On Sun, 25 May 2008 09:53:28 -0700 (PDT), BradGuth <bradguth@gmail.com>
wrote:
the rest of us get to live and die with.
Nope.
Tell us about the electromagnetic weaponry aimed at your head which can
render you and yours inoperable in less than 10 seconds.
_Oblivion_ T. E. "Israeli shill" Bearden
http://www.cheniere.org/books/oblivion/index.html
Doesn't look like the rest of the world wants your new world order, pal.
Besides whose side will these be on if the USA & their Wall Street/banking
cohorts cause WW3 for their European feudal banking ubermasters?
Not your side, that's for sure.
http://www.rense.com/general82/myst13.htm
http://www.youtube.com/watch?v=m0m8MrlOwYo
The Battle for America Has Begun- Strategic Forecasts
Politics / New World Order
May 14, 2008 - 07:34 PM
By: Richard_C_Cook
This article contains several forecasts, including the possible start of a
major war with unforeseeable consequences, if the U.S. should happen to
attack Iran . Of course it is in the nature of forecasts to be speculative.
There are also forecasts that are intended to serve as warnings and thereby
contribute to preventing the events under analysis from ever taking place.
The world's financial elite, long having made their homes in the
metropolises of Western Europe, also with a major branch in New York City ,
may be the party that is really behind what could be an attempt to start
World War III by pitting the U.S. against the Asiatic land powers, most
notably Russia
The elite have long viewed control of the vast resource-rich Asian continent
as the key to control of the world, with the fulcrum of domination being the
oil-rich Middle East . Such a war could begin if the U.S. and Britain follow
through by attacking Iran on the heels of the Afghan and Iraq wars and
recent military deployments to the Persian Gulf region.
The attack may be nuclear, egged on by neocon extremists in the U.S. and
their counterparts in Israel , who may simultaneously carry the attack to
Lebanon and Syria . (See Mahdi Darius Nazemroaya, “Beating the Drums of a
Broader Middle East War,” Global Research, May 7, 2008.) These events are
closely tied to the U.S. economic recession now underway and the 2008
presidential election.
What is unique about this analysis is the author's contention that the U.S.
is being used unwittingly by the European-based financial powers for their
own purposes. They know that the U.S. economy is bankrupt, because they have
made it so through a quarter century of financial manipulations that have
destroyed our manufacturing base and left us horrendously in debt.
Now they have suckered us into the last thing we need—a major Asian land war
that threatens to bring Russia and perhaps China into the fray. But that's
all right, because once we have exhausted ourselves and courted nuclear
retaliation, Europe, which is uniting under the European Union, will likely
be left standing, as will Israel .
Note that Israel was created by and owes its primary allegiance to the
European financiers, especially those in London , even though the U.S. has
been its primary arms supplier and enabler since the assassination of
President John F. Kennedy in 1963. If the financiers, aided by Israel , can
instigate a major war to get rid of Russia , along with the U.S. , as world
powers, they will have accomplished their aim.
The Unique Status of the U.S. and Russia
The U.S. and Russia are the two great continental powers which up until
about a century ago most stood in the way of the rapacity and greed of the
international financial elite. The people of both nations have a history of
being deeply spiritual, talented and innovative, and rooted in the land.
Both nations tried for a long time to keep Western Europe , with its history
of economic and colonialist imperialism, at arms length.
Despite the wars and traumas of the 20th century, both the U.S. and Russia
remain cultures where ordinary people have struggled to express themselves,
to learn, to work, and to excel, even with Russia 's background of Tsarist
and Soviet autocracy. See, for instance, the writings of Russian author
Alexander Solzhenitsyn (1918-).
This heritage is much different from that of the Western European
aristocratic culture with its rigid class divisions, where an economically
powerful oligarchy has controlled society for centuries and has always
managed to stay on top despite wars and revolutions.
The aristocratic tradition is most notable in Great Britain , with the
incredible wealth of the Windsor royal family and the concentric circles of
power and influence which surround it. These circles are made up of a blend
of the old nobility with the more recent additions of bankers, financiers,
industrialists, government executives, media moguls, and intelligence
operatives who continue to control much of the wealth of the world.
The people who settled America fled that predatory aristocratic culture to
find freedom. It is less well known how Tsarist Russia resisted Western
European domination, but it is a fact that a longstanding alliance among the
House of Romanoff, the Orthodox Church, the rural nobility, and the
peasantry came together to create a culture that successfully kept that
nation free from external control for most of its history.
European Lust for Control of the Middle East
It was really the European elite, both deeply materialistic and coldly
inhumane, that was responsible for both of the 20 th century's world wars,
for funding the Bolshevik Revolution in Russia , and for bringing about
today's economic crisis that threatens to reduce to abject poverty or even
starve perhaps half of the world's population. Now a third world war
threatens, and while it appears on the surface that the immediate cause may
be U.S. ambitions in the Middle East , this is a mask for the underlying
machinations of the European controllers who are pulling the strings.
These people couldn't care less if the U.S. is bankrupted or destroyed in a
larger Asian conflict while engaged in doing their dirty work. In fact that
appears to be the plan. A nation like the U.S. that owes as much money as it
does today to foreigners, including China and Japan who purchase close to
half our national debt, is no longer master of its own destiny.
The European desire for military conquest of the Middle East dates to the
Crusades which started in the 11 th century. By the end of the 18 th
century, Great Britain had planted itself on the eastern terminus of the
region through the conquest of India . In 1798, Napoleon invaded Egypt .
World War I saw the destruction of the Ottoman Empire, with Britain and
France redrawing the map of an area consisting of almost a million square
miles. When Israel was founded in 1948, it became a Western bridgehead.
But today it's the U.S. , with its bases in Saudi Arabia and the Persian
Gulf, and conquests in Afghanistan and Iraq , that leads the charge. This is
so, even though a glance at the map shows how contrary to our strategic
interests—and how unimaginably expensive—it is for us to have been drawn
into a major open-ended military commitment in this part of the world. Some
call it empire. Rational men call it lunacy.
How has this come about? Since the 1970s, the U.S. has been dangerously
dependent on Middle Eastern oil and on the OPEC nations to purchase our
Treasury bonds. The need to sell our debt abroad came about late in the
Vietnam War when our post-World War II trade surplus was reversed and the
government went deeply into debt to pay for the war and the growth in income
support entitlements.
But there is another explanation for why we are there—pressure from the
Jewish lobby. This lobby acts in the U.S. , perhaps unwittingly and
certainly against its own interests as U.S. citizens, as a surrogate not
only for Israel , but, taking a longer view, also for the European financial
elite who backed the creation of a Jewish national state in Palestine in the
first place.
Of course many Jews, including sizeable numbers in Israel , themselves no
longer believe in policies which have brought them so much ill repute.
Increasingly, people of goodwill, including many of the Jewish faith, are
coming to understand that neither opposition to the abuses of the financial
elite nor questioning the actions of the Israeli state itself is anti-Jewish
or anti-Semitic.
But if events continue in the same direction, the Asiatic land powers, now
loosely organized through the Shanghai Cooperation Organization, which
includes China , Russia , Kazakhstan , Kyrgyzstan , Tajikistan , and
Uzbekistan , with Iran as an observer, will have had enough. There is a line
in the sand facing west as well as east. A major war is clearly on its way
which seems to be timed to coincide with the ongoing economic collapse that
is undermining the U.S. economy and also threatening to plunge much of the
world into famine.
Connection with the 2008 Presidential Election
The war scenario is unfolding now and will likely accelerate as we approach
the November presidential election. The actions underway appear to be
designed to present any new president with a fait accompli, where corrective
action is no longer possible. It would be the last and worst of the
catastrophes visited on our nation by the revolutionary cabal of George W.
Bush, Richard Cheney, Condoleezza Rice, and the neocon shock troopers who
took over when the Supreme Court awarded Bush the presidency after the 2000
Florida election debacle. Within nine months came the 9/11 attacks, followed
by wars against Afghanistan and Iraq using off-the-shelf plans. Next came
the Department of Homeland Security and the Patriot Acts.
Now in 2008 the three remaining presidential candidates are all compromised.
Hillary Clinton, with her husband Bill, have long been servitors of that
branch of the international financial elite headquartered on Wall Street in
New York City . Recently, Republican candidate John McCain traveled to do
homage to Israel , then attended a soiree with the Fourth Baron Rothschild
in London . Barack Obama has also affirmed his loyalty to Israel , though
his utterances against Iran are less vehement than those of Hillary Clinton,
who has threatened to “obliterate” that nation.
Obama appears the most likely to become president, because the financial
controllers, acting through the corporate media, seem to have designated him
as such. Hillary Clinton is under intense pressure to get out, even though
the Democratic race is a virtual dead heat and she just routed Obama in the
West Virginia primary. The latest blow to Clinton is the endorsement of
Obama by John Edwards, the Democrats' 2004 vice presidential candidate.
Obama is the candidate who came out of nowhere because eighty percent of
Americans believe the nation is headed in the wrong direction. He is the
candidate calling for “change,” whatever that means.
Paul Krugman, writing for the New York Times , says, “Mrs. Clinton, we're
assured by sources right and left, tortures puppies and eats babies. But her
policy proposals continue to be surprisingly bold and progressive….Mr. Obama
is widely portrayed, not least by himself, as a transformational figure who
will usher in a new era. But his actual policy proposals, though liberal,
tend to be cautious and relatively orthodox.”
The determination by the financial controllers that Obama is the anointed
one may also be shown by the entry into the race of former Georgia
congressman Bob Barr as the candidate of the Libertarian Party. Barr will
siphon votes away from John McCain and make Obama's election a certainty,
just as Ross Perot did with President George H.W. Bush in 1990, allowing the
election to swing to pro-business Democrat Bill Clinton.
Barr's entry is no accident and serves multiple purposes. According to
journalist James P. Tucker, Jr., for instance, attendees at an April 25-28
meeting of the Trilateral Commission in Washington , D.C. , made a
determination to stop Republican candidate Dr. Ron Paul's momentum in
stirring up a political “revolution.” (James P. Tucker, Jr., “Trilateral
Commission: Global Elite Gather in D.C.,” Global Research, May 6, 2008)
Dr. Paul, who has been delivering the news that the Federal Reserve by which
the bankers rule should be abolished, and that U.S. foreign policy based on
military conquest of the world should end, has been causing, according to
the Trilateralists cited by Tucker, “significant future damage.” Bob Barr
will doubtless be awarded handsomely for his trouble in helping de-fuse Dr.
Paul's movement.
Dr. Paul is to be commended for his stance in taking on the establishment,
and from the financiers' point of view, such populist uprisings as he is
leading obviously must be checked. Using a Libertarian candidate to do this
costs them nothing, as it is almost comical how the “macho” but outdated
laissez-faire economics of the Libertarians play into the hands of the
privately-owned banking system which makes all the important economic
decisions anyway.
Obviously the financial establishment must feel reassured by the likelihood
that Obama really won't change much of anything. Overseas, this could make
it even more certain that a wider war will start before the election, so
that Obama, being “cautious and relatively orthodox,” as Krugman says, will
go along with whatever scenario he is handed and so will be handcuffed by
events.
The trigger could be a 9/11-type faux attack, possibly a “suitcase” nuke
going off in a U.S. port city, as has been rumored. Other possible scenarios
include an attack on Iran being a cover for the election to be “stolen” from
Obama, or even for the election to be canceled, with Bush continuing as
president. Perhaps this is what explains Bush's curious detachment in the
face of his coming departure as the most unpopular president in history. He
may even entertain the psychopathic idea that cancelling the election could
be perfectly “legal” and within his rights as a wartime chief executive.
What would Obama do if faced with such an outrage while out on the campaign
trail? Perhaps nothing.
Meanwhile, Democratic figures in Congress, such as Senator Joe Biden and
Congressman John Conyers, are threatening to impeach President Bush if he
attacks Iran without a congressional resolution. Unfortunately, the
Democrats are totally lacking in credibility given their failure to force
Bush to retreat from Iraq despite their mandate in the 2006 elections where
they regained a majority in both houses. Bush would probably like nothing
more in the waning days of his presidency than calling their bluff.
A Calamity Rooted in History
Events on this scale take decades or even centuries to develop. In fact such
plans may have been in the works at least since the late 1800s, when three
world wars were allegedly forecast by such figures as the celebrated
Confederate general and Freemason Albert Pike, elected Sovereign Grand
Commander of the Scottish Rite's Southern Jurisdiction in 1859.
True to Pike's prediction, 1914-18 saw World War I, which forced the
centuries-old rule of the European landed nobility to accommodate to the
banking elites and to the heads of the industrial cartels which built the
war machines of the combating nations.
According to Benjamin Freedman (1890-1984), an American eye-witness to
events within the Woodrow Wilson administration, Wilson took the U.S. to war
only after being pressured to support Great Britain when the British agreed
to facilitate creation of a Zionist state in Palestine . The original
Zionists, led by Theodor Herzl, had been favorably disposed to accepting a
British offer of virgin land in Kenya , but the financiers wanted Palestine
because of Middle Eastern oil and proximity to the Suez Canal . The result
was the Balfour Declaration of 1916.
At the end of World War I came the Russian Revolution, when the financiers
paid for the Bolsheviks to destroy the Russian Christian monarchy of the
Romanoffs. Soviet communism was the result. Less than a generation later
another world war was fought, with World War II ending with the triumph of
the U.S. , Britain , France , the Soviet Union, and China as allies.
Afterwards, finance capitalism exerted its control of the developing world
through the International Monetary Fund and World Bank. According to
economist Michael Hudson, the West declared the existence of a Cold War only
after the Soviet Union refused to accede to U.S. hegemony by joining the
IMF. (Michael Hudson, Superimperialism: The Economic Strategy of American
Empire , 2003)
Another major revolution followed World War II, as had happened after World
War I, but this time in China , where the communists under Mao Tse-Tung took
over. In 1948, the nation of Israel was declared, partly through the
instrumentality and wealth of the Third Baron Rothschild, who was also an
MI5 controller and alleged Soviet agent. (See Roland Perry, The Fifth Man ,
1994.)
The key event in how the financial elite gained control over the U.S. in the
postwar world was the 1971 decision by the Nixon administration to remove
the dollar gold peg and allow world currencies to “float.” After the U.S.
agreed to the explosion of OPEC oil prices in the 1970s, dollars flooded the
world. (See Richard C. Cook, “Extraordinary Times, Intentional Collapse, and
Takedown of the U.S.A. ,” Global Research, April 30, 2008.)
In 1979 the Federal Reserve under Paul Volcker plunged the U.S. into
recession to fight the resulting inflation, and the U.S. producing economy
was wrecked. Since that time there has been no real growth of the U.S. GDP
or the standard of living of American workers. Rather a steady and seemingly
irreversible decline has set in under the euphemistic title of the “service
economy.” Since the early 1980s there has been a constant cycle of inflating
and deflating asset bubbles, with the latest episode being the collapse of
the housing bubble following the ruinous housing and real estate inflation
engineered by Alan Greenspan, Volcker's successor as head of the Federal
Reserve.
The result of the bubble economy under the Federal Reserve regime known as
“monetarism” has been a debt overhang on the U.S. producing economy of $50
trillion, four times the nominal GDP of $13 billion. There is an additional
overhang of more than $500 trillion in derivative speculation worldwide that
many legitimate U.S. investors, including employee pension funds, have been
caught up in.
Severe economic distress usually leads to war, with the elite financing both
sides and using the resulting chaos to redraw the map to their advantage. We
have now had two world wars, and the third appears to be coming. The end
result, according to “conspiracy theorists,” is supposed to be a financial
world dictatorship with Europe 's financial and hereditary aristocrats at
the top of the heap. The center of this dictatorship would be Northern
Europe, with the focal point being the two-square-mile financial district
known as the City of London . This group also controls the European Union
headquartered in Brussels .
Then what is left of North America, Asia, Africa, and Latin America would be
tightly controlled colonies inhabited by relatively small numbers of “human
cattle” and their overseers. The advanced technological execution for the
machinery of control and oppression would be the job of professionals in the
field, probably including the British MI5, the CIA, the Israeli Mossad, and
private armed mercenaries like Blackwater and Halliburton.
Dangers of the Present Moment
Whatever may be the murky background of the financiers' conspiracy of
subversion, what makes the present situation so dangerous is that entire
nations and regions are slipping from their grasp. Russia , China ,
Venezuela , Bolivia , Ecuador , and other nations are becoming increasingly
independent. Meanwhile, as food prices inflate, people in developing nations
are facing starvation, even as Western agribusiness and oil companies reap
record profits. Political upheavals are inevitable.
It has never been so obvious to so many that Western-style finance
capitalism is ruining the world. An example of the growing awareness is a
new book entitled Currency Wars (Huobi Zhanzheng) , written by a Chinese
author who lived in the United States and worked on Wall Street.
According to Asia Times Online (April 8, 2008), Currency Wars “has become a
runaway bestseller in China in the past nine months. The book caused a
sensation of interests and heated discussions in Chinese cyber space and
other media on Western intentions behind its demand that China quickly
appreciate the value of its currency. Song Hongbing, the book's author,
draws from a wide range of literature in English and argues that the modern
history of international finance is primarily a process of how a very small
number of powerful families in the West have established their control over
governments and international institutions.
“According to Song, there is no such thing as a free market when it comes to
global finance and financial institutions. From the Rothschild family at the
time of the Napoleonic Wars to the rise of J.P. Morgan, the Rockefellers,
and other prominent U.S. financial powerhouses, Song sees all the modern
wars, depressions, and manmade disasters having a linkage to the
manipulation of a handful of Western private bankers.”
And it's not only in China . Through the internet, hundreds of millions of
people are wising up to what the central banks and global corporations run
by the world's super-rich are doing to them.
So the financiers are realizing that things are not going their way. The
world is becoming more diverse. Nations, peoples, and regions long for
freedom and security. Science and technology have the potential to bring
about astounding improvements in the standard of living, as well as
individual knowledge and potency.
There is also a worldwide resurgence of nationalism, for example, in Russia
. After that nation overthrew communism in 1991, the international
financiers attempted to move in through the Russian oligarchs and take
control of the nation's resources. But a free election brought Vladimir
Putin to power. He succeeded in producing on Russian soil a nationalist
revolution which is loathed by the Western financier press, such as the
Washington Post . Russia today is regaining its identity and independence.
In East Asia , China is threatening to break out of the system of U.S.
dollar hegemony and use its own currency to bring about commercial stability
in the region. In the Middle East, Iran has yet to cave in to U.S. pressure,
the Palestinians still defy Israel , and in other areas around the world,
including Central Asia, Africa, and Latin America, movements toward
indigenous self-governance threaten to upset the “ Washington consensus” and
introduce a truly multilateral tenor to world affairs. The euro is also
making inroads as an alternative reserve currency.
Meanwhile, the American colossus is eroding. The U.S. government, with
almost $10 trillion in debt, has been declared functionally bankrupt by
experts. The domestic economy no longer has a manufacturing sector worth
speaking of. Outside of the financial centers on the east and west coasts,
the nation's business establishment is deeply in debt and noncompetitive
with overseas producers. Public health is declining.
The U.S. financial system began to deflate in the summer of 2007 but has so
far avoided a wholesale crash due to the easy credit policies of the Federal
Reserve in allowing financial institutions to roll over their debts. This is
all likely to terminate after the 2008 election, when the Federal Reserve
stops bailing out the system and real depression sets in. Simply put, the
U.S. population no longer has anything close to sufficient income to support
its accustomed way of life, especially with the ongoing collapse of the
standard of living due to oil and food price increases.
So the war-mongers may be thinking they must now act before it's too
late—before a worldwide convulsion throws them from their seats of power.
The time for the financiers to set off the next major conflagration may have
arrived. Naïve American politicians are there, as always, ready to help,
perhaps sensing but not really acknowledging that they have been led into a
trap.
The Real U.S. Strategic Interest
If the next big war starts soon it will likely have been triggered in order
to distract attention from our economic woes. Once chaos sets in there will
be food riots and starvation around the world, including in America . And
yes, the police and military are getting ready. The war will be a handy
excuse to lock up people by using the Patriot Acts and various executive
orders signed by President George W. Bush. Canada and Israel have already
signed a joint public safety “partnership,” which doubtless includes
cooperation with the U.S. Department of Homeland Security.
At this point you would expect American policy-makers to realize that the
U.S. has no strategic interest in maintaining its military forces overseas
in such a vulnerable posture and would start withdrawing. You would also
expect that they would do what President Franklin Roosevelt did during the
New Deal which was to utilize public credit to rebuild the U.S. public and
private infrastructure before the economy collapses altogether.
The fact that none of the mainstream political leaders, least of all McCain
or the Democratic front-runner Obama, has any intention of taking such
decisive action proves that policy is not being controlled from within the
United States . When a person or a nation fails to act in its own
self-interest, there has to be a reason. That reason is usually that its
actions are controlled from outside.
The fact is that the U.S. economy is controlled by international finance,
not by the U.S. business establishment or by our own political system. So
the U.S. cannot change anything, especially in taking effective and rational
measures to get the nation out of debt. Similarly in the area of foreign and
military affairs, the nation appears unable to backtrack from its march to
catastrophe.
So whether the people of this nation want it or not—and a majority do
not—wars are being waged, with the one against Iran likely to be followed by
a general world conflict—the battle for Asia . It will be the financiers and
their personal military forces—chiefly Israel , which is armed to the teeth
with nuclear weapons—who will be left to pick up the pieces once the U.S.
and Russia have reduced each other's forces to rubble.
Can anything be done? Of course. A U.S. president worthy of the office would
take two immediate actions. The first would be to abolish the Federal
Reserve, as Ron Paul advocates. But instead of hankering for a Libertarian
“free-banking” system more suited to 1830 than to 2008, “We the People”
should demand that our elected representatives in the White House and
Congress use public credit to rebuild our economy and provide our people
with real income security. (See Richard C. Cook, "An Emergency Program of
Monetary Reform for the United States," Global Research, April 26, 2007.)
The second immediate action should be to stop trying to conquer the globe
militarily on behalf of alien financial and geopolitical interests. These
measures will also allow the governmental tax burden to be cut radically,
because the main purposes of the income tax are to pay interest on the
national debt and finance wars.
It is now time for all genuine American patriots, including those in the
military, intelligence, and political establishments, as well as students,
workers, employees, managers, industrialists, and retirees to recognize the
crisis and step forward fearlessly to defend the real interests of our
country. Increasingly people are coming to understand that winning the
battle for America requires steadfast opposition to the cabal which holds
power and is ready to throw our nation and its population to the wolves for
a bit of vainglory and thirty pieces of silver.
Unfortunately, it seems to be the way with empires for those in power to be
identified exclusively with their personal self-interest while the world
crashes down around them. People must w ake up. The house is on fire. We can
only hope that some still have eyes to see.
Of course everything in Washington could change with a responsible president
who is supported by a new Congress which has the determination that should
be expected after the voters take their vengeance this November on a
Republican Party that Bush, Cheney, and Rice have tarred with infamy. But
then again only if a widened Middle Eastern war can be prevented between now
and then. It could be prevented if an awakened military loyal to the
Constitution refused to obey the illegal orders of a repudiated lame duck
president acting without congressional authorization.
For the longer-term, we should step back, reassess the geopolitical outlook,
and take the long-overdue step of recognizing who our natural allies in the
world really are. One of these is Russia . Instead of fighting Russia we
should forge a new alliance with that nation with the aim of securing peace,
first in the Middle East and then in the world. If we want to find an enemy
to attack, we should start with Wall Street, then send an expeditionary
force to lay siege to the City of London .
By Richard C. Cook
http:// www.richardccook.com
Copyright 2008 Richard C. Cook
Richard C. Cook is a former federal government analyst who was one of the
key figures in the investigation of the space shuttle Challenger disaster.
He is author of the book - Challenger Revealed: An Insider's Account of How
the Reagan Administration Caused the Greatest Tragedy of the Space Age is
Richard C. Cook's personal story of how he disrupted the cover-ups
surrounding the Challenger disaster.
http://www.marketoracle.co.uk/Article4710.html
The Reason For Soaring
Oil Prices - Pt II
By F. William Engdahl*
5-22-8
http://www.rense.com/general82/pil.htm
As detailed in an earlier article, a conservative calculation is that at
least 60% of today's $128 per barrel price of crude oil comes from
unregulated futures speculation by hedge funds, banks and financial groups
using the London ICE Futures and New York NYMEX futures exchanges and
uncontrolled inter-bank or Over-The-Counter trading to avoid scrutiny. US
margin rules of the government's Commodity Futures Trading Commission allow
speculators to buy a crude oil futures contract on the Nymex, by having to
pay only 6% of the value of the contract. At today's price of $128 per
barrel, that means a futures trader only has to put up about $8 for every
barrel. He borrows the other $120. This extreme "leverage" of 16 to 1 helps
drive prices to wildly unrealistic levels and offset bank losses in
sub-prime and other disasters at the expense of the overall population.
The hoax of Peak Oil-namely the argument that the oil production has hit the
point where more than half all reserves have been used and the world is on
the downslope of oil at cheap price and abundant quantity-has enabled this
costly fraud to continue since the invasion of Iraq in 2003 with the help of
key banks, oil traders and big oil majors. Washington is trying to shift
blame, as always, to Arab OPEC producers. The problem is not a lack of crude
oil supply. In fact the world is in over-supply now. Yet the price climbs
relentlessly higher. Why? The answer lies in what are clearly deliberate US
government policies that permit the unbridled oil price manipulations.
World Oil Demand Flat, Prices Boom
The chief market strategist for one of the world's leading oil industry
banks, David Kelly, of J.P. Morgan Funds, recently admitted something
telling to the Washington Post, "One of the things I think is very important
to realize is that the growth in the world oil consumption is not that
strong."
One of the stories used to support the oil futures speculators is the
allegation that China's oil import thirst is exploding out of control,
driving shortages in the supply-demand equilibrium. The facts do not support
the China demand thesis however.
The US Government's Energy Information Administration (EIA) in its most
recent monthly Short Term Energy Outlook report, concluded that US oil
demand is expected to decline by 190,000 b/d in 2008. That is mainly owing
to the deepening economic recession. Chinese consumption, the EIA says, far
from exploding, is expected to rise this year by only 400,000 barrels a day.
That is hardly the "surging oil demand" blamed on China in the media. Last
year China imported 3.2 million barrels per day, and its estimated usage was
around 7 million b/d total. The US, by contrast, consumes around 20.7
million b/d.
That means the key oil consuming nation, the USA, is experiencing a
significant drop in demand. China, which consumes only a third of the oil
the US does, will see a minor rise in import demand compared with the total
daily world oil output of some 84 million barrels, less than half of a
percent of the total demand.
The Organization of the Petroleum Exporting Countries (OPEC) has its 2008
global oil demand growth forecast unchanged at 1.2 mm bpd, as slowing
economic growth in the industrialised world is offset by slightly growing
consumption in developing nations. OPEC predicts global oil demand in 2008
will average 87 million bpd -- largely unchanged from its previous estimate.
Demand from China, the Middle East, India, and Latin America -- is forecast
to be stronger but the EU and North American demand will be lower.
So the world's largest oil consumer faces a sharp decline in consumption, a
decline that will worsen as the housing and related economic effects of the
US securitization crisis in finance de-leverages. The price in normal open
or transparent markets would presumably be falling not rising. No supply
crisis justifies the way the world's oil is being priced today.
Big new oil fields coming online
Not only is there no supply crisis to justify such a price bubble. There are
several giant new oil fields due to begin production over the course of 2008
to further add to supply.
The world's single largest oil producer, Saudi Arabia is finalizing plans to
boost drilling activity by a third and increase investments by 40 %. Saudi
Aramco's plan, which runs from 2009 to 2013, is expected to be approved by
the company's board and the Oil Ministry this month. The Kingdom is in the
midst of a $ 50 billion oil production expansion plan to meet growing demand
in Asia and other emerging markets. The Kingdom is expected to boost its
pumping capacity to a total of 12.5 mm bpd by next year, up about 11 % from
current capacity of 11.3 mm bpd.
In April this year Saudi Arabia's Khursaniyah oilfield began pumping and
will soon add another 500,000 bpd to world oil supply of high grade Arabian
Light crude. As well, another Saudi expansion project, the Khurais oilfield
development, is the largest of Saudi Aramco projects that will boost the
production capacity of Saudi oilfields from 11.3 million bpd to 12.5 million
bpd by 2009. Khurais is planned to add another 1.2 million bpd of
high-quality Arabian light crude to Saudi Arabia's export capacity.
Brazil's Petrobras is in the early phase of exploiting what it estimates are
newly confirmed oil reserves offshore in its Tupi field that could be as
great or greater than the North Sea. Petrobras, says the new ultra-deep Tupi
field could hold as much as 8 billion barrels of recoverable light crude.
When online in a few years it is expected to put Brazil among the world's
"top 10" oil producers, between those of Nigeria and those of Venezuela.
In the United States, aside from rumors that the big oil companies have been
deliberately sitting on vast new reserves in Alaska for fear that the prices
of recent years would plunge on over-supply, the US Geological Survey (USGS)
recently issued a report that confirmed major new oil reserves in an area
called the Bakken, which stretches across North Dakota, Montana and
south-eastern Saskatchewan. The USGS estimates up to 3.65 billion barrels of
oil in the Bakken.
These are just several confirmations of large new oil reserves to be
exploited. Iraq, where the Anglo-American Big Four oil majors are salivating
to get their hands on the unexplored fields, is believed to hold oil
reserves second only to Saudi Arabia. Much of the world has yet to be
explored for oil. At prices above $60 a barrel huge new potentials become
economic. The major problem faced by Big Oil is not finding replacement oil
but keeping the lid on world oil finds in order to maintain present
exorbitant prices. Here they have some help from Wall Street banks and the
two major oil trade exchanges-NYMEX and London-Atlanta's ICE and ICE
Futures.
Then why do prices still rise?
There is growing evidence that the recent speculative bubble in oil which
has gone asymptotic since January is about to pop.
Late last month in Dallas Texas, according to one participant, the American
Association of Petroleum Geologists held its annual conference where all the
major oil executives and geologists were present. According to one
participant, knowledgeable oil industry CEOs reached the consensus that "oil
prices will likely soon drop dramatically and the long-term price increases
will be in natural gas."
Just a few days earlier, Lehman Brothers, a Wall Street investment bank had
said that the current oil price bubble was coming to an end. Michael
Waldron, the bank's chief oil strategist, was quoted in Britain's Daily
Telegraph on Apr. 24 saying, "Oil supply is outpacing demand growth.
Inventories have been building since the beginning of the year."
In the US, stockpiles of oil climbed by almost 12 million barrels in April
according to the May 7 EIA monthly report on inventory, up by nearly 33
million barrels since January. At the same time, MasterCard's May 7 US
gasoline report showed that gas demand has fallen by 5.8%. And refiners are
reducing their refining rates dramatically to adjust to the falling gasoline
demand. They are now running at 85% of capacity, down from 89% a year ago,
in a season when production is normally 95%. The refiners today are clearly
trying to draw down gasoline inventories to bid gasoline prices up. 'It's
the economy, stupid,' to paraphrase Bill Clinton's infamous 1992 election
quip to daddy Bush. It's called economic recession.
The May 8 report from Oil Movements, a British company that tracks oil
shipments worldwide, shows that oil in transit on the high seas is also
quite strong. Almost every category of shipment is running higher than it
was a year ago. The report notes that, "In the West, a big share of any oil
stock building done this year has happened offshore, out of sight." Some
industry insiders say the global oil industry from the activities and stocks
of the Big Four to the true state of tanker and storage and liftings, is the
most secretive industry in the world with the possible exception of the
narcotics trade.
Goldman Sachs again in the middle
The oil price today, unlike twenty years ago, is determined behind closed
doors in the trading rooms of giant financial institutions like Goldman
Sachs, Morgan Stanley, JP Morgan Chase, Citigroup, Deutsche Bank or UBS. The
key exchange in the game is the London ICE Futures Exchange (formerly the
International Petroleum Exchange). ICE Futures is a wholly-owned subsidiary
of the Atlanta Georgia International Commodities Exchange. ICE in Atlanta
was founded in part by Goldman Sachs which also happens to run the world's
most widely used commodity price index, the GSCI, which is over-weighted to
oil prices.
As I noted in my earlier article, ('Perhaps 60% of today's oil price is pure
speculation'), ICE was focus of a recent congressional investigation. It was
named both in the Senate's Permanent Subcommittee on Investigations' June
27, 2006, Staff Report and in the House Committee on Energy & Commerce's
hearing in December 2007 which looked into unregulated trading in energy
futures. Both studies concluded that energy prices' climb to $128 and
perhaps beyond is driven by billions of dollars' worth of oil and natural
gas futures contracts being placed on the ICE. Through a convenient
regulation exception granted by the Bush Administration in January 2006, the
ICE Futures trading of US energy futures is not regulated by the Commodities
Futures Trading Commission, even though the ICE Futures US oil contracts are
traded in ICE affiliates in the USA. And at Enron's request, the CFTC
exempted the Over-the-Counter oil futures trades in 2000.
So it is no surprise to see in a May 6 report from Reuters that Goldman
Sachs announces oil could in fact be on the verge of another "super spike,"
possibly taking oil as high as $200 a barrel within the next six to 24
months. That headline, "$200 a barrel!" became the major news story on oil
for the next two days. How many gullible lemmings followed behind with their
money bets?
Arjun Murti, Goldman Sachs' energy strategist, blamed what he called
"blistering" (sic) demand from China and the Middle East, combined with his
assertion that the Middle East is nearing its maximum ability to produce
more oil. Peak Oil mythology again helps Wall Street. The degree of
unfounded hype reminds of the kind of self-serving Wall Street hype in
1999-2000 around dot.com stocks or Enron.
In 2001 just before the dot.com crash in the NASDAQ, some Wall Street firms
were pushing sale to the gullible public of stocks that their companies were
quietly dumping. Or they were pushing dubious stocks for companies where
their affiliated banks had a financial interest. In short as later came out
in Congressional investigations, companies with a vested interest in a
certain financial outcome used the media to line their pockets and that of
their companies, leaving the public investor holding the bag. It would be
interesting for Congress to subpoena the records of the futures positions of
Goldman Sachs and a handful of other major energy futures players to see if
they are invested to gain from a further rise in oil to $200 or not.
Margin rules feed the frenzy
Another added turbo-charger to present speculation in oil prices is the
margin rule governing what percent of cash a buyer of a futures contract in
oil has to put up to bet on a rising oil price (or falling for that matter).
The current NYMEX regulation allows a speculator to put up only 6% of the
total value of his oil futures contract. That means a risk-taking hedge fund
or bank can buy oil futures with a leverage of 16 to 1.
We are hit with an endless series of plausible arguments for the high price
of oil: A "terrorism risk premium;" "blistering" rise in demand of China and
India; unrest in the Nigerian oil region; oil pipelines' blown up in Iraq;
possible war with IranAnd above all the hype about Peak Oil. Oil speculator
T. Boone Pickens has reportedly raked in a huge profit on oil futures and
argues, conveniently that the world is on the cusp of Peak Oil. So does the
Houston investment banker and friend of Dick Cheney, Matt Simmons.
As the June 2006 US Senate report, The Role of Market Speculation in Rising
Oil and Gas Prices, noted, "There's a few hedge fund managers out there who
are masters at knowing how to exploit the peak oil theories and hot buttons
of supply and demand, and by making bold predictions of shocking price
advancements to come, they only add more fuel to the bullish fire in a sort
of self-fulfilling prophecy."
Will a Democratic Congress act to change the carefully crafted opaque oil
futures markets in an election year and risk bursting the bubble? On May 12
House Energy & Commerce Committee stated it will look at this issue into
June. The world will be watching.
* F. William Engdahl is author of A Century of War: Anglo-American Oil
Politics and the New World Order (PlutoPress), and Seeds of Destruction: The
Hidden Agenda of Genetic Manipulation. (Global Research, available at
<http://www.globalresearch.ca>www.globalresearch.ca).