Petrodollar Recycling - Guest Post

A guest post from John Souter.


This (scroll to Recyling Petrodollars) is an article that gives far more insight into the machinations of the inner temples of power during the 60s than any retrospective of pop art and culture can either claim or be blamed for.


Hem lines being raised, lowered or ripped off altogether may have questioned social behaviour and moral values, but it didn't start wars and it did not finance them. We have to look deeper into the hierarchies of social (or even the existence of anti social structures) to gain an insight into the 'values' that give prominance to that sort of behaviour.


While the article is based on one policy instigated by Nixon, it lays out a clear critical path between the policy's conception and a legitimate conclusion of it being a major catalyst for the financial crises the western world is facing today under the euphemism of austerity.


Carnaby Street! Nah, that was only a sideshow.

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A Message From The Wife Of An Oil Rig Worker

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courtesy of small dead animals

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Peak Oil

Contributed by TediousTrantrums (petem)

I was casually reading through my Tweets when I saw the following from Captain Ranty “The Russians will be pleased to see Libya normalise. They were the only f****** finding anything. BP – nowt. Shell – zip. Russia 7 wells, 7 finds.”

This reminded me of a bit of research I carried out a few months ago which was prompted by an article I’d read on the web about the success of Russian oil prospecting. They’d been very successful and this had been attributed to research, which had been carried out in the late 1940s and early 1950s. Due to a shortage of oil in Russia at the time and a lack of potential oil imports the Russian had decided to look at hard at what oil really was and where it was to be found.

They discovered that oil was, in fact, produced deep within the earth and flowed up through deep faults into reservoirs. At the time this was a fairly wild thing to suggest and it gained no traction at all in the West. Since then however, they have gone on to explore in areas, which do not fit the traditional topology for oil prospecting and have been pretty successful, just as Captain Ranty suggested in his tweet.

They drill deeply, very deeply. Much deeper than Western Oil companies which is no surprise given the traditional search for oil is looking for decomposed dinosaur and other creatures residue. The Russians don’t believe a word of “fossil fuels” or of peak oil for that matter.

Which brings us neatly to another group of people who have trouble with oil, our environmental friends or Greenies. They don’t like oil because it produces CO2, which is a very bad thing, although it isn’t. They have managed to have oil exploration completely stopped or curtailed to the extent that there are supposed shortages and of course it’s running out. The oil companies are no angels that’s for sure and neither are the futures commodity oil speculators.

So oil could be plentiful, cheap and last for a very long time.  The fact that it is becoming ever more expensive, duty hikes notwithstanding, causes us all major headaches and problems. The cost is passed onto to us for the petrol we buy, the goods we buy which are delivered to the shop using oil and of course every sort of item, which contains or is contained by oil based products. It is also still used for heating especially in its gaseous form the price of which also increases beyond which is sensible.

The bottom line is Russia has demonstrated significant success in finding new oil in significant quantities by using science to determine what is actually possible rather than relying on discredited science mixed with global warming fairy stories as we in parts of the west do.

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Scotland v Norway

Oslo

Here in Scotland politicians often mention Norway, also an oil producing nation, as a successful small country and by all accounts it is.

Its economy also relies on forestry (which occupies 26% of the country) and fishing yet agriculture hardly features at all - 3% of the total area of the country in comparison with 75% in Scotland, making Scotland far more self-sufficient foodwise. Hunting is still as much of an necessity as a sport in Norway and their diet is high in venison and fish.

One of the differences between the two countries is the stable economy Norway enjoys with its oil fund creating financial security for many years to come. Wages are higher than Scotland but so is the cost of living.

Another difference is the attitude of Norway to the EU.  Norwegians have no desire to belong to the EU and are perfectly comfortably with their current arrangement of being a member of the EEA (European Economic Area).

A very recent poll reports that Norwegian opposition to joining the EU has reached a new high with almost two-thirds of voters opposing the country's accession to the bloc.  Only 25% of people were in favour with 8% being undecided.

Norwegians have twice voted against EU membership, in 1972 and 1994.

Perhaps it's time Scotland had a closer look as to why Norway continues to reject becoming an EU member. The issue is important to Scotland's future and the SNP's policy on Europe needs to be discussed openly.

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Government By Blackberry

In the past seven days the Westminster government has been severely criticised over their handling of the evacuation of British nationals from Libya.

The MSM and the 24-hour drip feed of news provided by Sky and the BBC have delighted in bringing angry Brits, with their stories of abandonment by the UK government, to our living rooms.

From what I've seen on television, I think the UK government has done a reasonable job considering the PM and deputy were out of the country, but more about that later.  The initial hesitation may have been attributed to this.

Anyone going to work or live in a country like Libya must know the risks involved. Many go because they're paid more than they would be in the UK and if they stay out of the UK enough days each year, they do not have to pay UK taxes.  I have no problem with that because it's their choice.

What I do have a problem with is some Brits expecting immediate rescue when - with the exception of those in the desert - they could have left the country a week ago as civilian flights were still operating to a reasonable schedule and the UK also chartered aircraft.  Many decided to disregard the situation until the middle of the week when they found Tripoli airport in chaos with thousands desperate to leave and civilian flights few and far between.

"It's the UK government's fault," was a popular response in the media.  I disagree.  When anyone decides to go abroad, for whatever reason, they must take responsibility for their own health and safety.  In serious emergency the British Embassy may be able to help but it's not always possible.  In the past couple of days Libya has become a serious emergency and, if the words of those who have successfully escaped the country, the Embassy staff have done everything in their power to ensure they were safely escorted to the port/airport.  I've yet to hear a word of criticism against anyone connected with the evacuation by an evacuee.  Neither have I heard any criticism of BP who also accepted other nationalities when  space was available on their flights to Malta.

It is unfortunate some oil workers' families, here in the UK, decided to go public with their concerns for their loved one's safety because they also gave too much information to the interviewer.  Those who work in middle east oil fields are well protected by guards employed by the relevant company. Looting from local crooks is not unknown and the guards and workers do their best to keep a good relationship with the host nation. After William Hague's plea to oil workers to let the Foreign Office know where they were, it was obvious to anyone listening that their safety was in doubt and action was being considered.

Most are very acquaint with survival skills but these were reduced when one of their escape routes, through the desert, was blocked. Too much information was being provided on news channels which was putting any rescue attempt in jeopardy.  Thankfully late yesterday around 150 British and other foreign nationals were airlifted safely to Malta by the British military.  Another 300 await rescue.

The media must be told to be more responsible. Gaddafi's henchmen didn't need to spend much time finding out where the UK's special forces were gathered. There is a fine line between news and news which must be withheld from the public because it would endanger the lives of others.  The line was crossed a few times this past week.

But David Cameron certainly didn't provide an acceptable level of leadership this week.  Since the coalition was formed I've occasionally questioned why he was giving Nick Clegg so much exposure in the media and wondered if he was hoping Mr Clegg would eventually flounder.  Nick Clegg did so last week - spectacularly, but David Cameron was unable to capitalise on it.  Why?  For some strange reason he allowed Mr Clegg to trot off on a skiing holiday in the same week the middle east was in uproar and he was to jet around parts of it in an effort to boost the sales of his business entourage. Such planning is not permitted in Ruralshire and certainly it was poor diary organisation from No 10.

It escapes my memory whether it was David Cameron or Nick Clegg who was reported to have said there was no necessity for the PM or his deputy to physically be in the country because communications equipment was excellent these days. The Blackberry was mentioned.  Does this show that Britain's PM and other senior politicians are purely figureheads these days or has it always been so and it's only due to modern communication systems, such as the Blackberry, that their hollowness has been revealed?

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The End of the Oil Dollar

Late last month Iran announced that its foreign currency reserves would henceforth be held in euros rather than the dollar.

Now, in the most profound financial change in recent Middle East history, Gulf Arabs are planning - along with China, Russia, Japan and France - to end dollar dealing for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.

Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.

The plans, confirmed to the Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help explain the sudden rise in gold prices, but it also augers an extraordinary transition from dollar markets within nine years.

The Americans, who are aware the meetings have taken place - although they have not discovered the details - are sure to fight this international cabal which will include hitherto loyal allies Japan and the Gulf Arabs.

This sounds like a dangerous prediction of a future economic war between the US and China over Middle East oil - yet again turning the region's conflicts into a battle for great power supremacy. China uses more oil incrementally than the US because its growth is less energy efficient. An indiction of the huge amounts involved can be gained from the wealth of Abu Dhabi, Saudi Arabia, Kuwait and Qatar who together hold an estimated $2.1 trillion in dollar reserves.

Brazil has shown interest in collaborating in non-dollar payment, along with India. China appears to be the most enthusiastic of all the financial powers involved, not least because of its enormous trade with the Middle East.

Chinese financial sources believe President Obama is too busy fixing the US economy to concentrate on the implications of the transition from the dollar in nine years' time. The current deadline for the currency transition is 2018.

Remember I mentioned Iran changing to the euros at the beginning of this post? Bankers remember what happened to the last Middle East oil producer to sell its oil in euros rather than dollars. A few months later after Saddam Hussein trumpeted his decision, the Americans and British invaded Iraq.

Another interesting article on this subject can be read here and is entitled 'The end of the dollar spells the rise of a new order.'

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