... a collection of recent web articles concerning important issues and challenges we face in our world today... along with some personal 'life' thoughts and observations mixed in.
Your read these kinds of reports and wonder how are we ever going to recover from this mess.
Without some form of regulation over these kinds of highly speculative transactions, those who are continually willing to make the markets a crap shoot, will over and over keep trying to beat the odds and hit another jackpot.
And when (not if) they fail, the way they've got it set up and are manipulating the system, the government will step in and bail them out.. more money gets printed...and they stay in charge to do it all over again.
Eventually this mother of all super-ponzi schemes has to come to a catastrophic ending... all we have left to take bets on, is when (not if) that actually is going to happen.
Each day this week, silver has been hammered down at approximately 9:00 am EST. Now, we all know that this isn't atypical...the EE have been doing this for years and we did see copper sell off at roughly the same time. However, several readers have brought to my attention the little nugget below and I think it requires your serious consideration.
First things first, here's a 15-minute May silver chart to peruse. Keep in mind that today's smackdown was in the face of ongoing strength in gold and crude, so, silver acted somewhat independently.
OK now, with this chart in mind, read this. Dated last November, our friend "Wynter" wrote the following: "WB: JPM is in worse shape then we ever dared to hope 20-Nov-10 07:06 am Blythe,
This is what I am now hearing from traders on the floor. These traders are not even sure if Blythe knows the full extent of JPM's silver exposure.
When I first started to realize that JPM has shorted far more silver than they could ever hope to cover, my first question was "why would they do that?" Not only that, why do it with a commodity where you must report your positions through the COT and Bank Participation Report? After all,the whole world can see what you are doing. [my added comment: Ted Butler included!]
Now I know the answer. According to Max Keiser and now a couple of other independent sources, it seems the reasons why first Bear Stearns and now JPM are so desperate to manipulate the price of silver down is due to the fact that BS and JPM shorted billions (yes billions not millions) in ounces of silver through their derivatives.
Just like Joe Conason at AIG, silver shorting through derivatives have caused literally billions in losses not the millions that we know about publicly. That is why JPM has been so desperate to manipulate the price of silver downward so blatantly. If I am right about this, then JPM will be dead when silver hits $60 or so. Based upon the COT and BPR, if silver hits $60, JPM will lose around an additional $6 billion dollars, a large number but not nearly large enough to bring down mighty JPM.
But what is not known is that due to the way that its derivatives are written, JPM's losses are exponentional once silver breaks $36 or so. Rumors has it that JPM could be losing as much as $40 billion once silver is above $50. It has something to do with how the derivatives are written with payment tied to the price of silver.
Since JPM was a price manipulator with respectt to the price of silver, JPM assumed that any derivative payments tied to silver would be less than they would be tied to some other index like the CPI or TIPS implied inflation index. JPM's inability to hold down the price of silver relative to other measures of inflation will cause unbelievable losses due to a mismatch in their derivative structures.
In essence,JPM has bet (a huge amount)through derivatives that silver will never outperform inflation. And why not,since JPM assumed that it will always be able to manipulate the price of silver. We have now come to understand that JPM's loss exposure to silver is much greater than we have ever dared to hope. WB: In an effort to clear up some recent confusion regarding my latest posting, I will try to explain what I have recently uncovered.
JPM's current short silver position is estimated to be approximately 150 million ounces down from the recent 180 million ounces in August. The losses from these positions are easy to figure out. For every $10 rise in the price of silver, JPM will lose $1.5 billion. But what I have recently discovered is that through its derivative positions, JPM will lose about 5 times that amount ounce the price of silver is above $36. And ounce silver is above $45 dollars, JPM's losses will increase to 8 times the amount of losses in their short positions. The reason is that as the price of silver increases, certain provisions get activated which multiplies the losses.
One reader asks the question why isnt the price of JPM going down to reflect the lossesd in silver. My answer is that the price of silver is not high enough to begin to trigger losses in their derivative positions. But once silver approaches this critical level say around $36, then you should begin to see the price of JPM stock begin to reflect these losses.
In fact, traders are saying that once the price of silver surpasses the stock price of JPM, then for every dollar the price of silver go up, JPM should lose around 70 cents or so. This means that if silver hits $60, JPM will be a single digit stock.
JPM market cap is around $170 billion. If silver losses are as great as $40 billion in cash , then JPM will be insolvent. Period. From your former traders (whom you dismissed so callously)"
Look, I still have absolutely no idea if this whole "WB Group" thing is real or imagined. There are, though, a lot of coincidences and in a rigged and manipulated "market" such as silver, the old phrase about "there are no coincidences" certainly rings true.
Lastly, I had planned on rolling my April 105 crude calls into some May 110s today. However, for now, the chart gives the appearance of another, impending up move. For now, I'm sitting tight.
As I publish this, I have lasts of:
April gold $1432.20
May silver $36.09
April crude $105.21
Lets go have a fun day! TF http://tfmetalsreport.blogspot.com/2011/03/questions-continue.html
Sent with MobileRSS for iPhone
I really get satisfaction from cruising... but this is about as far away from what I find enjoyable about cruising as possible.
This is like vacationing in a gigantic floating 'Mall of America' for a week... I have no idea where the attraction is in that... personal opinion... it's really not enticing at all.
Is bigger always better?
Most folks have seen images of the ship by now, but if you have not, take a 5-minute look here:
Oasis of the Seas
• ... 1,180 feet long, 208 feet wide, and 236 ft. high above the waterline, with a draft of only 30 ft.
• ... accommodates over 5,400 guests in 2,700 staterooms, with a crew of 2,165.
• ... that's almost 8 times more passengers than the Regent 'Navigator' we'll be sailing on this August.
• ... actually accommodates over 6,296 total guests.
• ... 225,282 gross tons,...over four times the size of the Titanic.
• ... 15 passenger decks, 24 passenger elevators placed both forward and aft.
• ... art work on board is eclectic and numerous, with 9,800 pieces.
• ... took 5,800 man-years to complete.
• ... most expensive cruise ship ever built, at a cost of $230,000 per berth.
• ... upright, dwarfs the One Canada Square building at Canary Wharf and NYC's Chrysler Building.
• ... one and a half times taller than the O2 Arena... longer than four football fields.
• ... almost one-and-a-half times the length of London's Tower Bridge, which spans 800 feet.
• ... stands taller than Nelson’s Column at 240 feet high.
• ... accommodates more guests per sailing than the capacity of the Royal Albert Hall (5,544 seats).
• ... several venues: a Flow Rider for surfers, an 82 ft long Zip Line Ride, an Aqua Theater (600 seat) Pool, a Central Park (with 2,178 trees), a Boardwalk complete with Carousel, and a myriad of other attractions in its Seven Neighborhoods.
Hey...don't think with each and every trip, world craziness does not enter into the equation, everyone traveling regularly today has it in the back of their mind.
We have some folks we know visiting Jordan at the moment, and right up to the time they left, we were talking about the situation over there with them. Anyway, in the end they went because several people they knew living in the country all assured them it would be okay to visit.
It was several years ago we made the direct decision to travel as much as we can, visiting as many places in the world as possible. First of all, while we are still relatively healthy and in shape to still do pretty much anything (Antarctica ain't easy dealing with a walker)... and while the political situation and state of the world permits. In the recent past we have had several trips affected (a visit to Egypt in the late 90's, and more recently India come immediately to mind).
It's one of the driving forces to visit the Amazon next year... even a year down the road makes it a more risky proposition, who knows what will happen in that length of time.
In the future there's no doubt more and more places are going to be 'restricted' in one way or another, for one reason or another. In addition, with the huge numbers of baby boomers now retiring each day, the cabins and rooms throughout the world are getting filled even that much quicker. They can't build those 5,000+ passenger ships fast enough to meet the increased demand... as for the smaller ships, forget about it, at times we've booked cruises up to two years in advance.
And it's going to get to the point cost will increasingly matter more in the mix. Prices for everything are going to skyrocket unimaginably over time.. and those now looming energy shortages will become more of a reality... (planes require jet-fuel, solar power's not an option).
So the time's gonna come (hopefully not for a few years) when our journeys will be more local than international... until then, I keep telling Bern, stay on the lookout for a new trip, and... BOOK IT!
On Mon, Mar 7, 2011 at 8:49 PM, <@optonline.net> wrote:
Plan for your next vacation early BJ !!! LOL
Thinking About Taking A Cruise?
If you're "bored" with cruises to Alaska, the Bahama's, You're going to love this cruise!
THINKING ABOUT TAKING A CRUISE?
L u x u r y C r u i s e L i n e s
Now Accepting Reservations! Additional cruise information available below.
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Ship Name
Starting Price
Days
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Sun Splendor
$5,200.00
5
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Grand Voyage
$6,150.00
7
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$7,091.00
10
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$5,200.00
7
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Grand Voyage II
$6,300.00
7
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$5,200.00
5
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$5,200.00
7
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10
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7
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7
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We board our luxury cruise ships in Djibouti on the Gulf of Aden near the entrance to the Red Sea ,
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If you don't have your own weapons, you can rent them from our onboard Master Gunsmith.
Enjoy reloading parties every afternoon,
with skeet and marksmanship competitions every night!
But the best fun of all, of course, is...
...Pirate Target Practice!
The object of our cruise is to sail up and down the Somali Coast waiting to get hijacked by pirates!
Weapons rentals:
Weapon Selection
Price
Description
AK-47 Light Assault
$12.00
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On a budget? Rent a full-auto scope-mounted AK-47 for only $9/day
with 7.62 ball ammo at $12 per 100 rounds:
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Customer Testimonials
"Six attacks in 4 days were more than I expected. I bagged three pirates, my wife nailed two,
and my 12-year old son sank two boats with the mini-gun.
This wonderful cruise was fun for the whole family"-- Fred D., Cincinnati , OH
"Pirates 0, Passengers 32! Well worth the trip! Can't recommend it highly enough!" -- Ben L., Bethesda , MD
BUT WAIT, THERE'S MORE!Twin mounted mini-guns are available for rental
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Additional Cruise Line Services
·Need a spotter? Our professional crew members can double as spotters for only $30/hour.
(spotting scope included, but gratuities are not)
·Also included: Free complimentary night vision equipment -
and throughout the night, coffee, pastries and snacks are always available on the main deck from 7pm until 6am
·Our deluxe package comes complete with gourmet meals and all rooms offer a mini-bar
OUR SATISFACTION GUARANTEE!
We guarantee you will experience at least two hijacking attempts by pirates
or you'll receive an instant $1,000 refund upon arrival in Mombasa .
How can we make that guarantee? We operate at 5 knots just beyond 12 nautical miles off the coast of Somalia ,
thus in international waters where pirates have no rights whatever.
In fact, we make three passes through the area's most treacherous waters to ensure maximum visibility
by Somali mother ships.
We repeat this for five days, making three complete passes past the entire Somali Coast .
At night, the boat is fully lit and bottle rockets are shot every five minutes, with loud disco music
directionally beamed shore side to attract maximum attention.
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"I haven't had this much fun since flying choppers in ' Nam . Don't worry about getting shot by pirates...
they never even got close to the ship with the crap they shoot and their lousy aim...
Come on board and bag your own clutch of genuine Somali pirates!"
Wither or not you believe it will come to pass to the degree described below.. it really has to be believed that we cannot go on forever & ever in this abandonment of rationale... avoiding looking at and acting upon what we do not want to see.
If anything, be prepared and expect the worse case scenario.. in that approach there is downside, but you've done what you can... and it just might make the future somewhat less painful.
______________________________
Happy days are here again! Stock markets are strong, company profits are up, bankers are making record profits and bonuses, unemployment is declining, and inflation is non-existent. Obama and Bernanke are the dream team making the US into the Superpower it once was.
Yes, it is amazing the castles in the air that can be built with paper money and deceitful manipulation of all economic data. And Bernanke will do anything to keep King Obama happy, including flooding markets with unlimited amounts of printed money. They both know that, in their holy alliance, they are committing a cardinal sin. But clinging to power is more important than the good of the country. An economic and social disaster is imminent for the US and a major part of the world and Bernanke and Obama are praying it won’t happen during their reign.
Moral and financial decadence
A deluge of an unprecedented magnitude is both inevitable and imminent. The consequences of the economic and political mismanagement will have a devastating impact on the world for a very long time. And the consequences will touch most corners of the world in so many different areas; economic, financial, social, political and geopolitical. The adjustment that the world will undergo in the next decade or longer, will be of such colossal magnitude that life will be very different for coming generations compared to the current social, financial and moral decadence. But history always gives us lessons and the one that is coming will be necessary and eventually good for the world. But the transition and adjustment will be extremely traumatic for most of us.
We have reached a degree of decadence that in many aspects equals what happened in the Roman Empire before its fall. The family is no longer the kernel of society. More than 50% of children in the Western world grow up in a one parent home, either being born by a single mother or with divorced parents. Children are neither taught ethical or moral values nor discipline. Many children consider attending school as optional and education standards are declining precipitously. Most families do not have a meal around the dinner table even once a week. Sex and violence are common place on television and in real life. Both press and television create totally false values and ideals. Everyone must be young and beautiful often enhanced by surgical or digital means. Old people have little value and their wisdom is not benefiting the younger generations.
The Golden Calf or materialism is the ultimate value that is worshiped and no means are eschewed to attain material goals. Since most of the prosperity that has been achieved in the last 40 years is based on printed money and debt, it is totally false and unsustainable. A major part of the Western world has improved their living standard, by exchanging services and swapping houses at ever rising prices financed by printed paper and credit. The perceived wealth that is created out of this is illusory and ephemeral. We have created a world economy which is based on debt and thin air.
The Gini coefficient of income and wealth is now reaching extremes in many countries. This measures inequality between rich and poor. In the US the Gini coefficient is now at the same level as in the 1920s before the depression. In countries like the US, the rich are getting richer whilst 45 million people live below the poverty line, 43 million receive food stamps and over 700,000 are homeless. With a real unemployment rate of 22% or higher, with urban youth unemployment much higher, the US will soon experience social unrest.
But it is not only the US that will experience financial misery, famine and social unrest. This will also hit most European countries and in particular the UK, southern Europe, Eastern Europe and the Baltic States as well as African countries, the Middle East, Asia, yes in fact the whole world.
Are boom and busts inevitable?
Cycles or ebbs and flows are a natural part of both economic life and nature. And right at the point when something could be done to limit the damage, most nations seem to have the uncanny knack of selecting the political individuals who will put fuel on the fire and make the situation catastrophically worse.
Greenspan was one such individual. During his 19 years as Chairman of the Fed, he could have limited the economic and social damage that the US would suffer. Instead he took every single measure possible to ensure that there would be a catastrophe with uncontrollable consequences. But we shouldn’t just blame the incompetence of Greenspan. It was sickening to watch every sycophantic congressman and senator licking Greenspan’s boots and praising his wisdom.
Because Greenspan’s money printing and incompetent interest rate management created one of the biggest financial bubbles in world economic history. But the politicians loved this. It made the stock market boom, and house prices surge. Thus the politicians were all loved by their voters who did not understand the dire consequences that were looming.
And Bernanke is continuing the same disastrous policies of creating money out of thin air. When will they ever learn that creating money out of nothing and running astronomical deficits that never will be repaid with real money leads to the road of total ruin?
The very sad answer is they won’t and therefore they are leading the world into a hyper-inflationary depression that will have uncontrollable and cataclysmic consequences for current and future generations.
Empty stomachs are rioting.
We have for years been warned about hyperinflation leading to famine, misery and social unrest. Well, this is exactly what is happening in many parts of the world. The protests and overthrowing of regimes in Tunisia, Egypt and Libya are primarily due to a major part of the peoples of these nations having no job, no money and little food. It is their empty stomachs that are rioting. In addition they are protesting against the leaders of these countries stealing from the people.
It is virtually certain that these riots will spread to many countries in the Middle East, Africa and the developing world. This will lead to new regimes and new political orders that could either be far left or far right politically or religious extremists. But the new regimes will not be in a position to change the root of the problem which is famine and poverty. In Egypt for example there has been a quiet military coup. It is unlikely that a democratic regime will take over from the military. So the people will protest again and again. And this will be the same in most countries. Eventually the people will take the law into their own hands since no regime will be able to give them the food they need.
The hyper-inflationary deluge is imminent.
Although food and fuel inflation is rampant worldwide already, we are only seeing the very beginning. Massive oil price rises are likely to continue as a result of the geopolitical situation as well as peak-oil. The Middle East is a time bomb waiting to go off. Israel is in an extremely precarious position and the involvement or non-involvement of the US in this conflict would both have dire consequences for Israel and peace in the world. Food prices will continue to rise dramatically. Major parts of the world are living below the poverty line today and this will increase exponentially.
The lethal concoction of rising food and fuel prices is already affecting the Western world. The Continuous Commodity Index – CCI, (60% food, 17% energy and 23% metals) has almost doubled since the low in early 2009 and has gone up 42% in the last 12 months. The almost vertical rise of the CCI is one of the best indicators of hyperinflation being imminent. A catastrophe of astronomical proportions is looming. This will hit the world at a time when there is no capacity whatsoever to take any real measures that could alleviate the problems.
Most countries are already running major deficits which will increase dramatically in the next few years. The banking system is bankrupt and is only holding together due to false valuations of toxic debt and derivatives. This is done with the blessing of governments since virtually no major bank could face an honest valuation of its assets.
Unemployment and especially youth unemployment is currently a problem worldwide and it will get much worse. In 2010, the US government spent 60% more than its revenues. In order to balance the budget individual and corporate income taxes would have to double. Never before in history has the world run out of real money as well as (affordable) food and fuel simultaneously. But his is exactly what is happening now and it will get substantially worse in the next few months and years.
Financial misery, famine and high unemployment combined with governments that will not be in a position to give real help are a recipe for disaster that will lead to social unrest and revolutions not only in developing countries but also in the West. Hungry people are desperate people and desperate people do desperate deeds.
Hyperinflation Watch
The following are indisputable facts:
The US dollar is down 82% against gold since 1999
The US dollar is down 49% against the Swiss Francs since 2001
The Dow Jones is down 81% against gold since 1999
The Continuous Commodity Index is up 100% since 2009
The above facts are clear evidence of an economy that has been totally mismanaged. But more importantly most of these trends are now starting to accelerate – a clear sign that hyperinflation is just around the corner.
With years of negative net worth and negative cash flow, the US is bankrupt today. The Federal deficit is forecast to increase by at least another $ 5 trillion in the next 5-7 years. Add to this the State deficits, the Municipal and City deficits that are rising at a galloping rate and we have a country that is going to hemorrhage to death in the next few years. One wonders when the totally ineffective and clueless rating agencies are going to fathom this. Not that it will matter if they once do. One also wonders what Bernanke and his coterie are thinking. They should have above average intelligence and could not possibly have avoided seeing the facts we all see today (of course, it's been discernibly 'coming' for over a decade). But he must please his master Obama and devotion to the King goes above all reasonable common sense, or rationale. So the two of them will continue to crank up the printing press and drown their people and the world in worthless paper.
Stock Market
To believe that the current money printing liquidity boom is real and sustainable would be a very serious and expensive mistake. The temporary and illusionary pickup that we are now seeing in the economy and stock market is the normal initial phase of a hyper-inflationary economy. It must not be mistaken for a real improvement in the economy.
The normal pattern at the beginning of a hyper-inflationary period is that stock markets surge. This is the result of the increased liquidity and a flight to more inflation proof assets. This was the case in for example the Weimar Republic and Zimbabwe. The Zimbabwe stock exchange that went from 1,420 in January 2005 to 5.4 trillion in June 2008, a 3 billion per cent increase. That was of course in Zimbabwe dollars. In US dollars the stock exchange went sideways with major volatility.
So in hyper-inflationary terms stock markets could continue to rise initially thus making them a better investment than cash. However, measured against real money, the Dow has gone down 82% against gold since 1999 and 86% against silver since 2001. We are currently seeing a dead cat bounce but expect the Dow to decline a further 90%, at least, against gold in the next few years.
So even if stock market investments will initially give the illusion of protecting investors, it will be a very poor hedge against the ravages of hyperinflation in real terms.
Bond market
Beginning in January 2009, long term interest rates were bottoming. Since then the 30 year bond yield is up from 2.6% to 4.6% an 80% rise. But more importantly the 30 year is currently in the process of breaking a 17 year downtrend line which dates back to 1994. This confirms that rates will now start a major and rapid rise which is likely to reach the mid-teens or higher. Governments will attempt to keep short rates low due to weak economies but eventually the rising long rates will put strong upward pressure on the short rates. So the flight to government bonds that we have seen in the last few years will soon reverse into a massive rush for the exit. This will coincide with rapidly increasing financing requirements by the US, UK, EU and many other governments. The poisonous concoction of rising rates and rising financing needs will create a vicious circle of collapsing bond markets and unsustainably high financing cost. This will continue to drive interest rates even higher which will further increase deficits and necessitate even faster running printing presses. Add to that a collapsing currency and the hyper-inflationary picture is complete. Investors should exit bond markets entirely if they want to avoid a total destruction of their assets.
Currency Market
Hyperinflation is created by the government destroying the currency as a result of money printing to finance deficits. This leads to the cost push inflation that we are now experiencing. Add to that, shortages in commodities worldwide, thus creating the perfect hyper-inflationary scenario. The Dollar, the Pound, the Euro and many other currencies will continue to decline. They can’t all decline against each other at the same time so the market will take turns in attacking one currency at a time. But all currencies will continue to decline against gold. The dollar will soon start a very rapid fall against gold and against many currencies. Investors should exit the Dollar and also the Pound and the Euro. There is no currency better than gold or silver but for any small amounts of cash prefer the Swiss Franc, the Norwegian Krone, the Singapore dollar and the Canadian dollar.
A hyper-inflationary depression will destroy the value of money as well as most assets that were financed by the credit bubble (property, stock market). Wealth protection is now critical and urgent. The best method of protecting assets against total destruction is physical gold and silver stored outside the banking system. Thereafter, precious metals, energy and food stocks are preferred.
But it must be remembered any asset including stocks held through a bank is dependent on a sound and surviving banking system.
The real move in precious metals is still to come. Less than 1% of investors own gold. Before this economic cycle is over we are likely to see a mania in physical precious metals that will drive prices exponentially higher. Luckily for investors, this is a mania which is unlikely to end in a collapse since gold most probably will be part of a future reserve currency.
Stating the inevitable:
“There is no means of avoiding a final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.”
-Ludwig von Mises
"Civilizations in the last moments embrace a total severance from reality, a reality that becomes too bleak to be absorbed.... the greater the extent of the deterioration the less they are able to comprehend what is happening around them.... this time it will be global, there are no new lands to pillage, no new peoples to exploit."
No Good Outcomes
The political class and their mouthpieces in the corporate controlled mainstream media are desperately trying to spin this latest oil price surge as a temporary inconvenience that will not derail the phony recovery story. Brent crude has closed at $116.00 per barrel. West Texas crude closed at $104.00 per barrel. Unleaded gas has risen by 22% in the last month and 60% since September 1, 2010. This slight increase hasn’t impacted Ben Bernanke or Lloyd Blankfein, their limo drivers just charge it to their unlimited expense accounts. Joe Sixpack, driving his 15 mpg Dodge RAM pickup, is now forking over an extra $1,200.00 per year in gas expenditures, not to mention more for everything impacted by oil such as food, utilities, and anything transported to their local Wal-Mart by truck (everything). Luckily, the Federal Reserve and crooked politicians only care about their comrades in the top 1% elitist society, for whom oil is an investment, not an expense.
The “experts” speak as if they know what will happen, even though they never saw the rebellions coming in Tunisia, Egypt or Libya. They assure the masses that Libya doesn’t really have an impact on U.S. oil supply. Did these guys take Econ 101 in college?
World oil demand is 88 million barrels per day... oil supply is 88 million barrels per day. If 1 million barrels of oil supply are taken off-line, it doesn’t matter that the U.S. doesn’t get their oil from Libya. All the world needs their oil. Supplier's ship oil to the highest bidder. Presto!!! – $116 a barrel oil.
Let’s assess the probability of things getting better in the near, medium, long term or ever term. A small number of countries account for 29% of the daily world oil supply.... does it strike you as a list of stable countries with happy populations of employed young men? Egypt, Libya, Yemen, Syria and Iran have already experienced revolution or are on the verge of revolution. Algeria is dead man walking... the Saudi royal family is trying to buy off the masses to stay in power.
The revolution genie is out of the bottle, and it can’t be put back. Mix 40% unemployment, with millions of young men, no hope, and some Muslim fundamentalism and you’ve got yourself an out of control situation. No amount of public relations spin will create a positive outcome for the United States.
The existing world order of despots, kings, and military juntas was just fine for Washington DC. They poured hundreds of billions of “aid”, tanks, helicopters and missiles to these “freedom fighter” despots who diverted the billions to their Swiss bank accounts and fell into line with U.S. policy. No matter who takes power when these revolutions succeed in toppling our puppets, the new regimes will not be friendlier toward America... and they still have the oil!
One look at world oil reserves paints a picture of great woe for the United States. Countries in the tinderbox of the Middle East and Africa control 65% of the world’s oil reserves. Saudi Arabia controls 20%, Iran and Iraq control 11% each, Venezuela controls 7%, Russia 5%, and Libya 3%. So, countries that can barely stomach our existence, hate us, or just despise us, control 57% of the world’s remaining oil. Sure, this sounds like a recipe for lower oil prices in the future... doesn't it!!
The two countries on our border are the only dependable suppliers for the U.S. Canada controls 13% of the world oil reserves, mostly in its tar sands... Mexico controls just over 1% of the world’s oil reserves, but supplies 13% of the U.S. daily oil supply.
Drill, Baby, Drill
Now for a reality check on the “Drill Baby Drill” propagandists like Larry Kudlow and the other dishonest Republican shills. The United States controls a full 1.58% of the remaining oil reserves in the world. We have 21.3 billion barrels of reserves versus 264 billion barrels in Saudi Arabia. We are currently producing 9 million barrels per day. At that production rate, the U.S. will deplete its proven reserves in the next 6 to 10 years. New discoveries will not be able to keep up with depletion of existing wells.
The good news just keeps coming... Mexico’s oil production has been dependent upon one giant oil field since 1976... the Cantarell oil field produced 2.1 million barrels per day in 2003 at its peak... it is currently producing 464,000 barrels per day. Peak oil has arrived in Mexico... by 2015, the country that currently supplies 13% of our daily oil supply will become a net importer of oil.
Based upon the monthly import data from the IEA, it would appear, to paraphrase Chief Brody in Jaws, we’re going to need more corn. As the Obama administration operates in denial of these simple facts, they will continue to push ethanol and Chevy Volts to save us from dirty oil. We are already diverting 40% of our corn crop to the ethanol boondoggle. Of course, this has nothing to do with the 98% increase in corn prices in the last year... maybe tax credits for solar panels on SUVs and rubber band propeller cars will save the day.
We know for a fact that Mexico’s 1.2 million barrels per day will evaporate in the next few years. But, at least we have that solid dependable 2.7 million barrels per day (30% of our daily imports) from those stable bastions of democracy Nigeria, Venezuela, Iraq, Angola, and Algeria... makes you want to go out and buy a Hummer.
The storyline being sold to the American people is that there is no need to worry. Saudi Arabia will step to the plate and make up for any shortfalls throughout the world. Just one problem. Saudi Arabia is lying about their reserves and their ability to increase production. They fit in very well in Congress and on Wall Street.
Lies, Obfuscation, Misinformation & Denial
The late Matt Simmons made the strong case In his book Twilight in the Desert that Saudi Arabia has been lying about their reserves for years. Documents released by Wikileaks give support to this contention. Cables from the U.S. Embassy in Riyadh , released by WikiLeaks, urge Washington to take seriously a warning from senior Saudi government oil executive Sadad al-Husseini, a geologist and former head of exploration at the Saudi oil monopoly Aramco, that the kingdom’s crude oil reserves may have been overstated by as much as 300 billion barrels – nearly 40%.
The UK Guardian reported: According to the cables, which date between 2007-09, Husseini said Saudi Arabia might reach an output of 12 million barrels a day in 10 years but before then – possibly as early as 2012 – global oil production would have hit its highest point... this crunch point is known as “peak oil”.
It also reported major project delays and accidents as “evidence that the Saudi Aramco is having to run harder to stay in place – to replace the decline in existing production.” While fears of premature “peak oil” and Saudi production problems had been expressed before, no US official has come close to saying this in public.
The overstatement of reserves by Saudi Arabia and most of the OPEC countries should be abundantly clear to anyone with a smattering of critical thinking skills (eliminates about everyone on CNBC or Fox News). Essentially, the self reported, unaudited declared oil reserves from OPEC members are a fraud. Production quotas for each member of OPEC are dependent upon their oil reserve amount. When this was instituted in the early 1980s, shockingly OPEC countries miraculously added nearly 300 billion barrels to proven reserves in a six year period with NO NEW DISCOVERIES of oil.
Dr. Ali Samsam Bakhtiari, a former senior expert of the National Iranian Oil Company, has estimated Iran, Iraq, Kuwait, Saudi Arabia and the United Arab Emirates have overstated reserves by a combined 320–390 billion barrels and has said, “As for Iran, the usually accepted official 132 billion barrels is almost one hundred billion over any realistic estimate.”
Using some common sense, someone might ask, “How could Saudi Arabia’s oil reserves remain above 260 million for the last 22 years despite pumping over 60 billion barrels during this time frame, and not making any major new discoveries?”
The monster Saudi oil fields are over 40 years old. They will deplete... oil is finite. Saudi Arabia’s production peaked in 2005 and it has been unable to reach that level since.
The spin sheiks in Riyadh and spin doctors in Washington DC cannot spin oil out of sand. Peak oil is about to choke the American way of life.
The denial, accusations and misinformation have already begun. Congressional hearings will be called to blame Big Oil and the dreaded speculators. Americans always need a bogeyman to blame for their mindless decisions and willingness to be led to slaughter by corrupt politicians. Big oil companies do benefit from higher oil prices. Big oil companies spend millions buying off Congressmen. Big oil companies cut corners, ignore safety procedures, and seek profits by any means possible. But, they do not control the oil. Nations control the oil. Many of these nations are led by lying, corrupt, evil despots. Blustering moronic Congressmen going after oil executives and phantom speculators are just a sideshow. It will divert the non-thinking masses from the truth our leaders haven’t allowed a refinery or nuclear power plant to be built since 1977. These leaders have promoted and subsidized corn based ethanol that requires more energy to produce than it creates and has driven the cost of our food sky high. We are more dependent on foreign oil than any time in our history.
The real speculators are the Americans who clog highways every morning driving monster SUVs, turbocharged sports cars, gas guzzling minivans, and pickup trucks... the ignorance of the average American car buyer knows no bounds. The recent bounce back in auto sales was led by SUVs and pickups... green clean cars are nothing but hype and BS. GM expects to sell about 10,000 Volts this year, and Nissan expects to sell about 25,000 Leafs in the United States, a piss in the ocean compared with the millions of sport wagons and SUVs purchased by Americans annually. And Americans are already dazed and confused by the surge in gas prices to almost $4.00 per gallon.
When oil prices spiked to $147 barrel in 2008, Americans were spending $467 billion per year for fuel. By early 2009, the collapse in energy prices due to the worldwide recession reduced the annual expenditure to $265 billion, freeing up over $200 billion for consumers to spend on other items, pay down debt, or save. Expenditures for fuel had already surged back to $400 billion before the recent spike in oil prices.
Next stop $500 billion. That should do wonders for the faux economic recovery that has been touted by Obama and the MSM for the last year. The years of denial, lies, indecision, bad decisions, and inertia have left the country vulnerable and at the mercy of countries in far off lands that despise our way of life.
There are no good outcomes... only bad... really bad... and catastrophic.... take your pick.
Could gas prices drop below $3.00 per gallon if the world sinks back into recession? Yes... but it would only be very momentary. The easy to access supply is dwindling... the medium and long term direction of gas at the pump is up. There is nothing that can be done in the next five years to prevent significantly higher oil prices. A full court press of realistic ideas like converting our truck fleets to natural gas, a major effort to build nuclear power plants, more drilling, greater use of wind, geothermal, and solar would take a decade or more to have an impact... and there is no consensus or resolve to undertake such an effort. Therefore, Americans will suffer the consequences.
It is without doubt we will someday be at the price level for gas the UK just reached... $8.00 a gallon... a $150+ fill-up, once unimaginable is now right on our horizon.
When you read this piece... go slowly... take your time to fully comprehend what's being said.
The most important paragraph is short, and to the point. It starts off by taking about tax revenue losses and how our deficit is now too large to be financed by the surpluses of other major powers in the world. It now requires the Fed to make massive purchases of Treasuries and other debt...and the continuation of these purchases threatens the dollar's value, and ultimately is role as the world's reserve currency.
Should you not know what that means 'do the research'... it should scare the ever loving crap out of you! For if the dollar is perceived as losing that role, the flight from dollars will prevent the US government from financing itself.
You don't even want to have a nightmare about that happening.
Everything now happening is just the first tremor of an oilquake that will shake our world to its core. The old oil order is dying, and with its demise we will see the end of cheap and readily accessible petroleum... forever.
It’s been the Middle East that has quenched the world’s thirst for oil since World War II. More than any other area, the Middle East has funneled its production to satisfy the energy cravings of oil-importing powers like the United States, China, Japan, and the European Union (EU).... 20 million barrels funneled into export markets every day... (approximately 43% of the world’s crude petroleum supply by 2035).
The world economy requires an increasing supply of affordable petroleum... the Middle East alone can provide that supply. Don’t count on any new order to deliver enough cheap oil to preserve the Petroleum Age. All powers watching the uprisings, rebellions, and protests blazing through the Middle East should be wary indeed: whatever their political or religious desires, local populations always turn out to harbor a fierce, passionate hostility to foreign domination and, in a crunch, will choose independence and the possibility of freedom over increased oil output.
The old Middle Eastern oil order cannot be reconstructed.... the result is sure to be a long-term decline in the future availability of exportable petroleum. Since no other area is capable of replacing the Middle East as the world’s premier oil exporter, the oil economy will shrivel, and with it, the global economy as a whole. The recent rise in the price of oil just a faint and early tremor heralding the oilquake to come. Oil won’t disappear from international markets, but in the coming decades it will never reach the volumes needed to satisfy projected world demand, which means that, sooner rather than later, scarcity will become the dominant market condition.
Only the rapid development of alternative sources of energy, and a dramatic reduction in oil consumption might spare the world the most severe economic repercussions.
Over the last 50 years, the richest Americans have shifted the burden of the federal individual income tax off themselves and onto everybody else. From WWII to the 60s, highest income earners paid a tax rate over 90% for many years. Today, the top earners pay a rate of only 35%. Take into account the many loopholes the rich can use far more than the poor, the gap narrows even more.
Buffett is alone among the billionaires in stating the present tax structure is unfair and harmful.
Lower taxes the rich got for themselves are one reason why they have become so much richer over the last half century.
Reduced taxes on the wealthy leave them with more money to influence politicians and politics. Their influence wins them further tax reductions, which gives them still more money to put to political use. When the loss of tax revenue from the rich worsens already strained government budgets, the rich press politicians to cut public services and government jobs and not even debate a return to the higher taxes that they used to pay.
Cutting the taxes on the rich no way guarantees social benefits from what they may choose to do with their money. Indeed, their choices can worsen economic conditions for the mass of people.
America is governed by an owning class that considers government intervention to maintain an equitable distribution of wealth, anti-American, socialist, and a threat to individual liberty and national prosperity.
In the 1970s, an alliance of elite interests began preparing to roll back the measures that created the American middle class and launched a full-scale class war during the 1980s under the banner of the Reagan revolution.Corporate interests provided the money and controlled the real agenda.
The Reagan administration rolled back taxes on the wealthiest Americans, ended robust antitrust enforcement, and launched a stunningly successful campaign to make finance the U.S. economy’s dominant and most profitable sector. This process continued seamlessly through subsequent Republican and Democratic administrations.
This effort to achieve an upward redistribution of wealth was so successful that from 1980 to 2005, the highest-earning 1 percent of the U.S. population increased its share of taxable income from 9 percent to 19 percent.
In 2007, the top 400 U.S. tax returns reported an average annual income of $345 million—compared to an average of $12.7 million for the top 427 returns in 1955.
The richest 2 percent of world’s people now own 51 percent of all the world’s assets.... the poorest 50 percent own only 1 percent.
We are deeply embroiled in a class war that poses a mortal threat to the middle class and to democracy.
"... the degree of institutionalized greed has reached astonishing proportions today, and a once fat context of American world dominance, unending resource availability, and relatively benign environmental consequences for plundering has ended.
Our current practices are anything but sustainable, but nobody is talking about it."
This new-found emery source comes at ENORMOUS RISK!!!
The landscape of our country is dotted with hundreds of thousands of new gas wells and drilling rigs...
...using the relatively new drilling method — known as hydrofracking — which carries with it significant environmental and public health risks.
Wells can produce over a million gallons of waste-water often laced with highly corrosive salts, carcinogens like benzene and radioactive elements like radium, all of which occur naturally thousands of feet underground... dangers to the environment and health are far greater than previously understood.
Shifting away from coal and toward natural gas, we’re producing massive amounts of toxic waste-water with salts and naturally occurring radioactive materials, and it’s not clear we have a plan for properly handling this waste.
Pennsylvania has allowed drillers to discharge much of their waste through sewage treatment plants into rivers. Plants not capable of adequately treating such hazaradous waste. Most of this water was sent to treatment plants not equipped to remove many of the toxic materials in drilling waste. Sewage treatment plants in three states accepted gas industry waste-water and discharged waste that was only partly treated into rivers, lakes and streams.
“There are business pressures” on companies to “cut corners,” John Hanger, who stepped down as secretary of the Pennsylvania Department of Environmental Protection in January, has said. “It’s cheaper to dump waste-water than to treat it.” And any fines imposed as miniscule compared to the profits.. (just another business expense).
Industry officials say dangerous waste is handled in compliance with state and federal laws, and that hydrofracking is well regulated by the states and that it has been used safely for decades.
With the track record all these 'public agencies' have in fact protecting the public (being on the side of corporate giants).. why should they now all of a sudden be believed.
Nearly half a million active natural-gas wells in the US in 2009, double the number from 1990... and 90 percent have used hydrofracking... air pollution caused by natural-gas drilling is a growing threat.
Anyone with an average amount of savvy can determine this 'process' is contaminating the water supply and the atmosphere. There's little doubt, it is doing irreparable harm, and we don't have a clue to just what extent we are 'doing ourselves in.'
We had been having our water tested very few years by an independent lab... think we'll be doing it allot more frequently from now on.
Note:
Shale gas is going the exact same way as coal...
"We are now seeing an unprecedented trend of increasing plant and animal diseases and disorders."
"This pathogen may be instrumental to understanding and solving this problem. It deserves immediate attention with significant resources to avoid a general collapse of our critical agricultural infrastructure."
We have unleashed very dangerous technology.. and the motivation, no matter what we are being told... is for increased profits of very large and powerful corporations...
