Saudi

This Week in Doom Oct. 14: Getting Away with Murder


That-Was-The-Week-That-W-That-Was-The-Week-473964gc2smFrom the keyboard of Surly1
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Originally published on the Doomstead Diner on October 14, 2018

“I have left my home, my family and my job, and am raising my voice. To do otherwise would betray those who languish in prison. I can speak when so many cannot… Saudi Arabia has not always been as it is now. We Saudis deserve better.”

 ― Jamal Khashoggi  


This was a week in which Hurricane Michael made landfall as a Cat 4 in the Florida Panhandle, and flattened Panama City and erased Mexico Beach. As of this writing, the crack SWAT teams of the Trump Administration had mustered a post-Maria Puerto Rican-style recovery effort, meaning that aside from the Red Cross, residents are on their own. We learned that Sears, once the largest retailer in the world, is closing hundreds of stores under the guidance of designated looter Fast Eddie Lampert. As Sears stores fail, Fast Eddie's real estate company buys out their leases and re-rents the space to flea markets and crack dealers, thus improving the American suburb. The Trump administration is weighing new family separation efforts at the borders.

A West Virginia politician who told liberals to “get you’re [sic] coathangers [sic] ready” in preparation for the overturning of abortion rights by the Supreme Court is now being sued for calling a psychologist a pedophile for defending LGBTQ kids. A newly discovered long and craggy rift is splintering across West Antarctica’s Pine Island Glacier, ready to split off. Illinois and Georgia are actively engaged in voter suppression. A five-year-old was detained at the border and persuaded to sign away her rights, as the Trump administration actively considers new family separation measures. New reports indicate that Supreme Court Justice Brett Kavanaugh is now being investigated for possible perjury charges by Chief Justice John Roberts. But the most compelling story of the week is that a journalist, Jamal Khashoggi, entered a Saudi Arabian embassy in Turkey and never emerged.


Who is Jamal Khashoggi and Why Should We Care?

The disappearance of Saudi journalist Jamal Khashoggi in Istanbul, Turkey on October 2 and allegations of foul play have inspired outrage. According to Wikipedia, Jamal Khashoggi was most recently a Washington Post columnist, and had a long career as a Saudi journalist,  author, and progressive voice in the Arab world. Khashoggi fled Saudi Arabia in 2017 after the government banned him from Twitter, and afterwards wrote newspaper articles critical of the Saudi government, the crown prince, Mohammad bin Salman, and the country's king, Salman of Saudi Arabia. He also opposed the Saudi-led intervention in Yemen.

Anonymous Turkish police sources have alleged that he was murdered and dismembered inside the consulate.[8][9] The Saudi government claims that Khashoggi left the consulate alive, through a rear entrance,[10] but Turkish police say that no CCTV recorded him exiting the consulate.[11]

Turkish government officials allege that Saudi government officials lured Khashoggi to the Saudi Consulate in Istanbul with the intention of harming him—and that there are video and audio recordings proving that after he was beaten, tortured and killed inside the Consulate, the body was dismembered. Some reports have it that Khashoggi recorded his own death via his Apple watch, connected to a mobile phone left outside. Whether this is true, or is Turkish disinfo to prevent disclosure of their own spying methods is unclear. 

So the Saudi regime had motive for Khashoggi's disappearance, as detailed in this article:  What You Should Know About Khashoggi: 5 Key Facts. It suggests reasons that the Saudis– and the Trumps who love them– may have the journalist's blood on their hands.

None of this is yet confirmed. But increasingly it seems that the Saudi crown prince, better known as M.B.S., condoned the torture, assassination and dismemberment of an American-based journalist using diplomatic premises in a NATO country. As a New York Times article has it,

Trump has expressed “great confidence” in M.B.S. and said that he and King Salman “know exactly what they are doing.” Jared Kushner wooed M.B.S. and built a close relationship with him — communicating privately without involving State Department experts — in ways that certainly assisted M.B.S. in his bid to consolidate power for himself.

The bipartisan cheers from Washington, Silicon Valley and Wall Street fed his recklessness. If he could be feted after kidnapping a Lebanese prime minister and slaughtering Yemeni children, why expect a fuss for murdering a mere journalist?

For their part, the Saudis are blaming the western press and the Qataris. Saudi Media Casts Khashoggi Disappearance as a Conspiracy, Claims Qatar Owns Washington Post. Saudi Arabia’s interior minister has condemned the accusations as  “lies and baseless allegations,”  according to the state-run Saudi Press Agency. Predictably, Trump's first thought was about money: "I know [Senators] are talking about different kinds of sanctions, but [the Saudis] are spending $110 billion on military equipment and on things that create jobs for this country." Trump also declared the US will uncover the truth about what happened to Khashoggi, inspiring the same faith as did O.J. Simpson when he pledged to devote the rest of his life to tracking down "the real killers."

Meanwhile, we are all supposed to forget how the Saudi royals are said to have Pampered Princeling Jared Kushner's balls on a keychain. Who should be surprised they act with such impunity?


This week marks the continuation of open season on journalists with no bag limit. In a little noticed trend, it’s been a deadly year for journalists, even in democratic countries where press freedom is nominally an essential part of civil society.

Journalist Victoria Marinova brutally murdered in Bulgaria

Victoria Marinova, a 30-year-old Bulgarian journalist working for regional TV channel TVN, was brutally killed last week in the city of Ruse, located in the north of the country. She is the fourth journalist killed in the EU since 2017 after Kim Wall in Denmark, Daphne Caruana Galizia in Malta and Jan Kuciak in Slovakia. 

According to local media reports, her body was found in an area of ​​difficult access, near the Danube river bank. The victim was allegedly raped, beaten and then strangled. She was beaten with such violence that her face was unrecognizable, so she was not identified until last night.

She had recently interviewed two other journalists were arrested last month by Bulgarian police while investigating destruction of documents allegedly revealing corrupt practices by a private road construction company. Dead men (and women) tell no tales.

Khashoggi and Marinova are just this week's casualties in a worrisome trend. At least 43 journalists have been killed around the world thus far in 2018 as a result of their work, according to the Committee to Project Journalists. That number is outpacing last year, and does not include 17 other deaths where motive has not been confirmed. 

Part of the authoritarian playbook has been to discredit journalists and others who shine light on deeds best perpetrated in darkness. Thus, Khashoggi’s Blood Is On Donald Trump’s Hands.

In July, met with A.G. Sulzberger, publisher of The New York Times, the paper most often called out by the  Orange Fraud’s years-long effort to delegitimize the U.S. press. In a statement memorializing the White House meeting, Sulzberger said he had gone to the White House to warn Trump: His vicious criticisms of the American press, especially the description of journalists as the “enemy of the people,” would likely result in  deadly results for reporters.

“I repeatedly stressed that this is particularly true abroad, where the president’s rhetoric is being used by some regimes to justify sweeping crackdowns on journalists. I warned that it was putting lives at risk, that it was undermining the democratic ideals of our nation, and that it was eroding one of our country’s greatest exports: a commitment to free speech and a free press.”

And here we are. Memory being the liberal superpower, we can remember a few months ago when a crazed gunman shot up the Capital Gazette. With Khashoggi, Sulzberger’s warning has shown that Trump's authoritarian act has traveled overseas, such that a journalist who lives in the U.S. and writes for a major American newspaper can be executed with impunity.

The National Memo article cited above puts it exact:

It’s difficult to overstate the brazenness of the Saudis’ alleged actions in targeting a U.S. resident who writes for an American paper while he was in a NATO country.

It seems unlikely that the Saudi regime — dependent as it is on the U.S., and on the Trump administration specifically — would have tried to kidnap or kill Khashoggi if its rulers thought it would upset Trump. But as Sulzberger warned, Trump’s derision toward reporters gave every indication that he didn’t care. And since Khashoggi’s disappearance, Trump has signaled his ongoing apathy. The message the president is sending to dictators around the world is that it is open season on dissident journalists.

Past presidents, aware of the danger of signaling such indifference, might have reacted with outraged statements and a promise of dire consequences for the regime that dared to commit such a crime. A bipartisan group of U.S. senators has tried to lay down such a marker, threatening sanctions against the highest levels of the Saudi government if it turns out to be implicated in Khashoggi’s disappearance.

But Trump’s vision of U.S. foreign policy is fundamentally transactional, looking with favor on despots like Crown Prince Mohammed who cater to his whims and sign hefty contracts for U.S. arms, while scorning our democratic allies for not paying “their fair share of common defense costs.”

There is a direct and unmistakable link between Trump’s anti-press rhetoric against journalists and Saudi actions. Since Trump hates journalists, the Saudis may have bet that he wouldn't mind they killed one. Unless Trump and his administration change course and make it clear selective murder of reporters is unacceptable, expect the trend to continue. With authoritarianism ascendant, who is truly safe?


banksy 07-flower-thrower-wallpaperSurly1 is an administrator and contributing author to Doomstead Diner. He is the author of numerous rants, screeds and spittle-flecked invective here and elsewhere. He lives a quiet domestic existence in Southeastern Virginia with his wife Contrary. Descended from a long line of people to whom one could never tell anything, all opinions are his and his alone, because he paid full retail for everything he has managed to learn.

What’s Next for Oil: Whiplash

roller-coaster gc2smOff the keyboard of Thomas Lewis

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roller-coaster This is the closest we could come to a chart showing what is next for ojl and gas prices, and how it’s going to feel. (Photo by Patrick McGarvey)

Published on The Daily Impact on January 18, 2015


A savvy investor once told me that if you read something in the news, it is no longer true, if it ever was. I keep this in mind as I read over and over that the world is awash in 3 billion barrels of surplus oil. This glut — always and everywhere specified as 3 billion barrels — is present, the conventional wisdom (oxymoron alert) goes, because the crafty Saudis refused to cut production when the price of oil tanked (metaphor alert). They did this, it is said, to run the pesky American oil frackers out of business before they took over the world. This reminds me of the engraved plaque found in many Irish bars: “The Lord invented whiskey to keep the Irish from ruling the world.” An endearing sentiment, but probably not true.

[“The Saudis have won,” somebody said to me the other night. Really? They’re burning cash so fast that, despite having one of the world’s largest foreign-exchange reserves, they’re on course toward bankruptcy in four years. They have been forced to cut back on the subsidies that up to now have bought their subjects’ loyalty by providing them with cheap gas, electricity and water; gas prices alone have shot up 50% this year. When Iran tried that a few years ago, revolution appeared in the streets like a sudden flame, and the government reversed course immediately.

To suggest that the Middle East is a tinderbox is to understate the obvious; to say that it has become immeasurably more flammable since the Arab Spring, similarly goes without saying; and to conclude from the foregoing that this is hardly the time to thrust people more deeply into worse poverty with less hope, would not challenge the reasoning powers of a candidate for US president. The Saudi royal family is terrified and rightly so by existential threats from ISIS, Iran and increasingly its own people.]

But back to the 3 billion barrel glut. Question 1 is where did that number come from that everyone is using without qualification? Why, from the International Energy Agency (IEA), one of whose jobs is to keep track of world oil stocks. That’s oil that has been pulled from the ground but has not yet made it to a refinery: it’s in tankers, in pipelines, on rail cars and in tank farms. And it is true that IEA has just estimated those stocks at 3 billion barrels.  

BUT those stocks did not just appear because prices fell — or in order to make prices fall. If you go back ten years or more in IEA records, you find that there have always been around 2.7 billion barrels in the pipeline, so to speak. So the present number, far from representing a sudden tsunami of unwanted oil, represents an uptick of just 300 million barrels, a 10 per cent increase. It represents about a three day supply of oil at current global consumption rates.

Far from being a tsunami of excess oil swamping the world, this glut is hardly enough to get our shoes wet. There are two implications to putting this excess in its proper perspective:

  1. Any return to anything like normal demand will vaporize the glut in a matter of days. Which means that’s how long it will take for prices to head back toward $100 a barrel from the current under-$40.
  2. Although encouraged to ramp production back up by the return of high prices, the oil industry will not be able to. True, they can uncap sealed wells and re-erect mothballed rigs — although even doing that, which will require finding new sources of financing and hiring workers, will take a dismaying length of time. But virtually all the oil companies in the world have for years been cutting back on the money they spend looking for new oil fields. Before the price crash they were cutting back because it wasn’t working, they weren’t finding new oil no matter how much they spent. Since the price crash they’ve been cutting  back viciously because they can’t afford it. But the result is the same: there are precious few new oil wells to drill, even at a profit.

Thus the prospect of peak oil, far from having been disproved by current events, as some are gloating, hasn’t even been much delayed by current events. And if there is to be a recovery from the current doldrums of the oil industry it will be wrenching, recession-inducing recovery because we all know what economies do when oil prices spike.

On the other hand, if the economic news continues to be as bad as it is now, and the expected global depression locks most of the world’s people into long-term poverty, and their ability to buy anything continues to wither as it is withering now, why then we will be all right. With respect to peak oil.

As long as we can’t afford to buy gas, it will remain cheap. The minute we start buying it again, it will become expensive and scarce. And it will happen so fast that the thrill of victory and the agony of defeat will be simultaneous.


Thomas Lewis is a nationally recognized and reviewed author of six books, a broadcaster, public speaker and advocate of sustainable living. He also is Editor of The Daily Impact website, and former artist-in-residence at Frostburg State University. He has written several books about collapse issues, including Brace for Impact and Tribulation. Learn more about them here.

The Caliph at the Gates of Vienna

Abu-Bakr-al-Baghdadi-300x183gc2smOff the keyboard of Pepe Escobar
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AbuBakr_alBaghdadi-020515

Originally published in Asia Times on October 29, 2015

 


History has a jolly habit of repeating itself as surrealist farce. Is it 1683 all over again, with the Ottoman Empire laying siege to Vienna just to be defeated by the “infidels” at the last minute?

No; it’s 2015 and a Caliph simulacrum – Ibrahim, a.k.a. Abu Bakr al-Baghdadi — has prompted a gaggle of world powers, lesser powers and assorted minions to converge to Vienna to discuss how to defeat him.

Abu Bakr al-Baghdadi

Abu Bakr al-Baghdadi

Westphalians, we got a problem. None of this makes any sense if Iran is not at the table discussing a solution for the Syrian tragedy. Moscow knew it from the start. Washington — reluctantly — had to admit the obvious. But the problem was never Iran. The problem is the ideological matrix of goons who metastasize into Caliphs: Saudi Arabia.

Back — inevitably — to surrealism. Saudi Foreign Minister Adel al-Jubeir stated, “The view of our partners … was that we should test the intentions of the Iranians and the Russians in arriving at a political solution in Syria, which we all prefer.”

Translation: “Our partners” means “His Masters’ Voice,” Washington; and the beheading-addicted oil hacienda does not “prefer” a political solution; they want regime change and a House of Saud satrapy.

Egypt, Iraq, Lebanon, the EU, France and even Qatar — whose mini-emir wanted to launch his own military campaign for regime change before someone told him to shut up — are keeping company to Iran in Vienna, alongside the US, Russia, Turkey and the House of Saud.

Talk about parallel lives. One thing is a polite altercation inside a gilded Vienna palace. The shifting military sands across a Sykes-Picot-in-shambles “Syraq” tell a very different story.

Beware the new Global Jihad

The ideal solution is tempting; Russia dispatches the Spetsnaz and some extra commandos; beheads the ISIS/ISIL/Daesh goons from a C4i point of view; surrounds them; and wipes them out.

Yet it won’t happen, as long as Sultan Erdogan in Turkey, petrodollar GCC minions and the CIA persist to “support” and/or weaponize assorted Salafi-jihadi goons, “moderate” or otherwise.

The fake “Caliphate” will be a very tough nut to crack because they don’t – and won’t – care about their own mounting casualties. The “4+1” alliance – Russia, Syria, Iran, Iraq plus Hezbollah – already knows it, and has already experienced trouble in their ranks.

Hezbollah took casualties. So did Iran’s Quds Force – as in reliable mid-level commanders. Iran has around 1,500 fighters on the ground – many of them Afghans – on the “4+1” side. On the opposite side we have the House of Saud funneling a lot of cash and TOW anti-tank missiles to the Army of Conquest, which is nothing but an al-Qaeda-led coalition of the willing displaying relatively overlapping agendas (first regime change, then Caliphate or Muslim Brotherhood reign).

There’s no evidence – yet – that ISIS/ISIL/Daesh has been depleted of the bulk of their shoulder-fired anti-aircraft plus anti-tank guided missiles.

So while Vienna talks, what is ISIS/ISIL/Daesh really up to?

They are about to choose between two different strategies.

  1. They dig in in Raqqa – the former capital of the Abbasid Caliphate, before Baghdad – waiting for a Mother of All Battles. After all they can’t afford to lose it, as Raqqa, geostrategically, is the ultimate crossroads in Syria. Former Ba’athist military and a cluster of Arab nationalists are lobbying for this strategy.
  1. Forget about digging in. The best is to expand the frontline, into the deeper desert, to the max. This means no clusters of targets available to the Russian Air Force, with the added benefit of the “4+1” – as in the Syrian Arab Army (SAA)/Iran/Hezbollah ground units supported by the Russian Air Force — overextending their lines of communication/supply and being faced with extra logistical problems. Hardcore Turks, Chechens, Uyghurs and Uzbeks are lobbying for this strategy.

Arguably the ISIS/ISIL/Daesh command is leaning towards option 2 – because of the Jihad Inc. component. At least 2,000 fake “Caliphate” goons – most of them from Chechnya, Turkey, Central Asia and Xinjiang – were killed in Kobani, which, unlike Raqqa, had no strategic value. The Jihad Inc. gang now wants to expand all the way to Central Asia, Xinjiang, Russia and, if they manage to find an opening, Europe and the US.

Option 2 also carries the added benefit, for fighting purposes, of extra support for “moderate jihadis” (not “rebels”), which means more interaction with Ahrar al-Sham, Liwa al-Tawhid, a few Army of Conquest factions, the Islamic Front and a bunch of Turkmen Salafi groups. None of these, by the way, are “moderate rebels”.

All these outfits would perfect mesh into an ISIS/ISIL/Daesh “expanding frontline” strategy, defended, among others, by one Muslim Shishani, Chechen commander of the Jund al-Sham, which is currently fighting around Latakia.

Shishani, significantly, told al-Jazeera Turk, “Fronts [such] as Raqqa and Aleppo will have no significance in a ground war against the Russians. The real war will be on the Tartus-Latakia front line. Jihad must be moved to that area.”

So imagine all of these outfits coalescing on an internal jihad plus global jihad platform, and still flush with cash. It’s no secret that Russian intel is alarmed by the high number of Chechens in the fake “Caliphate” ranks, not to mention Chinese intel regarding the Uyghurs. These may find very hard to return to Xinjiang; but the Chechens will be back in the Caucasus. That’s the famous “Aleppo is 900 km away from Grozny” syndrome.

To add to the royal mess, FSB director Alexander Bortnikov has already warned about a concentration of Taliban – many of whom pledged allegiance to the fake “Caliphate” — at Afghanistan’s northern borders with Uzbekistan and Tajikistan. For Putin and the Russian intel apparatus, the situation in Afghanistan is “close to critical”. A jihad spillover across Central Asia is all but certain.

The bottom line, thus, is stark. Move over, al-Qaeda; ISIS/ISIL/Daesh is using the “4+1” offensive to forge its identity as the leader of a Global Jihad. Saudi imams anyway have already declared jihad against Russia. And the decrepit Al-Azhar in Cairo is about to do the same thing.

Check the Iranian game

There’s no evidence the Obama administration is about to admit all “moderate rebels” are, after all, jihadis. The ISIS/ISIL/Daesh command, anyway, is waiting; were that to happen – as in Washington sharing Moscow’s analysis – all outfits will switch to Global Jihad mode, led by the fake “Caliphate.”

Russian airstrike against ISIS in Syria

 

 

 

 

Russian airstrike against ISIS in Syria

It’s already murky enough as it stands. The mix of Syrian/Iranian ground intel plus the Russian air campaign have to make sure not only that ISIS/ISIL/Daesh does not have the hardware nor the manpower to defend Raqqa; they also need to cut off all their communication/supply lines with those jihadis who are fighting the “4+1” in western Syria.

Even under attack by the Russian Air Force, which forced a large number of goons and their families to flee Syria for the Western Iraq desert, ISIS/ISIL/Daesh managed to make progress in southern Aleppo, infiltrating al-Safira, and keeping control of at least 10 checkpoints along the crucial supply line that runs from Hama, through Salamiyeh, Ithriyah and Khanaser, all the way to Aleppo. The SAA simply cannot afford to lose this corridor; now that’s priority number one. Hundreds of thousands of Aleppo civilians, meanwhile, are trying to survive as de facto hostages.

It’s crucial to check out the Iranian game on the ground. The best source so far has been the deputy commander of the Iranian Revolutionary Guards Corps (IRGC), Brig. Gen. Husayn Salami, who talked extensively to the Vision of the Islamic Republic of Iran Network 2.

Salami – that’s the IRGC speaking – frames Syria as the “focal point of strategic efforts made by an international coalition” to implement a “destructive political scheme in the Islamic world.” By “international coalition” he means NATO plus the Saudis. Iran’s role is “guaranteeing the political, psychological, economic and military stability of the Syrian system.”

He frames Iran’s role on four levels. “On a strategic level, we support the Syrian government, nation and army politically and psychologically. As advisors, we transfer our war experiences to top commanders in the Syrian army. Actually, we are helping them modernize and rebuild the structure of the Syrian army … When it comes to the operational level, we are helping brigade commanders for example … This is why a number of our commanders are there and are helping in planning and devising operational strategies.” Iran also helps at a tactical and technical (logistic) level.

And here’s something absolutely key – as well as anathema for the House of Saud; “Our national security is intertwined with the security of important parts of the Islamic world, the national security of Syria. This is the main philosophy behind our presence [in Syria].” The nuance that US Think Tankland is incapable of spotting is this doesn’t have anything to do with keeping Assad in power forever, as Iranian diplomats are now saying on the record.

Salami also stressed Russia went into Syria because otherwise it would have to fight jihad at home (that’s exactly what the Chechens at ISIS/ISIL/Daesh want). Putin’s Syria strategy, by the way, has been fully supported by the speaker of the Iranian parliament, Ali Larijani, who was a key guest at the Valdai summit last week.

I’m the Caliph; hear me roar

Faced with the Russian/Iranian strategy, what is the Empire of Chaos to do?

Murk the already murky sands, what else? That sorry lot that passes for Obama’s “senior national security advisers” has recommended positioning US Special Forces closer to ISIS/ISIL/Daesh in Syria.

This special “guidance” is supposed to help the coalition known as Democratic Forces of Syria – which is led by the YPG Kurds – to take Raqqa. But that does not necessarily mean US Special Forces will be fighting alongside the “4+1” towards the same objective. After all, we’re always thrown back deep into Geopolitics Surrealistan – where the US-led Coalition of the Dodgy Opportunists (CDO) totally ignores what the “4+1” are doing. And don’t forget intra-coalition hatred — as in Ankara abhorring the US insistence on working with Syrian Kurds.

As for Iraq, the Obama administration and the Pentagon now barely qualify as the butt end of running jokes. Sunnis in Anbar province are furious that the mightiest satellite surveillance system in history simply failed to register ISIS/ISIL/Daesh’s advances, from Tikrit to Ramadi and environs.

To add a final insult to (repeated) injuries – as in the “4+1” intel center in Baghdad, excluding the US, plus the authorization for Russia to bomb fake “Caliphate” convoys trying to cross from the Syrian desert – Baghdad and the EU have just agreed to set up yet another intel center to exchange data on ISIS/ISIL/Daesh. The bottom line is the Obama administration is absolutely terrified that the EU is inclined to support the Russian campaign – increasingly regarding the CDO for what it is; a joke.

The near future offers even more dangerous surrealist instances; think of the Obama administration helping Shi’ite militias to take Mosul in Iraq back from ISIS/ISIL/Daesh, and at the same time helping Kurds in Syria to take back Raqqa, an Arab city. All hell is bound to break loose between Sunnis across “Syraq” and Americans – and ISIS/ISIL/Daesh will mightily profit from it.

As it stands, there’s not going to be a frontal attack on Aleppo by the SAA and Iran/Hezbollah, covered by the Russian Air Force; instead, the “4+1” strategy will be to disrupt to the max the logistical supply routes to all Salafi-jihadi outfits, which implies trying to cut off the flux of cash and weapons smuggled via Turkey.

But once again; what about the Empire of Chaos?

The Obama administration is essentially fighting — sort of — ISIS/ISIL/Daesh in Iraq, where Washington lost a multi-trillion dollar war. Team Obama never bothered to fight the fake “Caliphate” in Syria — because they were contributing to the “Assad must go” agenda.

Sultan Erdogan – with Ankara at the table in Vienna – is still allowed to have a free-for-all border out of which ISIS/ISIL/Daesh profits handsomely. And the paranoid, Shi’ite-hating House of Saud – with Riyadh at the table in Vienna – is still allowed to shower all manner of Salafi-jihadi goons with all manner of weapons. This is what passes for Obama’s policy in Syria, as the Caliph’s roaring laughter can be heard all the way to Vienna.


Pepe Escobar is the author of Globalistan: How the Globalized World is Dissolving into Liquid War (Nimble Books, 2007), Red Zone Blues: a snapshot of Baghdad during the surge (Nimble Books, 2007), and Obama does Globalistan (Nimble Books, 2009).

The School of Globalism

From the keyboard of James Howard Kunstler
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Originally Published on Clusterfuck Nation April 6, 2015

“…we may be headed into a world where capital is abundant, deflationary pressures are substantial and demand could be in short supply for quite some time.”

Lawrence Summers, former Secretary of the Treasury

Professor Summers must be reading Ben Bernanke’s new blog. Or maybe he’s writing it for walking-around money. At $250,000 a pop for making a speech, Mr. Bernanke can certainly afford to pay high-toned hacks to polish his spin-o-nomics. Raillery aside, Mr. Summers’ utterance provokes some pretty fundamental questions: what exactly is this world we’re heading into, and what exactly does that capital consist of?

It is, first, a world of unraveling globalism. So many people who should know better — members of the supposed thinking class who have suspended their thinking — swallowed Tom Friedman’s dictum that globalism was here to stay, a permanent new feature of the human condition. File that idea in the dead letter office, along with Francis Fukuyama’s The End of History. With the help of competitive central bank racketeering, desperate nations have propelled themselves from financial disorder to geopolitical turmoil and history marches on — lately to the ululations of gleeful beheaders. Friedman’s flat world was predicated on a dominant and sound American polity, and we’ll have neither in that world Mr. Summers says we’re moving into.

In fact the first condition was predicated on the second: that America would continue to dominate the global economy because its polity was sound. We have clearly blown that by rigging together a corrupt troika of banks, market swindlers, and captive eunuch officials who expanded the financial sector of the economy from 5 percent to more than 40 percent, largely by pillaging the middle class and destroying the basis of their income. The USA set the tone for 21st century magical finance, in which “wealth” was “created” by digital accounting fraud. The effects at home are visible on our landscape of suburban hyperwaste and decrepitating older towns and cities.

One might say the main effect of the 50-year-long Friedman globalism orgy was the schooling of other nations in American-style financial fraud. Surely China has now surpassed the USA, considering the structural perversities of their banking and government relations. They really don’t have to account to anybody, including themselves, and the numbers they publish must be even more fantastical than the junk statistics produced by the US BLS. Europe has been a star pupil and only a few months ago announced a Quantitative Easing (fake capital creation) program as ambitious as America’s have been. Japan, of course, is just marking time until it quietly slips away and goes medieval.

Global disintegration has advanced furthest, not surprisingly, in the fragile band of regions most strung out on the primary commodity: oil. The Middle East / North Africa / Central Asia war zone is steadily combusting, and there is no sign of resolution across the whole of it, only the promise that conflict will get worse. Saudi Arabia was the cornerstone of that district, and the senile Saudi leadership finds itself in peril as its military pretends to support splintering Yemen. The other Arabian princes of other non-Saud clans must be watching the spectacle with wonder and nausea. When Arabia blows up, that will truly be the beginning of the end.

The foregoing leads to that other original question: what is that “capital” we’re counting on? I’d propose that it doesn’t exist. It is a figment engraved on the hard drives of the world, a ghost that haunts the people still in charge of that disintegrating global economy. There is still wealth in the world, but a lot less than people such as Larry Summers say there is.

 


James Howard Kunstler is the author of many books including (non-fiction) The Geography of Nowhere, The City in Mind: Notes on the Urban Condition, Home from Nowhere, The Long Emergency, and Too Much Magic: Wishful Thinking, Technology and the Fate of the Nation. His novels include World Made By Hand, The Witch of Hebron, Maggie Darling — A Modern Romance, The Halloween Ball, an Embarrassment of Riches, and many others. He has published three novellas with Water Street Press: Manhattan Gothic, A Christmas Orphan, and The Flight of Mehetabel.

Oil Price Crash!!! Part 2

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Aired on the Doomstead Diner on December 16, 2014

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Discuss this Rant at the Podcast Table inside the Diner

Before going into the Rant, I thought it would be a good idea to review the price charts and profitability aspects as the price continues to crater here, with the Saudis now Jawboning a possible $40 Handle.  Below some charts for where we are right now as background for the Rant.

http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/12/20141212_EOD17.jpg

Here we see how vast the decoupling of Stocks and Credit is from the cratering price of Oil.  In all likelihood, both will catch up (or rather DOWN) here in short order.

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/12/fig%20133.jpg

On the international level, this chart gives you a good idea of how much Red Ink various OPEC countries are bleeding at the current price. It gets bigger obviously as the price goes further south.  The Saudis are sitting on a pile of money to try to weather the storm, but Venezuela is already broke.  The Ruskies are seeing a Run on the Ruble as well as dealing with sanctions.

http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/12/20141212_CL3.jpg

http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/11/20141107_shale.jpg

At a price in the $50 Handle range, most of the Fracking Plays are money losers.  They’ll probably pump dry what is already drilled as the costs are sunk in the ground already, but new drilling and new CapEx will not occur until prices come back up, if they ever do.  Market Cap of Energy Companies is getting hammered and many will go into Chapter 11.  Halliburton has lost half its Market Cap since July, EOG Resources about a third of theirs.

http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/12/20141212_EOD3.jpg

Bond Yields for the Energy Sector are skyrocketing, which means the Bond Prices are collapsing since Price moves inversely to Yield.  Rolling over old debt and financing money losing operations is going to become increasingly more difficult.

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/12/Barrons%20top%20tick.png

Stocks are trailing Oil in the Crash, but are likely to get a lesson in Gravity soon.

http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/12/20141212_rig.jpg

Rig Counts are already declining, a pattern likely to accelerate after January 1st.  Large Layoffs and Unemployment in the sector is likely soon.

Now, LET’S RANT!!!!


Snippet:

liquidation…The latest Jawboning from the Saudis is they are prepared to let it fall to the $40 range, but it is unclear that even a $40/bbl price will get demand to rebound here in countries now sporting 50% youth unemployment. If they start giving it away FREE, that might get it to rebound, which brings us right back to how this whole system got rolling.

In the beginning, when Oil came Spurting up out of the Ground on Jed Clampett’s farm, it cost close to nothing to extract it. John D. Rockefeller and Standard Oil provided cheap oil to leverage up all the industries that depend on consuming it, the automotive and airline industries primarily. For around 100 years from 1875 to 1975, Oil price was FLATLINED at below $1/bb, and then the first of the Oil Shocks hit with the Embargo from OPEC, and then around 2000 the price went parabolic and shot up to over $100, precipitating the crash of 2008.

The price dropped into the $30 range, and then Da Fed began its EZ money policies, providing a stream of ZIRP money for Wall Street to gamble with, which they did in spades, funding the Shale Revolution with a ton of junk bonds, now all set to go worthless. What they forgot to do here was fund the consumption end of the equation, and as a result demand has been dropping steadily, to the point now where there is a glut of oil on the market and the producers have to do a Liquidation Sale at whatever they can get for it, EVERYTHING MUST GO!

For the rest, LISTEN TO THE RANT!!!

In case you missed it, here is Oil Crash!!! Part 1

Note: For non-native speakers of English and people who prefer to read rather than listen, you can find the Full Transcript HERE on Thursday

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