Klusterfuck coming, 2011 - Michael T. Klare

The Year Of Living Dangerously

By Michael T. Klare

24 January, 2011

TomDispatch.com

Rising commodity prices and extreme weather events threaten global stability

Get ready for a rocky year. From now on, rising prices, powerful storms, severe droughts and floods, and other unexpected events are likely to play havoc with the fabric of global society, producing chaos and political unrest. Start with a simple fact: the prices of basic food staples are already approaching or exceeding their 2008 peaks, that year when deadly riots erupted in dozens of countries around the world.

It’s not surprising then that food and energy experts are beginning to warn that 2011 could be the year of living dangerously -- and so could 2012, 2013, and on into the future. Add to the soaring cost of the grains that keep so many impoverished people alive a comparable rise in oil prices -- again nearing levels not seen since the peak months of 2008 -- and you can already hear the first rumblings about the tenuous economic recovery being in danger of imminent collapse. Think of those rising energy prices as adding further fuel to global discontent.

Already, combined with staggering levels of youth unemployment and a deep mistrust of autocratic, repressive governments, food prices have sparked riots in Algeria and mass protests in Tunisia that, to the surprise of the world, ousted long-time dictator President Zine al-Abidine Ben Ali and his corrupt extended family. And many of the social stresses evident in those two countries are present across the Middle East and elsewhere. No one can predict where the next explosion will occur, but with food prices still climbing and other economic pressures mounting, more upheavals appear inevitable. These may be the first resource revolts to catch our attention, but they won’t be the last.

Put simply, global consumption patterns are now beginning to challenge the planet’s natural resource limits. Populations are still on the rise, and from Brazil to India, Turkey to China, new powers are rising as well. With them goes an urge for a more American-style life. Not surprisingly, the demand for basic commodities is significantly on the rise, even as supplies in many instances are shrinking. At the same time, climate change, itself a product of unbridled energy use, is adding to the pressure on supplies, and speculators are betting on a situation trending progressively worse. Add these together and the road ahead appears increasingly rocky.

Breadbaskets without Bread

Let’s begin with food, the most important and volatile of these commodities. Food prices declined in October 2008 after the onset of the global financial crisis, but that seems to have been an anomaly. The December 2010 index of global food prices compiled by the U.N.’s Food and Agricultural Organization (FAO) hit a record 215, one point higher than in the spring of 2008. (In that index, based on a “bundle” of food staples, a baseline of 100 represents average prices in 2002-2004.) In fact, some food products, including sugar, cooking oils, and fats, are now trading substantially above their 2008 levels; others, including dairy products, grains, and meat, are inching perilously close to record levels.

As 2011 begins, food experts fear that, within months, prices for key staples will climb above the 2008 threshold and stay there, causing extreme hardship for poor people around the world. “We are at a very high level,” said a worried Abdolreza Abbassian, an economist at the FAO. “These levels in the previous episode led to problems and riots across the world.”

Of particular concern to Abbassian and his colleagues is the rising cost of corn, rice, and wheat, the staple crops of billions in many of the poorest countries. According to the FAO, by the end of 2010 international corn and wheat prices were already approaching their 2008 peak levels (about $260 and $340 per metric ton, respectively).

Analysts attribute the rise in grain prices to growing demand in both developed and developing nations, along with a number of cataclysmic weather-related events and speculation by investors. An extreme drought and fierce fires last summer destroyed a large percentage of the wheat crop in Russia and Ukraine, while heavy flooding in India and the inundation of 20% of Pakistan damaged significant parts of the grain output of those countries. At the same time, unusually hot and dry weather suppressed production in a number of other key farming areas.

What makes the picture look so worrisome today are indications that the severity and frequency of extreme weather events appear to be on the rise. In the past few weeks alone, several such events point the way to serious supply problems ahead. Most significant has been the unprecedented rainfall and flooding in Australia that put an area more than twice the size of California largely underwater, significantly disrupting wheat cultivation there. Australia is one of the world’s leading wheat producers. Unusually dry conditions in the American Midwest and Argentina have also hinted at future problems in grain and corn output. It’s still too early to predict the size of this year’s grain and corn harvests, but many analysts are warning of a shortfall in supplies, along with sky-high prices.

Mainstream analysts and government officials are loathe to attribute this traffic jam of extreme weather events to global warming. Huge variations in rainfall can be normal, especially in places like Australia that are susceptible to El Niño/La Niña ocean-temperature oscillations, and politicians are fearful of assuming responsibility for a problem as massive as climate change. But climate change theory has long suggested that the warming trend -- 2010 tied 2005 for the warmest year on record and nine of the 10 warmest years have come in the last decade -- will be accompanied by an increase in the frequency and severity of storms. It’s hard to escape the conclusion that recent events, including those Australian floods, are tied to rising global temperatures.

The Energy Crisis Returns

Soaring food prices are being driven as well by speculative investments and the rising price of oil. Partly in response to the diminishing value of the dollar, some investors are sinking their money into food futures (along with gold and silver) as a speculative hedge. At the same time, the price of oil is edging toward the $100 mark, making it increasingly profitable for farmers to switch from growing corn for human consumption to growing it for the manufacture of ethanol, which in turn reduces the amount of farm acreage devoted to staples. Oil would have to fall below $50 per barrel to make the cultivation of corn as a food product competitive with ethanol production -- and that’s not likely to happen. So even if more corn is produced this year, less will be available for food purposes and the price of what remains is bound to rise.

The precipitous rise in oil prices has startled the experts. Not so long ago, the U.S. Department of Energy (DoE) was projecting a price range of $70-$80 per barrel in 2011, but as the year began oil was already trading above $90 a barrel and some analysts predict that it will reach $100 before the year is out. A few are even talking about the $150 barrel and gas prices at the pump of $4 or more. If prices climb above $100, global consumer spending could take another nosedive.

“Oil prices are entering a dangerous zone for the global economy,” says Fatih Birol, the chief economist for the International Energy Agency (IEA). “The oil import bills are becoming a threat to the economic recovery.”

As with food, the rising cost of oil is a product of growing demand, insufficient supplies, and speculative investments. According to the most recent projections from the IEA, daily global oil consumption in 2011 will average 87.4 million barrels, an increase of about two million barrels from the first quarter of 2010. Much of the extra demand is coming from China, where a newly-minted middle class is buying automobiles at a record clip, as well as from the United States, where previously cautious consumers are slowly returning to pre-2008 driving habits.

At a time when the oil industry is experiencing declining rates of output at many existing oil fields and finding it ever more difficult to add production, even two million extra barrels per day can be a daunting challenge (and greater demand is expected in the coming years). In the United States, for example, much hope was placed in oil exploration in the deep waters of the Gulf of Mexico and offshore Alaska, but in the wake of the BP disaster, this seems like a forlorn prospect. Production in Mexico and the North Sea, two bright spots of recent years, is facing a sharp decline, while other key producers, including those in the Middle East, are struggling to maintain current output levels at existing fields.

Many energy analysts believe that the world is at (or will soon reach) peak oil -- the moment when global petroleum output achieves a maximum sustainable daily rate and begins a long-term, irreversible decline. Others contend that higher levels of output are still possible. Whatever the truth of the matter, at this moment the oil industry is finding it increasingly difficult, and ever more costly, to boost output above current levels. This, combined with insatiable demand, is driving prices skyward.

Under these circumstances, speculators are again being drawn into the oil market as a rare sure bet. Such speculators helped push oil prices to a record $147 per barrel back in 2008, but fled the market when prices crashed as the American economy headed to a meltdown. Now, they’re coming back. “Hedge funds and private investors are buying up financial instruments tied to the price of crude, and thereby helping push up oil prices,” the Wall Street Journal reported in late December.

Most analysts are expecting a price surge this spring or summer when American motorists hit the road. “We will have a spring rally that will take us to between $3.10 and $3.50 a gallon for gasoline at service stations in the United States,” predicted Tom Kloza, chief oil analyst at the Oil Price Information Service.

The rising price of gas will, in turn, hurt consumers just as they show signs of opening their wallets again. No less worrisome, oil-importing countries like the United States, Japan, and many in Europe will face soaring bills for fuel imports, further enfeebling economies already suffering from profound weakness.

According to some calculations, oil prices added another $72 billion to America’s mammoth balance-of-payments deficit last year. Europe had to cough up an additional $70 billion for imported oil and Japan $27 billion. “It is a very telling story,” says the IEA’s Fatih Birol of recent oil-price data. “2010 rang the first alarm bells and 2011 price levels could bring us to the same financial crisis times that we saw in 2008.”

Rising food prices leading to riots, protests, and revolts, mounting oil prices, mammoth worldwide unemployment, and a collapsed recovery -- it looks like the perfect set of preconditions for a global tsunami of instability and turmoil. Events in Algeria and Tunisia give us just an inkling of what this maelstrom might look like, but where and how it will next erupt, and in what form, is anyone’s guess. A single guarantee: we haven’t seen the last of resource revolts which, in the coming years, could reach an intensity we scarcely imagine today.

Michael T. Klare is a professor of peace and world security studies at Hampshire College, a TomDispatch regular, and the author, most recently, of Rising Powers, Shrinking Planet. To listen to Timothy MacBain's latest TomCast audio interview in which Klare discusses what rising food prices mean globally, click here or, to download it to your iPod, here. A documentary movie version of his previous book, “Blood and Oil,” isavailable from the Media Education Foundation.

Copyright 2011 Michael T. Klare

Peak Oil and a Changing Climate: Dandelion Salad "goodie"

videonation | January 03, 2011

The scientific community has long agreed that our dependence on fossil fuels inflicts massive damage on the environment and our health, while warming the globe in the process. But beyond the damage these fuels cause to us now, what will happen when the world’s supply of oil runs out?

In a new video series from The Nation and On The Earth Productions, Bill McKibben, Noam Chomsky, Nicole Foss, Richard Heinberg and other scientists, researchers and writers explain.
Go here to learn more about “Peak Oil and a Changing Climate,” and to see the other videos in the series.

Peak Oil and a Changing Climate: An Introduction (Video)



see
From Snowstorms to Heat Waves, How Global Warming Causes Extreme Weather and Climate Instability
Ralph Nader: Keynote on Energy and Policy
Energy crisis: Turning-point of humanity By Rudo de Ruijter
A Crude Awakening (2007)
Peak Oil
Global Warming on Dandelion Salad
http://vodpod.com/dandelionsalad/tag/peak%20oil
http://vodpod.com/dandelionsalad/tag/global%20warming
http://vodpod.com/dandelionsalad/tag/sustainability

SUICIDE IS PAINLESS (Featured Article)

I have not posted the tables. They'd take too long to load AND if you access the link you will be able to read the important comments.

I found the article and the tables shocking.



16 comments

Posted on 2nd November 2010 by admin in Economy |Politics |Social Issues

tags: Bubbles, home prices, Jeremy Grantham, John Hussman, MASH, Military industrial complex, National Debt, Peak oil, QE2, suicide, Y2K


Everyone has watched one of the best TV series of all-time – M*A*S*H. You also know the tune that played during the opening credits as helicopters delivered wounded soldiers to the 4077 Mobile Army Surgical Unit. Most people have never heard the lyrics that go with the music. The song is Suicide is Painless and the lyrics were sung during the M*A*S*H Movie. As I watched the movie a few weeks ago, the lyrics struck home. Our country has been slowly committing suicide for the last 40 years. The movie and TV series were set during the Korean War. It is fitting that military spending is one of the major causes of our suicide as a nation. On an inflation adjusted basis, the US has doubled spending on Defense since 1962. It is on course to rise another 20% in the next four years. Dwight D. Eisenhower warned us about the military industrial complex in 1961:

“In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.”

The fact that the US currently spends 7 times as much on Defense as the next nearest country is proof that the military industrial complex has gained unwarranted influence and a disastrous rise of misplaced power has occurred.
U.S. DEFENSE SPENDING

File:InflationAdjustedDefenseSpending.

When you critically analyze why we would need to spend 7 times as much as China on military when there is no country on earth that can challenge us, the answer can only be OIL. Our own military came to the following chilling conclusion in their Joint Operating Environment report, issued earlier this year:

By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 MBD.

A severe energy crunch is inevitable without a massive expansion of production and refining capacity. While it is difficult to predict precisely what economic, political, and strategic effects such a shortfall might produce, it surely would reduce the prospects for growth in both the developing and developed worlds. Such an economic slowdown would exacerbate other unresolved tensions, push fragile and failing states further down the path toward collapse, and perhaps have serious economic impact on both China and India. At best, it would lead to periods of harsh economic adjustment. To what extent conservation measures, investments in alternative energy production, and efforts to expand petroleum production from tar sands and shale would mitigate such a period of adjustment is difficult to predict. One should not forget that the Great Depression spawned a number of totalitarian regimes that sought economic prosperity for their nations by ruthless conquest.



The U.S. military knows we are on the verge of an oil crisis. There are no new supplies ready to come on line before 2015. The President and his advisors know that an oil crisis is in our immediate future. We have military bases in Saudi Arabia, Iraq, and Kuwait. We have active fighting forces in Afghanistan and Pakistan. We have a naval armada of aircraft carriers in the Persian Gulf. Our forces completely encircle Iran. Is this a coincidence when the countries with the largest oil reserves in the world are noted?

1. Saudi Arabia – 262 billion barrels
2. Iran – 133 billion barrels
3. Iraq – 112 billion barrels
4. Kuwait – 97 billion barrels

The war on terror is a cover for access to the hundreds of billions of barrels of oil in the Middle East. A 10 million barrel per day shortfall by 2015 would be disastrous for a country that consumes 25% of all the oil in the world. Our hyper-consumer society is like a drug addict, dependent on its oil fix. If we are denied oil for even one day, the withdrawal symptoms would be traumatic and harrowing.

There are 255 million passenger vehicles in the U.S. Our society will collapse within weeks without a sufficient supply of oil. The average American’s only concern about oil is when they get a card in the mail from Jiffy Lube telling them it is time for their 5,000 mile oil change. They stick a hose in their gas tank and fluid pours out, allowing them to motor freely around mall dotted suburbia. Within five years they will be paying over $5 per gallon for this fluid or they will be waiting in lines for three hours to get 10 gallons of that precious fluid. Peak cheap oil has been predictable for decades. The Department of Energy was created 31 years ago. Preparing for peak cheap oil would have required some pain, sacrifice and forethought. But, suicide is painless.
Visions of Things To Be

Through early morning fog I see
visions of the things to be
the pains that are withheld for me
I realize and I can see…

That suicide is painless
It brings on many changes
and I can take or leave it if I please.

Suicide is Painless – M.A.S.H. Movie

As I peer through the fog and attempt to see visions of things to be, I see nothing but pain ahead. Anyone who can look at the following chart and not conclude that there is much pain ahead for this country is either a Goldman Sachs banker, a Federal Reserve Governor, or a bought off politician in Washington DC. It is no coincidence that after Richard Nixon closed the gold window in 1971 and allowed the Federal Reserve to “manage” our economy that total debt outstanding in the US surged from $2 trillion to over $50 trillion. GDP has risen by 1,300% since 1971, while total US debt has risen by 2,600%. Now for the kicker. Real GDP has only gone up by 292% since 1971. This means that 1,000% of the increase in GDP was from Federal Reserve created inflation. Over this same time frame, real wages have declined by 6%, from $318 per week in 1971 to $299 per week today. Inflation has been the American drug of choice to commit suicide over the last 40 years. It is stealthy, seemingly painless, and deadly.

File:US debt outstanding by sector.

Inflation is the “painless” method through which the Federal Reserve has decided this country will commit suicide. It is like turning on the car in the garage and letting the carbon monoxide slowly put you to sleep. The ruling elite are content that the American public is dumbed down by the government run public schools. They count on the fact that 9 out of 10 Americans do not understand inflation. It is an insidious scheme of robbing the working middle class and funneling it to the Wall Street/K Street ruling class. The Federal Reserve has gotten bolder in the last few years as they realized the public doesn’t understand or care what they do. Bernanke has relished in the mainstream media adulation that he saved the world with his printing press in 2008/2009. Even though critical thinkers know for a fact that it was Federal Reserve policies that created the worldwide financial conflagration in the first place, the corporate mainstream media and the Wall Street beneficiaries have been cheerleaders of Easy Al and Helicopter Ben. These men are traitors. They have purposefully impoverished senior citizens and the working middle class in order to enrich their ruling elite masters on Wall Street and in Washington DC.

Ben Bernanke on Wednesday afternoon will announce Quantitative Easing Part Deux. This is a fancy name for Ben printing $1 trillion out of thin air, buying US Treasuries and/or more toxic mortgage securities and artificially lowering interest rates to convince Americans to spend money they don’t have. Jeremy Grantham, in his recent quarterly letter, issues a scathing indictment of Bernanke’s methods:

“For all of us, unfortunately, there is still a further great disadvantage attached to the Fed Manipulated Prices. When rates are artificially low, income is moved away from savers, or holders of government and other debt, toward borrowers. Today, this means less income for retirees and near-retirees with conservative portfolios, and more profit opportunities for the financial industry; hedge funds can leverage cheaply and banks can borrow from the government and lend out at higher prices or even, perish the thought, pay out higher bonuses. This is the problem: there are more retirees and near retirees now than ever before, and they tend to consume all of their investment income. With artificially low rates, their consumption really drops. The offsetting benefits, mainly shown in dramatically recovered financial profits despite low levels of economic activity, flow to a considerable degree to rich individuals with much lower propensities to consume.”

The ruling elite in Washington DC and Wall Street decided that fraud, misinformation and cooking the books was preferable to the pain of honesty, orderly bankruptcy, and assets valued at their true worth. Ben Bernanke ”saved the world” by putting the taxpayer on the hook for $1.5 trillion of toxic mortgage garbage he bought from his masters on Wall Street. John Hussman describes the decision to choose painless suicide over choosing painful medicine to cure our disease:

“Over the short run, two policies have been primarily responsible for successfully kicking the can down the road following the recent financial crisis. The first was the suppression of fair and accurate financial disclosure – specifically FASB suspension of mark-to-market rules – which has allowed financial companies to present balance sheets that are detached from any need to reflect the actual liquidating value of their assets. The second was the de facto grant of the government’s full faith and credit to Fannie Mae and Freddie Mac securities. Now, since standing behind insolvent debt in order to make it whole is strictly an act of fiscal policy, one would think that under the Constitution, it would have been subject to Congressional debate and democratic process. But the Bernanke Fed evidently views democracy as a clumsy extravagance, and so, the Fed accumulated $1.5 trillion in the debt obligations of these insolvent agencies, which effectively forces the public to make those obligations whole, without any actual need for public input on the matter.”

The Only Way to Win is Cheat

The only way to win is cheat
And lay it down before I’m beat
and to another give my seat
for that’s the only painless feat.

That suicide is painless
It brings on many changes
and I can take or leave it if I please.

Suicide is Painless – M.A.S.H. Movie

The Federal Reserve has incessantly created new bubbles every time one of their old bubbles has burst, since the elevation of Alan Greenspan as Fed Chairman in 1987. The bailout of LTCM convinced Wall Street that uncle Al would come to the rescue if their gambles endangered the financial system. Greenspan cheered on the internet revolution and flooded the system for the fake Y2K crisis. When the internet bubble burst in 2000 and the 9/11 attack struck in 2001, Greenspan aided and abetted the greatest bubble in history. He dropped interest rates to historic lows, encouraged the use of adjustable rate mortgages, didn’t enforce bank regulations, and pretended that he couldn’t see the bubble forming. Jeremy Grantham explained the Federal Reserve, Wall Street and K Street conspiracy to avoid the pain of dealing with our long-term structural problems in his latest letter:

“House prices may often not be susceptible to manipulation. Low interest rates may not be enough: they may stimulate hedge fund managers to speculate in stocks, but most ordinary homeowners are not interested in speculating. To stir up enough speculators to move house prices, we needed a series of changes, starting with increasing the percentage of the population that could buy a house. This took ingenuity on two fronts: overstating income and reducing down payment requirements, ideally to nil. This took extremely sloppy loan standards and virtually no data verification. This, in turn, took a warped incentive program that offered great rewards for quantity rather than quality, and a corporation overeager, with aggressive accounting, to book profits immediately. It also needed a much larger, and therefore new, market in which to place these low-grade mortgages. This took ingenious new packages and tranches that made checking the details nearly impossible, even if one wanted to. It took, critically, the Fed Manipulated Prices to drive global rates down. Even more importantly, it needed the global risk premium for everything to hit world record low levels so that suddenly formerly staid European, and even Asian, institutions were reaching for risk to get a few basis points more interest. Such an environment is possible only if there exists an institution with a truly global reach and a commitment to drive asset prices up. In the U.S. Fed, under the Greenspan-Bernanke regime, just such an institution was ready and willing.”

On Wednesday Ben Bernanke will inject more poison into the veins of a once great country. This country, at one time, dealt with its problems in a realistic manner and was willing to sacrifice, cooperate, and make hard choices. QE2 will not help our economy or solve any of our problems.


Is It To Be Or Not To Be?

A brave man once requested me
to answer questions that are key
‘is it to be or not to be’
and I replied ‘oh why ask me?’

‘Cause suicide is painless
it brings on many changes
and I can take or leave it if I please.
…and you can do the same thing if you choose.

Suicide is Painless – M.A.S.H. Movie
The leaders of this country, with the full support of a zombie like disinterested distracted electorate, have chosen to ignore and defer every tough decision regarding energy, spending, entitlements, deficits, and infrastructure. The Federal Reserve has allowed politicians to run the National Debt up to $13.6 Trillion by imposing no limits on the printing of fiat currency backed by nothing but promises. Based on Obama’s 10 year budget projections, adjusted for the real impact of Obamacare and extension of Bush tax cuts, the National Debt will reach $20 trillion in 2015 and $25 trillion by 2019. This is truly a suicide mission. We will never reach these levels because the sweet relief of death will overtake our economic system as the final vestiges of QE2 painlessly bring about the end.



Grantham warns that Bernanke’s actions on Wednesday are a desperate last ditch attempt to fend off the pain of reality. It will fail.

“Thus, our current policy of QE2 is merely the last desperate step of an ineffective plan to stimulate the economy through higher asset prices regardless of any future costs. Continuing QE2 may be an original way of redoing the damage done by the old Smoot-Hawley Tariff hikes of 1930, which helped accelerate a drastic global decline in trade. We may not even need the efforts of some of our dopier Senators to recreate a more traditional tariff war. And all of this stems from the Fed and the failed idea that it can or should interfere with employment levels by interfering with asset prices.”

The only difference between Dr. Bernanke and Dr. Kevorkian is that Kevorkian helped the terminally ill commit suicide. Dr. Bernanke and his colleagues at the Federal Reserve have inflicted suicide on a patient that was healthy and capable of living many more years. The suicide concoction of fiat currency, debt, military empire, and delusion has been painless for those in power, but painful for the working middle class of this country. Dr. Bernanke fancies himself as an expert on the Great Depression. He is destined to be remembered as the man who killed America. Suicide is painless, it brings on many changes.

- More solar car newz -

XOF1 completed the Dempster drive

Posted by: "Marcelo da Luz"

mdaluz@xof1.com xof1team

Thu Aug 7, 2008 11:30 am (PDT)

Hello solar car enthusiasts,

I am pleased to announce that XOF1 completed the drive on the Dempster highway, covering 1,500km of gravel, mud, potholes, dust, rain, etc...

More information posted at the project website under "news update".
http://www.xof1.com/projectnewsupdate.html

Thank you all for those of you who have been writing and supporting the project, much appreciated.

Kindest regards,

Marcelo da Luz
The Power of One, solar car project
Ph. (416) 465 9459, Mobile (416) 834 0788
E-Mail: mdaluz@xof1.com
Website: www.xof1.com

"inspired by the sun, motivated by the environment"

	Objective: Develop and build a solar car to set a world distance record.
Mission Statement: To fulfill a dream and inspire others to accomplish their dreams in a positive way to benefit mankind and the environment.
	Commitment: Promote the use of clean and sustainable energy.

OIL PROFIT$, most sickening story of the day

Oil giants report massive profits

By Shannon Jones
6 August 2008

Profits for the major multi-national petroleum producers surged in the second quarter of 2008 boosted by record oil prices. Leading the way were ExxonMobil and Royal Dutch Shell, which netted over $10 billion apiece.

Exxon, the world’s largest privately held oil company, reported a 14 percent rise in income to a record $11.68 billion, the largest ever for a US corporation. Some $10 billion of that came from selling oil, up 70 percent from the previous quarter. The massive profits came despite an eight percent decline in production from 2007, the largest in a decade.

Exxon cited a number of factors in the production decline including a strike in Nigeria and the nationalization of one of its large oil projects in Venezuela.

Shell, meanwhile, reported profits of $11.56 billion on revenue of $131.42 billion, up 55 percent. The company’s production of oil and natural gas fell one percent compared to last year.

The second largest US oil company, Chevron, said it had profits of $5.68 billion for the quarter, also a record.

Conoco Phillips and British Petroleum both reported record earnings. BP reported a $9.5 billion profit for the quarter and a $13.4 billion profit for the first six months of 2008 while Conoco took in $5.4 billion for the quarter. French energy company Total earned $7.3 billion.

The six largest producers saw a combined 40 percent jump in profits to $51.5 billion.

Other European-based oil companies also saw big increases in profits.

* The Italian oil company Eni SpA said its profits rose to $5.36 billion, an increase of 52 percent.

* Spanish Argentine oil company Repsol YPE saw its profits rise 11 percent to $1.4 billion.

* Norway’s StatoilHydro ASA reported a record second quarter profit of $3.7 billion.

Despite its massive windfall profits, Exxon’s share price declined because profits did not meet Wall Street expectations. Profits from its refining and chemical business fell due to shrinking profit margins, partly a result of higher oil prices.

One analyst commented, “Oil prices climbed 100 percent, but their profit was only up 14 percent.” He noted that the company’s stock had fallen 13 percent, the steepest decline in its history.

Exxon holds the record for the top six most profitable quarters in US history and the most profitable year. It produces three percent of the world’s oil and gas. For the first six months of 2008, the company took in $22.57 billion.

Crude oil hit a record $147 a barrel on July 11—having risen from under $25 a barrel in 2003.

Since then it has fallen considerably due to expectations of a drop in demand due to a slowing US economy. America consumes about 24 percent of world output. As of August 1, oil futures were still trading 90 percent higher than a year ago. Demand averaged 20.7 million barrels a day over the last 12 months, the lowest annual consumption rate since 2004-2005.

Exxon’s profits amounted to $128 million a day or nearly $1,500 a second. Its quarterly profit was slightly larger than the gross domestic product of Afghanistan.

The huge profits raked in by the oil giants while consumers stagger under high fuel prices is generating popular outrage. Oil company executives have deflected calls for a windfall profit tax by claiming the money is needed for investment in exploration and production. However, Exxon plowed $8 billion this quarter into repurchase of its own stock, a move solely aimed at enriching executives and investors. A report indicates Exxon spent only one percent of its $41 billion in profits last year into research into alternative energy sources.

Between 2005-2007 Exxon spent $89.5 billion on stock buybacks and just $2.9 billion in research and development. For its part, Shell handed out $3.8 billion to investors through stock buybacks and dividends in the second quarter. The five largest oil companies operating in the US collectively spent $194 billion on stock repurchases from 2004 through the first quarter of this year.

The major US oil companies appear headed for a combined $160 billion in profits for 2008. That compares to $123 billion in 2007.

Exxon and other oil companies have rewarded their CEOs with multi-billion dollar payouts. Last year Exxon CEO Rex Tillerson cashed in $16.1 million in stock options in addition to his $1.75 million salary. He also received a $3.36 million bonus. Conoco Chairman James Mulva received $31.3 million last year.

The failure of the oil monopolies to redirect any significant portion of their vast resources to research into new energy sources in the face of the dwindling supply of fossil fuels and the danger posed by global warming refutes claims that the capitalist market can be relied on to rationally distribute resources. This is further underscored by the activities of speculators, including giant hedge funds, which have racked up huge profits from oil commodity speculation while returning no value to society.

The joke is on us, it surely is ... OIL?? who owns it anyway?

If We Drill in the U.S., We Don't Get the Oil

By Cenk Uygur, Huffington Post.

The oil that comes from offshore drilling will belong to the multinational firm, like Exxon-Mobil and will go to world markets, not us.

One thing has been driving me crazy about this drilling debate -- everyone seems to assume that if we drill for oil in the US, that we will get the oil. And hence, we won't be dependent on foreign oil anymore. But we won't get anything, Exxon-Mobil will.

The oil that comes from that drilling will not be United States property (Republicans aren't suggesting we nationalize the oil companies, are they?). It will be the property of whichever oil company got the rights to that contract. They can then sell it to whoever they like -- and they will. They will sell it on the world market, so the Chinese will have just as much access to the oil that comes out of the coast of Florida as we will.

The Democrats have done a decent job of beating back the argument that this will effect prices in the short run, or even in the long run. But no one has addressed the point above. The Republicans make it seem like we won't be dependent on foreign oil -- and that prices will go down in the US -- if we have our own oil. But it won't be ours. And it will be sold on the world market, so its effect on global oil prices will be even smaller.

When we ask the question of whether there should be drilling off the coast of Florida or in the Arctic National Wildlife Refuge, we should ask the question this way -- would you be comfortable with the Chinese or the Germans or Russians or the Saudis drilling on American land? Because for all intents and purposes, they will be.

Large multi-national firms like Exxon-Mobil are not US property. They sell to the world and their allegiance is to corporate profits. So, when they drill, they drill for the whole world, not just us. Some might find that heart-warming, but it certainly has nothing to do with the US having more oil or lower prices.

See more stories tagged with: oil drilling, offshore drilling, oil

Cenk Uygur is co-host of The Young Turks, the first liberal radio show to air nationwide.

Do you want to know why Iran has a nuclear program?

The principal lesson taught in school regarding personal finance is that everyone should have at least a five-year business plan. Creating such a plan forces us to take inventory of what we have, allowing us to figure out what we need to do to be able to prepare for what our needs may be for the future.

This concept is also applied to collectives, such as corporations, communities and countries. The larger the collective the further into the future the business plan should foresee.

This is where Iran’s nuclear program comes in. You see, even though we may be under the assumption that an oil well will produce oil indefinitely, reality is much different. One of the most important observed properties of oil wells is that they follow Hubbert’s peak theory postulate, “that for any given geographical area, from an individual oil-producing region to the planet as a whole, the rate of petroleum production tends to follow a bell-shaped curve.”

click to enlarge - source

“Early in the curve (pre-peak), the production rate increases due to the discovery rate and the addition of infrastructure. Late in the curve (post-peak), production declines due to resource depletion. The Hubbert peak theory is based on the observation that the amount of oil under the ground in any region is finite, therefore the rate of discovery which initially increases quickly must reach a maximum and decline.”

According to a 2007 report (PDF) by German based Energy Watch Group, many countries have already gone past peak oil.

click to enlarge - source (PDF)

We don’t know where on the peak oil curve Iran is right now, but even if they have not reached peak oil production yet, it is safe to assume that they will shortly. This means that Iran must begin to look for other sources of energy for its future, just like many other countries. At present, the primary choices available for power production are very limited. They are hydro, gas, coal and nuclear – with nuclear giving the biggest bang for the buck.

“At the moment there are more than 400 nuclear power plants all over the world, which produce about 17% of the world's electricity. The share can range from just few percent in some countries up and to 75% as in France.”

According to the data available at the Nuclear Training Centre (ICJT), the United States has 104 reactors connected, however this is not enough to satisfy America’s energy needs, which is why “John McCain is pushing for the construction of 45 new nuclear reactors by 2030.” This means that the United States with a population of approximately 300 million would have 149 reactors.

click to enlarge - source

Iran has a population of over 71 million and it must have a plan in place to supply energy to its citizens in the future. Their oil and gas are non-renewable resources, which means that they will be running out at some point. The implications of this are beyond what our politicians and the Western mainstream media present.

Iran has a nuclear program because their government has done the calculations and realizes that if they are to survive they will need alternate sources of energy. Considering that nuclear power is the least problematic based on certain global warming hypotheses, they are pursuing the only and best choice available to them.

What makes those countries that already have nuclear power think for one second that they have the right to deny others the same privilege? If Iran is denied the right to develop nuclear power then other energy-starved countries will also be denied.

Do we actually believe that we have the right to do this? And even if we think that we do, do we actually believe that people living in countries that have yet to develop nuclear power will refrain from developing the technology just because we say so, especially when they see us enjoying all the benefits that comes with access to almost unlimited energy?

If we try to deny Iran the right to develop this technology, then we are essentially telling them that they should remain a developing nation indefinitely, while they watch their lifestyle deteriorate as their oil and gas supplies slowly dwindle.

The conflict between Iran, the US, and Israel is about the survival of a tribe, of a culture, of a country. Iranians and the peoples of other countries that find themselves being denied energy will fight for their right to develop a reliable energy source, after all, under the Nuclear Non-Proliferation Treaty, they have the 'Inalienable Right' to Nuclear Energy. Are we really ready to start a war to deny them their rights? Do we actually believe that we have the means to do so?

What a predicament our leaders have put us in.

I think the best way to resolve this crisis is to ask ourselves what we would do if another nation threatened us for developing technology that could supply the energy requirements of our country.

Inspiring essay on TPMuckraker by The Facilitatrix

This appears as Obama and McCain have exposed themselves for the asses that they are ..

An EXCELLENT essay! (Wish I'd written it myself, but I spend my time getting everything on this blog now .. )

The Second Great Depression is already in the USA, there are gobs of things to fix. Impeachment and a WAR CRIMES tribunal are the only answers legally BUT we must stay inspired.

The Bush legacy is much worse than you think

By The Facilitatrix - April 16, 2008, 2:32PM

You know what, folks? The sky is falling.

The Bush administration is merely the culmination of a strategy that's been undermining our free, open, and self-determining society for years, and pushing most of us into a cesspool while a few live in splendor.

All these years of letting the market regulate itself has led us here: an environment so raped and pillaged that to reverse the climate change—which is fast leading from over warming to water shortages to food shortages to famine to wars to death and chaos on a level we need to watch The Road Warrior to picture.

We may not see the worst of it, but our children or grandchildren will, and it ain't gonna be pretty. Only a few will be exempt from the effects.

Welcome to our world

What we have right now are airlines flying with unsafe aircraft, because a politicized FAA didn't want to squelch business growth by making the airlines maintain their fleet properly. We have mine disasters and vaunted "clean coal." We have profiteering in unmonitored student loans. We have an FCC that protects media conglomerates, not the airwaves. We have Bizarro-world taxation and environmental standards. But none of this hurts the few, and much of it benefits them further.
We have an educational system that is the laughingstock of the world's unsympathetic and a tragedy to our friends in the world, friends who remember the shining society the US was building and reaching, with secondary education that prepared children to become functioning adults and higher education available to any who were willing to pay the price in effort and intellectual growth, not devastating, life-long debt. This strengthens those few, turning social and economic gaps into chasms.

We have a "justice" system that slaps the hands of corporate malefactors while it methodically pits race against race, to keep the underclasses struggling just to survive, so they won't have the strength to fight the system that controls injustice. The few nod approvingly.

The few, the arrogant

We have a superclass of the few that has for decades methodically worked toward the massive gap we have between their wealth and the rest of us, based, I can only imagine, on pathological needs for money and power, because they sure as hell can't eat any better now than they did in 1965.

We have a "shadow market" of the few operating free from even minimal regulation and that benefits from the petty greed of players in the stock market, because investors' grandiose schemes for profit and distress at loss are merely tools for the real profit gained by the shadow puppeteers.

We have a society of the rest of us in which those recently disenfranchised by deregulation and free markets are those who in generations past disenfranchised other races and ethnicities. And they're still reeling from the loss, so much so that their bitterness—yes, their bitterness—is aimed at people who had nothing to do with disenfranchising them.

But the superclass has had its minions tell the white former middle class over and over that it's the blacks, the Mexicans, the liberals, the Jews, the terrorists, the gays, the atheists—everyone but those actually responsible for it—who took away their jobs and their way of life.

How'd they do it? And who helped?

The superclass knows that if they tell us up is down and right is wrong long enough and often enough, they'll wear down the weakest of us, the most disillusioned of us, the most fearful of us, and the angriest of us, so we'll lash out at others and each other, rather than at them. We've been turned so topsy-turvy that we focus on what they tell us are threats to our "way of life" and can't see outside of the tunnel they've built to see the builders themselves.

Their minions are the middle managers, the stockbrokers, the investor-players, the lobbyists, and the legislators, who buy into the superclass's vision and do their dirty work for them, dreaming their grand dreams. The minions think that by doing their masters' bidding and playing their game, they'll get a piece of the pie. But even though it's a very, very big pie, only very, very few get to enjoy it.

So, wake up, little minions! Wake up, Condoleezza and Colin and Alberto and Alphonso, and really, Harriet and Karen and Lurita. Because the guys in charge have absolutely no intention of sharing the pie with you. Blacks, Mexicans, and women need not apply to the superclass, but you can work for them. Oh, and Johnny Yoo? Nice work on the memos. We'll call you if we need anything else done. You are not one of them, and you never can or will be. You are the pie makers. You steal from your own to make the pie, but you don't get to take it home.

Bush and Cheney and O'Neill and Rove, along with some select, moving-and-shaking (and correctly born, educated, and baptized) senators (sorry, not you, Joe L.) enjoy the pie, but no congressmen (Really, the grunts? I think not!). And of course, the business moguls who share the beds of of the politicos in the superclass win with them, and they gobble up the pie and get fatter than even Croesus could have imagined.

They're not going to give anything back.

Unless those of us who are on to what the superclass has done to us rise up—and I mean that in its classical, revolutionary sense—nothing will ever get better for anyone but them. And unless we shove the faces of all of those minion-enablers into the reality that they can't eat that pie—which they were never intended to share—they're going to keep on helping those few who have done the world more harm than any war, any despot, any plague, or any disaster.

So anything they tell us? More smoke and mirrors to keep us from screaming out the truth and taking back our education, our health, our utilities, our infrastructure, our transportation, our communications, our media, and anything else that has been deregulated or allowed to be "free marketed" into its current state. And we've got to regulate the hell out of everything, and tax the bastards within an inch of their lives. Then at least we can stop them where they now stand and maybe even get something back.

Who will win?

But you know what? No matter what we do to the superclass—short of incarcerating the lot of them in Pelican Bay, looting their villas, or building some guillotines—they will always have more money than they rest of us can imagine. Just accept that now. It shouldn't stop us from doing what we need to do, though.

We can restore our freedoms. We can stop playing their games, using their oil, swallowing their pabulum, and blaming fellow victims. But we're going to have to fight for it, and we're going to have to convince their minions that facilitating the puppeteers is in no one's interest but the puppeteers themselves.

So take up metaphorical arms and do what we need done to save us all. Winning an election isn't going to make things magically better. But it's a necessary first step toward unraveling our knots and cutting the puppets' strings. Just don't expect the superclass to give anything back without a dirty, ugly, bloody fight.

Again, the torture prosecutor is the first step. And this would lead to IMPEACHMENT !
The WORLD is breathlessly awaiting what US patriot really do - and if you've read the blog you know that Obama is no answer.

The elections WILL be cancelled. And then there is very heavy work to be done and I am doing my part, as I can.

Full videos of Lindsey Williams on the oil crisis

The Energy Non-Crisis

Lindsey Williams

Is the oil crisis being manufactured?

Lindsey Williams says it is.

He was crystal clear over a year ago that gasoline was headed straight to $4.00 a gallon and he says he knows why.

Williams became an oil industry insider by virtue of his success at mediating labor disputes in the Alaska oil fields.

Little did his colleagues know, he had no intention to become a "good old boy."

Cheating at the Gas Pumps !!

WOW !

This is from my cousin in Houston. It's very interesting as a news report just came on regarding this same information about the price difference when you pump your guess The investigative reporter said to make a test before pumping a lot of guess to see if the $ amount is the same as what the price per gal says.

We saw on the news the other night that this is happening everywhere.

Brian pumped exactly one gallon of gas. The price did not match the cost of one gallon, it was higher. He went inside and complained, got a refund. There is also a number on each pump that you can call and complain.

This is a true story, so read it carefully.

On April 24, 2008, I stopped at a BP gas station in GA. My truck's gas gauge was on 1/4 of a tank. I use the mid-grade, which was priced at $3.71 per gallon. When my tank is at this point, it takes somewhere around 14 gallons to fill it up. When the pump showed 14 gallons had been pumped I began to slow it down, then to my surprise it went to 15, then 16. I even looked under my truck to see if it was being spilled. It was not. Then it showed 17 gallons on the pump. It stopped at 18 gallons. This was very strange to me, since my truck has only an 18 gallon tank. I went on my way a little confused, then on the evening news I heard a report that 1 out of 4 gas stations had calibrated their pumps to show more gas had been pumped than a person actually got.

Here is how to check a pump to see if you are getting the right amount:

Whichever grade you are using, put EXACTLY 10 GALLONS in your tank, then look at the dollar amount. If the dollar amount is not EXACTLY 10 times the price of the fuel you have chosen, then the pumps are rigged. In my case as I said the mid-grade was $3.71 9/10 per gallon; my dollar amount for 10 gallons should have been $37.19. I wish I had checked the pump. It doesn't matter where you pump gas, please check the 10 gallon price. If you do find a station that is cheating, contact the state Agriculture Department, and direct your comments to the Commissioner. Info is on the gas pumps.

Please don't delete this until you have sent it to all people in your address book. We need to put a stop to this outrageous cheating of customers.

THE MYTH OF PEAK OIL !! TOTALLY EXPOSED

From Eileen Dannemann: This is a very important WHISTLEBLOWER. I urge you to watch this video for yourselves.

I thought it was so important to inspire you to see this video that I Excerpted, herein, from the video
http://video.google.com/videoplay?docid=3340274697167011147

About the Author

Lindsey Williams, who has been an ordained Baptist minister for 28 years, went to Alaska in 1971 as a missionary. The Transalaska oil pipeline began its construction phase in 1974, and because of Mr. Williams' love for his country and concern for the spiritual welfare of the "pipeliners," he volunteered to serve as Chaplain on the pipeline, with the subsequent full support of the Alyeska Pipeline Company.

Because of the executive status accorded to him as Chaplain, he was given access to the information that is documented in this book.

After numerous public speaking engagements in the western states, certain government officials and concerned individuals urged Mr. Williams to put into print what he saw and heard, stating that they felt this information was vital to national security. Mr. Williams firmly believes that whoever controls energy controls the economy. Thus, The Energy Non-Crisis.

Because of the outstanding public response that has been generated by this book, Lindsey Williams is in great demand for speaking engagements, radio, and TV shows. http://www.reformation.org/energy-non-crisis.html
The Energy Non-Crisis book by Lindsey Williams

From Eileen Dannemann: Excerpts from the video
http://video.google.com/videoplay?docid=3340274697167011147

Lindsey Williams talks about his first hand knowledge of Alaskan oil reserves larger than any on earth. And he talks about how the oil companies and U.S. government won't send it through the pipeline for U.S. citizens to use.
Cost to bring a barrel of crude oil out of ground (not including transportation)

Saudi Arabia: $5.00
North slope of Alaska…out of ground: $3.00 a barrel


The oil crisis is a designed plan. This plan has been developing for over 30 years. Lindsay Williams, the Chaplain on the Alaska pipeline was privy to the board meetings. The board members of the oil companies determine the prices and tell the oil producing countries what that will be.

Washington, DC politicians scared to death to tell the truth. ie: What happened to JFK; to McDonald on flight 0007; George Hansen (Congressman)…his family destroyed.

Henry Kissinger's deal with the Middle East Oil Producers, 60s and 70s. He traveled to all the oil producing nations in the world.

The deal:
• America will buy oil from the Arab nations and insure that they will amass great wealth and be Shakes and Sheiks.
The Oil nation's must:
• Denominate all oil sales in American dollars
• Take a certain percentage of the money to build infrastructure.
• Take a portion of the dollars and buy our national debt.

There were two countries that wouldn't sign

IRAQ (second largest oil field in the world)

IRAN (third largest oil field in the world)

Iraq: Sadham Hussein refused to sign. He was singled out. Bush Sr. had no choice but to destroy him.

Oil north slope of Alaska cannot be brought to refining because of this deal. We have more oil and natural gas on the north slope of Alaska than nearly any place in the world.

The standard currency of the world is oil..

If the US does not succeed in Iraq and Iran there will be much trouble. Gas prices are expected to rise over $6.00 to 7.00 a gallon if we do not expose this deal. If we pulled it out of our Alaska North slope it would be $1.50 a gallon at the pumps.

In the 70s Oil board members encouraged the Arab nations to buy gold/. Then, having been manipulated, the American oil executives determined that oil would go down form $32.00 a barrel to $10.00 a barrel; then gold crashed to $300

The price of the gasoline at the pump is a form of taxation imposed by "them". Who are they???
Lindsay knew 25 years ago. He sat with them; he listened to them. Who makes the money?

THE CHAIN: Any product there is: Manufacturer, wholesaler; in between man; to retailer; to consumer Who is the in between man? The video ends suddenly.

(I was married to a DARPA agent. EVERYTHING THIS MAN IS TRUE. The oil infrastructure needs to be upgraded, for sure. That is why we must provoke a Constitutional crisis and nationalize America's oil .. )

FASCISM by any other name is STILL FASCISM

Voices

Empirical evidence George W. Bush is a fascist

Jesse Hemingway

The Republican Party lays claim to represent big business and capitalism I can prove that in fact George W. Bush is a fascist. There are ideological currents within the Republican Party yet capitalism is fundamentally driven by elements of unobstructed business practices by the government and going concern. Economics is a social science contained by certain laws with out these laws it could not be recognized as a specific discipline. Capitalism is a system in which the government is mutual exclusive from industry, business traffic, and economics. Fascism is the integration of the government into one or more of these elements industry, business traffic, and economics. George W. bush is directing the government to intervene in one or more these elements of industry, business traffic, and economics to undermine market forces and economic principles.

George W. Bush has seized dictatorial control and has compromised the United States Constitution by his actions of disregarding the voice of both houses of Congress. We the United States are presently in a severe energy crisis the oil industries have recorded consecutive enormous profits. The oil industries are continuing to receive unneeded subsidies from the American taxpayers; for financial relief to the oil industries from when they where also in a similar state of crisis years back. As the American taxpayers are feeling the brunt of this present energy crisis the oil industry refuses to yield their taxpayers subsidies the oil industry has only one person protecting them that is George W. Bush. George W. Bush protection to the oil industry is unreasonable.

Both houses of Congress have voted and proposed to transfer the present subsidies the oil industries are receiving to alternative energy programs those programs would enhance a variety of methods of alternative energy while these programs would also increase our vital national security. This is also a principle of economics law of substitutions which is a natural occurring event in ecomomies. Although, this law of substitutions can not occur when the industry that are in competition is either an oligopoly or monopoly which should be recognized by even a C student from Yale in economic that would be George W. Bush. For George W. Bush not to demand the oil industries to relinquish these subsides from the American taxpayers is clearly an act of classical fascism.

Fascism :A system of government marked by centralization of authority under a dictator, stringent socioeconomic controls, suppression of the opposition through terror and censorship, and typically a policy of belligerent nationalism and racism.

A political philosophy or movement based on or advocating such a system of government.
Oppressive, dictatorial control. http://dictionary.reference.com/browse/fascism

What is capitalism?

Capitalism is a social system based on the recognition of individual rights, including property rights, in which all property is privately owned. Under capitalism the state is separated from economics (production and trade), just like the state is separated from religion. Capitalism is the system of of laissez faire. It is the system of political freedom.

http://www.capitalism.org/faq/capitalism.htm

-###-

Jesse Hemingway holds a bachelor’s degree in business administration with a minor in safety management. He has served in the U.S. Navy and worked in the chemical industry. He is the author of "Friendly Fire on Holy Grounds: the Stockpile Conspiracy". In his book Mr. Hemingway investigates a lead left behind by the fallen president John F. Kennedy and invites readers to decide the truth for themselves. For more information, visit www.jfksfriendlyfire.net Also available online at Barnes and Noble and Amazon. Read review.

2 Voices


Bush is a crook and a pathological liar.

I used to keep a large file on the entire Bush family. Going through the documents in that file was similar to reviewing the activities of an organized crime family.

There is an underlying theme in the entire Bush family. Especially when they gain the presidency by whatever means.

This underlying theme goes like this, they could care less what happens to the American economy OR even the lives of anybody effected by their decisions. The ONLY motivating factor of members of the Bush family is what actions are necessary for them personally to make money. After that they could care less if they destroy the entire world in order to fill their own pockets.

Daddy Bush destroyed the American economy also. But even worse he was directly behind the flow of cocaine into the country in order to fund other black op activities. Baby Bush invaded Afghanistan and now we have a steady flow of heroin into the country because under Taliban rule poppy production was against their moral values.

Daddy Bush's thousand points of light were all the fires that were burning so people didn't freeze to death on the streets.

Comment
I believe he said 1000 years under the new third Reich

not a 1000 points of light.
05/22/08 @ 08:48

RodriqueTrenblay on the new American empire's fiscal problems (MUST READ)

Friday, May 16, 2008

In a Casino Mentality, The Economy Goes From Bubble to Bubble

by Rodrigue Tremblay

[U.S.] "strategy should aim, above all, at the removal of Saddam Hussein’s regime from power."...[His removal is absolutely vital to] "the security of the world in the first part of the 21st century" and for "the safety of American troops in the region, of our friends and allies like Israel and the moderate Arab states, and a significant portion of the world's supply of oil."

Neocons' January 26, 1998 letter to President Bill Clinton

[About the Iraqis] “If they turn on their radars we're going to blow up their goddamn missiles. They know we own their country. We own their airspace... We dictate the way they live and talk. And that's what's great about America right now. It's a good thing, especially when there's a lot of oil out there we need.”

U.S. Air Force Brig. General William Looney, head of the US-UK flying operation south of the 32nd parallel over Iraq (no-fly zones), interview reproduced in the Washington Post, August 30 1999, [quoted in William Blum's book, Rogue State, Common Courage Press, 2005, p. 159]

"Focus your operations on the oil, especially in Iraq and in the Gulf, as this would mean [the West's] death."

Osama bin Laden, December 2004

"The high crude oil prices do not have any relation to production or consumption,"... [It is] "because of the decrease in the value of the dollar."

Mahmoud Ahmadinejad, Iran President, April 2008

The American economy seems to be going from bubble to bubble: in 2000, it was the tech bubble; in 2005, it was the housing bubble; and now, it is the oil and commodities bubble. In fact, the entire world of investment is now a giant casino where speculators are in charge and where governments look the other way. For many basic marketable staples (rice, wheat, and corn) and commodities (oil, gas, metals), prices have no relation to the underlying values of what is being traded. Such prices are mostly driven by bad policies and by the pyramidal “greatest fool” technique by which large off-shore speculators navigate through unregulated derivatives to push prices up ever further, until the bubble burst. Meanwhile, a lot of disruptions may be created and people's lives may have been endangered or lost. The current famine in many countries is the end result of such government approved manipulation of markets, by OPEC and a host of other cartels and so-called speculative hedge funds.

Is it possible for an economy to grow and prosper without always being on a roller coaster? Indeed, does the current explosion in oil and commodities prices reflect real supply and demand shifts, such as supply disruptions, or is it also or even mainly driven by geopolitical factors and financial speculation that fuel an ever larger insatiable artificial demand?

It is my feeling that the plummetting U.S. dollar is having serious unintended economic consequences worldwide. Indeed, such a panic devaluation of the most widely used key currency is fueling a major rush out of dollar holdings into hard assets, such as oil, gold and other commodities. Central banks, companies and individuals are losing faith in the dollar paper currency, which has been depreciating fast against other currencies, but whose intrinsic value is also expected to be eroded further by the coming inflation that will inevitably follow the Fed's current liquidity creation. All these problems are interconnected.

Let us remember that the oil problem in the U.S. is largely a self-inflicted predicament since the U.S. government opted to move away from a self-sufficiency and a renewable-energy based economy. In 1982, for example, the U.S. daily consumption of oil had been brought down to about 9 million barrels a day, from 14 million barrels a day before the 1973 OPEC-initiated oil shock. Since the U.S. was producing about 9 million barrels of oil a day, it can be said the American economy was then self-sufficient in that form of energy needs. The Reagan administration changed all that: No more 55 an hour driving limits; reduced obligations for car manufacturers to raise gas mileage; no more restrictions, fiscal or otherwise, on the purchase of gas guzzlers, etc. The result is that the United States, with less than five percent of the world population, now consumes 25 percent of the daily world oil output, roughly 22 million barrels a day out of about 88 million barrels produced daily worldwide. And, here's the gist, 60 percent of that oil has to be imported. What's more, for the world as a whole, also 60 percent of oil imports come from the unstable Middle East. That's what we can call playing with fire!

Therefore, since oil access under American control played an important part in the Bush-Cheney's decision to launch an unprovoked war against Iraq in the spring of 2003, in order to turn that sovereign country into an American oil protectorate under management by a few major Anglo-American oil companies, it can said that the seeds for this illegal war were sown way back, during the Republican Reagan administration. That was when the philosophy of deregulation was rampant and was then hailed as a success. But, as a consequence, twenty-five precious years have been lost in preparing the U.S. economy for the time when oil would become a scarce energy source. Now, this time has arrived, but this is still the era of Hummer type vehicles that can only run on large quantities of costly and risky imported oil.

Indeed, in the U.S., there are now three cars for four adults and those cars are larger and have more powerful engines than anywhere else in the world. If only a few countries, such as China and India, were to emulate the United State in that regard, as their income levels rise, world oil consumption would more than double. But with no known oil reserves to meet such an expanded demand, oil prices would skyrocket, crushing the purchasing power of consumers and raising inflation. The result would be a major worldwide economic crisis before economically viable alternative energy sources could be developed. This could take ten to twenty years.

Are we there now? If not, we are moving fast toward that day of reckoning, while do-nothing or complicit governments hope for a miracle or some magic solution. The main consequences will be rising inflation, 19th century wars for securing resources, and a worldwide economic slowdown in production and trade. The next twenty years should prove to be interesting for a few, but taxing for the many.

Rodrigue Tremblay is professor emeritus of economics at the University of Montreal and can be reached at rodrigue.tremblay@yahoo.com

He is the author of the book 'The New American Empire'

Visit his blog site at: www.thenewamericanempire.com/blog.

Author's Website: www.thenewamericanempire.com/

Check Dr. Tremblay's coming book "The Code for Global Ethics" at: www.TheCodeForGlobalEthics.com/

Posted, Thursday, May 16, 2008, at 5:30 am

Email to a friend:

http://www.TheNewAmericanEmpire.com/tremblay=1087

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