lower their standards until 2005 and even then relied on wall Street to vet the subprime loans they were buying.

To be sure, blaming Wall Street for everything is also wrong-headed, though wall Street certainly did some stupid, greedy and shady things (No, I am not letting them off the hook!) But the cast of miscreants is numbered in the millions and it stretches around the planet. Everyone (for example) who got into the get-rich-quick Ponzi scheme of house flipping, especially if they lied about their income to do so. And everyone who took out a HELOC (Home Equity Line of Credit) and foolishly charged it up on a consumption binge. And shall we talk about the mortgage brokers who coached people into lying, the loan officers who steered customers into the riskiest (and highest earning) loans they could, the sellers who asked palace-prices for crackerbox hovels, the appraisers who rubber-stamped such prices, the regulators who turned a blind eye to all the fraud and malfeasance, the ratings agencies who handed out AAA ratings to securities full of junk, the politicians who rejoiced over the apparent "Bush Boom" well, I could continue, but you get the picture.

We have met the enemy and he was us.

kevin on the left , says: December 22, 2017 at 10:49 am
"The Holy Bible teaches us that repentance is the first crucial step on the path towards salvation. Until the progressives, from their alleged "elite" down the rank and file at Kos, HuffPo, whatever, take a good, long, hard look at the current national dumpster fire and start claiming some responsibility, America has no chance of solving problems or fixing anything."

Pretty sure that calling other people to repent of their sin of disagreeing with you is not quite what the Holy Bible intended.

[Nov 30, 2017] Money Imperialism by Michael Hudson

Highly recommended!
Notable quotes:
"... Since World War II the United States has used the Dollar Standard and its dominant role in the IMF and World Bank to steer trade and investment along lines benefiting its own economy. But now that the growth of China's mixed economy has outstripped all others while Russia finally is beginning to recover, countries have the option of borrowing from the Asian Infrastructure Investment Bank (AIIB) and other non-U.S. consortia. ..."
"... The problem with surrendering is that this Washington Consensus is extractive and lives in the short run, laying the seeds of financial dependency, debt-leveraged bubbles and subsequent debt deflation and austerity. The financial business plan is to carve out opportunities for price gouging and corporate profits. Today's U.S.-sponsored trade and investment treaties would make governments pay fines equal to the amount that environmental and price regulations, laws protecting consumers and other social policies might reduce corporate profits. "Companies would be able to demand compensation from countries whose health, financial, environmental and other public interest policies they thought to be undermining their interests, and take governments before extrajudicial tribunals. These tribunals, organised under World Bank and UN rules, would have the power to order taxpayers to pay extensive compensation over legislation seen as undermining a company's 'expected future profits.' ..."
"... At the center of today's global split are the last few centuries of Western social and democratic reform. Seeking to follow the classical Western development path by retaining a mixed public/private economy, China, Russia and other nations find it easier to create new institutions such as the AIIB than to reform the dollar standard IMF and World Bank. Their choice is between short-term gains by dependency leading to austerity, or long-term development with independence and ultimate prosperity. ..."
"... The price of resistance involves risking military or covert overthrow. Long before the Ukraine crisis, the United States has dropped the pretense of backing democracies. The die was cast in 1953 with the coup against Iran's secular government, and the 1954 coup in Guatemala to oppose land reform. Support for client oligarchies and dictatorships in Latin America in the 1960 and '70s was highlighted by the overthrow of Allende in Chile and Operation Condor's assassination program throughout the continent. Under President Barack Obama and Secretary of State Hillary Clinton, the United States has claimed that America's status as the world's "indispensible nation" entitled it back the recent coups in Honduras and Ukraine, and to sponsor the NATO attack on Libya and Syria, leaving Europe to absorb the refugees. ..."
"... The trans-Atlantic financial bubble has left a legacy of austerity since 2008. Debt-ridden economies are being told to cope with their downturns by privatizing their public domain. ..."
"... The immediate question facing Germany and the rest of Western Europe is how long they will sacrifice their trade and investment opportunities with Russia, Iran and other economies by adhering to U.S.-sponsored sanctions. American intransigence threatens to force an either/or choice in what looms as a seismic geopolitical shift over the proper role of governments: Should their public sectors provide basic services and protect populations from predatory monopolies, rent extraction and financial polarization? ..."
"... Today's global financial crisis can be traced back to World War I and its aftermath. The principle that needed to be voiced was the right of sovereign nations not to be forced to sacrifice their economic survival on the altar of inter-government and private debt demands. The concept of nationhood embodied in the 1648 Treaty of Westphalia based international law on the principle of parity of sovereign states and non-interference. Without a global alternative to letting debt dynamics polarize societies and tear economies apart, monetary imperialism by creditor nations is inevitable. ..."
"... The past century's global fracture between creditor and debtor economies has interrupted what seemed to be Europe's democratic destiny to empower governments to override financial and other rentier interests. Instead, the West is following U.S. diplomatic leadership back into the age when these interests ruled governments. This conflict between creditors and democracy, between oligarchy and economic growth (and indeed, survival) will remain the defining issue of our epoch over the next generation, and probably for the remainder of the 21 st century. ..."
"... wiki/Anglo-Persian Oil Company "In 1901 William Knox D'Arcy, a millionaire London socialite, negotiated an oil concession with Mozaffar al-Din Shah Qajar of Persia. He financed this with capital he had made from his shares in the highly profitable Mount Morgan mine in Queensland, Australia. D'Arcy assumed exclusive rights to prospect for oil for 60 years in a vast tract of territory including most of Iran. In exchange the Shah received £20,000 (£2.0 million today),[1] an equal amount in shares of D'Arcy's company, and a promise of 16% of future profits." Note the 16% = ~1/6, the rest going off-shore. ..."
"... The Greens in Aus researched the resources sector in Aus, to find that it is 83% 'owned' by off-shore entities. Note that 83% = ~5/6, which goes off-shore. Coincidence? ..."
"... Note that in Aus, the democratically elected so-called 'leaders' not only allow exactly this sort of economic rape, they actively assist it by, say, crippling the central bank and pleading for FDI = selling our, we the people's interests, out. Those traitor-leaders are reversing 'Enlightenment' provisions, privatising whatever they can and, as Michael Hudson well points out the principles, running Aus into debt and austerity. ..."
"... US banking oligarchs will expend the last drop of our blood to prevent a such a linking, just as they were willing to sacrifice our blood and treasure in WW1 and 2, as is alluded to here.: ..."
"... The past century's global fracture between creditor and debtor economies has interrupted what seemed to be Europe's democratic destiny to empower governments to override financial and other rentier interests. Instead, the West is following U.S. diplomatic leadership back into the age when these interests ruled governments. This conflict between creditors and democracy, between oligarchy and economic growth (and indeed, survival) will remain the defining issue of our epoch over the next generation, and probably for the remainder of the 21st century. ..."
"... It's important to note that such interests have ruled (owned, actually) imperial Britain for centuries and the US since its inception, and the anti-federalists knew it. ..."
"... "After World War I the U.S. Government deviated from what had been traditional European policy – forgiving military support costs among the victors. U.S. officials demanded payment for the arms shipped to its Allies in the years before America entered the Great War in 1917. The Allies turned to Germany for reparations to pay these debts." The Yank banker, the Yankee Wall Street super rich, set off a process of greed that led to Hitler. ..."
"... But they didn't invent anything. They learned from their WASP forebears in the British Empire, whose banking back to Oliver Cromwell had become inextricably entangled with Jewish money and Jewish interests to the point that Jews per capita dominated it even at the height of the British Empire, when simpleton WASPs assume that WASPs truly ran everything, and that WASP power was for the good of even the poorest WASPs. ..."
"... The Berlin Baghdad railway was an important cause for WWI. ..."
"... Bingo. Stopping it was a huge factor. There was no way the banksters of the world were going to let that go forward, nor were they going to let Germany and Russia link up in any other ways. They certainly were not about to allow any threats to the Suez Canal nor any chance to let the oil fields slip from their control either. ..."
"... This is not how the Enlightenment was supposed to evolve ..."
"... In fact, this is exactly how it was supposed to work. The wave of liberal democracies was precisely to overturn the monarchies, which were the last bulwark protecting the people from the full tyranny of the financiers, who were, by nature, one-world internationalists. ..."
"... The real problem with this is that any form of monetary arrangement involves an implied trusteeship, with obligations on, as well as benefits for, the trustee. The US is so abusing its trusteeship through the continual use of an irresponsible sanctions regime that it risks a good portion of the world economy abandoning its system for someone else's, which may be perceived to be run more responsibility. The disaster scenario would be the US having therefore in the future to access that other system to purchase oil or minerals, and having that system do to us what we previously did to them -- sanction us out. ..."
"... " Marx believed that capitalism was inherently built upon practices of usury and thus inevitably leading to the separation of society into two classes: one composed of those who produce value and the other, which feeds upon the first one. In "Theories of Surplus Value" (written 1862-1863), he states " that interest (in contrast to industrial profit) and rent (that is the form of landed property created by capitalist production itself) are superfetations (i.e., excessive accumulations) which are not essential to capitalist production and of which it can rid itself." ..."
Nov 30, 2017 | www.unz.com

Money Imperialism Introduction to the German Edition Michael Hudson November 29, 2017 3,500 Words 1 Comment Reply

In theory, the global financial system is supposed to help every country gain. Mainstream teaching of international finance, trade and "foreign aid" (defined simply as any government credit) depicts an almost utopian system uplifting all countries, not stripping their assets and imposing austerity. The reality since World War I is that the United States has taken the lead in shaping the international financial system to promote gains for its own bankers, farm exporters, its oil and gas sector, and buyers of foreign resources – and most of all, to collect on debts owed to it.

Each time this global system has broken down over the past century, the major destabilizing force has been American over-reach and the drive by its bankers and bondholders for short-term gains. The dollar-centered financial system is leaving more industrial as well as Third World countries debt-strapped. Its three institutional pillars – the International Monetary Fund (IMF), World Bank and World Trade Organization – have imposed monetary, fiscal and financial dependency, most recently by the post-Soviet Baltics, Greece and the rest of southern Europe. The resulting strains are now reaching the point where they are breaking apart the arrangements put in place after World War II.

The most destructive fiction of international finance is that all debts can be paid, and indeed should be paid, even when this tears economies apart by forcing them into austerity – to save bondholders, not labor and industry. Yet European countries, and especially Germany, have shied from pressing for a more balanced global economy that would foster growth for all countries and avoid the current economic slowdown and debt deflation.

Imposing austerity on Germany after World War I

After World War I the U.S. Government deviated from what had been traditional European policy – forgiving military support costs among the victors. U.S. officials demanded payment for the arms shipped to its Allies in the years before America entered the Great War in 1917. The Allies turned to Germany for reparations to pay these debts. Headed by John Maynard Keynes, British diplomats sought to clean their hands of responsibility for the consequences by promising that all the money they received from Germany would simply be forwarded to the U.S. Treasury.

The sums were so unpayably high that Germany was driven into austerity and collapse. The nation suffered hyperinflation as the Reichsbank printed marks to throw onto the foreign exchange also were pushed into financial collapse. The debt deflation was much like that of Third World debtors a generation ago, and today's southern European PIIGS (Portugal, Ireland, Italy, Greece and Spain).

In a pretense that the reparations and Inter-Ally debt tangle could be made solvent, a triangular flow of payments was facilitated by a convoluted U.S. easy-money policy. American investors sought high returns by buying German local bonds; German municipalities turned over the dollars they received to the Reichsbank for domestic currency; and the Reichsbank used this foreign exchange to pay reparations to Britain and other Allies, enabling these countries to pay the United States what it demanded.

But solutions based on attempts to keep debts of such magnitude in place by lending debtors the money to pay can only be temporary. The U.S. Federal Reserve sustained this triangular flow by holding down U.S. interest rates. This made it attractive for American investors to buy German municipal bonds and other high-yielding debts. It also deterred Wall Street from drawing funds away from Britain, which would have driven its economy deeper into austerity after the General Strike of 1926. But domestically, low U.S. interest rates and easy credit spurred a real estate bubble, followed by a stock market bubble that burst in 1929. The triangular flow of payments broke down in 1931, leaving a legacy of debt deflation burdening the U.S. and European economies. The Great Depression lasted until outbreak of World War II in 1939.

Planning for the postwar period took shape as the war neared its end. U.S. diplomats had learned an important lesson. This time there would be no arms debts or reparations. The global financial system would be stabilized – on the basis of gold, and on creditor-oriented rules. By the end of the 1940s the United States held some 75 percent of the world's monetary gold stock. That established the U.S. dollar as the world's reserve currency, freely convertible into gold at the 1933 parity of $35 an ounce.

It also implied that once again, as in the 1920s, European balance-of-payments deficits would have to be financed mainly by the United States. Recycling of official government credit was to be filtered via the IMF and World Bank, in which U.S. diplomats alone had veto power to reject policies they found not to be in their national interest. International financial "stability" thus became a global control mechanism – to maintain creditor-oriented rules centered in the United States.

To obtain gold or dollars as backing for their own domestic monetary systems, other countries had to follow the trade and investment rules laid down by the United States. These rules called for relinquishing control over capital movements or restrictions on foreign takeovers of natural resources and the public domain as well as local industry and banking systems.

By 1950 the dollar-based global economic system had become increasingly untenable. Gold continued flowing to the United States, strengthening the dollar – until the Korean War reversed matters. From 1951 through 1971 the United States ran a deepening balance-of-payments deficit, which stemmed entirely from overseas military spending. (Private-sector trade and investment was steadily in balance.)

U.S. Treasury debt replaces the gold exchange standard

The foreign military spending that helped return American gold to Europe became a flood as the Vietnam War spread across Asia after 1962. The Treasury kept the dollar's exchange rate stable by selling gold via the London Gold Pool at $35 an ounce. Finally, in August 1971, President Nixon stopped the drain by closing the Gold Pool and halting gold convertibility of the dollar.

There was no plan for what would happen next. Most observers viewed cutting the dollar's link to gold as a defeat for the United States. It certainly ended the postwar financial order as designed in 1944. But what happened next was just the reverse of a defeat. No longer able to buy gold after 1971 (without inciting strong U.S. disapproval), central banks found only one asset in which to hold their balance-of-payments surpluses: U.S. Treasury debt. These securities no longer were "as good as gold." The United States issued them at will to finance soaring domestic budget deficits.

By shifting from gold to the dollars thrown off by the U.S. balance-of-payments deficit, the foundation of global monetary reserves came to be dominated by the U.S. military spending that continued to flood foreign central banks with surplus dollars. America's balance-of-payments deficit thus supplied the dollars that financed its domestic budget deficits and bank credit creation – via foreign central banks recycling U.S. foreign spending back to the U.S. Treasury.

In effect, foreign countries have been taxed without representation over how their loans to the U.S. Government are employed. European central banks were not yet prepared to create their own sovereign wealth funds to invest their dollar inflows in foreign stocks or direct ownership of businesses. They simply used their trade and payments surpluses to finance the U.S. budget deficit. This enabled the Treasury to cut domestic tax rates, above all on the highest income brackets.

U.S. monetary imperialism confronted European and Asian central banks with a dilemma that remains today: If they do not turn around and buy dollar assets, their currencies will rise against the dollar. Buying U.S. Treasury securities is the only practical way to stabilize their exchange rates – and in so doing, to prevent their exports from rising in dollar terms and being priced out of dollar-area markets.

The system may have developed without foresight, but quickly became deliberate. My book Super Imperialism sold best in the Washington DC area, and I was given a large contract through the Hudson Institute to explain to the Defense Department exactly how this extractive financial system worked. I was brought to the White House to explain it, and U.S. geostrategists used my book as a how-to-do-it manual (not my original intention).

Attention soon focused on the oil-exporting countries. After the U.S. quadrupled its grain export prices shortly after the 1971 gold suspension, the oil-exporting countries quadrupled their oil prices. I was informed at a White House meeting that U.S. diplomats had let Saudi Arabia and other Arab countries know that they could charge as much as they wanted for their oil, but that the United States would treat it as an act of war not to keep their oil proceeds in U.S. dollar assets.

This was the point at which the international financial system became explicitly extractive. But it took until 2009, for the first attempt to withdraw from this system to occur. A conference was convened at Yekaterinburg, Russia, by the Shanghai Cooperation Organization (SCO). The alliance comprised Russia, China, Kazakhstan, Tajikistan, Kirghizstan and Uzbekistan, with observer status for Iran, India, Pakistan and Mongolia. U.S. officials asked to attend as observers, but their request was rejected.

The U.S. response has been to extend the new Cold War into the financial sector, rewriting the rules of international finance to benefit the United States and its satellites – and to deter countries from seeking to break free from America's financial free ride.

The IMF changes its rules to isolate Russia and China

Aiming to isolate Russia and China, the Obama Administration's confrontational diplomacy has drawn the Bretton Woods institutions more tightly under US/NATO control. In so doing, it is disrupting the linkages put in place after World War II.

The U.S. plan was to hurt Russia's economy so much that it would be ripe for regime change ("color revolution"). But the effect was to drive it eastward, away from Western Europe to consolidate its long-term relations with China and Central Asia. Pressing Europe to shift its oil and gas purchases to U.S. allies, U.S. sanctions have disrupted German and other European trade and investment with Russia and China. It also has meant lost opportunities for European farmers, other exporters and investors – and a flood of refugees from failed post-Soviet states drawn into the NATO orbit, most recently Ukraine.

To U.S. strategists, what made changing IMF rules urgent was Ukraine's $3 billion debt falling due to Russia's National Wealth Fund in December 2015. The IMF had long withheld credit to countries refusing to pay other governments. This policy aimed primarily at protecting the financial claims of the U.S. Government, which usually played a lead role in consortia with other governments and U.S. banks. But under American pressure the IMF changed its rules in January 2015. Henceforth, it announced, it would indeed be willing to provide credit to countries in arrears other governments – implicitly headed by China (which U.S. geostrategists consider to be their main long-term adversary), Russia and others that U.S. financial warriors might want to isolate in order to force neoliberal privatization policies. [1] I provide the full background in "The IMF Changes its Rules to Isolate China and Russia," December 9, 2015, available on michael-hudson.com, Naked Capitalism , Counterpunch and Johnson's Russia List .

Article I of the IMF's 1944-45 founding charter prohibits it from lending to a member engaged in civil war or at war with another member state, or for military purposes generally. An obvious reason for this rule is that such a country is unlikely to earn the foreign exchange to pay its debt. Bombing Ukraine's own Donbass region in the East after its February 2014 coup d'état destroyed its export industry, mainly to Russia.

Withholding IMF credit could have been a lever to force adherence to the Minsk peace agreements, but U.S. diplomacy rejected that opportunity. When IMF head Christine Lagarde made a new loan to Ukraine in spring 2015, she merely expressed a verbal hope for peace. Ukrainian President Porochenko announced the next day that he would step up his civil war against the Russian-speaking population in eastern Ukraine. One and a half-billion dollars of the IMF loan were given to banker Ihor Kolomoiski and disappeared offshore, while the oligarch used his domestic money to finance an anti-Donbass army. A million refugees were driven east into Russia; others fled west via Poland as the economy and Ukraine's currency plunged.

The IMF broke four of its rules by lending to Ukraine: (1) Not to lend to a country that has no visible means to pay back the loan (the "No More Argentinas" rule, adopted after the IMF's disastrous 2001 loan to that country). (2) Not to lend to a country that repudiates its debt to official creditors (the rule originally intended to enforce payment to U.S.-based institutions). (3) Not to lend to a country at war – and indeed, destroying its export capacity and hence its balance-of-payments ability to pay back the loan. Finally (4), not to lend to a country unlikely to impose the IMF's austerity "conditionalities." Ukraine did agree to override democratic opposition and cut back pensions, but its junta proved too unstable to impose the austerity terms on which the IMF insisted.

U.S. neoliberalism promotes privatization carve-ups of debtor countries

Since World War II the United States has used the Dollar Standard and its dominant role in the IMF and World Bank to steer trade and investment along lines benefiting its own economy. But now that the growth of China's mixed economy has outstripped all others while Russia finally is beginning to recover, countries have the option of borrowing from the Asian Infrastructure Investment Bank (AIIB) and other non-U.S. consortia.

At stake is much more than just which nations will get the contracting and banking business. At issue is whether the philosophy of development will follow the classical path based on public infrastructure investment, or whether public sectors will be privatized and planning turned over to rent-seeking corporations.

What made the United States and Germany the leading industrial nations of the 20 th century – and more recently, China – has been public investment in economic infrastructure. The aim was to lower the price of living and doing business by providing basic services on a subsidized basis or freely. By contrast, U.S. privatizers have brought debt leverage to bear on Third World countries, post-Soviet economies and most recently on southern Europe to force selloffs. Current plans to cap neoliberal policy with the Trans-Pacific Partnership (TPP), Transatlantic Trade and Investment Partnership (TTIP) and Transatlantic Free Trade Agreement (TAFTA) go so far as to disable government planning power to the financial and corporate sector.

American strategists evidently hoped that the threat of isolating Russia, China and other countries would bring them to heel if they tried to denominate trade and investment in their own national currencies. Their choice would be either to suffer sanctions like those imposed on Cuba and Iran, or to avoid exclusion by acquiescing in the dollarized financial and trade system and its drives to financialize their economies under U.S. control.

The problem with surrendering is that this Washington Consensus is extractive and lives in the short run, laying the seeds of financial dependency, debt-leveraged bubbles and subsequent debt deflation and austerity. The financial business plan is to carve out opportunities for price gouging and corporate profits. Today's U.S.-sponsored trade and investment treaties would make governments pay fines equal to the amount that environmental and price regulations, laws protecting consumers and other social policies might reduce corporate profits. "Companies would be able to demand compensation from countries whose health, financial, environmental and other public interest policies they thought to be undermining their interests, and take governments before extrajudicial tribunals. These tribunals, organised under World Bank and UN rules, would have the power to order taxpayers to pay extensive compensation over legislation seen as undermining a company's 'expected future profits.' "

[2] Lori M. Wallach, "The corporation invasion," La Monde Diplomatique , December 2, 2013, http://mondediplo.com/2013/12/02tafta . She adds: "Some investors have a very broad conception of their rights. European companies have recently launched legal actions against the raising of the minimum wage in Egypt; Renco has fought anti-toxic emissions policy in Peru, using a free trade agreement between that country and the US to defend its right to pollute (6). US tobacco giant Philip Morris has launched cases against Uruguay and Australia over their anti-smoking legislation." See also Yves Smith, "Germany Bucking Toxic, Nation-State Eroding Transatlantic Trade and Investment Partnership," Naked Capitalism , July 17, 2014, and "Germany Turning Sour on the Transatlantic Trade and Investment Partnership," Naked Capitalism, October 30, 2014.

This policy threat is splitting the world into pro-U.S. satellites and economies maintaining public infrastructure investment and what used to be viewed as progressive capitalism. U.S.-sponsored neoliberalism supporting its own financial and corporate interests has driven Russia, China and other members of the Shanghai Cooperation Organization into an alliance to protect their economic self-sufficiency rather than becoming dependent on dollarized credit enmeshing them in foreign-currency debt.

At the center of today's global split are the last few centuries of Western social and democratic reform. Seeking to follow the classical Western development path by retaining a mixed public/private economy, China, Russia and other nations find it easier to create new institutions such as the AIIB than to reform the dollar standard IMF and World Bank. Their choice is between short-term gains by dependency leading to austerity, or long-term development with independence and ultimate prosperity.

The price of resistance involves risking military or covert overthrow. Long before the Ukraine crisis, the United States has dropped the pretense of backing democracies. The die was cast in 1953 with the coup against Iran's secular government, and the 1954 coup in Guatemala to oppose land reform. Support for client oligarchies and dictatorships in Latin America in the 1960 and '70s was highlighted by the overthrow of Allende in Chile and Operation Condor's assassination program throughout the continent. Under President Barack Obama and Secretary of State Hillary Clinton, the United States has claimed that America's status as the world's "indispensible nation" entitled it back the recent coups in Honduras and Ukraine, and to sponsor the NATO attack on Libya and Syria, leaving Europe to absorb the refugees.

Germany's choice

This is not how the Enlightenment was supposed to evolve. The industrial takeoff of Germany and other European nations involved a long fight to free markets from the land rents and financial charges siphoned off by their landed aristocracies and bankers. That was the essence of classical 19 th -century political economy and 20 th -century social democracy. Most economists a century ago expected industrial capitalism to produce an economy of abundance, and democratic reforms to endorse public infrastructure investment and regulation to hold down the cost of living and doing business. But U.S. economic diplomacy now threatens to radically reverse this economic ideology by aiming to dismantle public regulatory power and impose a radical privatization agenda under the TTIP and TAFTA.

Textbook trade theory depicts trade and investment as helping poorer countries catch up, compelling them to survive by becoming more democratic to overcome their vested interests and oligarchies along the lines pioneered by European and North American industrial economies. Instead, the world is polarizing, not converging. The trans-Atlantic financial bubble has left a legacy of austerity since 2008. Debt-ridden economies are being told to cope with their downturns by privatizing their public domain.

The immediate question facing Germany and the rest of Western Europe is how long they will sacrifice their trade and investment opportunities with Russia, Iran and other economies by adhering to U.S.-sponsored sanctions. American intransigence threatens to force an either/or choice in what looms as a seismic geopolitical shift over the proper role of governments: Should their public sectors provide basic services and protect populations from predatory monopolies, rent extraction and financial polarization?

Today's global financial crisis can be traced back to World War I and its aftermath. The principle that needed to be voiced was the right of sovereign nations not to be forced to sacrifice their economic survival on the altar of inter-government and private debt demands. The concept of nationhood embodied in the 1648 Treaty of Westphalia based international law on the principle of parity of sovereign states and non-interference. Without a global alternative to letting debt dynamics polarize societies and tear economies apart, monetary imperialism by creditor nations is inevitable.

The past century's global fracture between creditor and debtor economies has interrupted what seemed to be Europe's democratic destiny to empower governments to override financial and other rentier interests. Instead, the West is following U.S. diplomatic leadership back into the age when these interests ruled governments. This conflict between creditors and democracy, between oligarchy and economic growth (and indeed, survival) will remain the defining issue of our epoch over the next generation, and probably for the remainder of the 21 st century.

Endnotes

[1] I provide the full background in "The IMF Changes its Rules to Isolate China and Russia," December 9, 2015, available on michael-hudson.com, Naked Capitalism , Counterpunch and Johnson's Russia List .

[2] Lori M. Wallach, "The corporation invasion," La Monde Diplomatique , December 2, 2013, http://mondediplo.com/2013/12/02tafta . She adds: "Some investors have a very broad conception of their rights. European companies have recently launched legal actions against the raising of the minimum wage in Egypt; Renco has fought anti-toxic emissions policy in Peru, using a free trade agreement between that country and the US to defend its right to pollute ( 6 ). US tobacco giant Philip Morris has launched cases against Uruguay and Australia over their anti-smoking legislation." See also Yves Smith , " Germany Bucking Toxic, Nation-State Eroding Transatlantic Trade and Investment Partnership ," Naked Capitalism , July 17, 2014 , and " Germany Turning Sour on the Transatlantic Trade and Investment Partnership ," Naked Capitalism, October 30, 2014 .

Priss Factor , Website November 30, 2017 at 5:28 am GMT

More like Dollar Supremacism

The Alarmist , Next New Comment November 30, 2017 at 8:02 am GMT

"Austerity" is such a misused word these days. What the Allies did to Germany after Versailles was austerity, and everyone paid dearly for it.

What the IMF and the Western Banking Cartel do to third world countries is akin to a pusher hopping up addicts on debt and then taking it away while stripping them of their assets, pretty much hurting only the people of the third world country; certainly not the WBC, and almost certainly not the criminal elite who took the deal.

The Austerity everyone complains about in the developed world these days is a joke, hardly austerity, for it has never meant more than doing a little less deficit-spending than in prior periods, e.g. UK Labour whining about "Austerity" is a joke, as the UK debt has done nothing but grow, which in terms understandable to simple folk like me means they are spending more than they can afford to carry.

jilles dykstra , Next New Comment November 30, 2017 at 8:15 am GMT
" The immediate question facing Germany and the rest of Western Europe is how long they will sacrifice their trade and investment opportunities with Russia, Iran and other economies by adhering to U.S.-sponsored sanctions "

In the whole article not a word about the euro, also an instrument of imperialism, that mainly benefits Germany, the country that has to maintain a high level of exports, in order to feed the Germans, and import raw materials for Germany's industries.

Isolating China and Russia, with the other BRICS countries, S Africa, Brazil, India, dangerous game.
This effort forced China and Russia to close cooperation, the economic expression of this is the Peking Petersburg railway, with a hub in Khazakstan, where the containers are lifted from the Chinese to the Russian system, the width differs.
Four days for the trip.
The Berlin Baghdad railway was an important cause for WWI.
Let us hope that history does not repeat itself in the nuclear era.

Edward Mead Earle, Ph.D., 'Turkey, The Great Powers and The Bagdad Railway, A study in Imperialism', 1923, 1924, New York

jacques sheete , Next New Comment November 30, 2017 at 11:29 am GMT
Another excellent article.

The U.S. response has been to extend the new Cold War into the financial sector, rewriting the rules of international finance to benefit the United States and its satellites – and to deter countries from seeking t o break free from America's financial free ride .

Nah, the NY banksters wouldn't dream of doing such a thing; would they?

skrik , Next New Comment November 30, 2017 at 11:29 am GMT

This is not how the Enlightenment was supposed to evolve

What I said, and beautifully put, the whole article.

World War I may well have been an important way-point, but the miserable mercantile modus operandi was well established long before.

An interesting A/B case:

a) wiki/Anglo-Persian Oil Company "In 1901 William Knox D'Arcy, a millionaire London socialite, negotiated an oil concession with Mozaffar al-Din Shah Qajar of Persia. He financed this with capital he had made from his shares in the highly profitable Mount Morgan mine in Queensland, Australia. D'Arcy assumed exclusive rights to prospect for oil for 60 years in a vast tract of territory including most of Iran. In exchange the Shah received £20,000 (£2.0 million today),[1] an equal amount in shares of D'Arcy's company, and a promise of 16% of future profits." Note the 16% = ~1/6, the rest going off-shore.

b) The Greens in Aus researched the resources sector in Aus, to find that it is 83% 'owned' by off-shore entities. Note that 83% = ~5/6, which goes off-shore. Coincidence?

Then see what happened when the erstwhile APOC was nationalized; the US/UK perpetrated a coup against the democratically elected Mossadegh, eventual blow-back resulting in the 1979 revolution, basically taking Iran out of 'the West.'

Note that in Aus, the democratically elected so-called 'leaders' not only allow exactly this sort of economic rape, they actively assist it by, say, crippling the central bank and pleading for FDI = selling our, we the people's interests, out. Those traitor-leaders are reversing 'Enlightenment' provisions, privatising whatever they can and, as Michael Hudson well points out the principles, running Aus into debt and austerity.

We the people are powerless passengers, and to add insult to injury, the taxpayer-funded AusBC lies to us continually. Ho, hum; just like the mainly US/Z MSM and the BBC do – all corrupt and venal. Bah!

Now, cue the trolls: "But Russia/China are worse!"

jacques sheete , Next New Comment November 30, 2017 at 12:04 pm GMT

The immediate question facing Germany and the rest of Western Europe is how long they will sacrifice their trade and investment opportunities with Russia, Iran and other economies by adhering to U.S.-sponsored sanctions.

US banking oligarchs will expend the last drop of our blood to prevent a such a linking, just as they were willing to sacrifice our blood and treasure in WW1 and 2, as is alluded to here.:

Today's global financial crisis can be traced back to World War I and its aftermath.

Excellent.:

The principle that needed to be voiced was the right of sovereign nations not to be forced to sacrifice their economic survival on the altar of inter-government and private debt demands Without a global alternative to letting debt dynamics polarize societies and tear economies apart, monetary imperialism by creditor nations is inevitable.

This is a gem of a summary.:

The past century's global fracture between creditor and debtor economies has interrupted what seemed to be Europe's democratic destiny to empower governments to override financial and other rentier interests. Instead, the West is following U.S. diplomatic leadership back into the age when these interests ruled governments. This conflict between creditors and democracy, between oligarchy and economic growth (and indeed, survival) will remain the defining issue of our epoch over the next generation, and probably for the remainder of the 21st century.

Instead, the West is following U.S. diplomatic leadership back into the age when these interests ruled governments. It's important to note that such interests have ruled (owned, actually) imperial Britain for centuries and the US since its inception, and the anti-federalists knew it.

Here is a revolution as radical as that which separated us from Great Britain.

You will find all the strength of this country in the hands of your enemies [ ed comment: the money grubbers ]

Patrick Henry June 5 and 7, 1788―1788-1789 Petersburg, Virginia edition of the Debates and other Proceedings . . . Of the Virginia Convention of 1788

The Constitution had been laid down under unacceptable auspices; its history had been that of a coup d'état.

It had been drafted, in the first place, by men representing special economic interests. Four-fifths of them were public creditors, one-third were land speculators, and one-fifth represented interests in shipping, manufacturing, and merchandising. Most of them were lawyers. Not one of them represented the interest of production -- Vilescit origine tali.

- Albert Jay Nock [Excerpted from chapter 5 of Albert Jay Nock's Jefferson, published in 1926]

Biff , Next New Comment November 30, 2017 at 12:39 pm GMT
The golden rule is one thing. The paper rule is something else. May you live in interesting times.
Jake , Next New Comment November 30, 2017 at 2:09 pm GMT
"After World War I the U.S. Government deviated from what had been traditional European policy – forgiving military support costs among the victors. U.S. officials demanded payment for the arms shipped to its Allies in the years before America entered the Great War in 1917. The Allies turned to Germany for reparations to pay these debts." The Yank banker, the Yankee Wall Street super rich, set off a process of greed that led to Hitler.

But they didn't invent anything. They learned from their WASP forebears in the British Empire, whose banking back to Oliver Cromwell had become inextricably entangled with Jewish money and Jewish interests to the point that Jews per capita dominated it even at the height of the British Empire, when simpleton WASPs assume that WASPs truly ran everything, and that WASP power was for the good of even the poorest WASPs.

Joe Hide , Next New Comment November 30, 2017 at 2:12 pm GMT
To Michael Hudson,
Great article. Evidence based, factually argued, enjoyably readable.
Replacements for the dollar dominated financial system are well into development. Digital dollars, credit cards, paypal, stock and currency exchange online platforms, and perhaps most intriguing The exponential rise of Bitcoin and similar crypto-currencies.

The internet is also exponentially exposing the screwing we peasants have been getting by the psychopath, narcissistic, hedonistic, predatory lenders and controllers. Next comes the widespread, easily usable, and inexpensive cell phone apps, social media exposures, alternative websites (like Unz.com), and other technologies that will quickly identify every lying, evil, jerk so they can be neutrilized / avoided

The Alarmist , Next New Comment November 30, 2017 at 2:13 pm GMT

"Textbook trade theory depicts trade and investment as helping poorer countries catch up, compelling them to survive by becoming more democratic to overcome their vested interests and oligarchies along the lines pioneered by European and North American industrial economies."

I must be old; the economic textbooks I had did explain the benefits of freer trade among nations using Ricardo and Trade Indifference Curves, but didn't prescribe any one political system being fostered by or even necessary for the benefits of international trade to be reaped.

Astuteobservor II , Next New Comment November 30, 2017 at 2:26 pm GMT
to be honest, this way of running things only need to last for 10-20 more years before automation will replace 800 million jobs. then we will have a few trillionaire overlords unless true AI comes online. by that point nothing matters as we will become zoo animals.
jacques sheete , Next New Comment November 30, 2017 at 2:36 pm GMT
@The Alarmist

What the IMF and the Western Banking Cartel do to third world countries is akin to a pusher hopping up addicts on debt and then taking it away while stripping them of their assets, pretty much hurting only the people of the third world country; certainly not the WBC, and almost certainly not the criminal elite who took the deal.

That's true and the criminals do similar asset stripping to their own as well, through various means.

It's always the big criminals against the rest of us.

jacques sheete , Next New Comment November 30, 2017 at 2:48 pm GMT
@jilles dykstra

The Berlin Baghdad railway was an important cause for WWI.

Bingo. Stopping it was a huge factor. There was no way the banksters of the world were going to let that go forward, nor were they going to let Germany and Russia link up in any other ways. They certainly were not about to allow any threats to the Suez Canal nor any chance to let the oil fields slip from their control either.

The wars were also instigated to prevent either Germany or Russia having control of, and free access to warm water ports and the wars also were an excuse to steal vast amounts of wealth from both Germany and Russia through various means.

All pious and pompous pretexts aside, economics was the motive for (the) war (s), and the issues are not settled to this day. I.e., it's the same class of monstrously insatiable criminals who want everything for themselves who're causing the major troubles of the day.

Unfortunately, as long as we have SoB's who're eager to sacrifice our blood and treasure for their benfit, things will never change.

jacques sheete , Next New Comment November 30, 2017 at 2:51 pm GMT

The golden rule is one thing. The paper rule is something else.

May you live in interesting times.

The golden rule is for dreamers, unfortunately. Those who control paper money rule, and your wish has been granted; we live in times that are both interesting and fascinating, but are nevertheless the same old thing. Only the particular particulars have changed.

Michael Kenny , Next New Comment November 30, 2017 at 3:01 pm GMT
Essentially, the anti-EU and anti-euro line that Professor Hudson has being pushing for years, which has now morphed into a pro-Putin line as the anti-EU faction in the US have sought to use Putin as a "useful idiot" to destroy the EU. Since nobody in Europe reads these articles, Ii doesn't really matter and I certainly don't see any EU leader following the advice of someone who has never concealed his hostility to the EU's very existence: note the use of the racist slur "PIIGS" to refer to certain EU Member States. Thus, Professor Hudson is simply pushing the "let Putin win in Ukraine" line dressed up in fine-sounding economic jargon.
jacques sheete , Next New Comment November 30, 2017 at 3:54 pm GMT

Since nobody in Europe reads these articles, Ii doesn't really matter

None of it rally matters anyway, no matter how valid. To paraphrase Thucydides, the money grubbers do what they want and the rest of us are forced to suck it up and limp along.

and I certainly don't see any EU leader following the advice

I doubt that that's Hudson's intent in writing the article. I see it as his attempt to explain the situation to those of us who care about them even though our concern is pretty much useless.

I do thank him for taking the time to pen this stuff which I consider worthwhile and high quality.

Anonymous , Disclaimer Next New Comment November 30, 2017 at 4:08 pm GMT
That sounds good but social media is the weapon of choice in the EU too. Lot's of kids know and love Hudson. Any half capable writer who empathetically explains why you're getting fucked is going to have some followers. Watering, nutrition, weeding. Before too long you'll be on the Eurail to your destination.
Wally , Website Next New Comment November 30, 2017 at 4:23 pm GMT
@Jake

said: "The Yank banker, the Yankee Wall Street super rich, set off a process of greed that led to Hitler." If true, so what? That's a classic example of 'garbage in, garbage out'. http://www.codoh.com

nickels , Next New Comment November 30, 2017 at 4:48 pm GMT

This is not how the Enlightenment was supposed to evolve

In fact, this is exactly how it was supposed to work. The wave of liberal democracies was precisely to overturn the monarchies, which were the last bulwark protecting the people from the full tyranny of the financiers, who were, by nature, one-world internationalists.

William McAdoo , Next New Comment November 30, 2017 at 5:08 pm GMT
The real problem with this is that any form of monetary arrangement involves an implied trusteeship, with obligations on, as well as benefits for, the trustee. The US is so abusing its trusteeship through the continual use of an irresponsible sanctions regime that it risks a good portion of the world economy abandoning its system for someone else's, which may be perceived to be run more responsibility. The disaster scenario would be the US having therefore in the future to access that other system to purchase oil or minerals, and having that system do to us what we previously did to them -- sanction us out.

The proper use by the US of its controlled system thus should be a defensive one -- mainly to act so fairly to all players that it, not someone else, remains in control of the dominant worldwide exchange system. This sensible course of conduct, unfortunately, is not being pursued by the US.

joe webb , Next New Comment November 30, 2017 at 10:11 pm GMT
there is fuzzy, and then there is very fuzzy, and then there is the fuzziness compounded many-fold. The latter is this article.

Here from wiki: "

" Marx believed that capitalism was inherently built upon practices of usury and thus inevitably leading to the separation of society into two classes: one composed of those who produce value and the other, which feeds upon the first one. In "Theories of Surplus Value" (written 1862-1863), he states " that interest (in contrast to industrial profit) and rent (that is the form of landed property created by capitalist production itself) are superfetations (i.e., excessive accumulations) which are not essential to capitalist production and of which it can rid itself."

Wiki goes on to identify "rentier" as used by Marx, to be the same thing as "capitalists." What the above quotation says is that capitalism CAN rid itself of genuine rent capital. First, the feudal rents that were extracted by landowners were NOT part of a free market system. Serfdom was only one part of unfree conditions. A general condition of anarchy in rules and laws by petty principalities characteristic of feudalism, both contained commerce and human beings. There was no freedom, political or economic.

The conflation (collapsing) of rents and interest is a Marxist error which expands into complete nonsense when a competitive economy has replaced feudal conditions. ON top of that, profits from a business, firm, or industrial enterprise are NOT rents.

Any marxist is a fool to pretend otherwise, and is just another ideological (False consciousness ) fanatic.

... ... ...

Wally, Next New Comment December 1, 2017 at 1:49 am GMT
@Michael Kenny

Indeed, Putin should be praised & supported. But where is the proof that 'Russia & Trump colluded to get Trump elected'? You also ignore the overwhelming Crimean support for returning to Russia. And you won't like this at all: Trump Declares "National Day for the Victims of Communism." https://www.whitehouse.gov/the-press-office/2017/11/07/national-day-victims-communism Hence, the Liars of the scamming "Holocau$t Industry" go crazy: https://www.salon.com/2017/11/07/trumps-national-day-for-the-victims-of-communism-is-opposite-of-holocaust-statement/

ThreeCranes , December 1, 2017 at 3:34 am GMT
@jilles dykstra

Germany loans money back to the poorer nations who buy her exports just as China loans money to the United States (they purchase roughly a third of our Treasury bonds) so that Americans can continue to buy Chinese manufactured goods.

The role to be played by the USA in the "new world order" is that of being the farmer to the world. The meticulous Asians will make stuff.

The problem with this is that it is based on 19th century notions of manufacturing. Technique today is vastly more complicated than it was in the 1820′s and a nation must do everything in its power to protect and nurture its manufacturing and scientific excellence. In the United States we have been giving this away to our competitors. We educate their children at our taxpayer's expense and they take the knowledge gained back to their native countries where, with state subsidies, they build factories that put Americans out of work. We fall further and further behind.

[Nov 29, 2017] Michael Hudson: The Wall Street Economy is Draining the Real Economy

Highly recommended!
Notable quotes:
"... An interview by Gordon T. Long of the Financial Repression Authority. Originally published at his website ..."
"... One of the most important distinctions that investors have to understand is the difference between secular and cyclical trends Let us begin with definitions from the Encarta® World English Dictionary: ..."
"... Secular – occurring only once in the course of an age or century; taking place over an extremely or indefinitely long period of time ..."
"... Cycle – a sequence of events that is repeated again and again, especially a causal sequence; a period of time between repetitions of an event or phenomenon that occurs regularly ..."
"... Secular stagnation is when the predators of finance have eaten too many sheeple. ..."
"... Real estate rents in this latest asset bubble, whether commercial or residential, appear to have been going up in many markets even if the increases are slowing. That rent inflation will likely turn into rent deflation, but that doesn't appear to have happened yet consistently. ..."
"... Barter has always existed and always will. Debt money expands and contracts the middle class, acting as a feedback signal, which never works over the long term, because the so encapsulated system can only implode, when natural resource liquidation cannot be accelerated. The whole point is to eliminate the initial requirement for capital, work. Debt fails because both sides of the same coin assume that labor can be replaced. The machines driven by dc technology are not replacing labor; neither the elites nor the middle class can fix the machines, which is why they keep accelerating debt, to replace one failed technology only to be followed by the next, netting extortion by whoever currently controls the debt machine, which the majority is always fighting over, expending more energy to avoid work, like the objective is to avoid sweating, unless you are dumb enough to run on asphalt with Nike gear. ..."
"... . . . The whole argument for privatization, for instance, is the opposite of what was taught in American business schools in the 19th century. The first professor of economics at the Wharton School of Business, which was the first business school, was Simon Patten. He said that public infrastructure is a fourth factor of production. But its role isn't to make a profit . It's to lower the cost of public services and basic inputs to lower the cost of living and lower the cost of doing business to make the economy more competitive. But privatization adds interest payments, dividends, managerial payments, stock buybacks, and merges and acquisitions . Obviously these financialized charges are factored into the price system and raise the cost of living and doing business . ..."
www.nakedcapitalism.com
April 29, 2016 by Yves Smith An interview by Gordon T. Long of the Financial Repression Authority. Originally published at his website

GORDON LONG: Thank you for joining us. I'm Gordon Long with the Financial Repression Authority. It's my pleasure to have with me today Dr. Michael Hudson Professor Hudson's very well known in terms of the FIRE economy to-I think, to a lot of our listeners, or at least he's recognized by many as fostering that concept. A well known author, he has published many, many books. Welcome, Professor Hudson.

MICHAEL HUDSON: Yes.

LONG: Let's just jump into the subject. I mentioned the FIRE economy cause I know that I have always heard it coming from yourself-or, indirectly, not directly, from yourself. Could you explain to our listeners what's meant by that terminology?

HUDSON: Well it's more than just people getting fired. FIRE is an acronym for Finance, Insurance and Real Estate. Basically that sector is about assets, not production and consumption. And most people think of the economy as being producers making goods and services and paying labor to produce them – and then, labour is going to buy these goods and services. But this production and consumption economy is surrounded by the asset economy: the web of Finance, Insurance, and Real Estate of who owns assets, and who owes the debts, and to whom.

LONG: How would you differentiate it (or would you) with what's often referred to as financialization, or the financialization of our economy? Are they one and the same?

HUDSON: Pretty much. The Finance, Insurance, and Real Estate sector is dominated by finance. 70 to 80% of bank loans in North America and Europe are mortgage loans against real estate. So instead of a landowner class owning property clean and clear, as they did in the 19 th century, now you have a democratization of real estate. 2/3 or more of the population owns their own home. But the only way to buy a home, or commercial real estate, is on credit. So the loan-to-value ratio goes up steadily. Banks lend more and more money to the real estate sector. A home or piece of real estate, or a stock or bond, is worth whatever banks are willing to lend against it

As banks loosen their credit terms, as they lower their interest rates, take lower down payments, and lower amortization rates – by making interest-only loans – they are going to lend more and more against property. So real estate is bid up on credit. All this rise in price is debt leverage. So a financialized economy is a debt-leveraged economy, whether it's real estate or insurance, or buying an education, or just living. And debt leveraging means that a larger proportion of assets are represented by debt. So debt equity ratios rise. But financialization also means that more and more of people's income and corporate and government tax revenue is paid to creditors. There's a flow of revenue from the production-and-consumption economy to the financial sector.

LONG: I don't know if you know Richard Duncan. He was with the IMF, etc, and lives in Thailand. He argues right now that capitalism is no longer functioning, and really what he refers to what we have now is "creditism." Because in capitalism we have savings that are reinvested into productive assets that create productivity, which leads to a higher level of living. We're not doing that. We have no savings and investments. Credit is high in the financial sector, but it's not being applied to productive assets. Is he valid in that thinking?

HUDSON: Not as in your statement. It's confused.

LONG: Okay.

HUDSON: There's an enormous amount of savings. Gross savings. The savings we have that are mounting up are just about as large as they've ever been – about, 18-19% of the US economy. They're counterpart is debt. Most savings are lent out to borrowers se debt. Basically, you have savers at the top of the pyramid, the 1% lending out their savings to the 99%. The overall net savings may be zero, and that's what your stupid person from the IMF meant. But gross savings are much higher. Now, the person, Mr. Duncan, obviously-I don't know what to say when I hear this nonsense. Every economy is a credit economy.

Let's start in Ancient Mesopotamia. The group that I organized out of Harvard has done a 20-study of the origins of economic structuring in the Bronze Age, even the Neolithic, and the Bronze Age economy – 3200 BC going back to about 1200 BC. Suppose you're a Babylonian in the time of Hammurabi, about 1750 BC, and you're a cultivator. How do you buy things during the year? Well, if you go to the bar, to an ale woman, what she'd do is write down the debt that you owe. It was to be paid on the threshing floor. The debts were basically paid basically once a year when the income was there, on the threshing floor when the harvest was in. If the palace or the temples would advance animals or inputs or other public services, this would be as a debt. It was all paid in grain, which was monetized for paying debts to the palace, temples and other creditors.

The IMF has this Austrian theory that pretends that money began as barter and that capitalism basically operates on barter. This always is a disinformation campaign. Nobody believed this in times past, and it is a very modern theory that basically is used to say, "Oh, debt is bad." What they really mean is that public debt is bad. The government shouldn't create money, the government shouldn't run budget deficits but should leave the economy to rely on the banks. So the banks should run and indebt the economy.

You're dealing with a public relations mythology that's used as a means of deception for most people. You can usually ignore just about everything the IMF says. If you understand money you're not going to be hired by the IMF. The precondition for being hired by the IMF is not to understand finance. If you do understand finance, you're fired and blacklisted. That's why they impose austerity programs that they call "stabilization programs" that actually are destabilization programs almost wherever they're imposed.

LONG: Is this a lack of understanding and adherence to the wrong philosophy, or how did we get into this trap?

HUDSON: We have an actively erroneous view, not just a lack of understanding. This is not by accident. When you have an error repeated year after year after year, decade after decade after decade, it's not really insanity doing the same thing thinking it'll be different. It's sanity. It's doing the same thing thinking the result will be the same again and again and again. The result will indeed be austerity programs, making budget deficits even worse, driving governments further into debt, further into reliance on the IMF. So then the IMF turns them to the knuckle breakers of the World Bank and says, "Oh, now you have to pay your debts by privatization". It's the success. The successful error of monetarism is to force countries to have such self-defeating policies that they end up having to privatize their natural resources, their public domain, their public enterprises, their communications and transportation, like you're seeing in Greece's selloffs. So when you find an error that is repeated, it's deliberate. It's not insane. It's part of the program, not a bug.

LONG: Where does this lead us? What's the roadmap ahead of us here?

HUDSON: A thousand years ago, if you were a marauding gang and you wanted to take over a country's land and its natural resources and public sector, you'd have to invade it with military troops. Now you use finance to take over countries. So it leads us into a realm where everything that the classical economists saw and argued for – public investment, bringing costs in line with the actual cost of production – that's all rejected in favor of a rentier class evolving into an oligarchy. Basically, financiers – the 1% – are going to pry away the public domain from the government. Pry away and privatize the public enterprises, land, natural resources, so that bondholders and privatizers get all of the revenue for themselves. It's all sucked up to the top of the pyramid, impoverishing the 99%.

LONG: Well I think most people, without understanding economics, would instinctively tell you they think that's what's happening right now, in some way.

HUDSON: Right. As long as you can avoid studying economics you know what's happened. Once you take an economics course you step into brainwashing. It's an Orwellian world.

LONG: I think you said it perfectly well there. Exactly. It gets you locked into the wrong way of thinking as opposed to just basic common sense. Your book is Killing the Host . What was the essence of its message? Was it describing exactly what we're talking about here?

HUDSON: Finance has taken over the industrial economy, so that instead of finance becoming what it was expected to be in the 19 th century, instead of the banks evolving from usurious organizations that leant to governments, mainly to wage war, finance was going to be industrialized. They were going to mobilize savings and recycle it to finance the means of production, starting with heavy industry. This was actually happening in Germany in the late 19 th century. You had the big banks working with government and industry in a triangular process. But that's not what's happening now. After WW1 and especially after WW2, finance reverted to its pre-industrial form. Instead of allying themselves with industry, as banks were expected to do, banks allied themselves with real estate and monopolies, realizing that they can make more money off real estate.

The bank spokesman David Ricardo argued against the landed interest in 1817, against land rent. Now the banks are all in favor of supporting land rent, knowing that today, when people buy and sell property, they need credit and pay interest for it. The banks are going to get all the rent. So you have the banks merge with real estate against industry, against the economy as a whole. The result is that they're part of the overhead process, not part of the production process.

LONG: There's a sense that there's a crisis lying ahead in the next year, two years, or three years. The mainstream economy's so disconnected from Wall Street economy. What's your view on that?

HUDSON: It's not disconnected at all. The Wall Street economy has taken over the economy and is draining it. Under what economics students are taught as Say's Law, the economy's workers are supposed to use their income to buy what they produce. That's why Henry Ford paid them $5 a day, so that they could afford to buy the automobiles they were producing.

LONG: Exactly.

HUDSON: But Wall Street is interjecting itself into the economy, so that instead of the circular flow between producers and consumers, you have more and more of the flow diverted to pay interest, insurance and rent. In other words, to pay the FIRE sector. It all ends up with the financial sector, most of which is owned by the 1%. So, their way of formulating it is to distract attention from today's debt quandary by saying it's just a cycle, or it's "secular stagnation." That removes the element of agency – active politicking by the financial interests and Wall Street lobbyists to obtain all the growth of income and wealth for themselves. That's what happened in America and Canada since the late 1970s.

LONG: What does an investor do today, or somebody who's looking for retirement, trying to save for the future, and they see some of these things occurring. What should they be thinking about? Or how should they be protecting themselves?

HUDSON: What all the billionaires and the heavy investors do is simply try to preserve their wealth. They're not trying to make money, they're not trying to speculate. If you're an investor, you're not going to outsmart Wall Street billionaires, because the markets are basically fixed. It's the George Soros principle. If you have so much money, billions of dollars, you can break the Bank of England. You don't follow the market, you don't anticipate it, you actually make the market and push it up, like the Plunge Protection Team is doing with the stock market these days. You have to be able to control the prices. Insiders make money, but small investors are not going to make money.

Since you're in Canada, I remember the beginning of the 1960s. I used to look at the Treasury Bulletin and Federal Reserve Bulletin figures on foreign investment in the US stock market. We all used to laugh at Canada especially. The Canadians don't buy stocks until they're up to the very top, and then they lose all the money by holding these stocks on the downturn. Finally, when the market's all the way at the bottom, Canadians decide to begin selling because they finally can see a trend. So they miss the upswing until they decide to buy at the top once again. It's hilarious to look at how Canada has performed in the US bond market, and they did the same in the silver market. I remember when silver was going up to $50. The Canadians said, "Yes, we can see the trend now!" and they began to buy it. They lost their shirts. So, basically, if you're a Canadian investor, move.

LONG: So the Canadian investors are a better contrarian indicator than the front page cover, you're saying.

HUDSON: I'd think so. Once they get in, you know the bubble's over.

LONG: Absolutely on that one. What are you currently writing? What is your current focus now?

HUDSON: Well, I just finished a book. You mentioned Killing the Host . My next book will be out in about three months: J is for Junk Economics . It began as a dictionary of terms, so I can provide people with a vocabulary. As we got in the argument at the beginning of your program today, our argument is about the vocabulary we're using and the words you're using. The vocabulary taught to students today in economics – and used by the mass media and by government spokesmen – is basically a set of euphemisms. If you look at the television reports on the market, they say that any loss in the stock market isn't a loss, it's "profit taking". And when they talk about money. the stock market rises – "Oh that's good news." But it's awful news for the short sellers it wipes out. Almost all the words we get are kind of euphemisms to conceal the actual dynamics that are happening. For instance, "secular stagnation" means it's all a cycle. Even the idea of "business cycles": Nobody in the 19 th century used the word "business cycle". They spoke about "crashes". They knew that things go up slowly and then they plunge very quickly. It was a crash. It's not the sine curve that you have in Josef Schumpeter's book on Business Cycles . It's a ratchet effect: slow up, quick down. A cycle is something that is automatic, and if it's a cycle and you have leading and lagging indicators as the National Bureau of Economic Research has. Then you'd think "Oh, okay, everything that goes up will come down, and everything that goes down will come up, just wait your turn." And that means governments should be passive.

Well, that is the opposite of everything that's said in classical economics and the Progressive Era, when they realized that economies don't recover by themselves. You need a-the government to step in, you need something "exogenous," as economist say. You need something from outside the system to revive it. The covert idea of this business cycle analysis is to leave out the role of government. If you look at neoliberal and Austrian theory, there's no role for government spending, and no role of public investment. The whole argument for privatization, for instance, is the opposite of what was taught in American business schools in the 19 th century. The first professor of economics at the Wharton School of Business, which was the first business school, was Simon Patten. He said that public infrastructure is a fourth factor of production. But its role isn't to make a profit. It's to lower the cost of public services and basic inputs to lower the cost of living and lower the cost of doing business to make the economy more competitive. But privatization adds interest payments, dividends, managerial payments, stock buybacks, and merges and acquisitions. Obviously these financialized charges are factored into the price system and raise the cost of living and doing business.

LONG: Well, Michael, we're-I thank you for the time, and we're up against our hard line. I know we didn't have as much time as we always like, so we have to break. Any overall comments you'd like to leave with our listeners who might be interested this school of economics?

HUDSON: Regarding the downturn we're in, we're going into a debt deflation. The key of understanding the economy is to look at debt. The economy has to spend more and more money on debt service. The reason the economy is not recovering isn't simply because this is a normal cycle. And It's not because labour is paid too much. It's because people are diverting more and more of their income to paying their debts, so they can't afford to buy goods. Markets are shrinking – and if markets are shrinking, then real estate rents are shrinking, profits are shrinking. Instead of using their earnings to reinvest and hire more labour to increase production, companies are using their earnings for stock buybacks and dividend payouts to raise the share price so that the managers can take their revenue in the form of bonuses and stocks and live in the short run. They're leaving their companies as bankrupt shells, which is pretty much what hedge funds do when they take over companies.

So the financialization of companies is the reverse of everything Adam Smith, John Stuart Mill, and everyone you think of as a classical economist was saying. Banks wrap themselves in a cloak of classical economics by dropping history of economic thought from the curriculum, which is pretty much what's happened. And Canada-I know since you're from Canada, my experience there was that the banks have a huge lobbying power over government. In 1979, I wrote for the IRPP Institute there on Canada In the New Monetary Order . At that time the provinces of Canada were borrowing money from Switzerland and Germany because they could borrow it at much lower interest rates. I said that this was going to be a disaster, and one that was completely unnecessary. If Canadian provinces borrow in Francs or any other foreign currency, this money goes into the central bank, which then creates Canadian dollars to spend. Why not have the central bank simply create these dollars without having Swiss francs, without having German marks? It's unnecessary to have an intermediary. But the more thuggish banks, like the Bank of Nova Scotia, said, "Oh, that way's the road to serfdom." It's not. Following the banks and the Austrian School of the banks' philosophy, that's the road to serfdom. That's the road to debt serfdom. It should not be taken now. It lets universities and the government be run by neoliberals. They're a travesty of what real economics is all about.

LONG: Michael, thank you very much. I learned a lot, appreciate it; certainly appreciate how important it is for us to use the right words on the right subject when we're talking about economics. Absolutely agree with you. Talk to you again?

HUDSON: Going to be here.

LONG: Thank you for the time.

Donald , April 29, 2016 at 7:33 am

Interesting, but after insulting Duncan, Hudson says the banks stopped partnering with industry and went into real estate, which sounded like what Duncan said.

I mention this because for a non- expert like myself it is sometimes difficult to tell when an expert is disagreeing with someone for good reasons or just going off half- cocked. I followed what Hudson said about the evils of the IMF, but didn't see where Duncan had defended any of that, unless it was implicit in saying that capitalism used to function better.

Alejandro , April 29, 2016 at 9:06 am

Michael Hudson from the interview;

"As we got in the argument at the beginning of your program today, our argument is about the vocabulary we're using and the words you're using. The vocabulary taught to students today in economics – and used by the mass media and by government spokesmen – is basically a set of euphemisms ."Almost all the words we get are kind of euphemisms to conceal the actual dynamics that are happening."

May consider it's about recognizing and deciphering the "doublespeak", "newspeak", "fedspeak", "greenspeak" etc, whether willing or unwitting using words for understanding and clarifying as opposed to misleading and confusing dialectic as opposed to sophistry.

Michael Hudson , April 29, 2016 at 9:54 am

What I objected to was the characterization of today's situation as "financialization." I explained that financialization is the FIRST stage - when finance WORKS. We are now in the BREAKDOWN of financialization - toward the "barter" stage.
Treating "finance" as an end stage rather than as a beginning stage overlooks the dynamics of breakdown. It is debt deflation. First profits fall, and as that occurs, rents on commercial property decline. This is already widespread here in New York, from Manhattan (8th St. near NYU is half empty) to Queens (Austin St. in Forest Hills.).

Leonard C.Tekaat , April 29, 2016 at 12:19 pm

I wrote an article you might be interested in reading. It outlines a tax policy which would help prevent what you are discussing in your article. The abuse of credit to receive rents and long term capital gains.

The title is "Congress Financialized Our Economy And Created Financial Crisis & More Poverty" Go to http://www.taxpolicyusa.wordpress.com

SomeCallMeTim , April 29, 2016 at 5:23 pm

Thank you for another eye-opening exposition. My political economy education was negative (counting a year of Monetarism and Austrian Economics around 1980), so I appreciate your interviews as correctives.

From your interview answer to the question about what we, the 99+% should do,I gathered only that we should not try to beat the market. Anything more than that?

Skippy , April 29, 2016 at 8:33 pm

From my understanding, post Plaza banking lost most of its traditional market to the shadow sector, as a result, expanded off into C/RE and increasingly to Financialization of everything sundry.

Disheveled Marsupial interesting to note Mr. Hudson's statement about barter, risk factors – ?????

Eduardo Quince , April 29, 2016 at 7:41 am

"secular stagnation" means it's all a cycle

Actually not.

One of the most important distinctions that investors have to understand is the difference between secular and cyclical trends Let us begin with definitions from the Encarta® World English Dictionary:

Secular – occurring only once in the course of an age or century; taking place over an extremely or indefinitely long period of time

Cycle – a sequence of events that is repeated again and again, especially a causal sequence; a period of time between repetitions of an event or phenomenon that occurs regularly

Excerpted from: http://contrarianinvestorsjournal.com/?p=405#

cnchal , April 29, 2016 at 8:30 am

Secular stagnation from http://lexicon.ft.com/Term?term=secular-stagnation

Secular stagnation is a condition of negligible or no economic growth in a market-based economy . When per capita income stays at relatively high levels, the percentage of savings is likely to start exceeding the percentage of longer-term investments in, for example, infrastructure and education, that are necessary to sustain future economic growth. The absence of such investments (and consequently of the economic growth) leads to declining levels of per capita income (and consequently of per capita savings). With the reduced percentage savings rate converging with the reduced investment rate, economic growth comes to a standstill – ie, it stagnates. In a free economy, consumers anticipating secular stagnation, might transfer their savings to more attractive-looking foreign countries. This would lead to a devaluation of their domestic currency, which would potentially boost their exports, assuming that the country did have goods or services that could be exported.

Persistent low growth, especially in Europe, has been attributed by some to secular stagnation initiated by stronger European economies, such as Germany, in the past few years.

Words. What they mean depends on who's talking.

Secular stagnation is when the predators of finance have eaten too many sheeple.

MikeNY , April 29, 2016 at 9:57 am

Secular stagnation is when the predators of finance have eaten too many sheeple.

This.

digi_owl , April 29, 2016 at 7:44 am

Sad to see Hudson parroting the line about banks lending out savings

Alejandro , April 29, 2016 at 9:18 am

That's not what he said. Re-read or re-listen, please.

Enquiring Mind , April 29, 2016 at 9:02 am

Hudson says

Markets are shrinking – and if markets are shrinking, then real estate rents are shrinking, profits are shrinking.

Real estate rents in this latest asset bubble, whether commercial or residential, appear to have been going up in many markets even if the increases are slowing. That rent inflation will likely turn into rent deflation, but that doesn't appear to have happened yet consistently.

Perhaps he meant to say that markets are going to shrink as the debt deflation becomes more evident?

tegnost , April 29, 2016 at 9:52 am

I think what it means is it's getting harder to squeeze the blood out of the turnip

Synoia , April 29, 2016 at 10:06 am

What Turnip? Its become a stone, fossilized..

rfdawn , April 29, 2016 at 10:52 am

Yes, I think we are into turnip country now. Figure 1 in this prior article looks clear enough – even if you don't like the analysis that went with it. Wealth inequality still climbs but income inequality has plateaued since Clinton I. Whatever the reasons for that, the 1% should be concerned – where is the ROI?

ke , April 29, 2016 at 10:22 am

Barter has always existed and always will. Debt money expands and contracts the middle class, acting as a feedback signal, which never works over the long term, because the so encapsulated system can only implode, when natural resource liquidation cannot be accelerated. The whole point is to eliminate the initial requirement for capital, work. Debt fails because both sides of the same coin assume that labor can be replaced. The machines driven by dc technology are not replacing labor; neither the elites nor the middle class can fix the machines, which is why they keep accelerating debt, to replace one failed technology only to be followed by the next, netting extortion by whoever currently controls the debt machine, which the majority is always fighting over, expending more energy to avoid work, like the objective is to avoid sweating, unless you are dumb enough to run on asphalt with Nike gear.

ke , April 29, 2016 at 12:49 pm

Labor has no problem with multiwhatever presidents, geneticists, psychologists, or economists, trying to hunt down and replace labor, in or out of turn, but none are going to be any more successful than the others. Trump is being employed to bypass the middle class and cut a deal. There is no deal. Labor is always going to pay males to work and their wives to raise children. Obviously, the majority will vote for a competing economy, and it is welcome to do so, but if debt works so well, why is the majority voting to kidnap our kids with public healthcare and education policies.

meeps , April 29, 2016 at 5:36 pm

I'm not sure I heard an answer to the question of what people, who might be trying to save for the future or plan for retirement, can do? Is the point that there isn't anything? Because I'm definitely between rocks and hard places

Robert Coutinho , April 29, 2016 at 9:29 pm

Yeah, he basically said there is no good savings plan. Big-money interests have rigged the rules and are now manipulating the market (this used to be the definition of what was NOT allowed). Thus, they use computer algorithms to squeeze small amounts out of the market millions of times. This means that the "investments" are nothing of the sort. You don't "invest" in something for milliseconds. He said that the 1% are mostly just trying to hold on to what they have. Very few trust the rigged markets.

ke , April 29, 2016 at 7:22 pm

If Big G can print to infinity, print, but then why book it as debt to future generations?

The future is already becoming the present, because the millenials aren't paying.

Russell , April 29, 2016 at 10:00 pm

Low rent & cheap energy are key to the arts & innovations. My model has to work for airports, starts at the fuel farm as the CIA & MI6 Front Page Avjet did. Well before that was Air America. I wonder if now American Airlines itself is a Front.

All of America is a Front far as I can about tell. Hadn't heard that Manhattan rents were coming down. Come in from out of town, how you going to know? Not supposed to I guess.

I got that textbook and I liked that guy John Commons. He says capitalism is great, but it always leads to Socialism because of unbridled greed.

The frenzy to find another stable cash currency showing in Bit Coin and the discussion of Future Tax Credits while the Euro is controlled by the rent takers demands change on both sides of the Atlantic.

We got shot dead protesting the war, and civil rights backlash is the gift that keeps giving to the Southerners looking up every day in every courthouse town, County seat is all about spreading fear and desperation.

How to change it all without violence is going to be really tricky.

cnchal , April 30, 2016 at 4:36 am

Many thanks for the shout out to Canada.

. . . So, basically, if you're a Canadian investor, move.

LONG: So the Canadian investors are a better contrarian indicator than the front page cover, you're saying.

HUDSON: I'd think so. Once they get in, you know the bubble's over.

When one reads the financial press in Canada, every dollar extracted by the lords of finance is a glorious taking by brilliant people at the top of the financial food chain from the stupid little people at the bottom, but when it counts, there was silence, in cooperation with Canada's one percent.

The story starts about five years ago, with smart meters. Everyone knows what they are, a method by which electrical power use can be priced depending on the time of day, and day of the week.

To make this tasty, Ontario's local utilities at first kept the price the same for all the time, and then after all the meters were installed, came the changes, phased in over time. Prices were increased substantially, but there was an out. If you changed your living arrangements to live like a nocturnal rodent and washed your clothes in the middle of the night, had supper later in the evening or waited for weekend power rates you could still get low power rates, from the three tier price structure.

The local utilities bought the power from the government of Ontario power generation utility, renamed to Hydro One, and this is where Michael Hudson's talk becomes relevant.

The successful error of monetarism is to force countries to have such self-defeating policies that they end up having to privatize their natural resources, their public domain, their public enterprises, their communications and transportation, like you're seeing in Greece's selloffs. So when you find an error that is repeated, it's deliberate. It's not insane. It's part of the program, not a bug .

LONG: Where does this lead us? What's the roadmap ahead of us here?

HUDSON: A thousand years ago, if you were a marauding gang and you wanted to take over a country's land and its natural resources and public sector, you'd have to invade it with military troops. Now you use finance to take over countries. So it leads us into a realm where everything that the classical economists saw and argued for – public investment, bringing costs in line with the actual cost of production – that's all rejected in favor of a rentier class evolving into an oligarchy. Basically, financiers – the 1% – are going to pry away the public domain from the government. Pry away and privatize the public enterprises, land, natural resources, so that bondholders and privatizers get all of the revenue for themselves. It's all sucked up to the top of the pyramid, impoverishing the 99% .

Eighteen months ago, there was an election in Ontario, and the press was on radio silence during the whole time leading up to the election about the plans to "privatize" Hydro One. I cannot recall one instance of any mention that the new Premier, Kathleen Wynne was planning on selling Hydro One to "investors".

Where did this come from? Did the little people rise up and say to the politicians "you should privatize Hydro One" for whatever reason? No. This push came from the 1% and Hydro One was sold so fast it made my head spin, and is now trading on the Toronto Stock exchange.

At first I though the premier was an economic ignoramus, because Hydro One was generating income for the province and there was no other power supplier, so one couldn't even fire them if they raised their prices too high.

One of the arguments put forward by the 1% to privatize Hydro One was a classic divide and conquer strategy. They argued that too many people at Hydro One were making too much money, and by privatizing, the employees wages would be beat down, and the resultant savings would be passed on to customers.

Back to Michael Hudson

. . . The whole argument for privatization, for instance, is the opposite of what was taught in American business schools in the 19th century. The first professor of economics at the Wharton School of Business, which was the first business school, was Simon Patten. He said that public infrastructure is a fourth factor of production. But its role isn't to make a profit . It's to lower the cost of public services and basic inputs to lower the cost of living and lower the cost of doing business to make the economy more competitive. But privatization adds interest payments, dividends, managerial payments, stock buybacks, and merges and acquisitions . Obviously these financialized charges are factored into the price system and raise the cost of living and doing business .

Power prices have increased yet again in Ontario since privatization, and Canada's 1% are "making a killing" on it. There has been another change as well. Instead of a three tier price structure, there are now two, really expensive and super expensive. There is no longer a price break to living like a nocturnal rodent. The 1% took that for themselves.

Procopius , April 30, 2016 at 8:10 am

I am so tired of seeing that old lie about Old Henry and the $5 a day. I realize it was just a tossed off reference to something most people believe for the purpose of describing a discarded policy, but the fact is very, very few of Old Henry's employees ever got that pay. See, there were strings attached.

Old Henry hired a lot of spies, too. He sent them around to the neighborhoods where his workers lived (it was convenient having them all in Detroit). If the neighbors saw your kid bringing a bucket of beer home from the corner tavern for the family, you didn't get the $5.

If your lawn wasn't mowed to their satisfaction, you didn't get the $5. If you were thought not to bathe as often as they liked, you didn't get the $5. If you didn't go to a church on Sundays, you didn't get the $5. If you were an immigrant and not taking English classes at night school, you didn't get the $5. There were quite a lot of strings attached. The whole story was a public relations stunt, and Old Henry never intended to live up to it; he hated his workers.

[Nov 29, 2017] Positive Feedback Loops, Financial Instability, The Blind Spot Of Policymakers

Highly recommended!
Notable quotes:
"... Primates with about exponentially increasing physical technologies continue to deliberately ignore and misunderstand themselves as much as is humanly possible, due to the history of warfare making and maintaining the currently existing political economy, whose maliciousness is manifesting through runaway vicious feedback loops, whereby the excessively successful control of Civilization through applications of the methods of organized crime are resulting in that Civilization manifesting runaway criminal insanities. Indeed, in that context, where there is almost nothing but the central core of triumphant organized crime, namely bankster dominated governments, surrounded by various layers of controlled "opposition" groups, which stay within the same bullshit-based frames of reference regarding those phenomena, the overall situation is that society becoming about exponentially sicker and insane. ..."
"... In general, "Asset Managers" are stuck inside taking for granted that everything they do has become almost totally based on being able to enforce frauds, despite some of them noticing the increasingly blatant ways that there are accumulating apparent anomalies in those systems, as vicious feedback loops drive those systems to become about exponentially more fraudulent, and therefore increasingly unbalanced. To come to better terms with those apparent anomalies requires going through series of intellectual scientific revolutions and profound paradigm shifts, which overall become ways that human beings better understand themselves as manifestations of general energy systems. However, since doing so requires recognizing how and why governments are necessarily the biggest forms of organized crime, dominated by the best organized gangsters, the banksters, it continues to be politically impossible to accomplish that. ..."
"... At each open, algos compute the increase in their AUM from the prior day and their margin reach. They then begin buying. All algos do this. Buying whenever cash/margin exists; selling whenever profit targets exist. On pullbacks, the algos withdraw, volume evaporates, minimizing the drop. The algos collectively increase equity prices without consideration of the value of the money involved. Not valuations. No fundamentals. Just ones and zeroes. Just a program. ..."
Nov 22, 2017 | www.zerohedge.com

Macro-prudential regulations follow financial crises, rarely do they precede one. Even when evidence is abundant of systemic risks building up, as is today, regulators and policymakers have a marked tendency to turn an institutional blind eye, hoping for imbalances to fizzle out on their own – at least beyond the duration of their mandates. It does not work differently in economics than it does for politics, where short-termism drives the agenda, oftentimes at the expenses of either the next government, the broader population or the next generation.

It does not work differently in the business world either, where corporate actions are selected based on the immediate gratification of shareholders, which means pleasing them at the next round of earnings, often at the expenses of long-term planning and at times exposing the company itself to disruption threats from up-and-comers.

Long-term vision does not pay; it barely shows up in the incentive schemes laid out for most professions . Economics is no exception. Orthodoxy and stillness preserve the status quo, and the advantages hard earned by the few who rose from the ranks of the establishment beforehand.

Yet, when it comes to Central Banking, and more in general policymaking, financial stability should top the priority list. It honorably shows up in the utility function, together with price stability and employment, but is not pursued nearly as actively as them. Central planning and interventionism is no anathema when it comes to target the decimals of unemployment or consumer prices, yet is residual when it comes to master systemic risks, relegated to the camp of ex-post macro-prudential regulation. This is all the more surprising as we know all too well how badly a deep unsettlement of financial markets can reverberate across the real economy, possibly leading into recessions, unemployment, un-anchoring of inflation expectations and durable disruption to consumer patterns. There is no shortage of reminders for that in the history books, looking at the fallout of dee dives in markets in 1929, 2000 and 2007, amongst others.

Intriguingly, the other way round is accepted and even theorized. Manipulating bond and stock prices, directly or indirectly, is mainstream policy theory today. From Ben Bernanke's 'portfolio balance channel theory', to the relentless pursuit of the 'wealth effect' via financial repression under Janet Yellen and Haruhiko Kuroda, to Mario Draghi tackling the fragmentation of credit markets across the EU via direct asset purchases, the practice has become commonplace. To some, like us, the 'wealth effect' may be proving to be more of an 'inequality effect' than much, leading to populism and constantly threatening regime change, but that is beyond the scope of this note today.

What we want to focus on instead is the direct impact that monetary interventionism like Quantitative Easing ('QE') and Negative or Zero Interest Rate Policies ('NIRP' or 'ZIRP') have on the structure of the market itself, how they help create a one-sided investment community, oftentimes long-only, fully invested when not levered up, relying on record-highs for bonds and stocks to perpetuate themselves endlessly - despite a striking disconnect from fundamentals, life-dependent on the lowest levels of volatility ever seen in history . The market structure morphed under the eyes of policymakers over the last few years, to become a pressure cooker at risk of blowing-up, with a small but steadily growing probability as times goes by and the bubble inflates. The positive feedback loops between monetary flooding and the private investment community are culpable for transforming an ever present market risk into a systemic risk, and for masking as peaceful what is instead an unstable equilibrium and market fragility.

Positive Feedback Loops create divergence from general equilibrium, and Systemic Risks

Positive feedback loops , in finance like in biology, chemistry, cybernetics, breed system instability, as they orchestrate a further divergence from equilibrium . An unstable equilibrium is defined as one where a small disturbance is sufficient to trigger a large adjustment.

QE and NIRP have two predominant effects on markets: (i) relentless up-trend in stocks and bonds (the 'Trend Factor') , dominated by the buy-the-dip mentality, which encapsulates the 'moral hazard' of investors knowing Central Banks are prompt to come to their rescue (otherwise known as 'Bernanke/Yellen/Kuroda/Draghi put'), and (ii) the relentless down-trend in volatility the 'Volatility Factor').

Two Factors Explain All: Trend and Volatility

The most fashionable investment strategies these days are directly impacted by either one or both of these drivers. Such strategies make the bulk of the overall market, after leverage or turnover is taken into account : we will refer to them in the following as 'passive' or 'quasi-passive' . The trend impacts the long-only community, crowning it as a sure winner, making the case for low- cost passive investing. The low volatility permeates everything else, making the case for full- investment and leverage.

The vast majority of investors these days are not independent from the QE environment they operate within : ETFs and index funds, Risk Parity funds and Target Volatility vehicles, Low Volatility / Short Volatility vehicles, trend-chasing algos, Machine Learning-inspired funds, behavioral Alternative Risk Premia funds. They are the poster children of the QE world. We estimate combined assets under management of in excess of $8trn across the spectrum. They form a broad category of 'passive' or 'quasi-passive' investors, as are being mechanically driven by two main factors: trend and volatility.

Source: Fasanara Presentations | Market Fragility - How to Position for Twin Bubbles Bust, 16 th October 2017. The slide is described in details in this video recording.

Extraordinary monetary policies have feedback loops with the asset management industry as a whole, reinforcing the effects on markets of such policies in a vicious – or virtuous - cycle . QE and NIRP help a large number of investment strategies to flourish, validating their success and supporting their asset gathering in the process, and are in return helped in boosting bond and stock markets by their flows joining the already monumental public flows.

Private flows so reach singularity with public flows, and the whole market economy morphs into a one big common bet on ever-rising prices, in shallow volatility. Here is the story of how $15trn of money printing by major Central Banks in the last ten years, of which $3.7trn in 2017 alone, is joined by total assets of $8trn managed into buying the same safe and risk assets across, with leverage, indiscriminately.

How Market Risk became Systemic Risk

Let's give a cursory look at the main players involved (a recent presentation we did is recorded here) . As markets trend higher, no matter what happens (ever against the shocked disbeliefs of Brexit, Trump, an Italian failed referendum and nuclear threats in North Korea), investors understand the outperformance that comes from pricing risks out of their portfolios entirely and going long-only and fully-invested. Whoever under-weighs positions in an attempt to be prudent ends up underperforming its benchmarks and is then penalized with redemptions. Passive investors who are long-only and fully invested are the winners, as they are designed to be bold and insensitive to risks. As Central Banks policies reduce the level of interest rates to zero or whereabouts, fees become ever more relevant, making the case for passive investing most compelling. The rise of ETF and passive index funds is then inevitable.

According to JP Morgan, in the last 10 years, $2trn left active managers in equities and $2trn entered passive managers (pag.39 here) . We may be excused for thinking they are the same $ 2trn of underlying investors progressively pricing risk provisions out of books, de facto , while chasing outperformance and lower fees.

To be sure, ETFs are a great financial innovation, helping reducing costs in an expensive industry and giving entry to markets previously un-accessible to most investors. Yet, what matters here is their impact on systemic risks, via positive feedback loops. In circular reference, beyond Central Banks flows, markets are helped rise by such classes of valuations-insensitive passive investors, which are then rewarded with further inflows, with which they can then buy more. The more expensive valuations get, the more they disconnect from fundamentals, the more divergence from equilibrium occurs, the larger fat-tail risks become.

In ever-rising markets, 'buy-and-hold' strategies may only possibly be outsmarted by 'buy-the-dip' strategies. Whatever the outcome of risk events, be ready to buy the dip quickly and blindly. As more investors design themselves up to do so, the dips are shallower over time, leading to an S&P500 that never lost 3% in 2017, an historical milestone. Machine learning is another beautiful market innovation, but what is there to learn from the time series of the last several years, if not that buy- the-dip works, irrespective of what caused the dip. Big Data is yet another great concept, shaping the future of us all. Yet, most data ever generated in humankind dates back three years only, in and by itself a striking limitation. The quality of the deduction cannot exceed the quality of the time series upon which the data science was applied. If the time series is untrustworthy, as is heavily influenced by monumental public flows ($300bn per months), what trust can we put on any model output originating from it? What pattern recognition can we really be hopeful of getting, in the first place? May some of it just be a commercial disguise for going long, selling volatility and leveraging up in various shapes or forms? What is hype and what is real? A short and compromised data series makes it hard, if not possible, to really know. Once public flows abate and price discovery is let free again, then and only then will we be in a position to know the difference.

Low volatility does what trending markets alone cannot. A state of low volatility presents the appearance of stuporous, innocuous, narcotized markets, thus enticing new swathes of unfitting investors in, mostly retail-type 'weak hands'. Weak hands are investors who are brought to like investments by certain characteristics which are uncommon to the specific investment itself, such as featuring a low volatility. It is in this form that we see bond-like investors looking at the stock market for yield pick-up purposes, magnetized by levels of realized volatility similar to what fixed income used to provide with during the Great Moderation. It is in this form that Tech companies out of the US have started filling the coffers of not just Growth ETF, where they should rightfully reside, but also Momentum ETF, and even, incredibly, Low-Volatility ETF.

Low volatility is also a dominant input for Risk Parity funds and Target Volatility vehicles . The lower the volatility, the higher the leverage allowed in such players, mechanically. All of which are long-only players, joining public flows, again helping the market rise to record levels in the process, in circular reference. Rewarded by new inflows, the buying spree gathers momentum, in a virtuous circle. Valuations are no real input in the process, volatility is what matters the most. Volatility is not risk, except for them it is.

It goes further than that. It is not only the level of volatility that count, but its direction too . As volatility implodes, relentlessly, into historical lows never seen before in history, a plethora of investment strategies is launched to capitalize on just that, directly: Short Volatility vehicles . They are the best performing strategy of the last decade, by and large. The problem here is that, due to construction, as volatility got to single-digit territory, relatively small spikes are now enough to trigger wipe-out events on several of these instruments. Our analysis shows that if equity volatility doubles up from current levels (while still being half of what it was as recently as in August 2015), certain Short Vol ETFs may stand to lose up to 75% or more. Moreover, short positions on long-vol ETFs can lose up to 250% of capital. For some, 'termination events' are built into contracts for sudden losses of this magnitude, meaning that the notes would be prematurely withdrawn. It is one thing to expect a spike in volatility to cause losses, it is quite another to know that a minor move is all it takes to trigger a default event.

On such spikes in volatility, Morgan Stanley Quant Derivatives Strategy desk warns further that market makers may be forced to rebalance their exposure non-linearly on a spike in volatility. A drop in the S&P 500 of 5% in one day may trigger approximately $ 400mn of Vega notional of rebalancing (pag.48 here) . We estimate that half a trillion dollars of additional selling on S&P stocks may occur following a correction of between 5% and 10%. That is a lot of selling, pre-set in markets, waiting to strike. Unless you expect the market to not have another 5% sell-off, ever again.

For more details, we describe the role of these different players in a recent video presentation and in our June Investment Outlook and May Investment Outlook.

It's All One Big Position

What do ETFs, Risk Parity and Target Vol vehicles, Low Vol / Short Vol vehicles, trend-chasing algos, Machine Learning, behavioral Alternative Risk Premia, factor investing have in common? Except, of course, being the 'winners take all' of QE-driven markets. They all share one or more of the following risk factors: long-only, fully invested when not leveraged-up, short volatility, short correlation, short gamma Thanks to QE and NIRP, the whole market is becoming one single big position.

The 'Trend Factor' and the 'Volatility Factor' are over-whelming, making it inevitable for a high- beta, long-bias, short-vol proxy to disseminate across. Almost inescapably so, given the time series the asset management industry has to deal with, and derive its signals from.

Several classes of investors may move to sell in lock-steps if and when markets turn. The boost to asset prices and the zero-volatility environment created the conditions for systemic risks in the form of an over-compensation to the downside. Record-low volatility breeds market fragility, it precedes system instability.

Flows Matter, Both Ways!

We will know soon if the fragility of markets is that bad. The undoing of loose monetary policies (NIRP, ZIRP) will create a liquidity withdrawal of over $1 trillion in 2018 alone (pag.61-62 here) . The reaction of the passive and quasi-passive communities will determine the speed of the adjustment in the pricing for both safe and risk assets, and how quickly risk provisions will re- enter portfolios. Such liquidity withdrawal will represent the first real crash-test for markets in 10 years.

As public spending on Wall Street abates, the risk is evident of seeing the whole market turning with it. The shocks of Trump and Brexit did not manage to derail markets for long, as public flows were overwhelming. Flows is what mattered, above all elusive, over-fitting economic narratives justifying price action at the margin. Flows may matter again now as they fade

Systemic Risk is Not Just About Banks: Look at Funds

The role of trending markets is known when it comes to systemic risks: a not sufficient but necessary condition. Most trends do not necessarily lead to systemic risks, but hardly systemic risks ever build up without a prolonged period of uptrend beforehand. Prolonged uptrends in any asset class hold the potential to instill the perception that such asset class will grow forever, irrespective of the fundamentals, and may thus lead to excessive risk taking, excess leverage, the formation of a bubble and, ultimately, systemic risks. The mind goes to the asset class of real estate, its undeterred uptrend into 2006/2007, its perception of perpetuity ("we have never had a decline in house prices on a nationwide basis'' Ben Bernanke) , the credit bubble built on banks hazardous activities on subprime mortgages as a result, and the systemic risks which emanated, with damages spanning well beyond the borders of real estate.

The role of volatility is also well-researched, especially low volatility. Hayman Minsky, in his " Financial Instability Hypothesis '' in 1977, analyses the behavioral changes induced by a reduction of volatility, postulating that economic agents observing a low risk are induced to increase risk taking, which may in turn lead to a crisis: "stability is destabilizing". In a recent study, Jon Danielsson, Director of the Systemic Risk Centre at the LSE, finds unambiguous support for the 'low volatility channel', insofar as prolonged periods of low volatility have a strong predictive power over the incidence of a banking crisis, owing to excess lending and excess leverage . The economic impact is the highest if the economy stays in the low volatility environment for five years : a 1% decrease in volatility below its trend translates in a 1.01% increase in the probability of a crisis. He also finds that, counter-intuitively, high volatility has little predictive power : very interesting, when the whole finance world at large is based on retrospective VAR metrics, and equivocates high volatility for high risk.

Both a persistent trend and prolonged low-volatility can lead banks to take excessive risks. But what about their impact on the asset management industry?

Thinking at the hard economic impact of the Great Depression (1929-1932) and the Great Recession (2007-2009), and the eminent role played by banks in both, it comes as little surprise that the banking sector captures all the attention. However, what remains to be looked into, and perhaps more worrying in today's environment, is the role of prolonged periods of uptrend and low-vol on the asset management industry

In 2014, the Financial Stability Board (FSB), an international body that makes recommendations to G20 nations on financial risks, published a consultation paper asking whether fund managers might need to be designated as " global systemically important financial institution " or G-SIFI, a step that would involve greater regulation and oversight. It did not result in much, as the industry lobbied in protest, emphasizing the difference between the levered balance sheet of a bank and the business of funds.

The reason for asking the question is evident: (i) sheer size , as the AM industry ballooned in the last few years, to now represent over [15trnXX] for just the top 5 US players!, (ii) funds have partially substituted banks in certain market-making activities, as banks dialed back their participation in response to tighter regulation and (iii) , funds can indeed do damage: think of LTCM in 1998, the fatal bailout of two Real Estate funds by Bear Stearns in 2007, the money market funds 'breaking the buck' in 2008 amongst others.

But it is not just sheer size that matters for asset managers. What may worry more is the positive feedback loops discussed above and the resulting concentration of bets in one single global pot , life-dependent on infinite momentum/trend and ever-falling volatility. Positive feedback loops are the link for the sheer size of the AM industry to become systemically relevant. Today more than ever, they morph market risks in systemic risks.

Volatility will not forever be low, the trend will not forever go: how bad a damage when it stops? As macro prudential policy is not the art of "whether or not it will happen" but of "what happens if", it is hard not to see this as a blind spot for policymakers nowadays.

ebworthen , Nov 22, 2017 10:55 AM

In other words, it's a Ponzi scheme.

Let it Go , Nov 22, 2017 11:49 AM

I have never seen it this bad, the numbers are all moutof wack!

It seems many of us are drawn to a good illusion and this proves true for most people in their daily life as well. In some ways, it could be said that our culture has become obsessed with avoiding what is real.

We must remember that politicians and those in power tend to throw people under the bus rather than rise up and take responsibility for the problems they create. The article below looks at how we have grown to believe things are fine.

http://The Allure Of Ilusions-Five Favorite Financial Myths.html

Batman11 , Nov 22, 2017 12:47 PM

The real estate boom features all the unknowns in today's thinking, which is why they are global.

This simple equation is unknown.

Disposable income = wages – (taxes + the cost of living)

You can immediately see how high housing costs have to be covered by wages; business pays the high housing costs for expensive housing adding to costs and reducing profits. The real estate boom raises costs to business and makes your nation uncompetitive in a globalised world.

The unproductive lending involved that leads to financial crises.

The UK:

https://cdn.opendemocracy.net/neweconomics/wp-content/uploads/sites/5/2017/04/Screen-Shot-2017-04-21-at-13.53.09.png

The economy gets loaded up with unproductive lending as future spending power has been taken to inflate the value of the nation's housing stock. Housing is more expensive and the future has been impoverished.

US:

https://cdn.opendemocracy.net/neweconomics/wp-content/uploads/sites/5/2017/04/Screen-Shot-2017-04-21-at-13.52.41.png

Unproductive lending is not good for the economy and led directly to 1929 and 2008.

Neoliberalism's underlying economics, neoclassical economics, doesn't look at private debt and so no one really knew what they were doing.

The real estate boom feels good for a reason that is not known to today's thinkers.

Monetary theory has been regressing since 1856, when someone worked out how the system really worked.

Credit creation theory -> fractional reserve theory -> financial intermediation theory

"A lost century in economics: Three theories of banking and the conclusive evidence" Richard A. Werner

http://www.sciencedirect.com/science/article/pii/S1057521915001477

" banks make their profits by taking in deposits and lending the funds out at a higher rate of interest" Paul Krugman, 2015. He wouldn't know, that's financial intermediation theory.

Bank lending creates money, which pours into the economy fuelling the boom; it is this money creation that makes the housing boom feel so good in the general economy. It feels like there is lots of money about because there is.

The housing bust feels so bad because the opposite takes place, and money gets sucked out of the economy as the repayments overtake new lending. It feels like there isn't much money about because there isn't.

They were known unknowns, the people that knew weren't the policymakers to whom these things were unknown.

The global economy told policymakers there was something seriously wrong in 2008, but they ignored it, I didn't.

Batman11 -> Batman11 , Nov 22, 2017 12:51 PM

The most fundamental of all fundamentals was unknown.

The relationship between debt and money.

the money supply = all the debt in the system, public and private

http://www.whichwayhome.com/skin/frontend/default/wwgcomcatalogarticles/images/articles/whichwayhomes/US-money-supply.jpg

M3 is going exponential before 2008, a credit bubble is underway (debt = money)

The FED and everyone else doesn't realise.

Batman11 -> Batman11 , Nov 22, 2017 1:25 PM

This is why austerity doesn't work in a balance sheet recession, e.g. Greece.

The IMF predicted Greek GDP would have recovered by 2015 with austerity.

By 2015 it was down 27% and still falling.

Oh dear.

Richard Koo had to explain the problem to the IMF.

https://www.youtube.com/watch?v=8YTyJzmiHGk

They had pushed Greece into debt deflation by cutting Government spending with austerity.

It wasn't just the IMF, the Troika all went along with this fatally flawed policy, this means the ECB and EU Commission also didn't know what they were doing.

Richard Koo had watched as Western "experts" told Japan to cut Government spending and seen the fall in GDP as the economy went downhill. The only way to get things going again was to increase Government spending and he has had decades to work out what was going on.

The Troika's bad economics has been wreaking havoc across the Club-Med.

Mark Blythe looks at the data.

https://www.youtube.com/watch?v=B6vV8_uQmxs&feature=em-subs_digest-vrecs

It comes out of knowledge that is missing from the mainstream.

Batman11 -> Batman11 , Nov 22, 2017 1:31 PM

Balancing the budget ............ be careful you might head into debt deflation.

If the private sector aren't borrowing the Government needs to borrow to keep the money supply stable.

You don't want to end up like Greece do you?

Radical Marijuana , Nov 22, 2017 3:15 PM

Another superficially correct analysis of "Positive Feedback Loops create divergence from general equilibrium, and Systemic Risks." The vicious feedback loops which have the most leverage are all aspects of the funding of the political processes, which have resulted in runaway systems of legalized lies, backed by legalized violence, the most important of which are the ways that the powers of public governments enforce frauds by private banks, the big corporations that have grown up around those big banks.

About exponentially advancing technologies have enabled enforced frauds to become about exponentially more fraudulent. The underlying drivers were the ways that the combined money/murder systems developed, whose social successfulness became more and more based on maximizing maliciousness. From a superficial point of view, those results may appear to be due to incompetence, however, from a deeper point of view those results make sense as due to the excessively successful applications of the methods of organized crime through the political processes, due to the vicious feedback loops of the funding of those political processes.

The only connections between human laws and natural laws are the abilities to back up lies with violence. Natural selection pressures have driven Globalized Neolithic Civilization to develop the most dishonest artificial selection systems possible, while the continuation of the various vicious feedback loops that made and maintained those developments are driving about exponentially increasing dishonesty. Although the laws of nature are not going to stop working, and the laws of nature underpinned the runaway development of excessively successful vicious feedback loops of organized crime, on larger and larger scales, to result in Globalized Neolithic Civilization, the overall results are that Civilization is becoming about exponentially more psychotic. Since Civilization necessarily operates according to the principles and methods of organized crime, while those who became the biggest and best organized forms of organized crime, namely, banker dominated governments, also necessarily became most dishonest about themselves, and yet, their bullshit social stories continue to dominate the public schools, and mainstream mass media, as well as the publicly significant controlled "opposition" groups.

Political economy is INSIDE human ecology, and therefore, the greatest systematic risks are to be found in the tragic trajectory of human ecologies which are almost totally buried under maximized maliciousness. "Public debates" about the human death control systems are based on previously having being as deceitful and treacherous as possible regarding those topics. The most extreme forms of that manifest as the ways that money is measurement backed by murder. Of course, that the debt controls are backed by the death controls are issues which are generally not publicly admitted nor addressed.

Global Neolithic Civilization has become almost totally based on being able to enforce frauds, in ways which have become about exponentially more fraudulent, as the vicious feedback loops which enable that to happen automatically reinforce themselves to get worse, faster. The almost total triumph of enforced frauds has resulted in social "realities" which are becoming exponentially more insane, since the social successfulness of enforced frauds requires the most people do not understand that, because they have been conditioned to not want to understand that. Rather, almost everyone takes for granted deliberately ignoring and misunderstanding the laws of nature in the most absurdly backward ways possible, because of the long history of successful warfare based on deceits and treacheries becoming the more recent history of successful finance based on enforcing frauds, despite that tragic trajectory of vicious feedback loops resulting in about exponentially increasing overall fraudulence.

Various superficially correct analyses, such as the one in the article above, are typical of the content on Zero Hedge , which does not come remotely close to recognizing the degree to which the dominate natural languages and philosophy of science have undergone series of compromises with the biggest bullies' bullshit-based world views, which became the banksters' bullshit about economics. Although it is theoretically possible for human beings to better understand themselves and Civilization, it continues to become more and more politically impossible to do so, due to the ever increasing vicious feedback loops of enforced frauds achieving symbolic robberies ...

Although the laws of nature are never going to stop working, it is barely possible to exaggerate the degree to which Civilization overall is becoming about exponentially more psychotic, due to the social "realities" based on successfully enforcing frauds becoming more and more out of touch with the surrounding, relatively objective, physical and biological facts. The various superficially correct analyses presented on Zero Hedge regarding that kind of runaway collective psychosis, driven by the vicious feedback loops of the funding of all aspects of the funding of the political processes, tend to always grossly understate the seriousness of that situation, especially including the crucial issues of how to operate the human murder systems after the development of weapons of mass destruction, which is unavoidable due to the rapid development of globalized electronic monkey money frauds, backed by the threat of force from apes with atomic weapons.

Those who believe that possessing precious metals, or cryptocurrencies, etc., are viable solutions to those problems are not remotely close to being in the right order of magnitude. Although there is no doubt that exponentially more "money" is being made out of nothing as debts, in order to "pay" for strip-mining the natural resources of a still relatively fresh planet, and so, there is no doubt that the exponentially decreasing value of that "money" is driving the accumulation of apparent anomalies, such as outlined in the article above, the actually crucial issues continue to be the ways that money is measurement backed by murder, as the most abstract ways that private property are claims backed by coercions. Stop-gap individual responses to the runaway fraudulence, such as faith in possessing precious metals or cryptocurrencies, make some relative sense in terms of the public "money" supplies becoming exponentially more fraudulent, but otherwise dismally fail to be in the ball park of the significant issues driven by prodigious progress in physical sciences, WITHOUT any genuine progress in political sciences, other than to continue to be able to better enforce bigger frauds, through the elaborations of oxymoronic scientific dictatorships, which adamantly refuse to become more genuinely scientific about themselves.

Primates with about exponentially increasing physical technologies continue to deliberately ignore and misunderstand themselves as much as is humanly possible, due to the history of warfare making and maintaining the currently existing political economy, whose maliciousness is manifesting through runaway vicious feedback loops, whereby the excessively successful control of Civilization through applications of the methods of organized crime are resulting in that Civilization manifesting runaway criminal insanities. Indeed, in that context, where there is almost nothing but the central core of triumphant organized crime, namely bankster dominated governments, surrounded by various layers of controlled "opposition" groups, which stay within the same bullshit-based frames of reference regarding those phenomena, the overall situation is that society becoming about exponentially sicker and insane.

That Civilization has been driven by natural selection pressures to manifest runaway psychoses is not going to stop the laws of nature from continuing to work through that Civilization. However, that will nevertheless drive the currently dominate artificial selection systems to become increasingly psychotic, in ways whereby their vicious feedback loops are less and less able to be sanely responded to ... Although some human beings have better and better understood some general energy systems, e.g., electric and atomic energy, etc., since warfare was the oldest and best developed forms of social science and engineering, whose successfulness was based on being able to maximize maliciousness, and since those then enabled successful finance to become based on runaway enforced frauds, human beings living within Globalized Neolithic Civilization are so hidebound by adapting to living inside those vicious feedback loops based on being able to enforce frauds that those human beings are mostly unwilling and unable to better understand themselves as also manifestations of general energy systems.

As the report, embedded in the article, begins by quoting Leonardo da Vinci:

"Learn how to see. Realize that everything connects to everything else."

In general, "Asset Managers" are stuck inside taking for granted that everything they do has become almost totally based on being able to enforce frauds, despite some of them noticing the increasingly blatant ways that there are accumulating apparent anomalies in those systems, as vicious feedback loops drive those systems to become about exponentially more fraudulent, and therefore increasingly unbalanced. To come to better terms with those apparent anomalies requires going through series of intellectual scientific revolutions and profound paradigm shifts, which overall become ways that human beings better understand themselves as manifestations of general energy systems. However, since doing so requires recognizing how and why governments are necessarily the biggest forms of organized crime, dominated by the best organized gangsters, the banksters, it continues to be politically impossible to accomplish that.

Muppet , Nov 22, 2017 7:03 PM

At each open, algos compute the increase in their AUM from the prior day and their margin reach. They then begin buying. All algos do this. Buying whenever cash/margin exists; selling whenever profit targets exist. On pullbacks, the algos withdraw, volume evaporates, minimizing the drop. The algos collectively increase equity prices without consideration of the value of the money involved. Not valuations. No fundamentals. Just ones and zeroes. Just a program.

[Nov 29, 2017] Attack on Sanders Economic Plan By Former Chairs of the Council of Economic Advisors Irresponsible

Highly recommended!
Notable quotes:
"... Well, again, what he was doing was running a program of a certain scale, of a large scale, through a set of standard macroeconomic assumptions. And that, again, is a reasonable exercise. If you ask me what my personal view is, I've written a whole book called The End of Normal in which I lay out reasons for my chronic pessimism about the capacity of the world economy to absorb a great deal more rapid economic growth. ..."
"... But that's not in the standard models, and it would not be appropriate to layer that on to a forecast of this kind. What Friedman was criticized for was not for putting his thumb on the scale, but for failing to put his thumb on the scale. In fact, that was the reasonable thing to do ..."
"... So what we had here was a, what was essentially an academic exercise that produced a result that was highly favorable to the Sanders position, and showed that if you did an ambitious program you would get a strong growth response. It's reasonable, certainly, for the first three or four years that that would transpire in practice. And what happened was that people who didn't like that result politically jumped on it in a way which was, frankly speaking, professionally irresponsible, in my view. It was designed to convey the impression, which it succeeded in doing for a brief while through the broad media, that this was not a reputable exercise, and that there were responsible people on one side of the debate, and irresponsible people on the other. ..."
"... The true nature of Capitalism has obviously been forgotten over time. Today we think it brings prosperity to all, but that was certainly never the intention. Today's raw Capitalism is showing its true nature with ever rising inequality. Capitalism is essentially the same as every other social system since the dawn of civilization. The lower and middle classes do all the work and the upper, leisure Class, live in the lap of luxury. The lower class does the manual work; the middle class does the administrative and managerial work and the upper, leisure, class live a life of luxury and leisure. ..."
"... The nature of the Leisure Class, to which the benefits of every system accrue, was studied over 100 years ago. "The Theory of the Leisure Class: An Economic Study of Institutions", by Thorstein Veblen. (The Wikipedia entry gives a good insight. It was written a long time ago but much of it is as true today as it was then. This is the source of the term conspicuous consumption.) We still have our leisure class in the UK, the Aristocracy, and they have been doing very little for centuries. The UK's aristocracy has seen social systems come and go, but they all provide a life of luxury and leisure and with someone else doing all the work. ..."
"... Feudalism – exploit the masses through land ownership. Capitalism – exploit the masses through wealth (Capital) ..."
"... Now the competition has gone, the US middle class is being wiped out. The US is going third world, with just rich and poor and no middle class. Raw Capitalism can only return Capitalism to its true state where there is little demand and those at the bottom live a life of bare subsistence. ..."
"... "The Marxian capitalist has infinite shrewdness and cunning on everything except matters pertaining to his own ultimate survival. On these, he is not subject to education. He continues wilfully and reliably down the path to his own destruction" ..."
"... "We came, we saw, he died" rinse and repeat for 5,000 years. ..."
"... By the 1920s, mass production techniques had improved to such an extent that relatively wealthy consumers were required to purchase all the output the system could produce and extensive advertising was required to manufacture demand for the chronic over-supply the Capitalist system could produce. ..."
"... They knew that if wealth concentrated too much there would not be enough demand. ..."
"... Fiscal conservatism, which champions a balanced budget and expenditure restraints, is often hailed as a politico-economic philosophy as well as a policy of financial responsibility. In practice, it has been used as an argument against free spending by governments which can lead to high levels of debt and inflation. It has not been a positive philosophy which advocates the pro-growth and stability benefits coming from balanced budgets. Rather, it is a negative one – reacting against excessive spending and its consequences. This is probably why modern examples of fiscal conservatism in the United States and the United Kingdom have not led to sustainable growth or a significant reduction in public debt. Instead, in the case of the Ronald Reagan era in the US in the 1980s, public debt soared as fiscal conservatism and other policies were abandoned. ..."
"... Galbraith is probably my favorite economist, and eminently reasonable here. It makes me think that Sanders should have used him, or someone like him as an adviser/in house economist, rather than relying on external analyses like Friedman. ..."
"... Is the American public, trained/indoctrinated to think of the USG budget in terms of a household budget analogy, ready for MMT? ..."
"... To me, too many of the supposed (and actual) intellectuals and high level advisers were experts in rationalizing and explaining the chosen party views, but still employed the Cato Institute suggestion to use "Leninist" propaganda techniques as put forth in the 1996 Newt Gingrich/Frank Luntz GoPac memo, "Language: A Key Mechanism of Control." ..."
"... Galbraith said casually about the thesis of his new book: This really is the new normal for capitalism – meaning low growth – because there is not much growth left. ..."
Mar 06, 2016 | naked capitalism

... ... ...

PERIES: James, the Council of Economic Advisors, they put out economic forecasts each year. And there has been some wildly optimistic ones. For example, if you look at the 2010 predictions for 2012 and 2013 they have not quite been attained. And one would say it was done in the interest of trying to make the administration that they were serving more impressive. But what accounts for this particular attack on Friedman's projection and other fellow economists?

GALBRAITH: This was a classic case of professional bad manners and rank-pulling. What we had here were four former chairs of the president's Council of Economic Advisors, and two from President Obama, two from President Clinton, who decided to use their big names and their titles in order to launch an attack on a professor of economics at the University of Massachusetts who had written a paper evaluating the Sanders economic program.

It's likely that the four bigwigs thought that Professor Friedman was a Bernie Sanders supporter. In fact, as of that time he was a Hillary Clinton supporter and a modest donor to her campaign. What he had done was simply to write his evaluation of the economic effects of the ambitious Sanders reform program. The four former council chairs announced that on the basis of their deep commitment to rigor and objectivity, they had discovered that this forecast was unrealistic. And what I pointed out was that that claim was based on no evidence and no analysis whatsoever. And when you pressed down on it you found that it was simply based on the obvious fact that we haven't seen the kinds of growth rates that Professor Friedman's analysis suggested the Sanders program would produce. And for a very simple reason: the Sanders program is bigger. It's more ambitious than anything we've seen in recent years, so it's not surprising that when you put it through a model it generates a higher growth rate.

So that was the basic underlying facts, and these guys, two men and two women, announced that they, that it was a disreputable study, but failed to present any analysis that suggested they'd actually even read the paper before they denounced it. And that's what I pointed out in my counter letter, in a number of articles that have appeared since.

PERIES: James, so in your letter, how do you counter them? What methods did you use to come to your conclusions?

GALBRAITH: Well, I, no need to say anything beyond the fact that I had looked in their letter for the rigor that they were so proud of, for the objectivity and the analysis that they were so proud of, and I'd found that they had not done any. They had not made any such claim, not done any such work.

So that began to provoke a discussion. It's fair to say ultimately, without apologizing for effectively launching an ad hominem attack on an independent academic researcher, one of the former chairs, Christina Romer of President Obama's council, and her husband David Romer, a fellow economist, did produce a paper in which they spelled out their differences with the, with the Friedman paper. But that, again, raised another set of interesting issues which we've continued to discuss at various, various outlets of the press.

PERIES: Now, James Friedman's claim that the growth rate from Sanders' plan to be around 5.3 percent. And some economists, including Dean Baker at the Center for Economic Policy and Research, have claimed that this is unrealistic. What do you make of that?

GALBRAITH: Well, the question is whether it is an effect, let's say, a reasonable projection, of putting the Sanders program into an economic model. And the answer to that question, yes, Professor Friedman did a reasonable job. He spelled out what the underlying assumptions that he was using were. He spelled out the basic rules of thumb that macroeconomists had used for decades to assess the effects of an economic program. In this case, an expansionary economic program. And he ran them through his model and reported the results, a perfectly reasonable thing to do.

Now, one can be skeptical. And I am, and Dean Baker is, lots of people are skeptical that the world would work out quite that way, because lots of things, in fact, happen which are not accounted for in a model. And we've talked, we've basically put together a list of things that you think might be problematic. But the exercise here was not to put everything into paper that might happen in the world. The exercise was to take the kind of bare bones that economists use to assess and to compare the consequences of alternative programs, and to ask what kind of results do you get out? And that's what, again, what Jerry Friedman did. It was a reasonable exercise, he came up with a reasonable answer, and he reported it.

PERIES: Now, Friedman seems to think that the rate of full employment in 1999 is attainable. However, many labor economists seem to think that the larger share of the elderly currently in society compared to 1999 explains some of the lack of labor participation, which creates a lower full employment ceiling that's contradicting Friedman's report. Your thoughts on that?

GALBRAITH: Well, I think it is a fact that the population is getting older. But as, I think, any economist would tell you, that when you offer jobs in the labor market, the first thing that happens is the people who are looking for work take those jobs. The second thing that happens is that people who might look for work when jobs were available start coming back into the labor market. And if that is not enough to fill the vacancies that you have, it's perfectly open to employers to raise their wages so as to bring more people in, or to increase the pace at which they innovate and substitute technology for labor so that they don't need the work.

So there's no real crisis involved in the situation if it turns out five years from now we're at 3.5 percent unemployment, and they were beginning to run short of labor. That's not a reason to, at this stage, say no, we're not going to engage in the exercise and run a more expansionary, vigorous reform program, a vigorous infrastructure project, a major reform of healthcare, a tuition-free public education program. All of those things, which were part of what Friedman put into his paper, should be done anyway. The fact that the labor market forecast might prove to have some different, the labor market might have different characteristics in five years' time is from our present point of view just a, it's an academic or a theoretical proposition, purely.

PERIES: And Friedman's paper, he looks at a ten-year forecast. Did you feel that when you looked at the specifics of that, including college, universal healthcare, infrastructure spending and of course, expanding Social Security and so on, that those categories and his predictions or projections, rather, made sense to you?

GALBRAITH: Well, again, what he was doing was running a program of a certain scale, of a large scale, through a set of standard macroeconomic assumptions. And that, again, is a reasonable exercise. If you ask me what my personal view is, I've written a whole book called The End of Normal in which I lay out reasons for my chronic pessimism about the capacity of the world economy to absorb a great deal more rapid economic growth.

But that's not in the standard models, and it would not be appropriate to layer that on to a forecast of this kind. What Friedman was criticized for was not for putting his thumb on the scale, but for failing to put his thumb on the scale. In fact, that was the reasonable thing to do.

On the contrary, and on the other side, when Christina and David Romer did put out their forecast, their own criticism of the Friedman paper, they concluded by asserting that if this program were tried, inflation would soar. So they there were making an allegation for which, again, they had no evidence and no plausible model, that in the world in which we presently live would produce that result.

So what we had here was a, what was essentially an academic exercise that produced a result that was highly favorable to the Sanders position, and showed that if you did an ambitious program you would get a strong growth response. It's reasonable, certainly, for the first three or four years that that would transpire in practice. And what happened was that people who didn't like that result politically jumped on it in a way which was, frankly speaking, professionally irresponsible, in my view. It was designed to convey the impression, which it succeeded in doing for a brief while through the broad media, that this was not a reputable exercise, and that there were responsible people on one side of the debate, and irresponsible people on the other.

And that was, again, something that–an impression that could be conveyed through the mass media, but would not withstand scrutiny, and didn't withstand scrutiny, once a few of us stood up and started saying, okay, where's your evidence, on what are you basing this argument? And revealed the point, which the Romers implicitly conceded, and I give them credit for that, that in order to criticize a fellow economist you need to do some work.

... ... ...

Keith , March 6, 2016 at 4:45 am

The true nature of Capitalism has obviously been forgotten over time. Today we think it brings prosperity to all, but that was certainly never the intention. Today's raw Capitalism is showing its true nature with ever rising inequality. Capitalism is essentially the same as every other social system since the dawn of civilization. The lower and middle classes do all the work and the upper, leisure Class, live in the lap of luxury. The lower class does the manual work; the middle class does the administrative and managerial work and the upper, leisure, class live a life of luxury and leisure.

The nature of the Leisure Class, to which the benefits of every system accrue, was studied over 100 years ago. "The Theory of the Leisure Class: An Economic Study of Institutions", by Thorstein Veblen. (The Wikipedia entry gives a good insight. It was written a long time ago but much of it is as true today as it was then. This is the source of the term conspicuous consumption.) We still have our leisure class in the UK, the Aristocracy, and they have been doing very little for centuries. The UK's aristocracy has seen social systems come and go, but they all provide a life of luxury and leisure and with someone else doing all the work.

Feudalism – exploit the masses through land ownership. Capitalism – exploit the masses through wealth (Capital)

Today this is done through the parasitic, rentier trickle up of Capitalism:

a) Those with excess capital invest it and collect interest, dividends and rent.
b) Those with insufficient capital borrow money and pay interest and rent.

All this was much easier to see in Capitalism's earlier days.

Malthus and Ricardo never saw those at the bottom rising out of a bare subsistence living. This was the way it had always been and always would be, the benefits of the system only accrue to those at the top.

It was very obvious to Adam Smith:

"The Labour and time of the poor is in civilised countries sacrificed to the maintaining of the rich in ease and luxury. The Landlord is maintained in idleness and luxury by the labour of his tenants. The moneyed man is supported by his extractions from the industrious merchant and the needy who are obliged to support him in ease by a return for the use of his money. But every savage has the full fruits of his own labours; there are no landlords, no usurers and no tax gatherers."

Like most classical economists he differentiated between "earned" and "unearned" wealth and noted how the wealthy maintained themselves in idleness and luxury via "unearned", rentier income from their land and capital.

We can no longer see the difference between the productive side of the economy and the unproductive, parasitic, rentier side. This is probably why inequality is rising so fast, the mechanisms by which the system looks after those at the top are now hidden from us.

In the 19th Century things were still very obvious.

1) Those at the top were very wealthy
2) Those lower down lived in grinding poverty, paid just enough to keep them alive to work with as little time off as possible.
3) Slavery
4) Child Labour

Immense wealth at the top with nothing trickling down, just like today.

This is what Capitalism maximized for profit looks like. Labour costs are reduced to the absolute minimum to maximise profit. The beginnings of regulation to deal with the wealthy UK businessman seeking to maximise profit, the abolition of slavery and child labour. The function of the system is still laid bare. The lower class does the manual work; the middle class does the administrative and managerial work and the upper, leisure, class live a life of luxury and leisure. The majority only got a larger slice of the pie through organised Labour movements.

By the 1920s, mass production techniques had improved to such an extent that relatively wealthy consumers were required to purchase all the output the system could produce and extensive advertising was required to manufacture demand for the chronic over-supply the Capitalist system could produce. They knew that if wealth concentrated too much there would not be enough demand. In the 1950s, when Capitalism had healthy competition, it was essential that the Capitalist system could demonstrate that it was better than the competition. The US was able to demonstrate the superior lifestyle it offered to its average citizens.

Now the competition has gone, the US middle class is being wiped out. The US is going third world, with just rich and poor and no middle class. Raw Capitalism can only return Capitalism to its true state where there is little demand and those at the bottom live a life of bare subsistence.

When you realise the true nature of Capitalism, you know why some kind of redistribution is necessary and strong progressive taxation is the only way a consumer society can ever be kept functioning.

A good quote from John Kenneth Galbraith's book "The Affluent Society", which in turn comes from Marx.

"The Marxian capitalist has infinite shrewdness and cunning on everything except matters pertaining to his own ultimate survival. On these, he is not subject to education. He continues wilfully and reliably down the path to his own destruction"

Marx made some mistakes but he got quite a lot right.

Keith , March 6, 2016 at 6:29 am

Thanks to Michael Hudson, whose ideas anyone will recognise who has read his book.

"Killing the Host"

If you haven't read it, do so immediately.

Keith , March 6, 2016 at 1:11 pm

Perhaps, Western civilization had already cultivated and concentrated psychopathic personality traits in its elite before Capitalism ever begun. Early European history is an endless procession of wars at home and abroad as the elite took their wealth by force and the masses were kept in check by force whenever necessary.

No peaceful group could ever survive this relentless onslaught of millennia. This psychopathic elite then took their warlike ways to every corner of the earth. The wealthy elite from this era then became the wealthy elite of the next Capitalist era. Even today their bloodlust cannot be sated as they look to control a global empire.

Keith , March 6, 2016 at 1:17 pm

"We came, we saw, he died" rinse and repeat for 5,000 years.

Vatch , March 6, 2016 at 5:00 pm

Certainly countless hundreds of peaceful, responsible, inclusive, open, empathetic indigenous societies have been co-opted/overthrown by the western model.

Yes, but it's not just the western model that overthrows peaceful societies. The empires of China, the Japanese monarchies, the empires of India (together with a cringeworthy caste system), the human sacrificing Aztecs, Mayas, and Incas, all prove that tyranny is not a western invention.

When a local population becomes too large to be supported by simple egalitarian hunting and gathering, something else is required. That something is agriculture, and almost inevitably, the organization, specialization, and partial urbanization required by large scale agricultural society leads to exploitation and tyranny. This is seen in the earliest societies for which we have a written record, Sumer and Egypt.

Jim Young , March 6, 2016 at 12:27 pm

Thanks for the explanations of Veblen and Galbraith, which I find enduring basics over more than 100 years of speculation, real investment, and the best way to keep consumer society healthy.

My unschooled, simple, way to measure the health of an economy is in the Velocity of Money in the real economy of useful products and services. It appears to be very far below where it was when we did our best, and lower than when we first started measuring it near the beginning of the Great Depression.

Clive , March 6, 2016 at 12:37 pm

Or, pictorially illustrated .

I'm thinking of having my Christmas Cards printed with it on the front this year.

Keith , March 6, 2016 at 1:58 pm

In addition ..

By the 1920s, mass production techniques had improved to such an extent that relatively wealthy consumers were required to purchase all the output the system could produce and extensive advertising was required to manufacture demand for the chronic over-supply the Capitalist system could produce.

They knew that if wealth concentrated too much there would not be enough demand.

Of course the Capitalists could never find it in themselves to raise wages and it took the New Deal and Keynesian thinking to usher in the consumer society.

For The Win , March 6, 2016 at 5:46 am

Colonialism and fiscal conservatism

Fiscal conservatism, which champions a balanced budget and expenditure restraints, is often hailed as a politico-economic philosophy as well as a policy of financial responsibility. In practice, it has been used as an argument against free spending by governments which can lead to high levels of debt and inflation. It has not been a positive philosophy which advocates the pro-growth and stability benefits coming from balanced budgets. Rather, it is a negative one – reacting against excessive spending and its consequences. This is probably why modern examples of fiscal conservatism in the United States and the United Kingdom have not led to sustainable growth or a significant reduction in public debt. Instead, in the case of the Ronald Reagan era in the US in the 1980s, public debt soared as fiscal conservatism and other policies were abandoned.

Rodger Malcolm Mitchell , March 6, 2016 at 2:08 pm

A Monetarily Sovereign government does not need to reduce debt. In the U.S. (which is Monetarily Sovereign) federal so-called "debt" is actually the total of deposits in T-security accounts at the Federal Reserve Bank. In short, "debt" is bank deposits.

Why anyone would want to reduce the size of deposits at the world's safest bank is a mystery to me - other than the misleading use of the word "debt."

While all bank accounts are, in fact, debt of banks, most banks boast about the size of their depositors' accounts.

Contrary to popular myth, federal debt (i.e. deposits at the FRB) does not lead to inflation. America's "debt" has grown more than 9,000% in the past 75 years, and the Fed is struggling to create inflation.

mpr , March 6, 2016 at 9:12 am

Galbraith is probably my favorite economist, and eminently reasonable here. It makes me think that Sanders should have used him, or someone like him as an adviser/in house economist, rather than relying on external analyses like Friedman. It would possibly have given his program more gravitas – first amongst elites, and then more generally. At least it would have had a chance of changing the broader discussion. Whether you agree with it or not, right now the general MSM reporting on the Sanders plan is that it doesn't add up.

diptherio , March 6, 2016 at 9:57 am

I want to know why he hasn't been prominently featuring Prof. Kelton and her economic policy prescriptions. What's up with that?

John Zelnicker , March 6, 2016 at 10:25 am

This is speculative, but since Prof. Kelton is actually the economist for the Minority (the Democrats) of the Senate Banking committee, there may be reasons of protocol that Sanders isn't using her policy ideas at the moment.

Another possibility is that trying to introduce a new economic paradigm while running for the nomination may be a bridge too far. If Sanders tried to explain to people that taxes don't fund federal spending, etc., heads would explode.

I'm also not sure how one would use Prof. Kelton's ideas without bringing in a whole bunch of MMT concepts. Maybe if Sanders wins the nomination he can begin to bring some of these ideas into the conversation.

Rodger Malcolm Mitchell , March 6, 2016 at 2:19 pm

He won't use her ideas simple because the American voter in not yet amenable to the facts of Monetary Sovereignty .

Try explaining even to your best friend that:

1. Unlike state and local taxes, Federal taxes do not fund federal spending.
2. Even if FICA were eliminated, Social Security and Medicare benefits dramatically could (and should) be increased. There are no federal "trust funds."
3. Federal deficits are necessary for economic growth
4. Federal "debt" is nothing more than deposits in T-security accounts at the Federal Reserve Bank.
5. America never has had, and is absolutely in no danger of, hyper-inflation.

Perhaps, if Bernie wins the election, he will be freer to educate the masses, as well as the economics community, but meanwhile he has to claim the popular myth that federal spending has to be "paid for" by taxes.

Kurt Sperry , March 6, 2016 at 11:48 am

Is the American public, trained/indoctrinated to think of the USG budget in terms of a household budget analogy, ready for MMT? I think it's politically OK to use MMT informed policies–"deficits don't matter"–as the Republicans have, but not OK to openly acknowledge doing so. MMT runs head on into bedrock beliefs like the protestant moral virtues of thrift and fiscal responsibility. People cling to this stuff as tightly as they cling to their religion and guns.

MaroonBulldog , March 6, 2016 at 1:00 pm

MMT is a volatile, explosive doctrine. Tell an ordinary off-the-street taxpayer that Federal taxes don't fund Federal expenditures, that Federal taxes destroy the money they collect and so keep inflation at desired levels, and ready yourself to answer this:

"If I'm just paying taxes so the money can be burned, why should I pay taxes? What good does paying taxes for that do me, or people like me?"

And be prepared not to have your answer heard, comprehended, or accepted, after it is given.

It could lead directly and quickly to the end of a system of tax collection based on voluntary compliance. It could ignite a revolution.

MMT is an unpopular doctrine. Whether it is the true theory, or a truer theory than others, of the state of the world–is not the point.

Yves Smith Post author , March 6, 2016 at 3:01 pm

She can't. She's his staffer (on the Senate Budget Committee) so she is now allowed to work on the campaign. It would be a big ethics violation and would produce a scandal. Staffers cannot work on any of their bosses campaigns, including re-elections. Remember, they are government employees, not on Sanders' personal payroll.

Jim Young , March 6, 2016 at 11:56 am

My old party has worked hard to try discredit James Galbraith. I was faced with some ridicule from a Bush era international negotiator for trying to read "The Predator State: How Conservatives Abandoned the Free Market and Why Liberals Should Too" in an airport waiting area.

To me, too many of the supposed (and actual) intellectuals and high level advisers were experts in rationalizing and explaining the chosen party views, but still employed the Cato Institute suggestion to use "Leninist" propaganda techniques as put forth in the 1996 Newt Gingrich/Frank Luntz GoPac memo, "Language: A Key Mechanism of Control."

I don't oppose them (at that level) expressing their well thought out views, even using the "persuasive" techniques described in the document at http://www.informationclearinghouse.info/article4443.htm but I do fault them for trying to prevent people from freely exploring far more comprehensive information and views.

We left the party ancestors had founded and stayed loyal to for 5 generations, though, because of the lower level dirty tricksters ("opposition researchers") that wanted us to corrupt the processes as one fund raiser told me, "We have to fight dirtier than Democrats."

Galbraith is a voice that must be listened to, just as there may be many others that we should be able to listen to (as I assume we could have under the old "Fairness Doctrine" before the corporate take over of almost all fully accessible media).

susan the other , March 6, 2016 at 11:49 am

stg Galbraith said casually about the thesis of his new book: This really is the new normal for capitalism – meaning low growth – because there is not much growth left. So maybe we are headed for a no growth world in which stability and sustainability dictate enterprise which is used to maintain a steady state – so that sounds more socialist than capitalist out of necessity. I believe this is our future too. And I think I understand Varoufakis' and Galbraith's "modest proposal" in a clearer light because growth must be used going forward not willy-nilly, but to achieve our ends. And also too – a while back the link that effectively said we had it backwards when we assume that capitalism supports socialism – because capitalism in reality lives off and is only possible under sufficient socialism. And it seems the 4 presidential advisors are more out to lunch than their letter showed.

jack , March 6, 2016 at 1:09 pm

As somebody asked above, I am still left wondering where Justin Wolfer's NYTimes piece fits into all this?

Detroit Dan , March 6, 2016 at 4:49 pm

Can't respond to all the nonsense. I just read Wolfer's piece and it seems to miss the point (as with the Romers), as noted in the following 2 articles. I especially recommend the 2nd one from John Cassidy in the New Yorker.

Friedman-Response-to-the-Romers
Bernie Sanders and the Case for a New Economic-Stimulus Package

Bernard , March 6, 2016 at 1:22 pm

as usual, i hear a lot "they" failed conservatism, never, Conservatism is just the age old avenue to "scam" the other. Bush "failed" at conservatism, i.e., it was Bush's fault not the ideology of Conservatism. on and on, this self repeated/reinforced "idea" that we have just not "found" the correct "application" of the ideal/reality that is Conservatism.

it does get old, too. all the people killed due to Conservatism and its' perpetrators. Greed, in other words, and the age old scam with "new and improved" tactics. These people have no concept of what "society" is, why we are all interrelated. to scam one is to scam us all. and these people are definitely not Christian in the "Jesus Christ" i've always heard about. Whatsoever you do unto the poor, you do unto me!

i just suppose psychopaths use any avenue for their "crimes." as i've heard, too, any great fortune is usually the result of a great crime.

somethings never change.

[Oct 10, 2017] The US Economy: Explaining Stagnation and Why It Will Persist by Thomas I. Palley

Highly recommended!
The paper is two years old. Looks how his prediction fared. Stagnation is still with us althouth low oil prices lifted all the boats. But this period is coming to the end.
Notable quotes:
"... The financial crisis that erupted in 2008 challenged the foundations of orthodox economic theory and policy. At its outset, orthodox economists were stunned into silence as evidenced by their inability to answer the Queen of England's simple question (November 5th, 2008) to the faculty of the London School of Economics as to why no one foresaw the crisis. ..."
"... Six years later, orthodoxy has fought back and largely succeeded in blocking change of thought and policy. The result has been economic stagnation ..."
"... Perspective # 3 is the progressive position which is rooted in Keynesian economics and can be labeled the "destruction of shared prosperity hypothesis" ..."
"... It is identified with the New Deal wing of the Democratic Party and the labor movement, but it has no standing within major economics departments owing to their suppression of alternatives to economic orthodoxy. ..."
"... However, financial excess is just an element of the crisis and the full explanation is far deeper than just financial market regulatory failure According to the Keynesian destruction of shared prosperity hypothesis, the deep cause is generalized economic policy failure rooted in the flawed neoliberal economic paradigm that was adopted in the late 1970s and early 1980s. ..."
"... globalization reconfigured global production by transferring manufacturing from the U.S. and Europe to emerging market economies. This new global division of labor was then supported by having U.S. consumers serve as the global economy's buyer of first and last resort, which explains the U.S. trade deficit and the global imbalances problem. ..."
"... This new global division of labor inevitably created large trade deficits that also contributed to weakening the aggregate demand (AD)generation process by causing a hemorrhage of spending on imports (Palley, 2015) ..."
"... Finance does this through three channels. First, financial markets have captured control of corporations via enforcement of the shareholder value maximization paradigm of corporate governance. Consequently, corporations now serve financial market interests along with the interests of top management. Second, financial markets in combination with corporations lobby politically for the neoliberal policy mix. ..."
"... Third, financial innovation has facilitated and promoted financial market control of corporations via hostile take-overs, leveraged buyouts and reverse capital distributions. Financial innovation has therefore been key for enforcing Wall Street's construction of the shareholder value maximization paradigm. ..."
"... The second vital role of finance is the support of AD. The neoliberal model gradually undermined the income and demand generation process, creating a growing structural demand gap. The role of finance was to fill that gap. Thus, within the U.S., deregulation, financial innovation, speculation, and mortgage lending fraud enabled finance to fill the demand gap by lending to consumers and by spurring asset price inflation ..."
"... this AD generation role of finance was an unintended consequence and not part of a grand plan. Neoliberal economists and policymakers did not realize they were creating a demand gap, but their laissez-faire economic ideology triggered financial market developments that coincidentally filled the demand gap. ..."
"... the financial process they unleashed was inevitably unstable and was always destined to hit the wall. There are limits to borrowing and limits to asset price inflation and all Ponzi schemes eventually fall apart. ..."
"... the long duration of financial excess made the collapse far deeper when it eventually happened. It has also made escaping the after-effects of the financial crisis far more difficult as the economy is now burdened by debts and destroyed credit worthiness. That has deepened the proclivity to economic stagnation. ..."
"... The neoliberal labor market flexibility agenda explicitly attacks unions and works to shift income to wealthier households. ..."
"... That model inevitably produces stagnation because it produces a structural demand shortage via (i) its impact on income distribution, and (ii) via its design of globalization which generates massive trade deficits, wage competition and off-shoring of jobs and investment. In terms of the three-way contest between the government failure hypothesis, the market failure hypothesis and the destruction of shared prosperity hypothesis, the economic policy debate during the Great Recession was cast as exclusively between government failure and market failure. ..."
"... This attitude to fiscal policy reflects the dominance within the Democratic Party of "Rubinomics", the Wall Street view associated with former Treasury Secretary Robert Rubin, that government spending and budget deficits raise real interest rates and thereby lower growth. According to that view, the US needs long-term fiscal austerity to offset Social Security and Medicare Side-by-side with the attempt to reflate the economy, the Obama administration also pushed for major overhaul and tightening of financial sector regulation via the Dodd- Frank Act (2010). ..."
"... The Obama administration's softcore neoliberalism would have likely generated stagnation by itself, but the prospect has been further strengthened by Republicans. ..."
"... The Obama administration was to provide fiscal stimulus to jump start the economy; the Fed would use QE to blow air back into the asset price bubble; the Dodd-Frank Act (2010) would stabilize financial markets; and globalization would be deepened by further NAFTA-styled international agreements. This is a near-identical model to that which failed so disastrously. Consequently, stagnation is the logical prognosis. ..."
"... Consequently, the economy is destined to repeat the patterns of the 1990s and 2000s. However, the US economy has also experienced almost twenty more years of neoliberalism which has left its economic body in worse health than the 1990s. That means the likelihood of delivering another bubble-based boom is low and stagnation tendencies will likely reassert themselves after a shorter and weaker period of expansion ..."
Apr 10, 2015 | www.thomaspalley.com

Abstract

This paper examines the major competing interpretations of the economic crisis in the US and explains the rebound of neoliberal orthodoxy. It shows how US policymakers acted to stabilize and save the economy, but failed to change the underlying neoliberal economic policy model. That failure explains the emergence of stagnation, which is likely to endure

Current economic conditions in the US smack of the mid-1990s. The 1990s expansion proved unsustainable and so will the current modest expansion. However, this time it is unlikely to be followed by financial crisis because of the balance sheet cleaning that took place during the last crisis

Revised 1: This paper has been prepared for inclusion in Gallas, Herr, Hoffer and Scherrer (eds.), Combatting Inequality: The Global North and South , Rouledge, forthcoming in 2015.

The crisis and the resilience of neoliberal economic orthodoxy

The financial crisis that erupted in 2008 challenged the foundations of orthodox economic theory and policy. At its outset, orthodox economists were stunned into silence as evidenced by their inability to answer the Queen of England's simple question (November 5th, 2008) to the faculty of the London School of Economics as to why no one foresaw the crisis.

Six years later, orthodoxy has fought back and largely succeeded in blocking change of thought and policy. The result has been economic stagnation

This paper examines the major competing interpretations of the economic crisis in the US and explains the rebound of neoliberal orthodoxy. It shows how US policymakers acted to stabilize and save the economy, but failed to change the underlying neoliberal economic policy model.

That failure explains the emergence of stagnation in the US economy and stagnation is likely to endure.

Current economic conditions in the US smack of the mid-1990s. The 1990s expansion proved unsustainable and so will the current modest expansion. However, this time it is unlikely to be followed by financial crisis because of the balance sheet cleaning that took place during the last crisis.

Competing explanations of the crisis

The Great Recession, which began in December 2007 and includes the financial crisis of 2008, is the deepest economic downturn in the US since the World War II. The depth of the downturn is captured in Table 1 which shows the decline in GDP and the peak unemployment rate. The recession has the longest duration and the decline in GDP is the largest. The peak unemployment rate was slightly below the peak rate of the recession of 1981-82. However, this ignores the fact that the labor force participation rate fell in the Great Recession (i.e. people left the labor force and were not counted as unemployed) whereas it increased in the recession of 1981-82 (i.e. people entered the labor force and were counted as unemployed).

Table 1. Alternative measures of the depth of US recessions.

... ... ...

Table 2 provides data on the percent change in private sector employment from business cycle peak to trough. The 7.6 percent loss of private sector jobs in the Great Recession dwarfs other recessions, providing another measure of its depth and confirming it extreme nature. 2 Over the course of the 1981-82 labor force participation rose from 63.8 percent to 64.2 percent, thereby likely increasing the unemployment rate. In contrast, over the course of the Great Recession the labor force participation rate fell from 66.0 percent to 65.7 percent, thereby likely decreasing the unemployment. The decrease in the labor force participation rate was even sharper for prime age (25 – 54 years old) workers, indicating that the decrease in the overall participation rate was not due to demographic factors such as an aging population. Instead, it was due to lack of job opportunities, which supports the claim that labor force exit lowered the unemployment rate. Table 2. U.S. private employment cycles, peak to trough. Source: Bureau of labor statistics and author's calculations.

... ... ...

Broadly speaking there exist three competing perspectives on the crisis (Palley, 2012).

For the period 1945 - 1975 the U.S. economy was characterized by a "virtuous circle" Keynesian growth model built on full employment and wage growth tied to productivity growth. This model is illustrated in Figure 1 and its logic was as follows. Productivity growth drove wage growth, which in turn fuelled demand growth and created full employment. That provided an incentive for investment, which drove further productivity growth and supported higher wages. This model held in the U.S. and, subject to local modifications, it also held throughout the global economy - in Western Europe, Canada, Japan, Mexico, Brazil and Argentina.

Figure 1. The 1945 – 75 virtuous circle Keynesian growth model. Wage growth Demand growth Full employment Productivity growth Investment

After 1980 the virtuous circle Keynesian growth model was replaced by a neoliberal growth model. The reasons for the change are a complex mix of economic, political and sociological reasons that are beyond the scope of the current paper. The key changes wrought by the new model were:

  1. Abandonment of the commitment to full employment and the adoption of commitment to very low inflation;
  2. Severing of the link between wages and productivity growth.

Together, these changes created a new economic dynamic. Before 1980, wages were the engine of U.S. demand growth. After 1980, debt and asset price inflation became the engine The new economic model was rooted in neoliberal economic thought. Its principal effects were to weaken the position of workers; strengthen the position of corporations; and unleash financial markets to serve the interests of financial and business elites.

As illustrated in figure 2, the new model can be described as a neoliberal policy box that fences workers in and pressures them from all sides. On the left hand side, the corporate model of globalization put workers in international competition via global production networks that are supported by free trade agreements and capital mobility.

On the right hand side, the "small" government agenda attacked the legitimacy of government and pushed persistently for deregulation regardless of dangers. From below, the labor market flexibility agenda attacked unions and labor market supports such as the minimum wage, unemployment benefits, employment protections, and employee rights. From above, policymakers abandoned the commitment of full employment, a development that was reflected in the rise of inflation targeting and the move toward independent central banks influenced by financial interests.

Figure 2. The neoliberal policy box. Globalization WORKERS Abandonment of full employment Small Government Labor Market Flexibility

Corporate globalization is an especially key feature. Not only did it exert downward inward pressures on economies via import competition and the threat of job off-shoring, it also provided the architecture binding economies together. Thus, globalization reconfigured global production by transferring manufacturing from the U.S. and Europe to emerging market economies. This new global division of labor was then supported by having U.S. consumers serve as the global economy's buyer of first and last resort, which explains the U.S. trade deficit and the global imbalances problem.

This new global division of labor inevitably created large trade deficits that also contributed to weakening the aggregate demand (AD)generation process by causing a hemorrhage of spending on imports (Palley, 2015)

An important feature of the Keynesian hypothesis is that the neoliberal policy box was implemented on a global basis, in both the North and the South. As in the U.S., there was also a structural break in policy regime in both Europe and Latin America. In Latin America , the International Monetary Fund and World Bank played an important role as they used the economic distress created by the 1980s debt crisis to push neoliberal policy

They did so by making financial assistance conditional on adopting such policies. This global diffusion multiplied the impact of the turn to neoliberal economic policy and it explains why the Washington Consensus enforced by the International Monetary Fund and World Bank has been so significant. It also explains why stagnation has taken on a global dimension.

III The role of finance in the neoliberal model

Owing to the extraordinarily deep and damaging nature of the financial crisis of 2008, financial market excess has been a dominant focus of explanations of the Great Recession. Within the neoliberal government failure hypothesis the excess is attributed to ill-advised government intervention and Federal Reserve interest rate policy. Within the neoliberal market failure hypothesis it is attributed to ill-advised deregulation and failure to modernize regulation.

According to the Keynesian destruction of shared prosperity hypothesis neither of those interpretations grasps the true significance of finance. The government failure hypothesis is empirically unsupportable (Palley, 2012a, chapter 6), while the market failure hypothesis has some truth but also misses the true role of finance That role is illustrated in Figure 3 which shows that finance performed two roles in the neoliberal model. The first was to structurally support the neoliberal policy box. The second was to support the AD generation process. These dual roles are central to the process of increasing financial domination of the economy which has been termed financialization (Epstein, 2004, p.3; Krippner, 2004, 2005; Palley, 2013). Figure 3. The role of finance in the neoliberal model. The role of finance: "financialization" Supporting the neoliberal policy box Aggregate demand generation Corporate behavior Economic policy Financial innovation The policy box shown in Figure 2 has four sides.

A true box has six sides and a four sided structure would be prone to structural weakness.

Metaphorically speaking, one role of finance is to provide support on two sides of the neoliberal policy box, as illustrated in Figure 4.

Finance does this through three channels. First, financial markets have captured control of corporations via enforcement of the shareholder value maximization paradigm of corporate governance. Consequently, corporations now serve financial market interests along with the interests of top management. Second, financial markets in combination with corporations lobby politically for the neoliberal policy mix.

The combination of changed corporate behavior and economic policy produces an economic matrix that puts wages under continuous pressure and raises income inequality.

Third, financial innovation has facilitated and promoted financial market control of corporations via hostile take-overs, leveraged buyouts and reverse capital distributions. Financial innovation has therefore been key for enforcing Wall Street's construction of the shareholder value maximization paradigm.

Figure 4. Lifting the lid on the neoliberal policy box. The neoliberal box Corporations Financial markets

The second vital role of finance is the support of AD. The neoliberal model gradually undermined the income and demand generation process, creating a growing structural demand gap. The role of finance was to fill that gap. Thus, within the U.S., deregulation, financial innovation, speculation, and mortgage lending fraud enabled finance to fill the demand gap by lending to consumers and by spurring asset price inflation

Financialization assisted with this process by changing credit market practices and introducing new credit instruments that made credit more easily and widely available to corporations and households. U.S. consumers in turn filled the global demand gap, along with help from U.S. and European corporations who were shifting manufacturing facilities and investment to the emerging market economies.

Three things should be emphasized.

  1. First, this AD generation role of finance was an unintended consequence and not part of a grand plan. Neoliberal economists and policymakers did not realize they were creating a demand gap, but their laissez-faire economic ideology triggered financial market developments that coincidentally filled the demand gap.
  2. Second, the financial process they unleashed was inevitably unstable and was always destined to hit the wall. There are limits to borrowing and limits to asset price inflation and all Ponzi schemes eventually fall apart. The problem is it is impossible to predict when they will fail. All that can be known with confidence is that it will eventually fail.
  3. Third, the process went on far longer than anyone expected, which explains why critics of neoliberalism sounded like Cassandras (Palley, 1998, Chapter 12). However, the long duration of financial excess made the collapse far deeper when it eventually happened. It has also made escaping the after-effects of the financial crisis far more difficult as the economy is now burdened by debts and destroyed credit worthiness. That has deepened the proclivity to economic stagnation.
IV Evidence

Evidence regarding the economic effects of the neoliberal model is plentiful and clear Figure 5 shows productivity and average hourly compensation of non-supervisory workers (that is non-managerial employees who are about 80 percent of the workforce). The link with productivity growth was severed almost 40 years ago and hourly compensation has been essentially stagnant since then.

Figure 5.

... ... ...

Table 3 shows data on the distribution of income growth by business cycle expansion across the wealthiest top 10 percent and bottom 90 percent of households. Over the past sixty years there has been a persistent decline in the share of income gains going to the bottom 90 percent of households ranked by wealth. However, in the period 1948 – 1979 the decline was gradual. After 1980 there is a massive structural break and the share of income gains going to the bottom 90 percent collapses. Before 1980, on average the bottom 90 percent received 66 percent of business cycle expansion income gains. After 1980, on average they receive just 8 percent.

Table 3. Distribution of income growth by business cycle expansion across the wealthiest top 10 percent and bottom 90 percent of households. Source: Tcherneva (2014), published in The New York Times , September 26, 2014. '49- '53 '54- '57 '59- '60 '61- '69 '70- '73 '75- '79 '82- '90 '91- '00 '01- '07 '09- '12 Average Pre-1908 Average Post-1980 Top 10% 20% 28 32 33 43 45 80 73 98 116 34% 92% Bottom 90% 80% 72 68 67 57 55 20 27 2 -16 66% 8%

Figure 6 shows the share of total pre-tax income of the top one percent of households ranked by wealth. From the mid-1930s, with the implementation of the New Deal social contract, that share fell from a high of 23.94 percent in 1928 to a low of 8.95 percent in 1978. Thereafter it has steadily risen, reaching 23.5 percent in 2007 which marked the beginning of the Great Recession. It then fell during the Great Recession owing to a recession-induced fall in profits, but has since recovered most of that decline as income distribution has worsened again during the economic recovery. In effect, during the neoliberal era the US economy has retraced its steps, reversing the improvements achieved by the New Deal and post-World War II prosperity, so that the top one percent's share of pre-tax income has returned to pre-Great Depression levels.

Figure 6. US pre-tax income share of top 1 percent. Source: http://inequality.org/income-inequality/. Original source: Thomas Piketty and Emanuel Saez (2003), updated at http://emlab.edu/users/saez.

As argued in Palley (2012a, p. 150-151) there is close relationship between union membership density (i.e. percent of employed workers that are unionized) and income distribution. This is clearly shown in Figure 7 which shows union density and the share of pre-tax income going to the top ten percent of wealthiest households. The neoliberal labor market flexibility agenda explicitly attacks unions and works to shift income to wealthier households.

Share of income going to the top 10 percent 2013: 47.0% Union membership density 11.2% 0% 10% 20% 30% 40% 50% 60% 1917 1923 1929 1935 1941 1947 1953 1959 1965 1971 1977 1983 1989 1995 2001 2007 2013 Source: Data on union density follows the composite series found in Historical Statistics of the United States; updated to 2013 from unionstats.com. Income inequality (share of income to top 10%) from Piketty and Saez,

"Income Inequality in the United States, 1913-1998, Quarterly Journal of Economics , 118(1), 2003, 1-39. Updated Figure 7. Union membership and the share of income going to the top ten percent of wealthiest households, 1917 – 2013. Source: Mishel, Gould and Bivens (2015). Table 4 provides data on the evolution of the U.S. goods and services trade balance as a share of GDP by business cycle peak. Comparison across peaks controls for the effect of the business cycle. The data show through to the late 1970s U.S. trade was roughly in balance, but after 1980 it swung to massive deficit and the deficits increased each business cycle. These deficits were the inevitable product of the neoliberal model of globalization (Palley, 2015) and they undermined the AD generation process in accordance with the Keynesian hypothesis.

Table 4. The U.S. goods & services trade deficit/surplus by business cycle peaks, 1960 – 2007. Sources: Economic Report of the President, 2009 and author's calculations. Business cycle peak year Trade balance ($ millions) GDP ($ billions) Trade balance/ GDP (%) 1960 3,508 526.4 0.7 1969 91 984.6 0.0 1973 1,900 1,382.7 0.1 1980 -25,500 2,789.5 -0.9 1981 -28,023 3,128.4 -0.9 1990 -111,037 5,803.1 -1.9 2001 -429,519 10,128.0 -4.2 2007 -819,373 13,807.5 -5.9

Finally, Figure 8 shows total domestic debt relative to GDP and growth. This Figure is highly supportive of the Keynesian interpretation of the role of finance. During the neoliberal era real GDP growth has actually slowed but debt growth has exploded. The reason is the neoliberal model did nothing to increase growth, but it needed faster debt growth to fill the demand gap created by the model's worsening of income distribution and creation of large trade deficits. Debt growth supported debt-financed consumer spending and it supported asset price inflation that enabled borrowing which filled the demand gap caused by the neoliberal model. Figure 8. Total domestic debt and growth (1952-2007). Source: Grantham, 2010.

V The debate about the causes of the crisis: why it matters

The importance of the debate about the causes of the crisis is that each perspective recommends its own different policy response. For hardcore neoliberal government failure proponents the recommended policy response is to double-down on the policies described by the neoliberal policy box and further deregulate markets; to deepen central bank independence and the commitment to low inflation via strict rules based monetary policy; and to further shrink government and impose fiscal austerity to deal with increased government debt produced by the crisis For softcore neoliberal market failure proponents the recommended policy response is to tighten financial regulation but continue with all other aspects of the existing neoliberal policy paradigm. That means continued support for corporate globalization, socalled labor market flexibility, low inflation targeting, and fiscal austerity in the long term. Additionally, there is need for temporary large-scale fiscal and monetary stimulus to combat the deep recession caused by the financial crisis.

However, once the economy has recovered, policy should continue with the neoliberal model For proponents of the destruction of shared prosperity hypothesis the policy response is fundamentally different. The fundamental need is to overthrow the neoliberal paradigm and replace it with a "structural Keynesian" paradigm. That involves repacking the policy box as illustrated in Figure 9.

The critical step is to take workers out of the box and put corporations and financial markets in so that they are made to serve a broader public interest. The key elements are to replace corporate globalization with managed globalization that blocks race to the bottom trade dynamics and stabilizes global financial markets; restore a commitment to full employment; replace the neoliberal anti-government agenda with a social democratic government agenda; and replace the neoliberal labor market flexibility with a solidarity based labor market agenda.

The goals are restoration of full employment and restoration of a solid link between wage and productivity growth.

Figure 9. The structural Keynesian box Corporations & Managed Financial Markets Globalization Full Employment Social Democratic Government Solidarity Labor Markets

Lastly, since the neoliberal model was adopted as part of a new global economic order, there is also need to recalibrate the global economy. This is where the issue of "global rebalancing" enters and emerging market economies need to shift away from export-led growth strategies to domestic demand-led strategies. That poses huge challenges for many emerging market economies because they have configured their growth strategies around export-led growth whereby they sell to U.S. consumers.

VI From crisis to stagnation: the failure to change

Massive policy interventions, unequalled in the post-war era, stopped the Great Recession from spiraling into a second Great Depression. The domestic economic interventions included the 2008 Troubled Asset Relief Program (TARP) that bailed out the financial sector via government purchases of assets and equity from financial institutions; the 2009 American Recovery and Reinvestment Act (ARRA) that provided approximately $800 billion of fiscal stimulus, consisting of approximately $550 billion of government spending and $250 billion of tax cuts; the Federal Reserve lowering its interest target to near-zero (0 - 0.25 percent); and the Federal Reserve engaging in quantitative easing (QE) transactions that involve it purchasing government and private sector securities. At the international level, in 2008 the Federal Reserve established a temporary $620 billion foreign exchange (FX) swap facility with foreign central banks.

That facility provided the global economy with dollar balances, thereby preventing a dollar liquidity shortage from triggering a wave of global default on short-term dollar loans that the financial system was unwilling to roll-over because of panic.3

Additionally, there was unprecedented globally coordinated fiscal stimulus arranged via the G-20 mechanism. 3

The FX swaps with foreign central banks have been criticized as being a bail-out for foreign economies. In fact, they saved the US financial system which would have been pulled down by financial collapse outside

Despite their scale, these interventions did not stop the recession from being the deepest since 1945, and nor did they stop the onset of stagnation. Table 5 shows how GDP growth has failed to recover since the end of the Great Recession, averaging just 2.1 percent for the five year period from 2010 – 2014. Furthermore, that period includes the rebound year of 2010 when the economy rebounded from its massive slump owing to the extraordinary fiscal and monetary stimulus measures that were put in place

Table 5. U.S. GDP growth. Source: Statistical Annex of the European Union, Autumn 2014 and author's calculations.

The growth rate for 2014 is that estimated in October 2014.

1961 - 1970 1971 - 1980 1981 - 1990 1991 - 2000 2001 - 2007 2008 - 2009 2010 - 2014

4.2% 3.2% 3.3% 3.5% 2.5% -1.6% 2.1%

Table 6 shows employment creation in the five years after the end of recessions, which provides another window on stagnation. The job creation numbers show that the neoliberal model was already slowing in the 1990s with the first episode of "jobless the US.

Many foreign banks operating in the US had acquired US assets financed with short-term dollar borrowings. When the US money market froze in 2008 they could not roll-over these loans in accordance with normal practice. That threatened massive default by these banks within the US financial system, which would have pulled down the entire global financial system.

The Federal Reserve could not lend directly to these foreign banks and their governing central banks lacked adequate dollar liquidity to fill the financing gap. The solution was to lend dollars to foreign central banks, which then made dollar loans to foreign banks in need of dollar roll-over short-term financing. recovery".

It actually ground to stagnation in the 2001 – 2007 period, but this was masked by the house price bubble and the false prosperity it created. Stagnation has persisted after the Great Recession, but the economic distress caused by the recession has finally triggered awareness of stagnation among elites economists. In a sense, the Great Recession called out the obvious, just as did the little boy in the Hans Anderson story about the emperor's new suit

Table 6. U.S. private sector employment creation in the five year period after the end of recessions for six business cycles with extended expansions. Source: Bureau of labor statistics and author's calculations. * = January 1980 the beginning of the next recession Recession end date Employment at recession end date (millions) Employment five years later (millions) Percent growth in employment Feb 1961 45.0 52.2 16.0% Mar 1975 61.9 74.6* 20.5% Nov 1982 72.8 86.1 18.3% March 1991 90.1 99.5 10.4% Nov 2001 109.8 115.0 4.7% June 2009 108.4 117.1 8.0% The persistence of stagnation after the Great Recession raises the question "why"? The answer is policy has done nothing to change the structure of the underlying neoliberal economic model.

That model inevitably produces stagnation because it produces a structural demand shortage via (i) its impact on income distribution, and (ii) via its design of globalization which generates massive trade deficits, wage competition and off-shoring of jobs and investment. In terms of the three-way contest between the government failure hypothesis, the market failure hypothesis and the destruction of shared prosperity hypothesis, the economic policy debate during the Great Recession was cast as exclusively between government failure and market failure.

With the Democrats controlling the Congress and Presidency after the 2008 election, the market failure hypothesis won out and has framed policy since then. According to the hypothesis, the financial crisis caused an exceptionally deep recession that required exceptionally large monetary and fiscal stimulus to counter it and restore normalcy. Additionally, the market failure hypothesis recommends restoring and renovating financial regulation, but other than that the neoliberal paradigm is appropriate and should be deepened In accordance with this thinking, the in-coming Obama administration affirmed existing efforts to save the system and prevent a downward spiral by supporting the Bush administration's TARP, the Federal Reserve's first round of QE (November/December 2008) that provided market liquidity, and the Federal Reserve's FX swap agreement with foreign central banks

Thereafter, the Obama administration worked to reflate the economy via passage of the ARRA (2009) which provided significant fiscal stimulus. With the failure to deliver a V-shaped recovery, candidate Obama became even more vocal about fiscal stimulus However, reflecting its softcore neoliberal inclinations, the Obama administration then became much less so when it took office. Thus, the winners of the internal debate about fiscal policy in the first days of the Obama administration were those wanting more modest fiscal stimulus.4 Furthermore, its analytical frame was one of temporary stimulus with the 4 Since 2009 there has been some evolution of policy positions characterized by a shift to stronger support for fiscal stimulus. This has been especially marked in Larry Summers, who was the Obama administration's goal of long-term fiscal consolidation, which is softcore neoliberal speak for fiscal austerity Seen in the above light, after the passage of ARRA (2009), the fiscal policy divide between the Obama administration and hardcore neoliberal Republicans was about the speed and conditions under which fiscal austerity should be restored.

This attitude to fiscal policy reflects the dominance within the Democratic Party of "Rubinomics", the Wall Street view associated with former Treasury Secretary Robert Rubin, that government spending and budget deficits raise real interest rates and thereby lower growth. According to that view, the US needs long-term fiscal austerity to offset Social Security and Medicare Side-by-side with the attempt to reflate the economy, the Obama administration also pushed for major overhaul and tightening of financial sector regulation via the Dodd- Frank Act (2010).

That accorded with the market failure hypothesis's claim about the economic crisis and Great Recession being caused by financial excess permitted by the combination of excessive deregulation, lax regulation and failure to modernize regulation Finally, and again in accordance with the logic of the market failure hypothesis, the Obama administration has pushed ahead with doubling-down and further entrenching the neoliberal policy box. This is most visible in its approach to globalization. In 2010, free trade agreements modelled after NAFTA were signed with South Korea, Colombia and Panama. The Trans-Pacific Partnership (TPP) and the Trans-Atlantic Trade and Investment Partnership (TTIP), two mega-agreements negotiated in secrecy and apparently bearing chief economic adviser when it took office. This shift has become a way of rewriting history by erasing the memory of initial positions. That is also true of the IMF which in 2010-2011 was a robust supporter of fiscal consolidation in Europe. similar hallmarks to prior trade agreements, are also being pushed by the Obama administration

The Obama administration's softcore neoliberalism would have likely generated stagnation by itself, but the prospect has been further strengthened by Republicans.

Thus, in accordance with their point of view, Republicans have persistently pushed the government failure hypothesis by directing the policy conversation to excessive regulation and easy monetary policy as the causes of the crisis. Consequently, they have consistently opposed strengthened financial regulation and demands for fiscal stimulus.

At the same time, they have joined with softcore neoliberal Democrats regarding doubling-down on neoliberal box policies, particularly as regards trade and globalization Paradoxically, the failure to change the overall economic model becomes most visible by analyzing the policies of the Federal Reserve, which have changed the most dramatically via the introduction of QE. The initial round of QE (QE1) was followed by QE2 in November 2010 and QE3 in September 2012, with the Fed shifting from providing short-term emergency liquidity to buying private sector financial assets.

The goal was to bid up prices of longer term bonds and other securities, thereby lowering interest rates on longer-term financing and encouraging investors to buy equities and other riskier financial assets. The Fed's reasoning was lower long-term rates would stimulate the economy, and higher financial asset prices would trigger a positive wealth effect on consumption spending. This makes clear the architecture of policy.

The Obama administration was to provide fiscal stimulus to jump start the economy; the Fed would use QE to blow air back into the asset price bubble; the Dodd-Frank Act (2010) would stabilize financial markets; and globalization would be deepened by further NAFTA-styled international agreements. This is a near-identical model to that which failed so disastrously. Consequently, stagnation is the logical prognosis.

VII Déjà vu all over again: back to the 1990s but with a weaker economy

The exclusion of the destruction of shared prosperity hypothesis, combined with the joint triumph of the market failure and government failure hypotheses, means the underlying economic model that produced the Great Recession remains essentially unchanged. That failure to change explains stagnation. It also explains why current conditions smack of "déjà vu all over again" with the US economy in 2014-15 appearing to have returned to conditions reminiscent of the mid-1990s.

Just as the 1990s failed to deliver durable prosperity, so too current optimistic conditions will prove unsustainable absent deeper change The déjà vu similarities are evident

All of these features mean both policy context and policy design look a lot like the mid-1990s. The Obama administration saved the system but did not change it

Consequently, the economy is destined to repeat the patterns of the 1990s and 2000s. However, the US economy has also experienced almost twenty more years of neoliberalism which has left its economic body in worse health than the 1990s. That means the likelihood of delivering another bubble-based boom is low and stagnation tendencies will likely reassert themselves after a shorter and weaker period of expansion

This structurally weakened state of the US economy is evident in the further worsening of income inequality that has occurred during the Great Recession and subsequent slow recovery.

... ... ...

Thomas I. Palley, Senior Economic Policy Advisor, AFL-CIO Washington, D.C. [email protected]

[Jun 24, 2017] The Saudi-Qatar spat - the reconciliation offer to be refused>. Qater will move closer to Turkey

Highly recommended!
Notable quotes:
"... "In my view this is a deep power struggle between Qatar and Saudi Arabia that has little to do with stated reasons regarding Muslim Brotherhood and Iran. The action to isolate Qatar was clearly instigated during US President Trump's recent visit in Riyadh where he pushed the unfortunate idea of a Saudi-led "Arab NATO" to oppose Iranian influence in the region. ..."
"... Moreover, Qatar was acting increasingly independent of the heavy Wahhabite hand of Saudi Arabia and threatening Saudi domination over the Gulf States. Kuwait, Oman, as well as non-Gulf Turkey were coming closer to Qatar and even Pakistan now may think twice about joining a Saudi-led "Arab NATO". Bin Salman has proven a disaster as a defense strategist, as proven in the Yemen debacle. ..."
"... Kuwait and Oman are urgently trying to get Saudi to backdown on this, but that is unlikely as behind Saudi Arabia stands the US and promises of tens of billions of dollars in US arms. ..."
"... This foolish US move to use their proxy, in this case Riyadh, to discipline those not "behaving" according to Washington wishes, could well be the turning point, the point of collapse of US remaining influence in the entire Middle East in the next several years." ..."
"... KSA could not have taken this course of action all by itself. Someone somewhere must be egging them on. But who? The US seems to have no interest in a Saudi-Qatari conflict. Israel might, but only if said conflict is resolved in Saudi favor. ..."
"... I am therefore coming to the conclusion that there is no longer clear leadership of US policy and there are different factions within the US government. The white house and CIA are supporting the Saudis while the Pentagon supports Qatar. This is just a hunch, but it seems like it could make sense. Perhaps this is what happens when a government is in a state of decompensation. ..."
"... It is mind boggling that a fundamental reshaping of the Middle East was most likely put in motion by Trump completely oblivious of what he was doing shooting from the hip on his Saudi trip. ..."
"... Outside of an outright invasion of Qatar by Saudi Arabia, it is hard to see this as a once in a life time geopolitical gift to Russia, Iran, Turkey, Syria, and Iran. ..."
"... Now when July 3 comes and goes, Saudi Arabia will look completely impotent in the eyes of the countries in the region. ..."
"... Gaddafi's speech to the Arab League in Syria 2008 was so prescient ..."
"... "We [the Arabs] are the enemies of one another I'm sad to say, we deceive one another, we gloat at the misfortune of one another, and we conspire against one another, and an Arab's enemy is another Arab's friend. ..."
"... I quite like the WWI parallel. Trump as Kaiser Wilhelm? There certainly are some striking similarities in character. ..."
"... "...gifted, with a quick understanding, sometimes brilliant, with a taste for the modern,-technology, industry, science -- but at the same time superficial, hasty, restless, unable to relax, without any deeper level of seriousness, without any desire for hard work or drive to see things through to the end, without any sense of sobriety, for balance and boundaries, or even for reality and real problems, uncontrollable and scarcely capable of learning from experience, desperate for applause and success, -- as Bismarck said early on in his life, he wanted every day to be his birthday-romantic, sentimental and theatrical, unsure and arrogant, with an immeasurably exaggerated self-confidence and desire to show off, a juvenile cadet, who never took the tone of the officers' mess out of his voice, and brashly wanted to play the part of the supreme warlord, full of panicky fear of a monotonous life without any diversions, and yet aimless, pathological in his hatred against his English mother." ..."
"... It also stands to reason if you simply consider Saudi's importance regionally: A lot is made of Iran's threat to Saudi influence, but Turkey - thanks in part to considerable investment by Qatar currently while investment from elsewhere has reduced massively -- is also very threatening to Saudi's influence, especially on the religious front. ..."
"... Iran representing Shia interests in the region and Turkey representing Sunni interests is not a difficult future to imagine. It would of course grate with Saudi Arabia given that it had poured vast amounts of money into the Turkish economy and the diyanet. ..."
"... Hassan Nasrallah has given his annual International Al-Quds Day speech with plenty of fire aimed at the usual suspects. The Daily Star reports: 'Nasrallah accused Saudi Arabia of "paving way for Israel" in the region. ..."
"... Actually, I hope for many more benefits will show up from this quarrel than improved profits for Iranian produce growers. It is worthwhile to observe that Dubai, a component emirate of UAE, has gigantic economic links with Iran, which must be tolerated by overlords from Abu Dhabi: they had to bail out their cousins after real estate collapse, so they have big money stake in Dubai being prosperous. Potentially, Dubai and especially the hapless vegetable and dairy producers in KSA can lose a bundle (the latter had to invest a lot in farms for Qatari market, it is not like letting cows graze on abundant grasslands plus planting cucumbers and waiting for the rain to water them). Aljazeera and Muslim Brotherhood are more irritating to KSA and UAE than an occasional polite missive to Iran. ..."
"... Qatar opened the Middle East's first centre for clearing transactions in the Chinese yuan on Tuesday, saying it would boost trade and investment between China and Gulf Arab economies. ..."
"... The only hope for Saudi Arabia is to re-denominate oil sales in multiple currencies such as the WTO drawing rights, of course based on another formula, perhaps based on the countries that purchase the most oil. This would be the only way for the royalty to gain longevity as rulers of the country. Any other scenario spells disaster. ..."
Jun 23, 2017 | www.moonofalabama.org
Pft | Jun 23, 2017 8:43:28 PM | 45
William Engdahls views. "In my view this is a deep power struggle between Qatar and Saudi Arabia that has little to do with stated reasons regarding Muslim Brotherhood and Iran. The action to isolate Qatar was clearly instigated during US President Trump's recent visit in Riyadh where he pushed the unfortunate idea of a Saudi-led "Arab NATO" to oppose Iranian influence in the region.

The Saudi move, clearly instigated by Prince Bin Salman, Minister of Defense, was not about going against terrorism. If it were about terrorism, bin Salman would have to arrest himself and most of his Saudi cabinet as one of the largest financiers of terrorism in the world, and shut all Saudi-financed madrasses around the world, from Pakistan to Bosnia-Herzgovina to Kosovo. Another factor according to informed sources in Holland is that Washington wanted to punish Qatar for seeking natural gas sales with China priced not in US dollars but in Renminbi. That apparently alarmed Washington, as Qatar is the world's largest LNG exporter and most to Asia.

Moreover, Qatar was acting increasingly independent of the heavy Wahhabite hand of Saudi Arabia and threatening Saudi domination over the Gulf States. Kuwait, Oman, as well as non-Gulf Turkey were coming closer to Qatar and even Pakistan now may think twice about joining a Saudi-led "Arab NATO". Bin Salman has proven a disaster as a defense strategist, as proven in the Yemen debacle.

As to the future, it appears that Qatar is not about to rollover and surrender in face of Saudi actions. Already Sheikh Tamim bin Hamad al-Thani is moving to establish closer ties with Iran, with Turkey that might include Turkish military support, and most recently with Russia.

Kuwait and Oman are urgently trying to get Saudi to backdown on this, but that is unlikely as behind Saudi Arabia stands the US and promises of tens of billions of dollars in US arms.

This foolish US move to use their proxy, in this case Riyadh, to discipline those not "behaving" according to Washington wishes, could well be the turning point, the point of collapse of US remaining influence in the entire Middle East in the next several years."

lysander | Jun 23, 2017 7:43:17 PM | 42
KSA could not have taken this course of action all by itself. Someone somewhere must be egging them on. But who? The US seems to have no interest in a Saudi-Qatari conflict. Israel might, but only if said conflict is resolved in Saudi favor.

I am therefore coming to the conclusion that there is no longer clear leadership of US policy and there are different factions within the US government. The white house and CIA are supporting the Saudis while the Pentagon supports Qatar. This is just a hunch, but it seems like it could make sense. Perhaps this is what happens when a government is in a state of decompensation.

R Winner | Jun 23, 2017 1:41:04 PM | 4

It is mind boggling that a fundamental reshaping of the Middle East was most likely put in motion by Trump completely oblivious of what he was doing shooting from the hip on his Saudi trip.

Outside of an outright invasion of Qatar by Saudi Arabia, it is hard to see this as a once in a life time geopolitical gift to Russia, Iran, Turkey, Syria, and Iran.

Juggs | Jun 23, 2017 2:24:33 PM | 9
Now when July 3 comes and goes, Saudi Arabia will look completely impotent in the eyes of the countries in the region.

I wonder if there is some sort of interest between Russia, Turkey, Qatar, and Iran on a coup in Saudi Arabia. I can't imagine it would be that difficult. I know it is not Putin's policy to play these types of games like the US Regime, but one has to assume that people are just fucking done with the clowns running Saudi Arabia.

harrylaw | Jun 23, 2017 2:36:39 PM | 10
Gaddafi's speech to the Arab League in Syria 2008 was so prescient..

"We [the Arabs] are the enemies of one another I'm sad to say, we deceive one another, we gloat at the misfortune of one another, and we conspire against one another, and an Arab's enemy is another Arab's friend.

Along comes a foreign power, occupies an Arab country [Iraq] and hangs its President,and we all sit on the sidelines laughing. Any one of you might be next, yes.

https://www.youtube.com/watch?v=VZZvPlGCt_8

okie farmer | Jun 23, 2017 2:37:39 PM | 11
https://www.theguardian.com/world/2017/jun/23/close-al-jazeera-saudi-arabia-issues-qatar-with-13-demands-to-end-blockade
Qatar given 10 days to meet 13 sweeping demands by Saudi Arabia
Gulf dispute deepens as allies issue ultimatum for ending blockade that includes closing al-Jazeera and cutting back ties with Iran
Juggs | Jun 23, 2017 2:41:55 PM | 13
Peter AU "Is Qatar, like Turkey, already heading for a multi-polar world? For 25 years, the US was the only game in town, but with Russia's move into Syria there are now options."

Hard to see the world heading in that direction:

I wonder if Qatar is already in talks with China about joining the Silk Road Initiative now that it is openly moving into the Russia and Iran sphere.

karlof1 | Jun 23, 2017 3:06:36 PM | 16
Juggs 13--

"I wonder if Qatar is already in talks with China about joining the Silk Road Initiative..."

You'll find the answer's yes as Pepe explains, https://sputniknews.com/columnists/201706161054701807-west-cannot-smell-what-eurasia-cooking/ and http://www.atimes.com/article/blood-tracks-new-silk-roads/

dh | Jun 23, 2017 3:20:35 PM | 19
@17 The best is yet to come. There's a chance Netanyahu will fly into Riyadh to tell everybody what to do. I'm sure he wants what's best for the region.
L'Akratique | Jun 23, 2017 3:29:54 PM | 20
I quite like the WWI parallel. Trump as Kaiser Wilhelm? There certainly are some striking similarities in character.

Quote from Thomas Nipperdey:

"...gifted, with a quick understanding, sometimes brilliant, with a taste for the modern,-technology, industry, science -- but at the same time superficial, hasty, restless, unable to relax, without any deeper level of seriousness, without any desire for hard work or drive to see things through to the end, without any sense of sobriety, for balance and boundaries, or even for reality and real problems, uncontrollable and scarcely capable of learning from experience, desperate for applause and success, -- as Bismarck said early on in his life, he wanted every day to be his birthday-romantic, sentimental and theatrical, unsure and arrogant, with an immeasurably exaggerated self-confidence and desire to show off, a juvenile cadet, who never took the tone of the officers' mess out of his voice, and brashly wanted to play the part of the supreme warlord, full of panicky fear of a monotonous life without any diversions, and yet aimless, pathological in his hatred against his English mother."

cankles | Jun 23, 2017 4:05:49 PM | 25
@Laguerre #23
I have difficulty in seeing a relationship with the Silk Road Initiative, other than that Qatar exports a lot of LNG to China.

China Eyes Qatar in its Quest to Build a New Silk Road

Last month at the China-Arab Cooperation Forum in Doha, Chinese Foreign Minister Wang Yi postulated that Qatar should take part in the realization of China's Silk Road Initiatives.
Laguerre | Jun 23, 2017 4:42:05 PM | 27
@cankles | Jun 23, 2017 4:05:49 PM | 25

Yeah, you're right. I hadn't looked into the question sufficiently. Of course the Chinese are looking for more external finance for the project. They don't want to be the only ones who pay. Fat chance, though. The Qataris have been in austerity since the decline in the oil price. Someone I know who works in the Qatar Museum has seen all her colleagues let go. And now the crisis with Saudi.

The Qataris may even have signed contracts with China. But if you know anything about the Gulf, there's a wide gap between signing a contract, and actually getting paid. It depends upon how the prince concerned feels about the project when the question of payment comes up. A company I worked for in the 80s took two years to get payment, even though they were experts in Gulfi relations.

AtaBrit | Jun 23, 2017 4:51:40 PM | 28
Great piece.

The issue of the threat regarding the Turkish base didn't surprise me much, though. I think it's clear that if MB is the target, then of course Turkey has to become a target, and Qatar - Turkey ties have to be broken. It stands to reason.

It also stands to reason if you simply consider Saudi's importance regionally: A lot is made of Iran's threat to Saudi influence, but Turkey - thanks in part to considerable investment by Qatar currently while investment from elsewhere has reduced massively -- is also very threatening to Saudi's influence, especially on the religious front.

Iran representing Shia interests in the region and Turkey representing Sunni interests is not a difficult future to imagine. It would of course grate with Saudi Arabia given that it had poured vast amounts of money into the Turkish economy and the diyanet.

On a slightly different note there's a scandal going on in western Turkey, in Duzce, at the moment because the local authority has unveiled a statue of Rabia - the four fingered Muslim Brotherhood salute! :-)

Mina | Jun 23, 2017 5:09:45 PM | 29
http://english.ahram.org.eg/NewsContent/2/8/271450/World/Region/UN-blames-warring-sides-for-Yemens-cholera-catastr.aspx
let's blame underfed guys in skirts for fun
karlof1 | Jun 23, 2017 5:16:47 PM | 30
Hassan Nasrallah has given his annual International Al-Quds Day speech with plenty of fire aimed at the usual suspects. The Daily Star reports: 'Nasrallah accused Saudi Arabia of "paving way for Israel" in the region.

'"It's unfortunate that Saudi Arabia is the head of terrorism and today it's holding its neighbors accountable for supporting terrorism," Nasrallah said, hinting to the recent economic sanctions against Qatar.' https://www.dailystar.com.lb/News/Lebanon-News/2017/Jun-23/410688-nasrallah-says-regional-conflicts-seek-to-serve-israel-interest.ashx

Al-Manar provides this report, http://english.almanar.com.lb/292250

Unfortunately, I cannot locate an English language transcript, although one might become available eventually as is usually the case.

Piotr Berman | Jun 23, 2017 6:42:14 PM | 36
Piotr Berman

Aljazeera evil? Are you joking? ....

@Anon | Jun 23, 2017 3:47:56 PM | 24

You did not address the argument I made, namely, that Aljazeera editors apparently belong to "Muslims, who immediately set out to support it [Darwinian theory of evolution] unaware of the blasphemy and error in it." These guys pretend to be nice Wahhabis, dressing in dishdashas, their womenfolks in abayas, but in fact they spread heretical and blasphemous doctrines. However, I am more of a Khazar than a Wahhabi and I do not treat this argument seriously.

It is the fact that compared to other government supported TV/online venues, say RT or PressTV, Aljazeera is well written and edited, has plenty of valuable material, etc. It is a worthwhile place to check when you want to get a composite picture on some issues. And it irritates KSA potentates in a myriad of ways, precisely because it targets "politically engaged Muslim".

It is a good example that pluralism has inherent positive aspects, devils that quarrel are better than "One Ring to rule them all, One Ring to find them, One Ring to bring them all, and in the darkness bind them."

====

Actually, I hope for many more benefits will show up from this quarrel than improved profits for Iranian produce growers. It is worthwhile to observe that Dubai, a component emirate of UAE, has gigantic economic links with Iran, which must be tolerated by overlords from Abu Dhabi: they had to bail out their cousins after real estate collapse, so they have big money stake in Dubai being prosperous. Potentially, Dubai and especially the hapless vegetable and dairy producers in KSA can lose a bundle (the latter had to invest a lot in farms for Qatari market, it is not like letting cows graze on abundant grasslands plus planting cucumbers and waiting for the rain to water them). Aljazeera and Muslim Brotherhood are more irritating to KSA and UAE than an occasional polite missive to Iran.

One pattern in Syrian civil war were persistent and bloody feuds between jihadists that formed roughly four groups:

  1. "salafi", presumably funded by KSA,
  2. "brothers", presumably funded by Qatar and Turkey,
  3. al-Qaeda/al-Nusra/something new that was forcing the first two groups to surrender some weapons (and money?),
  4. and ISIS that had more complex sources (or more hidden).

Medium term strategy of Syrian government and allies for the near future is to "de-escalate" in the western part of the country and finish off ISIS, partitioning hitherto ISIS territories in some satisfactory way, while maintaining some type of truce with the Kurds. Then finish off the jihadists, except those most directly protected by Turkey. Finally, take care of the Kurds. Some sufficiently safe federalism can be part of the solution, but nothing that would lead to enclaves with their own military forces and their own foreign policy, like Iraqi Kurdistan.

That requires the opposing parties to exhibit somewhat suicidal behavior. A big time official feud between "brothers" and "salafi + Kurds" (a pair that shares some funding but with scant mutual affection" can help a lot. Most of all, a big time feud between Turkey and KSA can stabilize the situation in which jihadists from Idlib and northern Hama observe a truce/de-escalation, while their colleagues from south Syria get clobbered, and definitely will induce them to refrain from attacking Syrian government while it is busy against ISIS. After Erdogan was prevented from marching onto Raqqa, he has two options: "Sunnistan" in eastern Syria under domination of YPG or a much smaller YPG dominated territory that can be subsequently digested. Option one is a true nightmare for Erdogan, more than a mere paranoia. However, Erdogan is also "pan-Sunni" Islamist, so he could be tempted to backstab infidels from Damascus, as he was doing before. An open feud with Sunnistan sponsors should help him to choose.

likklemore | Jun 23, 2017 6:49:14 PM | 37
Cankles @ 25 Is that really you? If so, you should know -

Look behind the curtain. This has to do with maintaining the price of oil in US$.

Qatar launches first Chinese yuan clearing hub in Middle East .

Qatar opened the Middle East's first centre for clearing transactions in the Chinese yuan on Tuesday, saying it would boost trade and investment between China and Gulf Arab economies.

"The launch of the region's first renminbi clearing center in Doha creates the necessary platform to realise the full potential of Qatar and the region's trade relationship with China," Qatar's central bank governor Sheikh Abdullah bin Saud al-Thani said at a ceremony.

"It will facilitate greater cross-border renminbi investment and financing business, and promote greater trade and economic links between China and the region, paving the way for better financial cooperation and enhancing the pre-eminence of Qatar as a financial hub in MENA (Middle East and North Africa)."
Industrial and Commercial Bank of China's (ICBC) Doha branch is the clearing bank for the centre, which intends to serve companies from around the Middle East.

A clearing bank can handle all parts of a currency transaction from when a commitment is made until it is settled, reducing costs and time taken for trading.

The centre "will improve the ease of transactions between companies in the region and China by allowing them to settle their trade directly in renminbi, drawing increased trade through Qatar and boosting bilateral and economic collaboration between Qatar and China," said ICBC chairman Jiang Jianqing.

At present, Qatar and the Gulf's other wealthy oil and gas exporters use the U.S. dollar much more than the yuan. Most of their currencies are pegged to the dollar, and most of their huge foreign currency reserves are denominated in dollars.

Laguerre @27

Date of article April 24, 2017

In April 2015, Qatar opened Qatar Renminbi Centre (QRC), the region's first clearing centre for the Chinese currency. This allows for trades priced in RMB to be cleared locally in Qatar rather than in other centres such as Shanghai or Hong Kong.ICBC has since become the designated clearance bank servicing the QRC, which has handled more than 350bn yuan ($52.6bn) since its inception.
http://emerge85.io/blog/the-middle-kingdoms-big-four-and-the-gulf

~ ~ ~ ~
Trending and not very far to seeing what is now held under the table. Oil will also be priced in RMB because KSA, to maintain their share of exports to China, will need to get on board. For now, it's been reaffirmed, SA does the whipping and USA protects the Royals.

rawdawgbugfalo | Jun 23, 2017 6:54:19 PM | 38
Well said, I still think this is all dreamlike. Having natural gas and sharing it with Iran is a mf.

Qatar: Is it about Trump, Israel or Nascent Influence? http://wsenmw.blogspot.com/2017/06/qatar-is-it-about-trump-israel-or.html

Piotr Berman | Jun 23, 2017 7:34:43 PM | 40
About Sunni-Shia split. My impression is that this is mostly KSA + UAE obsession. For example, there is a substantial Shia minority in Pakistan, but the dominant thinking among the Sunnis seems to be "Muslim solidarity". There is a minority that is virulently anti-Shia, but they are politically isolated and despised exactly on the account of breaking that solidarity. After all, Pakistan forms the boundary of the Umma with non-Muslim India. I base that opinion on comments in online Pakistani newspapers, and what I have heard from an acquaintance who was a religiously conservative Sunni Pakistani. To him, the attack on Yemen by KSA was wrong "because they are Muslim". So even if Pakistan is to a certain extend in Saudi pocket, and its deep state has an extremist Sunni component, overt siding against "fellow Muslim" is out of the question.

Egypt is another case. One can find rather isolated anti-Shia outbursts, like writings of some fossils in Al-Azhar (who are responsible for the state religion), but the government steers away from that, and in spite of hefty subsidies, it joined Yemen war only symbolically and for a very short time (unlike Sudan that really needs the cash for its mercenaries). As you move further away from the Persian Gulf, the indifference to the "split" increases. As far as Qatar and Aljazeera are concerned, probably no one detests them more than Egyptian elite, as they were valiantly fighting Muslim Brotherhood for the sake of progress with some occasional large massacres (killing several hundreds of protesters, issuing hundreds of death penalties to participants in a single protest, in absentia! incredible idiocy+cruelty). That explains why al-Sisi joined KSA against Qatar.

However, the civil war in Libya that embroils Egypt is a classic case of unexpected alliances. Egypt with a help from Russia, KSA and UAE supports the "eastern government" that bases legitimacy on democratic parliament re-assembled in Tobruq on Egyptian border, and dominated by military strongman Haftar. The latter has the best chance of all people to become a military strongman of all Libya, but apparently has meager popularity and thus, too few troops. He patched that problem by an alliance with a Salafi group that had a numerous militia, currently partitioned into smaller units and incorporated into Haftar's brigades. Even with that, his progress on the ground is very, very gradual. Against him is the government in Tripolis, legitimized by a more fresh parliament and UN/EU, plus a military force that includes several militias. Part of the parliamentary support stems from Muslim Brotherhood, and some part of military support comes from Salafi militias. There are also aspects of a "war of all against all", seems that Saharan tribes collected a lot of fresh blood feuds.

Thus Qatari+Turkish support for Tripoli government is aligned with EU, and Egyptian support for Tobruq government is aligned with Russia and KSA.

Dusty | Jun 23, 2017 7:38:26 PM | 41
I thought I might just throw this out there and see what sticks. US policy is based on power and control. Saudi Arabia has been a good ally but it does not serve use policy or strategic goals any longer. Not really. I think the grand prize for destabilizing the middle east is Saudi Arabia. It would be the only way to truly control the development of other nations or more specifically, to control their rivalries and save the the US from complete economic breakdown. The Saudi's are being plumbed by the best of them, telling them they are you friends, we have your back and so long as Saudi Arabia loses more money and keeps lossing money in needless wars etc.

The only hope for Saudi Arabia is to re-denominate oil sales in multiple currencies such as the WTO drawing rights, of course based on another formula, perhaps based on the countries that purchase the most oil. This would be the only way for the royalty to gain longevity as rulers of the country. Any other scenario spells disaster. Of course, it would be a rough go for them for a while, but in the end, a slight change in outlook and the unfair advantage given to the US would go a long way, economically to stabilizing large blocks of countries. They also could of course change their outlook on the world, but that is certainly a difficult challenge. If the Muslim world came together based on their similarities, they could be a very powerful block.

The US no longer has the financial velocity it once maintained and this is much more due to insane ideas about being a hegemon. I never thought revolution would be possible in the US, but it is coming and it won't take much. The country does not appear to have intelligence peddle back a number of policies, drunk on its own poison, it makes capitalism look disgusting. A new business model is needed, one that developes mutual trade based on respect from within the exchange itself. Saudi Arabia needs to cultivate multi-channel support for its biggest resource so that when the returns are no longer there, they will have also developed multiple avenues to prosperity. Just a thought.

[Sep 26, 2016] War as a Business Opportunity

Highly recommended!
Notable quotes:
"... As General Smedley Butler, twice awarded the Medal of Honor, said: War is a racket . Wars will persist as long as people see them as a "core product," as a business opportunity. In capitalism, the profit motive is often amoral; greed is good, even when it feeds war. Meanwhile, the Pentagon is willing to play along. It always sees "vulnerabilities" and always wants more money. ..."
"... Wars are always profitable for a few, but they are ruining democracy in America. Sure, it's a business opportunity: one that ends in national (and moral) bankruptcy. ..."
Sep 24, 2016 | www.antiwar.com
A good friend passed along an article at Forbes from a month ago with the pregnant title, "U.S. Army Fears Major War Likely Within Five Years - But Lacks The Money To Prepare." Basically, the article argues that war is possible - even likely - within five years with Russia or North Korea or Iran, or maybe all three, but that America's army is short of money to prepare for these wars. This despite the fact that America spends roughly $700 billion each and every year on defense and overseas wars.

Now, the author's agenda is quite clear, as he states at the end of his article: "Several of the Army's equipment suppliers are contributors to my think tank and/or consulting clients." He's writing an alarmist article about the probability of future wars at the same time as he's profiting from the sales of weaponry to the army.

As General Smedley Butler, twice awarded the Medal of Honor, said: War is a racket . Wars will persist as long as people see them as a "core product," as a business opportunity. In capitalism, the profit motive is often amoral; greed is good, even when it feeds war. Meanwhile, the Pentagon is willing to play along. It always sees "vulnerabilities" and always wants more money.

But back to the Forbes article with its concerns about war(s) in five years with Russia or North Korea or Iran (or all three). For what vital national interest should America fight against Russia? North Korea? Iran? A few quick reminders:

#1: Don't get involved in a land war in Asia or with Russia (Charles XII, Napoleon, and Hitler all learned that lesson the hard way).

#2: North Korea? It's a puppet regime that can't feed its own people. It might prefer war to distract the people from their parlous existence.

#3: Iran? A regional power, already contained, with a young population that's sympathetic to America, at least to our culture of relative openness and tolerance. If the US Army thinks tackling Iran would be relatively easy, just consider all those recent "easy" wars and military interventions in Iraq, Afghanistan, Libya, Syria

Of course, the business aspect of this is selling the idea the US Army isn't prepared and therefore needs yet another new generation of expensive high-tech weaponry. It's like convincing high-end consumers their three-year-old Audi or Lexus is obsolete so they must buy the latest model else lose face.

We see this all the time in the US military. It's a version of planned or artificial obsolescence . Consider the Air Force. It could easily defeat its enemies with updated versions of A-10s, F-15s, and F-16s, but instead the Pentagon plans to spend as much as $1.4 trillion on the shiny new and under-performing F-35 . The Army has an enormous surplus of tanks and other armored fighting vehicles, but the call goes forth for a "new generation." No other navy comes close to the US Navy, yet the call goes out for a new generation of ships.

The Pentagon mantra is always for more and better, which often turns out to be for less and much more expensive, e.g. the F-35 fighter.

Wars are always profitable for a few, but they are ruining democracy in America. Sure, it's a business opportunity: one that ends in national (and moral) bankruptcy.

William J. Astore is a retired lieutenant colonel (USAF). He taught history for fifteen years at military and civilian schools and blogs at Bracing Views . He can be reached at [email protected] . Reprinted from Bracing Views with the author's permission.

[Mar 31, 2016] Softpanorama Energy Bulletin, 2016

Continued

Recommended Links

Google matched content

Softpanorama Recommended

Top articles

[May 28, 2021] Electricity usage in the USA will take " until 2022 to get back to 2019 levels': Duke Energy CEO Published on Apr 30, 2021 | finance.yahoo.com

[Nov 06, 2020] Did the Iraq War Cause the Great Recession?' Published on Apr 07, 2013 | marknesop.wordpress.com

[Aug 24, 2020] Why neoclassical economics is a yet another secular religious doctrine, and not a science Published on Aug 24, 2020 | peakoilbarrel.com

[Aug 19, 2020] American imperialism vs. EU imperialism: Pushed into the Ukrainian adventure by the US? Rubbish. The EU and its constituent members were attempting to play their own hand and were not merely following the US lead submissively. Published on Aug 19, 2020 | turcopolier.typepad.com

[Jul 03, 2020] Fracking: From Revolution to Money Pit Published on Jul 02, 2020 | www.bloomberg.com

[Jul 03, 2020] The world s economy is in contraction. Although capital, what actual capital exists, will have to try and do something productive, it is confronted by this fact, that everything is facing contraction. Published on Jul 03, 2020 | www.moonofalabama.org

[May 21, 2020] The 'Clean Break' Doctrine OffGuardian Published on May 21, 2020 | off-guardian.org

[Feb 23, 2020] Where Have You Gone, Smedley Butler The Last General To Criticize US Imperialism by Danny Sjursen Published on Feb 23, 2020 | www.zerohedge.com

[Feb 09, 2020] Trump demand for 50% of Iraq oil revenue sound exactly like a criminal mob boss Published on Jan 21, 2020 | www.unz.com

[Feb 07, 2020] How They Sold the Iraq War by Jeffrey St. Clair Published on Mar 20, 2018 | www.counterpunch.org

[Jan 12, 2020] MIC along with Wall Street controls the government and the country Published on Jan 12, 2020 | angrybearblog.com

[Jan 12, 2020] Luongo Fears "An Abyss Of Losses" As Iraq Becomes MidEast Battleground Published on Jan 12, 2020 | www.zerohedge.com

[Jan 10, 2020] The Saker interviews Michael Hudson Published on Jan 09, 2020 | thesaker.is

[Jan 09, 2020] Opposing War With Iran: Three Reasons by Anthony DiMaggio Published on Jan 09, 2020 | www.counterpunch.org

[Jan 08, 2020] Do you really want to be a one term president? Pompeo can talk big now and then go back to Kansas to run for senator. Where will you be able to take refuge? Published on Sep 18, 2019 | turcopolier.typepad.com

[Dec 21, 2019] Trump administration sanction companies involved in laying the remaining pipe, and also companies involved in the infrastructure around the arrival point. Published on Dec 21, 2019 | peakoilbarrel.com

[Dec 21, 2019] Trump comes clean from world s policeman to thug running a global protection racket by Finian Cunningham Published on Dec 27, 2018 | www.rt.com

[Nov 03, 2019] How Controlling Syria s Oil Serves Washington s Strategic Objectives by Nauman Sadiq Published on Nov 02, 2019 | www.zerohedge.com

[Oct 10, 2019] There is no reason that anyone should treat George Bush with respect: he is a war criminal, who escaped justice Published on Oct 09, 2019 | economistsview.typepad.com

[Jul 17, 2019] Oil Is Driving the Iran Crisis by Michael T. Klare Published on Jan 11, 2019 | thenation.com

[Jul 06, 2019] Why is Iran such a high priority for US elite? Because Iran successfully booted out the CIA and CIA-imposed regime out of their country and successfully remained independent since then Published on Jul 06, 2019 | www.nakedcapitalism.com

[Jul 05, 2019] The World Bank and IMF 2019 by Michael Hudson and Bonnie Faulkner Published on Jul 05, 2019 | www.unz.com

[Jun 29, 2019] Latest Weapon Of US Imperialism Liquified Natural Gas Published on Jun 29, 2019 | www.zerohedge.com

[Jun 22, 2019] Why a U.S.-Iran War Could End Up Being a Historic Disaster by Doug Bandow Published on Jun 22, 2019 | nationalinterest.org

[Jun 21, 2019] Russia accuses U.S. of pushing Iran situation to brink of war RIA - Reuters Published on Jun 21, 2019 | www.reuters.com

[Jun 20, 2019] The Trump regime wants another pointless war by Ryan Cooper Published on Jun 18, 2019 | theweek.com

[Jun 20, 2019] The Trump-Bolton Duo Is Just Like the Bush-Cheney Duo Warmongers Using Lies to Start Illegal Wars by Prof Rodrigue Tremblay Published on Jun 18, 2019 | www.globalresearch.ca

[May 31, 2019] US energy department rebrands fossil fuels as 'molecules of freedom'...and this is in The Guardian and not The Onion Published on May 31, 2019 | www.moonofalabama.org

[Apr 22, 2019] Current Neo-McCarthyism hysteria as a smoke screen of the UK and the USA intent to dominate European geopolitics and weaken Russia and Germany Published on Jul 24, 2018 | angrybearblog.com

[Apr 21, 2019] Psywar: Propaganda during Iraq war and beyond Published on Apr 21, 2019 | www.moonofalabama.org

[Apr 16, 2019] The incompetent, the corrupt, the treacherous -- not just walking free, but with reputations intact, fat bank balances, and flourishing careers. Now they re angling for war with Iran. Published on Apr 15, 2019 | www.theamericanconservative.com

[Apr 07, 2019] There is no doubt the tight rock structures which are much more difficult to extract oil from than sandstone reservoir can be stimulated in different ways with good result. But that costs a lot of money. Published on Apr 07, 2019 | peakoilbarrel.com

[Mar 30, 2019] The US desperately needs Venezuelan oil Published on Mar 30, 2019 | www.moonofalabama.org

[Mar 16, 2019] (Global) peak oil comes in phases. As Art Berman said, shale oil is oil's retirement party. Published on Mar 16, 2019 | peakoilbarrel.com

[Feb 15, 2019] Consumption of liquid fuels grows over the next decade, before broadly plateauing in the 2030s Published on www.bp.com

[Feb 15, 2019] You can see how the definitions are going to blur and they're going to allow declaring oil production numbers to be anything that they want them to be. Published on Feb 15, 2019 | peakoilbarrel.com

[Feb 03, 2019] Neoliberalism and Christianity Published on May 02, 2018 | www.moonofalabama.org

[Jan 13, 2019] Catherine Austin Fitts – Federal Government Running Secret Open Bailout Published on Jan 12, 2019 | www.youtube.com

[Nov 11, 2018] Trump's Iran Policy Cannot Succeed Without Allies The National Interest by James Clapper & Thomas Pickering Published on Nov 09, 2018 | nationalinterest.org

[May 27, 2018] Northwestern University roundtable discusses regime change in Russia Defend Democracy Press Published on www.defenddemocracy.press

[Feb 20, 2018] For the life of me I cannot figure why Americans want a war/conflict with Russia Published on Feb 20, 2018 | www.moonofalabama.org

[Feb 03, 2018] JP Morgan Oil Could Hit $78 Within Months Published on Feb 03, 2018 | oilprice.com

[Dec 22, 2017] Beyond Cynicism America Fumbles Towards Kafka s Castle by James Howard Kunstler Published on Dec 12, 2017 | www.theamericanconservative.com

[Nov 30, 2017] Money Imperialism by Michael Hudson Published on Nov 30, 2017 | www.unz.com

[Nov 29, 2017] Michael Hudson: The Wall Street Economy is Draining the Real Economy Published on www.nakedcapitalism.com

[Nov 29, 2017] Positive Feedback Loops, Financial Instability, The Blind Spot Of Policymakers Published on Nov 22, 2017 | www.zerohedge.com

[Nov 29, 2017] Attack on Sanders Economic Plan By Former Chairs of the Council of Economic Advisors Irresponsible Published on Mar 06, 2016 | naked capitalism

[Oct 10, 2017] The US Economy: Explaining Stagnation and Why It Will Persist by Thomas I. Palley Published on Apr 10, 2015 | www.thomaspalley.com

[Jun 24, 2017] The Saudi-Qatar spat - the reconciliation offer to be refused>. Qater will move closer to Turkey Published on Jun 23, 2017 | www.moonofalabama.org

[Sep 26, 2016] War as a Business Opportunity Published on Sep 24, 2016 | www.antiwar.com

Oldies But Goodies

Sites

General information

Statistical information

eia.gov

Other countries

Blogs (from The Oil Drum)


Last modified: July 24, 2021