Economic Terrorism., Comment/discuss
Dr. Walid Phares presented a new paradigm: Economic Terrorism.
If they chose to increase the price of oil to their own determent and say so in some memo, or a smoking gun. Then one might have a case for Economic Terrorism, a kind of economic suicide bombing.
But to attribute price fixing to terrorism is alot like watching someone having sex and predicting if they are in love or not. If done well you can't tell.
There is enough Greed around to motivate pricing fixing without even a thought of terrorism.
But often the talk about Wall St often assumes there is some all controlling power operating things, THERE ISN'T, THAT IS WHAT MAKES CAPITALISM WORK. The Feds are trying to control things now with a bailout, and who has more money than the Feds? No one. And they can't control the market, maybe influence it, some.
On Wall Street calling someone greedy is like telling a holy man he prays to much, fairly meaningless.
Greed , on Wall St. if you get too greedy you loose. Greed is a self correcting vice.
When is the last time you waited to long to sell a stock and ended up giving back some of the price gains being too greedy. If you get too Greedy and do something Illegal you go to prison.
But the Lobbyist have been able to change that in one case, Usury, Mafia went to prison for that, banks get bailouts??? And get to change the bankruptcy laws so they can pursue their victims to the grave, legally.
If Opec raises prices to high then a world recession will ensue as poorer countrys can't afford oil. And while high oil prices lead to bigger cash flow in the near term, in the long term it leads to lower cash flows, as less and less of the oil is bought and it engenders altermative energy sources.
And Opec is about cash flows over the intermediate term, life term of the regime/ruler. Loss of cash flows to OPEC leads to less money at home and civil unrest.
Currently there are enough market forces to account for the oil price increase, peak oil,
increasing demand, Russia and China, India etc. Or so it seems, I don't have access to the data
I would need without a lot of work to check it out.
But lets take a look at whats on hand.
Walid: "The international community is waking up to watch another dimension of globalization: the lethal domino effect. When the greatest economy goes down, the international economic system follows."... but of course this includes the OPEC nations too.
Oil pricing is a combination of supply and demand, which determines the price.
And to my knowledge the house of Saud is running higher production than ever, and greed prevents the other OPEC countrys from cutting production. Cut production equals fewer profits.
Walid asks "Many argue that the trend of pushing out-of-control loans to unqualified segments of society emanated from political operatives on the Left. Meaning that pressure groups, including national politicians, induced Wall Street to cross the fine line of appropriate banking policy to grant almost any loan seeker, regardless of his capacity to pay back the mortgage loan. But even if that were true, market analysts would have figured out the weaknesses of such a plan. So the next question is: on what grounds was the huge release of funds rationalized?"
Eventually I think we will find the banks were behind the huge release of funds and even promoted it to the Dems. Once a Banking Corp found they could grant loans regardless of risk
and re-package the loans and sell them to the Feds, without risk of loss then it became the question of how many of these bad loans can the push out the door to the Feds, Freddie and Fannie.
Make a bad loan, collect huge fees and sell it to the government where they sell them on Wall St as a type of Real Estate bond, all with out any risk to the banks. The same banks charging the usury interest rates on credit cards, they are already running a criminal usury scam, they just found a way to add a mortgage scam.
Some of these RE bonds leaked into the Money Markets.
Some of these RE bonds leaked into the Money Markets.
And the banks are not done, they will be back asking for more money for bailouts, the current law provides for bailouts of Credit cards ( charging up to 99% interest ), and bad auto loans.
The CEO's gave up Golden Parachutes in exchange for performance bonuses, after lining up $700 billion bailout, let the bonuses FLOW, they performed they got $700 billion.
Banking Greed, and they will pay the price, prison terms for many banking CEOs, the public want blood and will get it.
The tipping point? USA has been heading for a tipping point and will continue to do so.
Globalization makes American workers compete with labor costs in China, just visit Walmart
for proof, find many made in USA labels? American consumers don't want to pay the higher price for American labor, look at the US auto makers losses.
Globalization makes for a more efficient capitalism, and higher profits but a lowering of American standards of living, but raising standards of living in the rest of the world. USA has to compete in a global market place, prices, labor.
Walid further states: "Indeed, as economic commentators tell us (including a strong accusation leveled by real estate tycoon Donald Trump on Fox News against OPEC), oil powers are behind the instability that crumbled the will of millions of middle class Americans over the past three years. If we go back in time, we can see that oil pricing by OPEC’s hard core shows clearly that US leadership wasn’t able to convince the top producers from the Gulf to give American oil consumers a chance. Most producing regimes replied that demand - mostly from China and India - was putting pressure on production. Pressed by Washington to produce more, the “regimes” alleged it would affect the selling price and thus minimize their profits, but promised they would try to “be understanding” of US needs in energy."
I wouldn't take investment advise from the Donald, ( how many times has he filed bankruptcy?) but lets look at his point. Trump IS NOT an oil economic authority.
"we can see that oil pricing by OPEC’s hard core shows clearly that US leadership wasn’t able to convince the top producers from the Gulf to give American oil consumers a chance."
How could they give Americans a better chance? Sell to America below market price?
Increase supply? They have, but maybe they could have increased it more? But not by much.
Or maybe they could reduce demand???
What did Donald want them to do? Lower prices? Lets start with the Huge Oil Cos here in USA lowering prices first. If we can get them to lower prices then maybe we can get OPEC to lower prices.
And the Donald said "producers discretion over price".
OPEC has limited control over price, price is determined by supply and demand for the most part.
Remember 1973 oil embargo, they just quit selling oil, the long lines at the gas stations?
In order to raise the price of oil they had to cut production way down, stop all delivery to USA.
It was a disaster for Opec.
Following the embargo, higher oil prices instigated new avenues for energy exploration or expansion including Alaska, the North Sea, the Caspian Sea, and Caucasus.
Saudi Arabia, trying to gain back market share, increased production and caused downward pressure on prices, making high-cost oil production facilities less profitable or even unprofitable.
...the move away from oil consumption to alternate energy sources. OPEC had relied on the famously limited price sensitivity of oil demand to maintain high consumption but had underestimated the extent to which other sources of supply would become profitable as the price increased. Electricity generation from nuclear power and natural gas, home heating from natural gas and ethanol blended gasoline all reduced the demand for oil.
When reduced demand and over-production produced a glut on the world market in the mid-1980s, oil prices plummeted and the cartel lost its unity. Oil exporters such as Mexico, Nigeria, and Venezuela, whose economies had expanded in the 1970s, were plunged into near-bankruptcy, and even Saudi Arabian economic power was significantly weakened.
The 1973 embargo could be called economic terrorism, but currently we would need to see a sharp reduction in supply, or prices increase during a reduction of demand.
What are the solutions to economic terrorism?
Lets think out side the box.
During the 1973 embargo OPEC-member states in the developing world withheld the prospect of nationalization of the companies' holdings in their countries. Most notably, the Saudis acquired operating control of Aramco, fully nationalizing it in 1980 under the leadership of Ahmed Zaki Yamani. As other OPEC nations followed suit, the cartel's income soared.
One option would be to "Worldize" the oil reserves, just like they Nationalized the Oil Cos.
( Another war. )
Other options switch American autos to natural gas, with refueling stations at home, tapped in to the gas furnaces. $2 or $3 gallon equalivant.
Require solar or wind power for all homes to cut oil consumption.
But if discovered it could be dealt with.
Do these charts show OPEC using oil for economic terrorism.
I don't think so, what do you think?
Walid further says:
"Ayman Zawahiri called expressly and repetitively on the public to sell their US dollars and buy gold instead (Be’u al dullar washtaru al zahab). These were stunning statements ignored by most analysts at the time but that are making sense today. He predicted a collapse in the infidels’ economy, starting from American markets. Was he a part of the lobbying effort in the OPEC game? Most likely not, but he seems to have been privy to the game, having insiders in the Wahhabi radical circles in the Peninsula: in the end there are too many political signs to dismiss and the analysis of price warfare is too evident to ignore."
The GWOT could account
for the price of gold increase.
for the price of gold increase.
I don't see conclusive evidence of any Economic Terrorism.
But Lack of proof isn't proof of Innocence.
Series 7 and 13
Internet Anthropologist Think tank said to move to cash on 9,18,08 at Dow 10,609 ""Cash may be king. This is going to get VERY very UGLY.""