Posts Tagged ‘oil’

Time To Invest In Pork Bellies And Beans

July 29, 2014

pork belly and beans
Preparing for war: Pork bellies and beans (source)

When I was in my teens (yes I can remember that far back) everybody was interested in the events leading up to World War One (Our Grandads had been involved you see)and being an avid reader I devoured various novels and memoirs on the social conditions, political chicanery, elitist snobbery and stupidity and commercial opportunism that guided our blundering path to a senseless conflict.

And one think that fascinated me, because I knew nothing of the soldiers’ diet was the economic advice to invest in pork bellies and beans.

Many commentators in traditional and new media have commented on how similar current political conditions are to what happened in 1914, with powerful alliances refusing to back down. And then today I read something that is really worrying.

Having $50 billion of assets under potential seizure is enough to make anyone wince. However, despite a carefuly worded statement on the Yukos award, (a dispute over some Russian oil company) Vladimir Putin seems totally unfazed by the threat of further sanctions being imposed over the flight MH17 controversy. Now I think I understand why, and it’s very concerning.

As The FT reports:

The award is a landmark not just for its size – 20 times the previous record for an arbitration ruling. The tribunal also found definitively that Russia’s pursuit of Yukos and its independently-minded main shareholder, Mikhail Khodorkovsky, a decade ago was politically motivated.

Though Russia cannot appeal against the award, Moscow said it would pursue all legal avenues for trying to get it “set aside”.

Even if the ruling stands, shareholders face a tortuous battle trying to enforce it. If Moscow refuses to pay, they must pursue Russian sovereign commercial assets in the 150 countries that are party to the so-called 1958 New York Convention on enforcing arbitration awards.

But perhaps this explains why Putin is not coming out swinging, as The FT concludes,

One person close to Mr Putin said the Yukos issue was noit significant in light of the bigger geopolitical stand-off over Ukraine.

“There is a war coming in Europe,” he said. “Do you really think this matters?”

Source: The Financial Times

Well, got to go, I have to instruct my broker to buy pork bellies and beans futures.

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Now Things Are Starting To Make Sense

July 26, 2014

It is now known that the uprising in Ukraine early this year that saw the elected government, which was cooperating far too well with Russia for the liking of the western powers overthrown and replaced by a US and EU sponsored gaggle of gangsters, thugs and neo – fascists whose task was to serve western interests rather than those of Ukraine’s population.

Many commentators have suggested that if we join up the dots the picture that emerges reveals a push by powerful interests to establish a USA led global hegemony. And when we look at regime change wars and civil unrest in other countries the screams of “conspiracy theory” from those who yearn to live under a global totalitarian government take on a hollow tone.

Libya, Iraq, Afghanistan, Syria and Ukraine have all been destabilised by international action led by the United States. Libya, Iraq and Syria all have oil So how do Afghanistan and Ukraine fit in.

Afghanistan is the key to opening a pipeline route from the Caspian and former Soviet Republics in central Asia to the Indian Ocean. And there are rumours of possible untapped oil and gas reserves in Afghan teritory.

Ukraines strategic location on the pipeline routes from oil and gas fields in the Caucasus and around The Caspian Sea into Europe. And then there’s this:

from zero hedge
Company In Which US Vice President Joe Biden’s Son Is Director Prepares To Drill Shale Gas In East Ukraine

Recall what we said earlier today: the proxy war Ukraine conflict, just like that in Syria preceding it, “is all about energy.” Recall also the following chart showing Ukraine’s shale gas deposits, keeping in mind that the Dnieper-Donets basin accounts for approximately 90 per cent of Ukrainian production. Finally, recall our story from May that Joe Biden’s son, Hunter, just joined the board of the largest Ukraine gas producer Burisma Holdings. Now put it all together and you will like figure out what will happen next.

Well maybe not what will happen next but certainly why the USA is so desperate to drive a wedge between Russia and Europe and to demonise Vladimir Putin while in the same move gaining control of Ukraine’s oil and gas reserves. And that offers some insight into why Obama was on TV blaming pro Russian separatists for downing Malaysia Airlines flight MH17 almost before it was hit.

It also demonstrates that the pro EU Ukrainian government and western interests had a lot to gain from politicising such an outrage. So ignoring any outbursts from certain Professorial pricks who can’t understand that when I said there was no evidence last Thursday that the separatists were responsible that is not the same as saying the separatists were not responsible or that somebody else was.

I know it is incomprehensible to childbrains who try and give their words authority by announcing “I’m a scientist”, or “I work in a university”, but in the real world there are often more than two possible answers to a question. (Actually I can truthfully say I have worked in three universities, Manchester, Liverpool and Corpus Christi, Cambridge; IT consultants get around.)

And so sensible people take a step back and wait for the details to emerge before jumping to conclusions. We’re still waiting.

Ukraine’s gas / oil deposits (source)

ukraine gas oil deposits

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USA, Russia and Sanctions: The Real Situation

March 14, 2014

Yesterday someone commented on my post about the threat of the Ukrsine dispute turning into economic warfare, that the USA would be immune to economic fallout from any trade war because the world trades in US dollars. Now knowing what I do about the dross printed and broadcast by US mainstream media, I could not criticise anybody for clinging to this piece of propaganda, but in reality the situation has been changing for some years.

So when you read reports that Russia is ready to hit back with counter sanctions against the EU and US should they try to use economic measures to force the Kremlin’s hand on the Ukraine issue, be afraid. Since the start of the Iraq war, the economic landscape has changed enormously. The USA is no nearly as dominant as it was, due to the actions of the last two US administrations Uncle Sam has little goodwill to trade with. China has already recealed plans to replace the US$ with a new reserve currency and simlar plans have been discussed in G20 sessions because of fears about the systemic weakness of the US economy.

The President and Scooby Doo villain Secretary Of State Kerry are not in a strong enough position to indulge in sabre rattling.

“We hope that there will only be targeted political sanctions, and not a broad package affecting economic trade, “Our sanctions will be, of course, similar, ” Deputy Economic Development Minister Aleksey Likhachev the Russian Economic Ministry has said .

One way Russia will use to protects its economy from sanctions is by shifting settlements of bilateral trades to other currencies. China and Iran have already taken the lead in this, following a move by the late Saddam Hussein which I blogged on some years ago (How Saddam May Yet Win The War ) The old tyrant was merely giving the finger to bill Clinton’s White House but he established a precedent that others noted.

America’s vulnerability to attacks on the dollar is summed up in this comment made by Aleksey Ulyukaev, the Minister of Economic Development said in an interview with the Vesti 24 TV channel.

“We need to increase trade volume conducted in national currencies. Why, in relation to China, India, Turkey and other countries, should we be negotiating in dollars? Why should we do that? We should sign deals in national currencies- this applies to energy, oil, gas, and everything else,”

The Duma, Russia’s parliament, is drafting legislation to allow Moscow to freeze assets of Western companies and individuals in the event sanctions are imposed following the Crimea referendum vote on March 16.

#Such a law would give The Kremlin “opportunities to defend our sovereignty from threats,” according to its author, Andrey Klishas, as quoted by RIA Novosti on March 5.

With Russia and China already dumping dollar reserves and US Treasury bonds this could easily spell trouble if Obama and Kerry are not careful. The US Congress has already denounced Russia’s actions in Ukraine. Last Tuesday, congress approved a resolution that urges The White House to “to work with our European allies and other countries to impose visa, financial, trade and other sanctions on senior Russian Federation officials, majority state-owned banks and commercial organizations, and other state agencies, as appropriate.”

Earlier this week the European Union threatened to impose further sanctions on Russia starting on March 17, after the referendum in Crimea takes place on Sunday. Speaking to the German parliament, Chancellor Angela Merkel hinted sanctions would be needed if Russia “continues its efforts to annex crimea or bring down the EU supported rebel government of Ukraine. Merkel warned that if Russia does not back down the result would be to change the European Union’s relationship with its neighbour. She is right of course, Germant depends on Russian gas, if Putin turns off the tap it would quickly cripple the German economy.

The real clincher in determining how the Ukraine confrontation will play out is China. Seemingly far removed from this dispute, China would appear to have little to gain from involving itself in a dispute between the western powers and Russia. China’s ambassador to Germany Shi Mingde, has warned however of the global economic affect sanctions against Russia could hold. Mingde said the geo-political tiff between Russia and the West could “spiral” into chaos (by whih he probably means a shooting war or an economic crisis to make 2008 look like a short term cashflow problem).
President Putin and the Russian foreign ministry have both said sanctions against Russia could backfire, and spill over into the global economy and Moscow’s Foreign Minister Sergey Lavrov denounced any “hasty and ill-considered” sanctions as being likely to cause “mutual damage”.

Iran-style sanctions on Russian trade appear impossible because the EU would be much more exposed than the US and as Putin has warned, the American economy would be massively exposed should Russia decide to dump the dollar reserves it has built during years of exporting gas and oil.
The European Union nations import around a third of their gas and many other natural resources from Russia, and several nations are completely dependent on Russian gas. The US and Russia trade very little so it is difficult to see what harmful effect US sactions could have (but since when did Barack hussein Obama, the ego on legs, think through such foreign policy subtleties), but Russia is Europe’s biggest customer, and the $13 trillion EU economy would de devastated if trade with Russia was halted overnight.

So to summarise, collapse of the dollar, crippling of the EU economy and global financial chaos and the presentation to China of an enormous opportunity; does anyone still think the US has no need to fear the consequences of economic conflict with Russia? On the other hand, Russia is not truly a democracy, The Kremlin will simply tell citizens any hardships they face are due to the evil western nations and anyone who questios that had best get their affairs in order. Simples.

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While Syria Distracts Us Will Egypt Seize Libya For It’s Oil

October 7, 2012

If the conflict in Syria, currently showing signs of spreading to Turkey, Iraq and Kurdistan were to escalate into a regional war, a proxy for east and west to butt heads without sustaining too much domestic damage, is Egypt likely to take advantage of the distraction and seize Libya for its oilfields?

Thw Egyptians certainly have an incentive. Since the Arab Spring kicked off almost two years ago, the Egyptian economy has been disintegrating. Foreign currency reserves have more than halved and many currency traders predict the Egyptian pound, already at its lowest point in eight years, will soon be devalued. Socially, discontent is widespread. According to Gulf News, “In the past three months, Egypt has experienced increased power cuts that sometimes last for hours, while a fuel and diesel crisis has at times paralyzed the country, with mile-long queues forming outside petrol stations.” The black market price for gas canisters is 10 times higher than the official selling price; for bread it’s five times higher.

Taking into account Egypt’s political ideology, its past relationship with its large but sparsly populated neighbour, and its economic situation this scenario is being raised as a concern by increasing numbers of diplomats, businesses and media organisations.

Egypt’s Muslim Brotherhood government desperately needs a $4.8-billion IMF bailout to stop the economy bleeding out but the Islamists refuse to curtail subsidies to peasant farmers because most of its support comes from the rural vote. To comply with IMF demands for austerity could easily trigger a popular revolt of the kind that led to the fall of the Mubarak regime.

Having cut the IMF umbilical cord the brotherhood is looking for aid from the Arab oil states and the U.S.A. but even if this materializes, it will be at best a stopgap. With tourism remaining the nation’s main source of foreign exchange, but tourists steering clear of Egypt because of its anti-Western riots, persecution of Christians and other minorities and rush to adopt Sharia law this revenue stream is faltering. Meanwhile foreign investors are increasingly wary of investing in Egyptian ventures leaving few options open to the government. The temptation to look next door at the source of wealth that kept an insane tyurant like Gadaffi in power in Libya for forty years could become an irresistible, temptation particularly since Egypt views union with Libya as inevitable.

If we remember that Arab loyalties are usually to tribe and clan rather than the synthetic nation states manufactured by the western powers after the fall of the Ottoman Empire in 1918, it becomes easy to see why an Egyptian annexation of Libya looks an obvious way forward for two nations plunged into chaos by the western meddling that triggered the Arab Spring.

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And God said Let The be Oil … and lo there was oil.

June 29, 2012

When Golda Mier, Isrsael’s Prime Minister back in the 1960s complained “Why did God lead us to the one place in the middle east where there was no oil and comedian Jackie Mason wisecracked, “What idiot put our oil underr their sand,” neither knew how wrong they were.

As the green lobby revs up for a good wail and gnash of teeth about fracking shale gas reserves the Israeli’s are finding that for decades they have been sitting on the biggest oil bonanza since Jed Clampitt struck lucky in The Beverley Hillbillies.

What will this mean to middle east politics? Read Ian P-J: Tensions Boil As Israeli Oil Riches Grow

One think’s for sure; those green meanies are going to be getting even more anti Semitic

G8 Leaders Will Talk About Reducing The Price Of Oil

May 18, 2012

Leaders of major economic powers including David Cameron will arrive today at a G8 summit in the USA on the back of promises to help families “struggling with the impact of oil prices.” The summit, at the Camp David presidential retreat, will tomorrow discuss a US call for developed economies to release oil from their strategic reserves to try to bring down world oil prices. The White House is arguing that an EU embargo on Iranian oil will soon start to push up prices, a potential threat to Mr Obama’s reelection campaign.

“With families across the world struggling with the impact of oil prices and a fragile global economy, we must renew our joint efforts to support growth, financial stability and energy security,” Mr Cameron writes in an article published today.

In a newspaper article today, Mr Cameron will hint at plan to deplete oil reserves which will reduce prices temporarily but make the developed nations more vulnerable to oil exporting nations, many of which are hostile to the west, holding us to ransome in future by limiting supplies.

The Prime Minister first discussed the oil plan with mr Obama in March, when he said the idea was “worth looking at”. Diplomats said the oil plan will be discussed at Camp David on saturday morning, although no action will be announced this weekend.

Now Little Nicky does not like to pour cold water on good ideas but this is not a good idea. In fact, with oil prices being the biggest issue in the USA at the moment it looks very much like a stitch up to help Obama’s re – election bid. So in the end we the people are going to end up paying to get our greatest enemy, thre New World Order’s houseboy, the fifth-columnist-in-chief a second term in office.

It is all likely to be in vain however. Though Russia is not a G8 nation Vladimir Putin declined an invitation to a to attend while China has let it be know the USA is no longer the world’s most influential economic power (The Cinese government and its banks hold a huge amount of American debt and could reduce the USA to another Greeece tomorrow if they wished,) so things are not looking good for the G8 plan even before it gets off the ground.

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