Outsourcing The Power Position

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King Ibn Saud

King Ibn Saud

We head into New Year celebrations enjoying a few extra dollars to spend, or put away for future needs, grateful that gasoline prices at the pump have eased enough to be felt. We also wish for continuation in this trend so that each of us can bask in a little relief from the ever-escalating costs on foods and daily necessities.  Grateful, yes, but to whom, and more importantly, why?

There is little to be gained in listening to the confusion radiating from most of our MSM on the significance of oil’s price collapse.  Its leader is too focused on golfing and has not taken the time to provide useful talking points.  Incredibly, some publications, unable to place “actions and decisions” at the hands of Obama, generically refer to some unsourced desires of the United States such as “seeking to punish Russia,” or “put pressure on Iran.” No one knows what this feckless President’s strategy really is, but the ever-helpful MSM imbues his non-existent strategy with “objectives” which will sound good to his ideological base.

Today, in order to pretend that Obama is clued-in, National Public Radio claim that in an interview it asked Obama if the U.S. had collapsed oil prices to create problems for Russia.  In a most nauseating claim and to beat his chest, he inferred that it was “part of our rationale.”  Whatever that meant, flew by NPR.  It  is a weak attempt at an ego’s revenge for Putin appearing to have upped him on the international stage over the past few years. Reality shouts that the state of the world and foreign affairs are beyond, no, . . .  far far beyond this President’s range of interests. Furthermore, he had and has no strategy on oil, other than to fight oil industry companies. Pretending through doublespeak, to have remotely been involved in leading an oil fuelled charge against Putin, is insane.  Nevertheless, into the leadership void we have foreign potentates and lunatics  leaping in and flexing their muscles.

The world knows Saudi Arabia’s decision to hold production levels has been a major factor in a confluence of events, such as U.S. production increases, Libyan, Algerian and Iraqi output increases and reduced consumption, that have led to the financial damage caused to many oil-dependent dictatorships.  Such impact will not lead to demands for leadership changes in most countries feeling the stress. Putin is a good such example — his popularity apparently rises as his countrymen’s standards of living slide.

Putin invades, Iran nuclearizes. Iraq becomes slaughter-central overnight with Afghanistan not far behind up that ladder of infamy.  Lybia, Egypt and the rest of the Middle East are still looking up the Obama definition of “spring,” in full knowledge that there is no “red line in the sand.”

Venezuela’s Dictator for the day, Maduro, has been partially fooled.  He thinks the oil price drop is a Saudi / U.S. strategy intended, “To harm Russia.” There is no doubt that current oil price levels are wreaking havoc on Putin’s empire, however, the harm to the already isolated Iran will be much more extensive if oil prices remain at current levels or go lower.  This is principally a strategy rooted in Saudi Arabia, and a continuation of the Al Saud family’s long term policy for self-preservation. Keep in mind, Iran is its principal enemy.  The Al Sauds are striking at the heart of Iran — not at the heart of North American oil independence, shale oil. The Saudis may be annoyed with America for not going all-in on Assad, or others of their ancient enemies, but Iran is the subject of their attack.   The greater the financial harm Saudi Arabia and the Gulf States can inflict on Iran, the longer Iran will take to deploy nuclear bombs, the less it will export terrorism and the weaker it will be. The cause is a financial one, with deep roots in religious doctrine.

Iran is the Shia’s principal nation and represents the foremost Sunni antagonist. The Baathists are a pan-Arabic socialist movement which has waged war against monarchies such as the Al Sauds who fought them in Iraq and ultimately toppled Saddam Hussein with U.S. military taking the lead. But let’s remember that Saddam Hussein was once upon a time supported by the Saudis in a long war against Iran.  Next on the Saudi hit list was another Baathist, Assad. Off with his head, . . . well not quite yet, but soon enough. And who has been supporting him?  . . . Iran.  So the time has come for the Al Sauds to tighten the vise on Iran.  Oil and cash are the movable jaws.  Iran is in trouble.  Is that it?

Not a chance.  Remember the Saudi-backed Muslim Brotherhood in Egypt?  Remember how Obama got excited and provided airstrikes to fuel his “Arab Spring” across the Middle East from Yemen to Algeria? The Egyptian military wanted none of it and squashed it in Egypt.  So long to the Brotherhood in Egypt, and things aren’t going so well for them and their Saudi backers on the Syrian front, although they have succeeded in destroying the country once known as Syria.

With confusion prevailing in the ME,  ISIS coagulated into an effective force with financial backing from Qatar, Kuwait and our close friends the Saudis. Why? Because their roots are, . . . surprise, Sunni.  They’re busy slaughtering Christian, Shia and Kurd populations in effort toward forming a new extremist Sunni state composed of Iraq, Syria and a small corner of Turkey.  Iraq is in play just as much as Syria. Who will be the major players in their dismemberment?  Iran and Turkey, with Saudi Arabia fighting without firing a single bullet.

What else might the Al Sauds be up to with oil in the mid fifties per barrel and dropping?   A disengagement of King Dollar from oil?  Now  that’s the play of the century.

It’s also a play we must not allow traction.  The bankers have led us into enough of a mess as it is.

 

 

A constituent of the vast baby boomer generation with a career which has been fortunate to know the ponderous corporate worlds, as well as the intimately pressurized, and invigorating entrepreneurial domains of high tech and venture capital, I have harvested my share of mistakes meandering through corridors of enterprise from Silicon Valley, to London and endless, colourful, sometimes praetorian points in between. The voyage has provided an abundance of fodder for a pen yielding to an inquisitive keyboard, a foraging mind, and a passionate spirit. Whether political or business or social or economic or personal, is it not all political? It is a privilege to write, and an even greater privilege to be read by anyone, and sometimes with the wind at my back the writing may occasionally be legible. I do not write to invite scorn, nor to invite respect, but if I get really lucky the writing can stimulate thinking. I also write for the very selfish purpose of animating my own processes, and engaging the best of what life offers. Above all, whether biting fire or swatting shadows, I am grateful to be gifted the freedom to write and publish whatever flows down to the keyboard. To all those who enabled this freedom, and to all those standing guard to preserve it, I am indebted.

5 Responses to “Outsourcing The Power Position”

  1. 1

    Nanny

    The nice thing about oil is, when you have it under your land, even when it is too expensive to drill up, it sits like money in the bank for later.
    Our oil sands and frackers can pull oil out at between $10 and $20 a barrel.
    The Saudi break-even point is much higher simply because they have an entire populace reliant on oil cash.
    Remember, House of Saud is a Muslim state and – minus the oil revenue – a failed state like every Muslim state.
    Their oil price must be high enough to support EVERYBODY in the country.
    As a result of their price war game, they are eating into reserves they built up over decades.
    Most expensive oil producers here in the USA simply cut back production rather than take a huge hit.
    Their oil is ”money in the bank,” for them later.
    Now, Texas, for instance, might be hurt, but not permanently.

  2. 2

    James Raider

    Nanny,

    House of Saud is a Muslim state and – minus the oil revenue – a failed state like every Muslim state.

    Agreed, and many other nations have failed to use their resource-derived wealth to build nation-building infrastructure, or promote entrepeneurialism — Russia is one such example, so is Canada, which is dependent on an out-of-control immigration industry. Bankers and brokers are getting paid billions in bonuses , while NOT contributing to real increases in Production and output.

    Such things as consolidations and acquisitions concentrate power, but don’t make us better or better able to compete. Overwhelming regulations further stifle the entrepreneur and they promote concentration of wealth and power.

    Only a burst or cave-in of the system will lead to clean-up and proper rebuilding.

  3. 3

    dscott

    Report: Hizbullah Tightens Belt over Oil Price Slump, Sanctions on Iran

    http://www.rantburg.com/poparticle.php?D=01/06/2015&SO=&HC=2&ID=407732

    Hizbollah is facing financial austerity because of the slump in global oil prices and the sanctions on its main backer Iran, The Christian Science Monitor reported.

    The party has had to impose salary cuts on personnel and defer payments to suppliers, The Monitor quoted political and diplomatic sources in Beirut as saying.

    Randa Slim, a Hizbullah expert and a director at the Washington-based Middle East Institute, also said that Iran’s assistance to the Syrian regime against rebels seeking to topple it have forced Tehran ?to divert more resources away from Hizbullah at a time when the resource base in Iran is shrinking.

    In other words, the Saudis are having more impact using the price of oil over 6 months than Obama has had in 6 years. Results = Competence

  4. 5

    dscott

    Any attempt by Obama to claim credit for this outcome would be laughed at by the public. But no doubt you are correct that the self serving media hound will attempt it.

    Obama has been the one to demand higher taxes on gasoline via carbon taxes; he has been the one to block drilling on federal lands which actually would have brought about the same result years earlier IF, IF, IF he had followed George W Bush’s policy on opening up off shore drilling on the east coast. He is the one who bombed Libya which then resulted in all of their oil production going off line. He is the one who withdrew US troops from Iraq which now imperils their export of oil to fund their government.

    What we should be doing is raking Obama over the coals for his failure to take world leadership on the issue by NOT doing this years earlier. Attempting to claim the credit now exposes his failures on the very issue. Not enlisting Saudi Arabia years ago to lower the price of oil is his failure after 250,000 people have died in Syria and Iraq since 2011.

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