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Iran: Heading toward a nuclear show-down?
By Jonathan Marcus Diplomatic and defence correspondent, BBC News
This looks set to be a critical week for diplomatic efforts to rein in Iran's nuclear programme. The UN's nuclear watchdog - the International Atomic Energy Agency (IAEA) - is due to release a report that is expected to give many more details about the basis for its suspicions that Iran is seeking to develop a nuclear bomb.
As the publication date approaches there's been a flurry of diplomatic activity with noises from Israel - and even from Britain - that a military strike against Iran cannot be ruled out.
As ever with Iran, the big powers are divided. Russia and China are eager that the IAEA pulls its punches, fearing that Iran could be driven into a corner.
Even the Iranians, who continue to insist that they have no desire to have nuclear weapons, have weighed in, claiming that the leaked contents of the IAEA report are "fabrications".
For some years, the IAEA has been warning of its concerns that Iran has been undertaking research related to nuclear weapons. Until now, the details have always been sketchy. There have been fears about "undisclosed nuclear activities involving military related organisations", including explosives research to enable the initiation of a nuclear chain reaction.
This week's report is expected to contain a specific annexe detailing what the agency believes the Iranians may be up to.
A flurry of leaked reports sest that there will be details sesting Iran's military nuclear research programme continued after 2003; the point when US intelligence agencies believe that such work was halted due to international pressure. Foreign scientists are said to have played a key part in some of Iran's technological breakthroughs.
You will notice that I have been careful to use words like "sest" and "indicate" because the IAEA has had very limited access to Iran's nuclear programme and the Iranians themselves have been far from helpful in answering the agency's questions.
The main source of the IAEA's material has been the intelligence agencies of several countries. The IAEA has not been able to gather the material itself and the pieces of information with which it has been supplied have been obtained and selected by others.
However, there does seem to have been something of a sea-change within the IAEA itself - a feeling that the full information that it does have on Iran's alleged weapons activities should now see the light of day.
Nonetheless, the IAEA is unlikely to be able to make a definitive judgement as to exactly where the Iranians are along the road towards a bomb.
Timelines here are crucial. Indeed, if you look back over the history of the diplomatic battles with Iran, timelines seem to be almost infinitely flexible.
The Israelis, who see an Iranian bomb as an existential threat, have frequently shouted the loudest, but there are generally moments of high anxiety - often leading up to crucial IAEA or UN meetings - after which things calm down again.
Western diplomats take the view that Iran could still be up to three years away from having a bomb, though its research effort has been making steady, albeit slow, progress.
The fuss now centres on this IAEA report and what may come after it. One option would be a full-scale referral to the UN Security Council with the possibility of further economic sanctions. Alternatively, Iran could be given some notice period within which to answer the IAEA's concerns, after which it might be harder for Moscow and Beijing to block a referral to New York.
For now, the diplomatic track probably still has some way to run. Amidst Europe's economic problems, the US end-game in Iraq and Afghanistan, an election looming in Washington and so on, there seems little real enthusiasm for a military option.
There are also doubts about just what a military strike would achieve, even if "successful". It might only delay Iran's quest for a bomb, while at the same time confirming its usefulness.
Some US reports sest there are fears of unilateral Israeli military action, though this could just be another attempt to ratchet up the pressure on Tehran. In that sense, this is just one more stage in a familiar crisis.
However, in one important sense things have changed. The broader upheavals in the Middle East - "the Arab Spring" - leave both Israel and Iran uncertain and more isolated. Israel has lost an ally in the Mubarak administration in Egypt and Iran could well be on the way to losing its only steadfast friend, the Syrian government of President Basher al-Assad.
Uncertainty and isolation can influence decision-making in strange ways. This is not the final chapter in the saga of Iran's nuclear programme, but then, no book lasts forever.
Ili to mozda ima veze sa:
Sam’s Exchange: Iran’s Oil Bourse. Who is next?
Biweekly column by Sam Barden
If you look at a map of the Middle East, you will notice that Iran is totally surrounded by American military bases. Full spectrum dominance from the United States military industrial complex is alive and well in the region. Most countries could be excused for feeling a little paranoid, or indeed intimidated by being totally surrounded by the U.S. military. Iran, it seems, is not.
© Photo Source: Sam Barden
Iran holds the fourth largest oil reserves in the world and the second largest gas reserves. The two main oil trading bourse’s in the world are the New York Mercantile exchange (NYMEX) and the Intercontinental Exchange (ICE) in London. Oil is of course priced in dollars. However, Iran has established an oil exchange, known as the International Oil Bourse (IOB). It is located on Kish Island, just off the coast of Iran, and is designated as a free trade zone by the Iranian government. It was created by cooperation with Iranian ministries, the Iran Mercantile Exchange and other state and private institutions in 2005. The IOB is intended as an oil exchange for petroleum, petrochemicals and gas in various currencies other than the U.S. dollar, primarily the euro and Iranian rial and a basket of other major (non-U.S.) currencies. However, on July 13, 2011, Iran began trading on their new bourse. Ironically, they offered oil cargo in USD, and the price offered was higher than traders were willing to pay, so no trades took place. Not a great start for an exchange, but what is really going on here?
Iran is under trading sanctions, and has been since 1979. In 2010, the United States and Europe significantly tightened sanctions on Iran, making it almost impossible for anyone to do business with Iranian companies in banking, shipping, insurance, petrochemicals and other trade. However, not everyone takes notice of them, especially China. In fact, Iran supplies China with about one million barrels of oil per day presently and is estimated to account for at least 15% of China’s imports for 2011. China simply ignores the U.S. driven sanctions on Iran. Iran’s oil bourse could also be a way to ignore the sanctions. According to Iranian parliament member Fakhroddin Heydari, Iran’s oil exchange is a way to dodge U.S. sanctions: “It also strengthens Iran’s position in setting oil prices in regional markets. …The oil bourse helps us break the barriers of sanctions; therefore, enabling the world’s outstanding businessmen to enter into transactions without any problem.” And problems do exist. The other energy hungry nation, India, also buys oil from Iran.
Iran supplies India with about 400,000 barrels a day. Due to sanctions, Iran supplies the oil on credit, and the balance outstanding at present is about $7 billion. India and Iran are apparently going to settle through a Turkish banking arrangement. This will of course attract the ire of the United States and pressure from Israel, and is likely to be a short-lived solution to Iran and India’s trade balance situation. What it does however highlight is the need for an oil clearing union, and Iran’s oil bourse might just tip the balance of other OPEC members, or indeed Russia or Venezuela, to follow suit and sell and price their oil through their own free trade zone oil exchanges. There is clearly a demand. At a time when the U.S. dollar is as vulnerable as it has ever been, Iran is piling on the pressure with their oil exchange. The thing that will kill the U.S. dollar as the world’s reserve currency faster than the debt ceiling or a U.S. debt default is if oil producers and consumers trade oil in other currencies.
If the main oil consuming and producing nations in the world conspire to trade oil over an open exchange, similar to Iran’s Oil Bourse, and price the oil in currencies other than or as well as the U.S. dollar, then the world is likely to be economically more stable. The possibility of seeing commodity exchanges emerging in Russia, Venezuela, Hong Kong, the UAE, or India is high. These exchanges could trade oil and other commodities against national currencies, rather than only against the U.S. dollar. By trading commodities over an exchange, each country involved will be able to provide open liquidity pools. One of the key requisites to becoming a reserve currency is for that country to provide liquidity in their currency. For Russia, trading their oil in rubles would be a natural first step towards cementing the ruble as one of the key world currencies. Likewise, China is already encouraging its trading partners to trade in the Chinese yuan, also likely to be a key world currency.
Iran’s IOB is not new. The timing of its move to trading physical cargos of oil on July 13 seems a clear step towards putting pressure on the U.S. dollar, and to show others that an alternative to the status quo of oil trading is available. The main question is which country will be the next to use its own oil exchanges, and will the U.S. military be able to surround that country?
ponedjeljak, lipanj 26, 2006
Hoce li doci do urusavanja dolara i zasto?
Golden Dollar: Kako smo vec zakljucili, do 1971 godine svaki US dolar je imao ekvivalentnu vrijednost u fiksnoj kolicini zlata. Buduci je za vrijeme Vijetnamskog rata trebalo mnogo dolara koje se namirivalo printanjem novih novcanica i time potrosnjom vecom nego su zlatne rezerve dozvoljavale, kad je poceo juris ostalih zemalja iz dolara u zlatne rezerve, Nixon je napustio ‘zlatni ekvivalent’ i od tad je vrijednost dolara odredjena ponudom i potraznjom na exchange marketu.
Exchange market: U normalnim okolnostima exchange rate medju valutama odrazava stanje trgovinske bilance neke zemlje. Zemlje koje izvoze vise nego sto uvoze trebale bi imati rast vrijednosti svoje valute, a zemlje koje kupuju vise nego sto prodaju bi imale pad vrijednosti valute. Ovo je slucaj za sve valute osim za US Dolar!
(Mala digresija: Hrvatska je turisticka zemlja, mi gledamo na buducnost prije sezone!).
Logicno pitanje: Kako, unatoc svim ekonomskim teorijama I praksama, USA moze desetljecima vise uvoziti nego izvoziti?
USA dug je oko 8 trilijuna $ (ili 8 tisuca miljardi!). 45% od toga je vanjski dug. Kako je to moguce? U cemu je catch?
Zadnjih tridesetak godina, US uvozi vise nego sto izvozi (uz pogorsanje tog trenda u zadnjem desetljecu!), ali dolar nije toliko oslabio!
Iste godine kad je Nixon napustio zlatni standard, OPEC zemlje su se dogovorile (vjerovatno nicim izazvane!) da ce prihvatiti jedino dolar kao sredstvo placanja za naftu.
Zacudo, to ima ogromnu prednost za USA jer sve ostale zemlje trebaju prvo kupiti dolare da bi mogli kupiti naftu.
Opet zacudo, to otvara potraznju za dolarom bas u trenutku napustanja zlatnog standarda.
Zahvaljujuci dogovorima zemalja OPEC-a (1971 i 1973) nafta se ekskluzivno prodaje u US dolarima.
To naravno stvara stalnu potraznju za dolarima na exchange marketu. Priblizno 85% trgovine naftom se odvija sasvim izvan USA.
Dolarski krug ide od exchange marketa preko zemalja koje kupuju naftu do zemalja izvoznica nafte, koje ga onda trose sirom svijeta vracajuci ga na exchange market na kraju jednog ciklusa.
Na exchange marketu je uglavnom vec desetljecima veca potraznja nego ponuda dolara iz 4 glavna razloga:
1. Obujam i cijena nafte na trzistu raste, dakle danas treba vise barela i vise dolara/barel nego prije
2. Zahvaljujuci slobodnom trzistu, dosta dolara ostaje u medjunarodnoj upotrebi van USA
3. Vecina centralnih banaka drze dolare kao stratesku rezervu i da zastite domicilnu valutu
4. US Treasury Bonds, koji kad su prodani van US smanjuju kolicinu dolara dostupnih van USA
Dakle, desetljecima ‘stranci’ (dakle 'non-US') stalno imaju potrebu za jos vecom kolicinom dolara. I US Treasury stampa nove dolare.
Ali sad postaje interesantno:
Postoji SAMO JEDAN nacin da ti dolari postanu dostupni vanjskom trzistu - Potrositi ih sirom svijeta!
Onda fino USA kupuje dobra, usluge, dionice, etc.
Naravno da to stvara vanjski dug jer ‘vanjsko trziste’ moze odluciti jednog dana kupovati u US, ali dok god ‘vanjsko trziste’ treba te dolare o dolarsko-naftnom krugu, nema potrebe za zabrinjavanje. Bez obzira sto US vec ima preveliki dug, dobavljaci ne mogu odbiti dolarsku ponudu jer trebaju dolare za kupnju nafte.
Ali US ne treba nikad to platit jer se obzirom da stranci trebaju kupiti dolare da bi platili naftu ta nabavka samo prebije kroz trgovinsku bilacu i dodaje US vanjskom dugu.
Za USA ovaj ‘Mandrake’ mehanizam funkcionira kao kreditna kartica iz bajke:
svaki put kad je povecana potreba za dolarom iz inozemstva za USA to znaci samo jedno: Free Shopping!
Kako je Saddam pokvario igru?
Pa Saddam je u studenom 2000. poceo prodavati naftu za Euro. To je popratio i rijesavanjem dolarskih rezervi odnosno zamjenom istih za Euro.
Naravno da je ta kolicina dolara preplavila exchange market i dolar je kliznuo nadolje. Znacajan broj internacionalnih tradera i investora je zbog toga reagirao prebacivanjem na Euro.
Centralne banke bi bile prisiljene prije ili kasnije prebaciti dio svojih dolarskih rezervi u eure. Do kraja 2002 godine dolar je pao 18%.
Krajem ozujka 2003 USA je upao u Irak, pocetkom lipnja oil trade je vracen na dolare sto medjutim nije zaustavilo nego samo usporilo pad dolara.
Od uvodjenja Eura dolar je pao za cca 30%.
U medjuvremenu je i Iran presao na Euro!
Kako bi ta igra mogla biti zavrsena u Iranu (ukoliko US ne nadje efikasan nacin sprijecavanja IOB)?
Iran je presao na ‘petroeuro’ u proljece 2003. Slijedeci planirani stupanj detronizacije dolara bio je uvodjenje IOB (Iranian Oil Bourse) bazirane na Euru.
E sad, zasto je to drukcije od prodaje u Eurima i zasto bi bas to bio problem za dolar?
Sama cinjenica da postoji burza koja cijenu nafte izrazava u eurima (neovisno od IPE i NYMEX!!!) ostavlja dolar bez zastite!
Cim se jedna zemlja izvoznica nafte odluci na prebacivanje na euro, dolarski kolac ranije namijenjen za kupovinu nafte od te zemlje zavrsava kao visak na exchange marketu.
Nacelno, USA ima tri nacina rijesavanja tog viska dolara na trzistu:
1. povuci ga s trzista izdavanjem bondova
2. vratiti ga natrag u ‘oil market’ dozvoljavajuci da cijene nafte rastu na IPE i NYMEX burzi
3. izvozi vise nego uvozis
Prva metoda je parcijalno funkcionirala izmedju 2000 i 2003.
Druga metoda je koristena tijekom 2004 i 2005 kad je cijena nafte udvostrucena (‘with the little help from my friends’-hurricanes).
Treca metoda....treca metoda je realna koliko i snijeg u Sahari!
Dakle, ukoliko Iran nakon sto (i ako!) burza profunkcionira uspije zadrzati cijenu nafte stabilnom, jedna zemlja izvoznica nafte s promjenom dolar-euro mogla bi urusiti dolar jer
US ce tesko biti u stanju zaustaviti veliki priljev dolara na exchange market.
Prva metoda ne bi prosla jer je u zadnje vrijeme nedovoljna potraznja za US Bondovima (ne cudi me zasto!).
Porast cijena nafte na IPE i NYMEX je u slucaju da Iran zadrzi cijenu stabilnom limitiran.
Treca opcija iznimnog povecanja americkog izvoza jednostavno nije provediva u kratkom vremenu (pitanje je i za duze vrijeme koliko bi bilo potrebno povecati izvoz da bi pokrio uvoz).
Dakle IOB ne bi samo reducirao moc IPE i NYMEX vec bi imao znacajan utjecaj i na tecajne odnose dolar-euro.
Ukoliko nafta postane jeftinija u eurima, naravno da ce svi juriti u euro.
U cijeloj ovoj prici izgleda da je USA odabrao strategiju embarga i/ili rata kroz pricu o ‘nuklearnoj bombi u rukama vjerskih fanatika’...
Dok god US uspije kontrolirati iransku cijenu nafte, tj. dok god je drzi relativno nestabilnom, petrodolarski status quo je izvjestan.
Jer iranska prijetnja je dolarske, a ne uranske naravi!
‘Perhaps 60% of today’s oil price is pure speculation’
By F. William Engdahl
Global Research, May 2, 2008
The price of crude oil today is not made according to any traditional relation of supply to demand. It’s controlled by an elaborate financial market system as well as by the four major Anglo-American oil companies. As much as 60% of today’s crude oil price is pure speculation driven by large trader banks and hedge funds. It has nothing to do with the convenient myths of Peak Oil. It has to do with control of oil and its price. How?
First, the crucial role of the international oil exchanges in London and New York is crucial to the game. Nymex in New York and the ICE Futures in London today control global benchmark oil prices which in turn set most of the freely traded oil cargo. They do so via oil futures contracts on two grades of crude oil—West Texas Intermediate and North Sea Brent.
A third rather new oil exchange, the Dubai Mercantile Exchange (DME), trading Dubai crude, is more or less a daughter of Nymex, with Nymex President, James Newsome, sitting on the board of DME and most key personnel British or American citizens.
Brent is used in spot and long-term contracts to value as much of crude oil produced in global oil markets each day. The Brent price is published by a private oil industry publication, Platt’s. Major oil producers including Russia and Nigeria use Brent as a benchmark for pricing the crude they produce. Brent is a key crude blend for the European market and, to some extent, for Asia.
WTI has historically been more of a US crude oil basket. Not only is it used as the basis for US-traded oil futures, but it's also a key benchmark for US production.
‘The tail that wags the dog’
All this is well and official. But how today’s oil prices are really determined is done by a process so opaque only a handful of major oil trading banks such as Goldman Sachs or Morgan Stanley have any idea who is buying and who selling oil futures or derivative contracts that set physical oil prices in this strange new world of “paper oil.”
With the development of unregulated international derivatives trading in oil futures over the past decade or more, the way has opened for the present speculative bubble in oil prices.
Since the advent of oil futures trading and the two major London and New York oil futures contracts, control of oil prices has left OPEC and gone to Wall Street. It is a classic case of the “tail that wags the dog.”
A June 2006 US Senate Permanent Subcommittee on Investigations report on “The Role of Market Speculation in rising oil and gas prices,” noted, “…there is substantial evidence supporting the conclusion that the large amount of speculation in the current market has significantly increased prices.”
What the Senate committee staff documented in the report was a gaping loophole in US Government regulation of oil derivatives trading so huge a herd of elephants could walk through it. That seems precisely what they have been doing in ramping oil prices through the roof in recent months.
The Senate report was ignored in the media and in the Congress.
The report pointed out that the Commodity Futures Trading Trading Commission, a financial futures regulator, had been mandated by Congress to ensure that prices on the futures market reflect the laws of supply and demand rather than manipulative practices or excessive speculation. The US Commodity Exchange Act (CEA) states, “Excessive speculation in any commodity under contracts of sale of such commodity for future delivery . . . causing sudden or unreasonable fluctuations or unwarranted changes in the price of such commodity, is an undue and unnecessary burden on interstate commerce in such commodity.”
Further, the CEA directs the CFTC to establish such trading limits “as the Commission finds are necessary to diminish, eliminate, or prevent such burden.” Where is the CFTC now that we need such limits?
They seem to have deliberately walked away from their mandated oversight responsibilities in the world’s most important traded commodity, oil.
Enron has the last laugh…
As that US Senate report noted:
“Until recently, US energy futures were traded exclusively on regulated exchanges within the United States, like the NYMEX, which are subject to extensive oversight by the CFTC, including ongoing monitoring to detect and prevent price manipulation or fraud. In recent years, however, there has been a tremendous growth in the trading of contracts that look and are structured just like futures contracts, but which are traded on unregulated OTC electronic markets. Because of their similarity to futures contracts they are often called “futures look-alikes.”
The only practical difference between futures look-alike contracts and futures contracts is that the look-alikes are traded in unregulated markets whereas futures are traded on regulated exchanges. The trading of energy commodities by large firms on OTC electronic exchanges was exempted from CFTC oversight by a provision inserted at the behest of Enron and other large energy traders into the Commodity Futures Modernization Act of 2000 in the waning hours of the 106th Congress.
The impact on market oversight has been substantial. NYMEX traders, for example, are required to keep records of all trades and report large trades to the CFTC. These Large Trader Reports, together with daily trading data providing price and volume information, are the CFTC’s primary tools to gauge the extent of speculation in the markets and to detect, prevent, and prosecute price manipulation. CFTC Chairman Reuben Jeffrey recently stated: “The Commission’s Large Trader information system is one of the cornerstones of our surveillance program and enables detection of concentrated and coordinated positions that might be used by one or more traders to attempt manipulation.”
In contrast to trades conducted on the NYMEX, traders on unregulated OTC electronic exchanges are not required to keep records or file Large Trader Reports with the CFTC, and these trades are exempt from routine CFTC oversight. In contrast to trades conducted on regulated futures exchanges, there is no limit on the number of contracts a speculator may hold on an unregulated OTC electronic exchange, no monitoring of trading by the exchange itself, and no reporting of the amount of outstanding contracts (“open interest”) at the end of each day.” 1
Then, apparently to make sure the way was opened really wide to potential market oil price manipulation, in January 2006, the Bush Administration’s CFTC permitted the Intercontinental Exchange (ICE), the leading operator of electronic energy exchanges, to use its trading terminals in the United States for the trading of US crude oil futures on the ICE futures exchange in London – called “ICE Futures.”
Previously, the ICE Futures exchange in London had traded only in European energy commodities – Brent crude oil and United Kingdom natural gas. As a United Kingdom futures market, the ICE Futures exchange is regulated solely by the UK Financial Services Authority. In 1999, the London exchange obtained the CFTC’s permission to install computer terminals in the United States to permit traders in New York and other US cities to trade European energy commodities through the ICE exchange.
The CFTC opens the door
Then, in January 2006, ICE Futures in London began trading a futures contract for
West Texas Intermediate (WTI) crude oil, a type of crude oil that is produced and delivered in
the United States. ICE Futures also notified the CFTC that it would be permitting traders in the United States to use ICE terminals in the United States to trade its new WTI contract on the ICE Futures London exchange. ICE Futures as well allowed traders in the United States to trade US gasoline and heating oil futures on the ICE Futures exchange in London.
Despite the use by US traders of trading terminals within the United States to trade US oil, gasoline, and heating oil futures contracts, the CFTC has until today refused to assert any jurisdiction over the trading of these contracts.
Persons within the United States seeking to trade key US energy commodities – US crude oil, gasoline, and heating oil futures – are able to avoid all US market oversight or reporting requirements by routing their trades through the ICE Futures exchange in London instead of the NYMEX in New York.
Is that not elegant? The US Government energy futures regulator, CFTC opened the way to the present unregulated and highly opaque oil futures speculation. It may just be coincidence that the present CEO of NYMEX, James Newsome, who also sits on the Dubai Exchange, is a former chairman of the US CFTC. In Washington doors revolve quite smoothly between private and public posts.
A glance at the price for Brent and WTI futures prices since January 2006 indicates the remarkable correlation between skyrocketing oil prices and the unregulated trade in ICE oil futures in US markets. Keep in mind that ICE Futures in London is owned and controlled by a USA company based in Atlanta Georgia.
In January 2006 when the CFTC allowed the ICE Futures the gaping exception, oil prices were trading in the range of $59-60 a barrel. Today some two years later we see prices tapping $120 and trend upwards. This is not an OPEC problem, it is a US Government regulatory problem of malign neglect.
By not requiring the ICE to file daily reports of large trades of energy commodities, it is not able to detect and deter price manipulation. As the Senate report noted, “The CFTC's ability to detect and deter energy price manipulation is suffering from critical information gaps, because traders on OTC electronic exchanges and the London ICE Futures are currently exempt from CFTC reporting requirements. Large trader reporting is also essential to analyze the effect of speculation on energy prices.”
The report added, “ICE's filings with the Securities and Exchange Commission and other evidence indicate that its over-the-counter electronic exchange performs a price discovery function -- and thereby affects US energy prices -- in the cash market for the energy commodities traded on that exchange.”
Hedge Funds and Banks driving oil prices
In the most recent sustained run-up in energy prices, large financial institutions, hedge funds, pension funds, and other investors have been pouring billions of dollars into the energy commodities markets to try to take advantage of price changes or hedge against them. Most of this additional investment has not come from producers or consumers of these commodities, but from speculators seeking to take advantage of these price changes. The CFTC defines a speculator as a person who “does not produce or use the commodity, but risks his or her own capital trading futures in that commodity in hopes of making a profit on price changes.”
The large purchases of crude oil futures contracts by speculators have, in effect, created an
additional demand for oil, driving up the price of oil for future delivery in the same manner that additional demand for contracts for the delivery of a physical barrel today drives up the price for oil on the spot market. As far as the market is concerned, the demand for a barrel of oil that results from the purchase of a futures contract by a speculator is just as real as the demand for a barrel that results from the purchase of a futures contract by a refiner or other user of petroleum.
Perhaps 60% of oil prices today pure speculation
Goldman Sachs and Morgan Stanley today are the two leading energy trading firms in the United States. Citigroup and JP Morgan Chase are major players and fund numerous hedge funds as well who speculate.
In June 2006, oil traded in futures markets at some $60 a barrel and the Senate investigation estimated that some $25 of that was due to pure financial speculation. One analyst estimated in August 2005 that US oil inventory levels sested WTI crude prices should be around $25 a barrel, and not $60.
That would mean today that at least $50 to $60 or more of today’s $115 a barrel price is due to pure hedge fund and financial institution speculation. However, given the unchanged equilibrium in global oil supply and demand over recent months amid the explosive rise in oil futures prices traded on Nymex and ICE exchanges in New York and London it is more likely that as much as 60% of the today oil price is pure speculation. No one knows officially except the tiny handful of energy trading banks in New York and London and they certainly aren’t talking.
By purchasing large numbers of futures contracts, and thereby pushing up futures
prices to even higher levels than current prices, speculators have provided a financial incentive for oil companies to buy even more oil and place it in storage. A refiner will purchase extra oil today, even if it costs $115 per barrel, if the futures price is even higher.
As a result, over the past two years crude oil inventories have been steadily growing, resulting in US crude oil inventories that are now higher than at any time in the previous eight years. The large influx of speculative investment into oil futures has led to a situation where we have both high supplies of crude oil and high crude oil prices.
Compelling evidence also sests that the oft-cited geopolitical, economic, and natural factors do not explain the recent rise in energy prices can be seen in the actual data on crude oil supply and demand. Although demand has significantly increased over the past few years, so have supplies.
Over the past couple of years global crude oil production has increased along with the increases in demand; in fact, during this period global supplies have exceeded demand, according to the US Department of Energy. The US Department of Energy’s Energy Information Administration (EIA) recently forecast that in the next few years global surplus production capacity will continue to grow to between 3 and 5 million barrels per day by 2010, thereby “substantially thickening the surplus capacity cushion.”
Dollar and oil link
A common speculation strategy amid a declining USA economy and a falling US dollar is for speculators and ordinary investment funds desperate for more profitable investments amid the US securitization disaster, to take futures positions selling the dollar “short” and oil “long.”
For huge US or EU pension funds or banks desperate to get profits following the collapse in earnings since August 2007 and the US real estate crisis, oil is one of the best ways to get huge speculative gains. The backdrop that supports the current oil price bubble is continued unrest in the Middle East, in Sudan, in Venezuela and Pakistan and firm oil demand in China and most of the world outside the US. Speculators trade on rumor, not fact.
In turn, once major oil companies and refiners in North America and EU countries begin to hoard oil, supplies appear even tighter lending background support to present prices.
Because the over-the-counter (OTC) and London ICE Futures energy markets are unregulated, there are no precise or reliable figures as to the total dollar value of recent spending on investments in energy commodities, but the estimates are consistently in the range of tens of billions of dollars.
The increased speculative interest in commodities is also seen in the increasing popularity of commodity index funds, which are funds whose price is tied to the price of a basket of various commodity futures. Goldman Sachs estimates that pension funds and mutual funds have invested a total of approximately $85 billion in commodity index funds, and that investments in its own index, the Goldman Sachs Commodity Index (GSCI), has tripled over the past few years. Notable is the fact that the US Treasury Secretary, Henry Paulson, is former Chairman of Goldman Sachs.
More on the real reason behind high oil prices- Part II
By F. William Engdahl
Global Research, May 21, 2008
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 Iran…And 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.
Global Research Associate 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 www.globalresearch.ca). He may be reached at email@example.com.
Nisam stigao prevodit iznimno interesantnu (kao i uvijek) teoriju (?) Engdahla, pa za one koji nisu vec citali evo na engleskom...
War and "Peak Oil"
Confessions of an ‘ex’ Peak Oil believer
By F. William Engdahl
Global Research, September 26, 2007
Confessions of an ‘ex’ Peak Oil believer
The good news is that panic scenarios about the world running out of oil anytime soon are wrong. The bad news is that the price of oil is going to continue to rise. Peak Oil is not our problem. Politics is. Big Oil wants to sustain high oil prices. Dick Cheney and friends are all too willing to assist.
On a personal note, I’ve researched questions of petroleum, since the first oil shocks of the 1970’s. I was intrigued in 2003 with something called Peak Oil theory. It seemed to explain the otherwise inexplicable decision by Washington to risk all in a military move on Iraq.
Peak Oil advocates, led by former BP geologist Colin Campbell, and Texas banker Matt Simmons, argued that the world faced a new crisis, an end to cheap oil, or Absolute Peak Oil, perhaps by 2012, perhaps by 2007. Oil was supposedly on its last drops. They pointed to our soaring gasoline and oil prices, to the declines in output of North Sea and Alaska and other fields as proof they were right.
According to Campbell, the fact that no new North Sea-size fields had been discovered since the North Sea in the late 1960’s was proof. He reportedly managed to convince the International Energy Agency and the Swedish government. That, however, does not prove him correct.
The Peak Oil school rests its theory on conventional Western geology textbooks, most by American or British geologists, which claim oil is a ‘fossil fuel,’ a biological residue or detritus of either fossilized dinosaur remains or perhaps algae, hence a product in finite supply. Biological origin is central to Peak Oil theory, used to explain why oil is only found in certain parts of the world where it was geologically trapped millions of years ago. That would mean that, say, dead dinosaur remains became compressed and over tens of millions of years fossilized and trapped in underground reservoirs perhaps 4-6,000 feet below the surface of the earth. In rare cases, so goes the theory, huge amounts of biological matter should have been trapped in rock formations in the shallower ocean offshore as in the Gulf of Mexico or North Sea or Gulf of Guinea. Geology should be only about figuring out where these pockets in the layers of the earth, called reservoirs, lie within certain sedimentary basins.
An entirely alternative theory of oil formation has existed since the early 1950’s in Russia, almost unknown to the West. It claims conventional American biological origins theory is an unscientific absurdity that is un-provable. They point to the fact that western geologists have repeatedly predicted finite oil over the past century, only to then find more, lots more.
Not only has this alternative explanation of the origins of oil and gas existed in theory. The emergence of Russia and prior of the USSR as the world’s largest oil producer and natural gas producer has been based on the application of the theory in practice. This has geopolitical consequences of staggering magnitude.
Necessity: the mother of invention
In the 1950’s the Soviet Union faced ‘Iron Curtain’ isolation from the West. The Cold War was in high gear. Russia had little oil to fuel its economy. Finding sufficient oil indigenously was a national security priority of the highest order.
Scientists at the Institute of the Physics of the Earth of the Russian Academy of Sciences and the Institute of Geological Sciences of the Ukraine Academy of Sciences began a fundamental inquiry in the late 1940’s: where does oil come from?
In 1956, Prof. Vladimir Porfir’yev announced their conclusions: ‘Crude oil and natural petroleum gas have no intrinsic connection with biological matter originating near the surface of the earth. They are primordial materials which have been erupted from great depths.’ The Soviet geologists had turned Western orthodox geology on its head. They called their theory of oil origin the ‘a-biotic’ theory—non-biological—to distinguish from the Western biological theory of origins.
If they were right, oil supply on earth would be limited only by the amount of organic hydrocarbon constituents present deep in the earth at the time of the earth’s formation. Availability of oil would depend only on technology to drill ultra-deep wells and explore into the earth’s inner regions. They also realized old fields could be revived to continue producing, so called self-replentishing fields. They argued that oil is formed deep in the earth, formed in conditions of very high temperature and very high pressure, like that required for diamonds to form. ‘Oil is a primordial material of deep origin which is transported at high pressure via ‘cold’ eruptive processes into the crust of the earth,’ Porfir’yev stated. His team dismissed the idea that oil is biological residue of plant and animal fossil remains as a hoax designed to perpetuate the myth of limited supply.
Defying conventional geology
That radically different Russian and Ukrainian scientific approach to the discovery of oil allowed the USSR to develop huge gas and oil discoveries in regions previously judged unsuitable, according to Western geological exploration theories, for presence of oil. The new petroleum theory was used in the early 1990’s, well after the dissolution of the USSR, to drill for oil and gas in a region believed for more than forty-five years, to be geologically barren—the Dnieper-Donets Basin in the region between Russia and Ukraine.
Following their a-biotic or non-fossil theory of the deep origins of petroleum, the Russian and Ukrainian petroleum geophysicists and chemists began with a detailed analysis of the tectonic history and geological structure of the crystalline basement of the Dnieper-Donets Basin. After a tectonic and deep structural analysis of the area, they made geophysical and geochemical investigations.
A total of sixty one wells were drilled, of which thirty seven were commercially productive, an extremely impressive exploration success rate of almost sixty percent. The size of the field discovered compared with the North Slope of Alaska. By contrast, US wildcat drilling was considered successful with a ten percent success rate. Nine of ten wells are typically “dry holes.”
That Russian geophysics experience in finding oil and gas was tightly wrapped in the usual Soviet veil of state security during the Cold War era, and went largely unknown to Western geophysicists, who continued to teach fossil origins and, hence, the severe physical limits of petroleum. Slowly it begin to dawn on some strategists in and around the Pentagon well after the 2003 Iraq war, that the Russian geophysicists might be on to something of profound strategic importance.
If Russia had the scientific know-how and Western geology not, Russia possessed a strategic trump card of staggering geopolitical import. It was not surprising that Washington would go about erecting a “wall of steel”—a network of military bases and ballistic anti-missile shields around Russia, to cut her pipeline and port links to western Europe, China and the rest of Eurasia. Halford Mackinder’s worst nightmare--a cooperative convergence of mutual interests of the major states of Eurasia, born of necessity and need for oil to fuel economic growth--was emerging. Ironically, it was the blatant US grab for the vast oil riches of Iraq and, potentially, of Iran, that catalyzed closer cooperation between traditional Eurasian foes, China and Russia, and a growing realization in western Europe that their options too were narrowing.
The Peak King
Peak Oil theory is based on a 1956 paper done by the late Marion King Hubbert, a Texas geologist working for Shell Oil. He argued that oil wells produced in a bell curve manner, and once their “peak” was hit, inevitable decline followed. He predicted the United States oil production would peak in 1970. A modest man, he named the production curve he invented, Hubbert’s Curve, and the peak as Hubbert’s Peak. When US oil output began to decline in around 1970 Hubbert gained a certain fame.
The only problem was, it peaked not because of resource depletion in the US fields. It “peaked” because Shell, Mobil, Texaco and the other partners of Saudi Aramco were flooding the US market with dirt cheap Middle East imports, tariff free, at prices so low California and many Texas domestic producers could not compete and were forced to shut their wells in.
While the American oil multinationals were busy controlling the easily accessible large fields of Saudi Arabia, Kuwait, Iran and other areas of cheap, abundant oil during the 1960’s, the Russians were busy testing their alternative theory. They began drilling in a supposedly barren region of Siberia. There they developed eleven major oil fields and one Giant field based on their deep ‘a-biotic’ geological estimates. They drilled into crystalline basement rock and hit black gold of a scale comparable to the Alaska North Slope.
They then went to Vietnam in the 1980s and offered to finance drilling costs to show that their new geological theory worked. The Russian company Petrosov drilled Vietnam’s White Tiger oilfield offshore into basalt rock some 17,000 feet down and extracted 6,000 barrels a day of oil to feed the energy-starved Vietnam economy. In the USSR, a-biotic-trained Russian geologists perfected their knowledge and the USSR emerged as the world’s largest oil producer by the mid-1980’s. Few in the West understood why, or bothered to ask.
Dr. J. F. Kenney is one of the only Western geophysicists who has taught and worked in Russia, studying under Vladilen Krayushkin, who developed the huge Dnieper-Donets Basin. Kenney told me in a recent interview that “alone to have produced the amount of oil to date that (Saudi Arabia’s) Ghawar field has produced would have required a cube of fossilized dinosaur detritus, assuming 100% conversion efficiency, measuring 19 miles deep, wide and high.” In short, an absurdity.
Western geologists do not bother to offer hard scientific proof of fossil origins. They merely assert it as a holy truth. The Russians have produced volumes of scientific papers, most in Russian. The dominant Western journals have no interest in publishing such a revolutionary view. Careers, entire academic professions are at stake after all.
Closing the door
The 2003 arrest of Russian Mikhail Khodorkovsky, of Yukos Oil, took place just before he could sell a dominant stake in Yukos to ExxonMobil after Khodorkovsky had a private meeting with Dick Cheney. Had Exxon got the stake they would have got control of the world’s largest resource of geologists and engineers trained in the a-biotic techniques of deep drilling.
Since 2003 Russian scientific sharing of their knowledge has markedly lessened. Offers in the early 1990’s to share their knowledge with US and other oil geophysicists were met with cold rejection according to American geophysicists involved.
Why then the high-risk war to control Iraq? For a century US and allied Western oil giants have controlled world oil via control of Saudi Arabia or Kuwait or Nigeria. Today, as many giant fields are declining, the companies see the state-controlled oilfields of Iraq and Iran as the largest remaining base of cheap, easy oil. With the huge demand for oil from China and now India, it becomes a geopolitical imperative for the United States to take direct, military control of those Middle East reserves as fast as possible. Vice President Dick Cheney, came to the job from Halliburton Corp., the world’s largest oil geophysical services company. The only potential threat to that US control of oil just happens to lie inside Russia and with the now-state-controlled Russian energy giants. Hmmmm.
According to Kenney the Russian geophysicists used the theories of the brilliant German scientist Alfred Wegener fully 30 years before the Western geologists “discovered” Wegener in the 1960’s. In 1915 Wegener published the seminal text, The Origin of Continents and Oceans, which sested an original unified landmass or “pangaea” more than 200 million years ago which separated into present Continents by what he called Continental Drift.
Up to the 1960’s supposed US scientists such as Dr Frank Press, White House science advisor referred to Wegener as “lunatic.” Geologists at the end of the 1960’s were forced to eat their words as Wegener offered the only interpretation that allowed them to discover the vast oil resources of the North Sea. Perhaps in some decades Western geologists will rethink their mythology of fossil origins and realize what the Russians have known since the 1950’s. In the meantime Moscow holds a massive energy trump card.
Kad je prije cca godinu dana Radical Element objavio pricu o Ameru, nekako mi je izgledala nestvarna mogucnost ujedinjavanja sjevernoamerickih valuta pod jednim nazivom 'Amero'.
No u svjetlu nedavnih dogadjanja s FEDsima i dolarom ne izgleda vise toliko nevjerovatno...
Dollar Crisis: None dare call it 'conspiracy'
By Hal Lindsey
Global Research, November 11, 2007
Crude oil prices hit an all-time high this week, closing above $98 a barrel for the first time in history.
According to the AAA, many drivers in my home state of California are already paying more than $4 a gallon for regular unleaded gas. And in one town south of Big Sur, unleaded gas topped $5 a gallon.
The U.S. dollar is at an all-time low, even when compared against the hapless Canadian loonie. Five years ago, a loonie was worth 60 cents. Today, it's worth $1.12 and climbing.
Yesterday, WorldNetDaily reported that the Chinese are considering abandoning the U.S. dollar as their national reserve currency. WND quoted Craig Smith's assessment of the consequences of such a move by Beijing on our economy: "If that were to happen, all bets are off, and we will be in a depression that makes 1929 look like child's play, or we will experience Weimar Republic inflation as the dollar makes extreme moves toward devaluations."
On Tuesday, the U.S. national debt topped $9 trillion for the first time in history, according to the U.S. Treasury Department's daily accounting of the national debt. Nine trillion dollars! The number is so staggeringly high that it exceeds our ability to comprehend it in monetary units.
Million, billion, trillion – in financial terms, for most of us, it means a lot of money, really a lot of money, but that is about as specific a picture as most ordinary people can grasp.
Let's put all these "illions" into perspective. A million seconds is roughly 12 days, whereas a billion seconds is approximately 32 years.
We understand dollars. And we understand time. So it would take 12 days to pay back a million dollars at a dollar a second. But if you started right now, you'd pay back a BILLION dollars, at a dollar a second, in the year 2039.
A trillion seconds is roughly 32 thousand years. At a dollar a second, you'd pay back a TRILLION dollars in the year 34007.
The U.S. debt stands at $9 trillion. If my calculator is working, then at a dollar a second, the U.S. could be debt- free in the year 290007.
The point of that little exercise was two-fold. The first was to clarify the sheer volume of the debt; the second was to demonstrate the possibility that anybody in government really believes we can ever pay it off.
Each U.S. citizen's share of the national debt works out, according to the National Debt clock, to $29,947.50. That means the average American family of five owes, collectively, $149,737.50.
It also means that unless the average American family of five has a net worth of at least $149,737,50 in assets excluding liabilities (they don't), America is already bankrupt.
Over the past few years, there has been growing public concern about the emerging "Security and Prosperity Partnership" plan that some say is really a "deceptive roadmap" to a coming North American Union and a new, unified currency tentatively called the "amero."
The feds steadfastly deny such a plan exists, even as it opens the borders to Mexican truck traffic, widens the I-35 corridor from Mexico to Canada and, counterintuitively, refuses to tighten the borders with either Mexico or Canada, despite both logic and widespread public demand.
All of these things have brought me to believe that powerful forces outside of our government – like the shadowy international Money Trust members of the "Bilderberg Group" – made a decision to force the formation of the North American Union along with the amero. There decisions have been instituted in the past via the Trilateral Commission, which is the dba for the nefarious Conference on Foreign Relations. Destroying the American dollar could force the crisis that would force the creation of the North American Union. To quote the title of a book of the 1960s era, "None Dare Call It Conspiracy."
Ordinary Americans may not fully grasp just how dire the true economic picture is, but you can bet our leaders do. Yet from the White House to the Federal Reserve, nobody seems particularly eager to address the issue, preferring instead to talk about the "budget," as if the budget WERE the debt, rather than merely a measure of our ability to keep up with our payments on the debt.
It is almost as if they already have a Plan B in reserve, ready and waiting to be triumphantly introduced – just in the nick of time.
I wonder what it might be?
Inace, uobicajeni Bushov komentar na pitanje o cijenama nafte je u stilu: "We have a strong plan!"
Da, od prije 2001 godine, i to vrlo uspjesan...Vidite samo sponzore tadasnje predsjednicke kampanje...
Greenspan predviđa slom burzi
Alan Greenspan smatra da su trenutna previranja u mnogim aspektima identična onima koja su obilježila 1987. i 1998. godinu.
"Tržišna kretanja posljednjih sedam tjedana u mnogim su aspektima identična onima 1998., kao i onima koja su dovela do burzovnog kraha 1987.", kazao je bivši predsjednik američke središnje banke Fed Greenspan u četvrtak navečer u Washingtonu, na događaju kojeg je organizirao akademski časopis Brookings Papers on Economic Activity.
Poslovna ekspanzija rezultat je euforije dok su kontrakcije rezultat straha ulagača, kazao je nadalje Greenspan, koji se na čelu Fed-a nalazio od 1987.-2005. No, i dalje je prisutan u svijetu financija kao konzultant Deutsche Bank i savjetnik Gordona Browna.
Naime, ekonomisti općenito vjeruju da isti čimbenici potiču i ekspanzije i kontrakcije, no Greenspan ističe da je faza gospodarskog rasta nešto posve drugo, dok je strah - a to je ono što je nastupilo sada - daleko potentnija sila od euforije, prenosi nadalje Wall Street Journal.
U 1998. hedge fond Long-Term Capital Management raspolagao je sa 100 milijardi dolara kapitala, ali je propao pod pritiskom ruske dužničke krize, koja je poharala mnoga tržišta derivata i izazvala slom na azijskim burzama.
Na cijelu se priču odlično nadovezuje i misteriozni investitor koji riskira gubitak od jedne milijarde dolara ukoliko Dow Jones Eurostoxx 50 indeks ne izgubi između jedne trećine i polovine vrijednosti do 21. rujna.
Investitor je stavio 245.000 opcija za prodaju dionica navedenog indeksa, a financijski ugovor takvog tipa između dvije strane omogućava zaradu kupcu jedino u slučaju pada vrijednosti imovine koja je predmet ugovora.
Brokeri su već nazvali ovaj dogovor „bin Ladenovska trgovina“, jer bi samo neki događaj magnitude 9-11 mogao jako srušiti vrijednost indeksa i omogućiti zaradu na tako kratkoročnom poslu. Naime, u slučaju takvog pada, nepoznati investitor zaradio bi oko dvije milijarde dolara.
Druga moguća katastrofa bila bi odluka Kine da ispuni prijetnje i sruši dolar rasprodajom svojih ogromnih dolarskih rezervi po „veleprodajnim cijenama“. (bold by Monsoon)
Slična kataklizmička predviđanja dolaze i od teksaškog kongresmena i predsjedničkog kandidata Ron Paula, koji tvrdi da su svi pokušaji FED-a da spasi tržište „bacanje novaca u rupu“ i da je ekonomski kolaps neminovan.
Inace, ovo smo vec opisivali u starijim postevima...vidi History ili na novoj lokaciji...
Post moved by Monsoon to new location
Za one koji se ne sjecaju, par-nepar je bila racionalizacija potrosnje goriva u osamdesetim godinama proslog stoljeca na prostorima bivse drzave.
Gas rationing triggers unrest in Iran
At least a dozen filling stations are torched as demonstrators take to the streets after the surprise edict.
By Ramin Mostaghim and Borzou Daragahi, Special to The Times
TEHRAN -- Demonstrators took to the streets and torched at least a dozen gas stations after the surprise start of gasoline rationing early this morning, Iranian news agencies and witnesses reported.
Under a plan to curb rapidly increasing domestic consumption of Iran's limited supply of gasoline, the government of President Mahmoud Ahmadinejad implemented a program that limits motorists to 26.4 gallons a month at the subsidized priced of 42 cents per gallon.
The proposal sparked public fury when it was first announced earlier this year. It had been temporarily shelved, only to be revived Tuesday night just two hours before it went into effect.
"From midnight tonight, gasoline for all motor vehicles and motorcycles will be rationed," state television said in an announcement quoting the Oil Ministry.
Motorists rushed to gas stations to fill up before the plan went into effect. Angry mobs in the capital set gas stations afire. A spokesman for the fire department told the daily World of Industry newspaper that 21 gas stations were burned down, but a source at the Gas Station Owners syndicate told the same paper the number was 16 and others cited the figure 12.
Despite huge oil reserves, Iran lacks refining capacity to meet rising domestic demand for gasoline and must import fuel from abroad, which it sells at a subsidized rate that costs the government at least $4 billion annually.
The new plan allows motorists to pump gas only with a debit card that keeps track of monthly consumption. The plan will be in place for four months and then reevaluated, according to the announcement on state-controlled television.
Lawmakers huddled with Oil Minister Vaziri Hamaneh in closed-door meetings today to discuss a plan for setting a price for fuel to be sold above the rationing quota.
Some experts speculated that the rioting was organized by leaders of smling rings that sell subsidized fuel to other Persian Gulf countries for huge profits. Others cautioned not to read too much into the unrest.
"These types of revolts are not new," said Mostafa Labbad, a Cairo-based Iran expert and publisher of Sharqnameh, an Egyptian journal about Iranian and Turkish affairs. "In Karaj and the outer parts of Iran, there are such rebellions every two or three months. They show the unpopularity of the country's economic policies."
Izgleda nelogicno da se racionalizacija potrosnje goriva provodi u zemlji izvoznici nafte, ali to je stvar prerade odnosno kapaciteta prerade nafte u iskoristive oblike benzina. Uz 'malu' pomoc sankcija prema Iranu nema mogucnosti investiranja u nove rafinerije za povecanje proizvodnje, a vjerovatno je i 'unutrasnji neprijatelj' jedva cekao da dodje do prilike za svrgavanje rezima.
Da su ostavili Pahlavija na vlasti prije pola stoljeca mozda ne bi trebali razmisljat kako se borit protiv radikalnog islama...samo on je htio nacionalizirati naftna postrojenja, cini mi se...hm, hm, teska dilema...
China and USA in New Cold War over Africa’s Oil Riches
Darfur? It’s the Oil, Stupid...
By F. William Engdahl
Global Research, May 20, 2007
To paraphrase the famous quip during the 1992 US Presidential debates, when an unknown William Jefferson Clinton told then-President George Herbert Walker Bush, “It’s the economy, stupid,” the present concern of the current Washington Administration over Darfur in southern Sudan is not, if we were to look closely, genuine concern over genocide against the peoples in that poorest of poor part of a forsaken section of Africa.
No. “It’s the oil, stupid.”
Hereby hangs a tale of cynical dimension appropriate to a Washington Administration that has shown no regard for its own genocide in Iraq, when its control over major oil reserves is involved. What’s at stake in the battle for Darfur? Control over oil, lots and lots of oil.
The case of Darfur, a forbidding piece of sun-parched real estate in the southern part of Sudan, illustrates the new Cold War over oil, where the dramatic rise in China’s oil demand to fuel its booming growth has led Beijing to embark on an aggressive policy of—ironically-- dollar diplomacy. With its more than $1.3 trillion in mainly US dollar reserves at the Peoples’ National Bank of China, Beijing is engaging in active petroleum geopolitics. Africa is a major focus, and in Africa, the central region between Sudan and Chad is priority. This is defining a major new front in what, since the US invasion of Iraq in 2003, is a new Cold War between Washington and Beijing over control of major oil sources. So far Beijing has played its cards a bit more cleverly than Washington. Darfur is a major battleground in this high-stakes contest for oil control.
China Oil diplomacy
In recent months, Beijing has embarked on a series of initiatives designed to secure long-term raw materials sources from one of the planet’s most endowed regions—the African subcontinent. No raw material has higher priority in Beijing at present than the securing of long term oil sources.
Today China draws an estimated 30% of its crude oil from Africa. That explains an extraordinary series of diplomatic initiatives which have left Washington furious.
China is using no-strings-attached dollar credits to gain access to Africa’s vast raw material wealth, leaving Washington’s typical control game via the World Bank and IMF out in the cold. Who needs the painful medicine of the IMF when China gives easy terms and builds roads and schools to boot?
In November last year Beijing hosted an extraordinary summit of 40 African heads of state. They literally rolled out the red carpet for the heads of among others Algeria, Nigeria, Mali, Angola, Central African Republic, Zambia, South Africa.
China has just done an oil deal, linking the Peoples Republic of China with the continent's two largest nations - Nigeria and South Africa. China's CNOC will lift the oil in Nigeria, via a consortium that also includes South African Petroleum Co. giving China access to what could be 175,000 barrels a day by 2008. It’s a $2.27 billion deal that gives state-controlled CNOC a 45% stake in a large off-shore Nigeria oil field. Previously, Nigeria had been considered in Washington to be an asset of the Anglo-American oil majors, ExxonMobil, Shell and Chevron.
China has been generous in dispensing its soft loans, with no interest or outright grants to some of the poorest debtor states of Africa. The loans have gone to infrastructure including highways, hospitals, and schools, a stark contrast to the brutal austerity demands of the IMF and World Bank. In 2006 China committed more than $8 billion to Nigeria, Angola and Mozambique, versus $2.3 billion to all sub-Saharan Africa from the World Bank. Ghana is negotiating a $1.2 billion Chinese electrification loan. Unlike the World Bank, a de facto arm of US foreign economic policy, China shrewdly attaches no strings to its loans.
This oil-related Chinese diplomacy has led to the bizarre accusation from Washington that Beijing is trying to “secure oil at the sources,” something Washington foreign policy has itself been preoccupied with for at least a Century.
No source of oil has been more the focus of China-US oil conflict of late than Sudan, home of Darfur.
Sudan oil riches
Beijing’s China National Petroleum Company, CNPC, is Sudan’s largest foreign investor, with some $5 billion in oil field development. Since 1999 China has invested at least $15 billion in Sudan. It owns 50% of an oil refinery near Khartoum with the Sudan government. The oil fields (see graphic) are concentrated in the south, site of a long-simmering civil war, partly financed covertly by the United States, to break the south from the Islamic Khartoum-centered north.
CNPC built an oil pipeline from its concession blocs 1, 2 and 4 in southern Sudan, to a new terminal at Port Sudan on the Red Sea where oil is loaded on tankers for China. Eight percent of China’s oil now comes from southern Sudan. China takes up to 65% to 80% of Sudan’s 500,000 barrels/day of oil production. Sudan last year was China’s fourth largest foreign oil source. In 2006 China passed Japan to become the world’s second largest importer of oil after the United States, importing 6.5 million barrels a day of the black gold. With its oil demand growing by an estimated 30% a year, China will pass the US in oil import demand in a few years. That reality is the motor driving Beijing foreign policy in Africa. (Source: USAID)
A look at the southern Sudan oil concessions shows that China’s CNPC holds rights to bloc 6 which straddles Darfur, near the border to Chad and the Central African Republic. In April 2005 Sudan’s government announced it had found oil in South Darfur whoich is estimated to be able when developed to pump 500,000 barrels/day. The world press forgot to report that vital fact in discussing the Darfur conflict.
Using the genocide charge to militarize Sudan’s oil region
Genocide was the preferred theme, and Washington was the orchestra conductor. Curiously, while all observers acknowledge that Darfur has seen a large human displacement and human misery and tens of thousands or even as much as 300,000 deaths in the last several years, only Washington and the NGO’s close to it use the charged term “genocide” to describe Darfur. If they are able to get a popular acceptance of the charge genocide, it opens the possibility for drastic “regime change” intervention by NATO and de facto by Washington into Sudan’s sovereign affairs.
The genocide theme is being used, with full-scale Hollywood backing from the likes of pop stars like George Clooney, to orchestrate the case for a de facto NATO occupation of the region. So far the Sudan government has vehemently refused, not surprisingly.
The US Government repeatedly uses “genocide” to refer to Darfur. It is the only government to do so. US Assistant Secretary of State Ellen Sauerbrey, head of the Bureau of Population, Refugees and Migration, said during a USINFO online interview last November 17, "The ongoing genocide in Darfur, Sudan — a 'gross violation' of human rights — is among the top international issues of concern to the United States." The Bush administration keeps insisting that genocide has been going on in Darfur since 2003, despite the fact that a five-man panel UN mission led by Italian Judge Antonio Cassese reported in 2004 that genocide had not been committed in Darfur, rather that grave human rights abuses were committed. They called for war crime trials.
Merchants of death
The United States, acting through surrogate allies in Chad and neighboring states has trained and armed the Sudan Peoples’ Liberation Army, headed until his death in July 2005, by John Garang, trained at US Special Forces school at Fort Benning, Georgia.
By pouring arms into first southern Sudan in the eastern part and since discovery of oil in Darfur, to that region as well, Washington fuelled the conflict that led to tens of thousands dying and several million driven to flee their homes. Eritrea hosts and supports the SPLA, the umbrella NDA opposition group, and the Eastern Front and Darfur rebels.
There are two rebel groups fighting in Sudan's Darfur region against the Khartoum central government of President Omar al-Bashir-- the Justice for Equality Movement (JEM) and the larger Sudan Liberation Army (SLA).
In February 2003 the SLA launched attacks on Sudan government positions in the Darfur region. SLA Secretary-General Minni Arkou Minnawi called for armed strle, accusing the government of ignoring Darfur. "The objective of the SLA is to create a united democratic Sudan.” In other words, regime change in Sudan.
The US Senate adopted a resolution in February 2006 that requested North Atlantic Treaty Organization troops in Darfur, as well as a stronger U.N. peacekeeping force with a robust mandate. A month later, President Bush also called for additional NATO forces in Darfur. Uh huh... Genocide? Or oil?
The Pentagon has been busy training African military officers in the US, much as it has for Latin American officers for decades. Its International Military Education and Training (IMET) program has provided training to military officers from Chad, Ethiopia, Eritrea, Cameroon and the Central African Republic, in effect every country on Sudan’s border. Much of the arms that have fuelled the killing in Darfur and the south have been brought in via murky, protected private “merchants of death” such as the notorious former KGB operative, now with offices in the US, Victor Bout. Bout has been cited repeatedly in recent years for selling weapons across Africa. US Government officials strangely leave his operations in Texas and Florida untouched despite the fact he is on the Interpol wanted list for money laundering.
US development aid for all Sub-Sahara Africa including Chad, has been cut sharply in recent years while its military aid has risen. Oil and the scramble for strategic raw materials is the clear reason. The region of southern Sudan from the Upper Nile to the borders of Chad is rich in oil. Washington knew that long before the Sudanese government.
Chevron’s 1974 oil project
US oil majors have known about Sudan’s oil wealth since the early 1970’s. In 1979, Jafaar Nimeiry, Sudan head of state, broke with the Soviets and invited Chevron to develop oil in the Sudan. That was perhaps a fatal mistake. UN Ambassador George H.W. Bush had personally told Nimeiry of satellite photos indicating oil in Sudan. Nimeiry took the bait. Wars over oil have been the consequence even since.
Chevron found big oil reserves in southern Sudan. It spent $1.2 billion finding and testing them. That oil triggered what is called Sudan’s second civil war in 1983. Chevron was target of repeated attacks and killings and suspended the project in 1984. In 1992, it sold it's Sudanese oil concessions. Then China began to develop the abandoned Chevron fields in 1999 with notable results.
But Chevron is not far from Darfur today.
Chad oil and pipeline politics
Condi Rice’s Chevron is in neighboring Chad, together with the other US oil giant, ExxonMobil. They’ve just built a $3.7 billion oil pipeline carrying 160,000 barrels/day of oil from Doba in central Chad near Darfur Sudan, via Cameroon to Kribi on the Atlantic Ocean, destined for US refineries.
To do it, they worked with Chad “President for life,” Idriss Deby, a corrupt despot who has been accused of feeding US-supplied arms to the Darfur rebels. Deby joined Washington’s Pan Sahel Initiative run by the Pentagon’s US-European Command, to train his troops to fight “Islamic terrorism.” The majority of the tribes in Darfur region are Islamic.
Supplied with US military aid, training and weapons, in 2004 Deby launched the initial strike that set off the conflict in Darfur, using members of his elite Presidential Guard who originate from the province, providing the men with all terrain vehicles, arms and anti-aircraft guns to Darfur rebels fighting the Khartoum government in the southwest Sudan. The US military support to Deby in fact had been the trigger for the Darfur bloodbath. Khartoum reacted and the ensuing debacle was unleashed in full tragic force.
Washington-backed NGO’s and the US Government claim unproven genocide as a pretext to ultimately bring UN/NATO troops into the oilfields of Darfur and south Sudan. Oil, not human misery, is behind Washington’s new interest in Darfur.
The “Darfur genocide” campaign began in 2003, the same time the Chad-Cameroon pipeline oil began to flow. The US now had a base in Chad to go after Darfur oil and, potentially, co-opt China’s new oil sources. Darfur is strategic, straddling Chad, Central African Republic, Egypt and Libya.
According to Keith Harmon Snow: "US military objectives in Darfur—and the Horn of Africa more widely—are being served at present by the US and NATO backing of the African Union troops in Darfur. There NATO provides ground and air support for AU troops who are categorized as 'neutral' and 'peacekeepers'. Sudan is at war on three fronts, each country-- Uganda, Chad, and Ethiopia-- with a significant US military presence and ongoing US military programs. The war in Sudan involves both US covert operations and US trained “rebel” factions coming in from South Sudan, Chad, Ethiopia and Uganda."
Chad’s Deby looks to China too
The completion of the US and World Bank-financed oil pipeline from Chad to the Cameroon coast was designed as one part of a far grander Washington scheme to control the oil riches of central Africa from Sudan to the entire Gulf of Guinea.
But Washington’s erstwhile pal, Chad’s President for Life, Idriss Deby, began to get unhappy with his small share of the US-controlled oil profits. When he and the Chad Parliament decided in early 2006 to take more of the oil revenues to finance military operations and beef up its army, new World Bank President, Iraq war architect, Paul Wolfowitz, moved to suspend loans to the country. Then that August, after Deby had won re-election, he created Chad’s own oil company, SHT, and threatened to expel Chevron and Malaysia’s Petronas for not paying taxes owed, and demanding a 60% share of the Chad oil prieline. In the end he came to terms with the oil companies, but winds of change were blowing.
Deby also faces growing internal opposition from a Chad rebel group, United Front for Change, known under its French name as FUC, which he claims is being covertly funded by Sudan. This region is a very complex part of the world of war. The FUC has based itself in Darfur.
Into this unstable situation, Beijing has shown up in Chad with a full coffer of aid money in hand. In late January, Chinese President Hu Jintao made a state visit to Sudan and to Cameroon among other African states. In 2006, China’s leaders visited no less than 48 African states. In August 2006 Beijing hosted Chad’s Foreign Minister for talks and resumption of formal diplomatic ties cut in 1997. China has begin to import oil from Chad as well as Sudan. Not that much oil, but if Beijing has its way, that will soon change.
This April, Chad’s Foreign Minister announced that talks with China over greater China participation in Chad’s oil development were “progressing well.” He referred to the terms the Chinese seek for oil development, calling them, “much more equal partnerships than those we are used to having.”
The Chinese economic presence in Chad, ironically, may be more effective in calming the fighting and displacement in Darfur than any African Union or UN troop presence ever could. That would not be welcome for some people in Washington and at Chevron headquarters, as they would not find the oil falling into their greasy bloody hands.
Chad and Darfur are but part of the vast China effort to secure “oil at the source” across Africa. Oil is also the prime factor in US Africa policy today. George W. Bush’s interest in Africa includes a new US base in Sao Tome/Principe 124 miles off the Gulf of Guinea from which it can control Gulf of Guinea oilfields from Angola in the south to Congo, Gabon, Equitorial Guinea, Cameroon and Nigeria. That just happens to be the very same areas where recent Chinese diplomatic and investment activity has focussed.
“West Africa’s oil has become of national strategic interest to us,” stated US Assistant Secretary of State for Africa, Walter Kansteiner already back in 2002. Darfur and Chad are but an extension of the US Iraq policy “with other means”—control of oil everywhere. China is challenging that control “everywhere,” especially in Africa. It amounts to a new undeclared Cold War over oil.
Ships packed with 17,000 sailors and Marines moved into the Persian Gulf on Wednesday as the US Navy staged another show of force off Iran's coast just days before US-Iran talks in Baghdad and amid new revelations over Iran's nuclear program.
The carrier strike groups, led by the Bremerton-based USS John C. Stennis and USS Nimitz joined by the amphibious assault ship USS Bonhomme Richard and its own strike group, were to conduct air training while the ships ran submarine, mine and other exercises.
The war games - which culminate in an amphibious landing exercise in Kuwait, just a few miles from Iran - appear to be a clear provocation for Iran, coming just ahead of the Baghdad talks.
US and Iranian ambassadors are to meet Monday in Baghdad to discuss Iraq's security issues. Iran has objected and dismissed US claims that Iran is supplying Iraqi Shiite militias with roadside bombs that kill American troops.
MANAMA, May 24 (Reuters) - The U.S. navy began war games on Iran's doorstep on Thursday, navy officials said, a day after a large flotilla of U.S. ships entered the Gulf in a dramatic daytime show of military muscle.
The group includes two nuclear-powered aircraft carriers, whose presence adds to the pressure on the Islamic Republic to abandon its own nuclear ambitions, which the West says are an attempt to develop atomic weapons.
Iran, already under U.N. sanctions for enriching uranium, says its plans are for energy purposes only.
Asked if any of the American ships carried atomic weapons, a U.S. navy spokesman said the United States routinely did not comment on whether its warships were equipped with nuclear arms. On the same day the U.S. ships entered the Gulf, skirting Iran's coast as they passed the Gulf's narrowest point, the U.N.'s atomic agency released a report saying Iran was continuing to defy world demands to stop enriching uranium. The agency's report opens the way for tougher sanctions.
"The Stennis is conducting flight operations in support of Operation Iraqi Freedom. Nimitz is conducting an air defence exercise. Bonhomme Richard is conducting replenishment at sea," navy Media Operations Officer Denise Garcia told Reuters.
The USS John C. Stennis, USS Nimitz, and the USS Bonhomme Richard are part of the group of nine ships that entered the Gulf on Wednesday, sending oil prices higher as jittery markets eyed possible tensions in the oil shipping hub.
OIL PRICES RISE
Oil prices have continued to rise, hitting a nine-month high above $71 on Thursday.
The ships, carrying about 17,000 personnel and 140 aircraft will take part in war drills over the next two weeks, the group's leader Rear Admiral Kevin Quinn said on Wednesday, adding that the drills would include exercises to defend against air, surface and submarine threats. Their aim is to reassure allies of the U.S. commitment to regional stability, he said.
Iran has blamed foreign forces for causing regional instability, and on Wednesday said it would give a "powerful answer" to enemies.
U.S. and Iranian ambassadors are due to meet on Monday in Baghdad to discuss security in Iraq, where the United States has accused Iran of fomenting violence. Iran denies the accusations. The passage of the U.S. ships through the Straits of Hormuz, a narrow channel in the Gulf and major oil shipping lane, was the largest such move in daylight hours since the 2003 Iraq war. Most U.S. navy ships transit the straits at night, so as not to attract attention, and rarely in large numbers.
LUXEMBOURG (AP): The head of the U.N.'s nuclear watchdog said Thursday he agrees with U.S. intelligence estimates that Iran is three to eight years from being able to make nuclear arms and urged the United States and other Security Council members to abandon "rhetoric" in their bid to get Tehran to scale down its nuclear ambitions.
Iran can only be kept away from nuclear arms "through a comprehensive dialogue," said Mohamed ElBaradei. On Wednesday, his organization, the International Atomic Energy Agency, reported Iran's uranium enrichment program was expanding and that the agency's knowledge of those activities was shrinking — a finding that may trigger new U.N. sanctions.
"We are moving toward Iran building (nuclear) capacity and knowledge, without (the IAEA) in a position to verify the nature or scope of that program," ElBaradei told a news conference in Luxembourg. ElBaradei would not offer his own view of when Iran will be able to produce nuclear weapons. But repeating previous comments, he added, "I tend to agree with (CIA estimates) that even if Iran wanted to go to nuclear weapons it would not be before the end of this decade or sometime in the middle of the next" — three to eight years. Pushed by the United States, France and Britain, the U.N. Security Council has already imposed sanctions twice on Tehran to make it abandon ever more sophisticated nuclear enrichment. The fear is that Iran wants to acquire nuclear arms. Tehran says it seeks to produce nothing more than nuclear energy.
Russia, Turkmenistan and Kazakhstan have agreed to build a new natural gas pipeline north from the Caspian Sea. Russia's President Vladimir Putin announced the deal at a summit with Central Asian leaders in Turkmenistan.
The agreement ensures Russia's access to Turkmenistan's gas, and is a setback to rival US and European Union plans.
They had hoped to pipe Turkmen gas across the Caspian sea via Turkey, in order to reduce the EU's dependence on Russian-controlled energy. Following two days of negotiations the presidents of the three countries, meeting in the Turkmen port city of Turkmenbashi, announced they would sign a treaty on the planned pipeline by September. President Putin said the deal would mean increased energy supplies to Europe.
The new pipeline will carry gas from Turkmenistan, one of the world's largest sources of gas, through Kazakhstan to Russia.
The deal represents a victory for Russia, which buys Turkmen gas at below-market prices. The BBC's Natalia Antelava says the agreement is a huge blow to Washington, Brussels and Beijing, who have all been vying for direct access to Turkmenistan's gas. They have lobbied strongly for a route under the Caspian Sea to Azerbaijan and Turkey, bypassing Russia.
Turkmenistan's massive gas reserves are effectively controlled by Moscow, since it relies on Russian energy giant Gazprom's Soviet-era pipelines for distribution.
For two decades, the isolationist policy of Turkmenistan's late leader Saparmurat Niyazov made additional access impossible.
But his death last year opened a window of opportunity and it was hoped that new President Kurbanguly Berdymukhamedov would give the go-ahead to a trans-Caspian pipeline that would ease Europe's dependence on Kremlin-controlled energy.
Story from BBC NEWS:
Analysis: Russian pipeline deal
Russia, Turkmenistan and Kazakhstan have reached a landmark gas pipeline deal that will strengthen Moscow's control over Central Asia's energy export routes. The BBC's regional analyst, Ian MacWilliam, examines what this means for Moscow.
On the face of it, this pipeline deal seems to be all in Russia's favour. It means that for the foreseeable future, most gas from Turkmenistan and Kazakhstan will be exported via Russia. Moscow already buys Turkmen gas at less than market prices, enabling it to export its own vast gas resources to Europe more profitably. The Central Asians know that keeping the Kremlin happy will make their own lives easier. The Turkmen and Kazakh leaders both grew up under the Soviet Union and they will have noticed Moscow's furious reaction in past months when Estonia, Georgia and Ukraine angered the Kremlin.
But for the Central Asians, the Caspian pipeline to Russia is the best offer on the table. Washington and the EU have been backing a plan to build a pipeline westward under the Caspian Sea which would allow gas exports to Europe free of Russian control. But that plan is still little more than an idea and it would take years to find financial backing.
Turkmenistan's new President Kurbanguly Berdymukhamedov has said the Western-backed plan is still on the agenda, but energy experts say it is still not even clear just how much gas Turkmenistan has, and therefore how viable a trans-Caspian pipeline would be.
Russia's President Vladimir Putin, by contrast, has said that work will start on the Russian pipeline by next year and it will mean that Turkmenistan can export more gas. The Central Asians will plan to diversify their export routes in the coming years as gas and oil production increases.
The Federal Reserve Monopoly Over Money
by Hon. Ron Paul of Texas (from www.dailyreckoning.com)
"The greatest threat facing America today is the disastrous fiscal policies of our own government, marked by shameless deficit spending and Federal Reserve currency devaluation."
(Ed. Note: Congressman Ron Paul of Texas enjoys a national reputation as the premier advocate for liberty in politics today. Dr. Paul is the leading spokesman in Washington for limited constitutional government, low taxes, free markets, and a return to sound monetary policies based on commodity-backed currency.)
Recently I had the opportunity to question Federal Reserve Chairman Ben Bernanke when he appeared before the congressional Joint Economic committee. The topic that morning was the state of the American economy, and many of my colleagues raised questions about how the Fed might better "regulate" things to ease fears of an economic downturn. The tenor of my colleagues' questions sested that Mr. Bernanke's job is nothing less than to run the U.S. economy, like some kind of Soviet central planner.
Certainly it's true that Mr. Bernanke can drastically affect the economy at the drop of a hat, simply by making decisions about the money supply and interest rates. But why do members of Congress assume this is good? Why do we accept without objection that a small group of people on the Federal Reserve Board wields so much power over our economic wellbeing? Is centralized, monopoly control over our money even compatible with a supposedly free-market economy?
Few Americans give much thought to the Federal Reserve System or monetary policy in general. But even as they strive to earn a living, and hopefully save or invest for the future, Congress and the Federal Reserve Bank are working insidiously against them. Day by day, every dollar you have is being devalued.
The greatest threat facing America today is not terrorism, or foreign economic competition, or illegal immigration. The greatest threat facing America today is the disastrous fiscal policies of our own government, marked by shameless deficit spending and Federal Reserve currency devaluation. It is this one-two punch of Congress spending more than it can tax or borrow, and the Fed printing money to make up the difference that threatens to impoverish us by further destroying the value of our dollars.
The Feds inflationary policies hurt older people the most. Older people generally rely on fixed incomes from pensions and Social Security, along with their savings. Inflation destroys the buying power of their fixed incomes, while low interest rates reduce any income from savings. So while Fed policies encourage younger people to over-borrow because interest rates are so low, they also punish thrifty older people who saved for retirement.
The financial press sometimes criticizes Federal Reserve policy, but the validity of the fiat system itself is never challenged. Both political parties want the Fed to print more money, either to support social spending or military adventurism. Politicians want the printing presses to run faster and create more credit, so that the economy will be healed like magic or so they believe.
Fiat dollars allow us to live beyond our means, but only for so long. History shows that when the destruction of monetary value becomes rampant, nearly everyone suffers and the economic and political structure becomes unstable. Spendthrift politicians may love a system that generates more and more money for their special interest projects, but the rest of us have good reason to be concerned about our monetary system and the future value of our dollars.
Kao podsjetnik na 'dolarsku terminologiju' jedan stari post - na hrvatskom, wow!
Iran and USA: 'Enjoying The Hostility'
Bahman Aghai Diba PhD International Law - Persian Journal
The Islamic regime of Iran and the government of the USA have many points of dispute. The question is: are they interested to solve them? It seems that both sides are enjoying the current mood of hostility due to their reasons.
As far as the regime of Iran is concerned, I think the answer to the above question is definitely no. the Islamic regime in Iran is a failed system. It has failed in economic, political, social and even cultural fields. At the same time, the regime is blaming the USA for all of its problems. If the US is out of this picture, then how are they going to explain their failures?
Some experts and ordinary people in and out of Iran argue that if Iran makes a compromise with the West, the main problems of Iran would be solved. I do not think so, and I believe the Islamic regime of Iran is very well aware of this fact. Which of the important problems of Iran will be solved in case of normalization of the Iran-US ties?
Population of Iran has become doubled in the last quarter of century that the Islamic regime is dominating Iran. At the same time, all governmental and nongovernmental capabilities have remained the same or reduced. What is the relations with the US going to do with the unemployment, hidden unemployment, low level of educations, brain drain, lack of skills, huge number of drug addicts, (one of the highest in the world), inflation, stagnation, stagflation (combination of the inflation and stagnation), depression, rising demands of the young generation, backward industries, old-dated administrative systems, weak agriculture and so on?
The reality is that the relations with the USA will not solve any of these acute and serious problems of the regime of Iran, at least in a quick way. On the other side, the Islamic regime of Iran will lose its "whipping boy".
The regime of Iran, considers the USA as personification of all values that the regime opposes. For the same reason, what it will gain fro the relations with the USA must be so important to compensate such a great loss. The regime needs to defend its policies, suppress the people, violate the human rights, close the newspapers and kill the opponents.
On the other hand, the US also sees good points in hostility with Iran.
Some of them are:
1- The US has difficulty in Iraq. It is a good policy to divert the attention to somewhere like Iran.
2- The Arab states of the Middle East region, are afraid of Iran's plans and they ask for:
A- US protection
B- Buying more weapons from the West
C- Supporting the US policy in Iraq
D- Getting closer to Israel
Kao nisam stigao komentirati rezultate izbora u US, uz iskrenu sucut republikancima, ipak nije ni za njih sve izgubljeno.
Naime, po kristaliziranju situacije nakon izbora i nekoliko kolateralnih zrtava u likovima Rumsfelda i UN wannabe ambasadora Boltona (s izgledom kao s reklame za 'Got Milk?'), situacija se lagano vraca u status quo.
Approval predsjedniku je tamo gdje je i bio (30%), demokratska stranka i dalje nema pojma sto bi napravila s pobjedom (How about impeachment? Ako je Clinton mogao na impeachment zbog jednog pusenja, sta se ceka s ovim kojemu puse milijuni?), zahuktavaju se predizborna ispitivanja snaga kao priprema za objavljivanje kandidature su pripreme za predsjednicke izbore 2008, tata Bush se ukljucio u skupljanje razbijenih jaja kroz Iraq Study Group,...
No prije povratka na bliskoistocno minsko polje, da vidimo samo ukratko kako stoje stvari s potencijalnim kandidatima za izbore:
Republikanci izgleda tipuju na McCain-a i trenutno se nijedan od ostalih potencijanih kandidata ne istice toliko kao on.
Kod demokrata je situacija slicna, sve naginje na Gdju Clinton medjutim zadnjih tjedana i mjeseci se nekoliko friskih likova progurava da bi ispitalo popularnost (najizrazitiji primjer je Barak Obama). Mislim da su sanse u izbornoj utrci McCain/Clinton or.Obama ipak na strani republikanaca.
Zasto? Zato jer mi se cini da ce odlucivati 'nesvrstani biraci' odnosno koliko god McCain nije prihvatljiv lijevo orijentiranom dijelu nesvrstanih, daleko je vise Clinton (ili cak Obama) neprihvatljiv tradicionalisticki orijentiranom dijelu USA...Kibi dabi...
Osim toga, izbori su ionako iluzija za birace da nesto mijenjaju...
Back to reality:
Grupa mudraca radno nazvana Iraq Study Group polako prikuplja ideje i analizira mogucnosti za Irak. I onda ce predsjednik Dubya to procitati, analizirati (Aha!) te predloziti svoje ideje. Koje ce onda mudraci analizirati i tako ce ta interakcija trajati dok se ne nadje optimalno rjesenje koje bi zadovoljilo sve strane u sukobu (zvuci poznato? sjetite se balkanskih ratova i uloge J. Bakera u tome).
WASHINGTON, Dec 12 (Reuters) - President George W. Bush is likely to delay the unveiling of a new strategy for Iraq until early 2007, instead of late this year as originally planned, a White House official said on Tuesday.
A senior official, speaking on condition of anonymity, said the plan was now "more likely" to come in the new year.
Facing growing pressure to shift course in the unpopular Iraq war, Bush is weighing the recommendations of the Iraq Study Group, led by former Secretary of State James Baker and ex-congressman Lee Hamilton. The panel's report calls for accelerating the training of Iraqi forces and pulling back U.S. combat troops by early 2008.
Several reviews are also under way within the administration and Bush held a video conference on Tuesday morning with the U.S. military commanders in Baghdad and his national security team.
The U.S. official said the administration is leaning toward a January announcement of its strategy overhaul because "there's still work to be done" and the aim to is to get a good plan rather than to meet a deadline.
"This is not a sign of trouble. This is a sign of determination on the part of the president," the official said.
Go for it, Dubya!