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ECONOMICS AND ESOTERICA FOR A NEW PARADIGM

Posts Tagged ‘Saudi Arabia

U.S. Corp and the impending IMF merger

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by Robert Denner
of Daily Economic Update
Posted December 1, 2011

BEEN LOTS OF TALK AROUND LATELY REGARDING THE COLLAPSE OF THE U.S. DOLLAR AND WHAT THAT WOULD MEAN FOR THE UNITED STATES OF AMERICA AND THE WORLD. There has also been a lot of talk about the Federal Reserve Bank of the United States of America and how unhappy the people of the US are getting with this largely unknown organization.

These two forces are converging together in what could be a very serious and detrimental way as it relates to the average US citizen. This article will rely heavily on flawed analogies to help the lay person understand the inner workings of both the IMF and the Federal Reserve Bank. This is not to be taken as an academic piece and I would ask that it not be judged as such. This is meant to help those people that have recently woken up to the reality that their country has been hi-jacked and those that are desperate to get up to speed as quickly as possible. So let’s jump right into the thick of it shall we? First we need to start with what I hope are simple lessons so that you can take what I am about to teach you and apply it to the real world.

There is one thing that bankers and computer people love to do and that is to use big scary acronyms to scare off the simple folk. So here is your first lesson.

IMF and the SDR

So right off the bat we are using acronyms that mean absolutely NOTHING to the lay person and yet that is an actual sentence believe it or not… IMF stands for the International Monetary Fund. The SDR is short for Special Drawing Rights and is the currency of the IMF. The International Monetary Fund is a private bank that is used to help sovereign nations engage in international commerce. Just like if you owned a company and you used bank A, and your supplier used Bank B, the IMF would be the bank that both banks A and B used to transfer payments and credits back and forth to each other. To Company A and B (using Bank A and B) it would be seamless.

But the IMF does a whole lot more for the global economy. They are the creditor of last resort for a lot of countries. For if you want to engage in international commerce in the free world (meaning the world now) you must be a part of the IMF system. Should a country that is part of this system become over leveraged because of mismanagement and debt accumulation, the IMF stands ready to come to the rescue. To understand how this relationship has worked in the past (and the present); I MUST go into some history. I will keep it brief I promise.

To understand how the global monetary/commercial world works you have to go back to the end of World War II. Following the war the United States was alone as a major industrial power. The rest of the industrial countries were in shambles. The United States was also nearly alone as a producer of oil. It is this later point that needs to be highlighted.

The United States used its vast oil reserves and coupled it with a highly trained industrial labor force and put it to work in its vast expanse of industrial capacity to re-build the rest of the world. It is this fact that is at the very center of our current monetary system some 60 years later. So I will start with my first analogy…

The US Corp could be seen as a huge company like General Motors. Following WWII US Corp was the only company left with the capacity to make things and it had the working capital and energy to do what it wanted. US Corp went out into the world and started to acquire other businesses. First was Japan Corp which US Corp had beaten into a pulp during the war. US Corp decided that it was in its own best interest to build Japan Corp back up but it needed to make sure that it never again could threaten US Corp the way it did in WWII.  Japan Corp used its own currency called the YEN and US Corp obviously used the Dollar. So to make this all work, US Corp had to make sure that the workers at Japan Corp didn’t feel like the last of their country was being taken from them. To keep them vested in the viability of their own country it was very important to let them keep their own currency and their own political structure, albeit greatly modified under the surface. We allowed Japan Corp to keep their figurehead CEO (the Emperor) and we installed a new board of directors (Democratic institutions). We linked the Bank of Japan to US Corp’s bank the Federal Reserve Bank through a new institution called the International Monetary Fund and the World Bank.

If we were to compare this to General Motors this would be like GM buying another company and bringing it under the umbrella of the GM brand. So in this case Japan is like Pontiac and they are given free rein to run their subsidiary the way they see fit, SO LONG as they abide by the parent companies rules.

This setup worked wonderfully and within a decade Japan Corp was back on its feet and was supplying cheap labor and products for US Corp and with every single barrel of oil Japan Corp bought on the international market it further linked them with our monetary system.  To keep the Japanese citizens from feeling that it was the US Corp in charge of everything we came up with the International Monetary Fund and the World Bank. Of course these institutions were funded initially by the United States and Great Britain and as such they were just pseudo US institutions. But it worked and the Japanese subsidiary of US Corp gladly bought oil and products from the United States in its own currency (the Yen) but it was linked via the IMF to the US Dollar. For you see US Corp linked everything that the industrial world needed to the US Dollar. All gold/oil/silver/food/etc were priced first in US Dollars and depending upon the relative “strength” of your currency to the US Dollar, this would dictate how much of your currency it would take to purchase a barrel of oil or an ounce of gold. This gave US Corp a huge advantage in the world as we produced almost everything anyways. We had most of the world’s oil supply and a very large portion of the food supply. We were the largest producer of the big complex things the world needed to rebuild. We allowed the smaller subsidiaries to produce the little stuff we needed or wanted. Japan Corp was great at the later, supplying us with small radios and other cool electronic gadgets.

US Corp built a company with dozens and dozens of subsidiaries, each one of them bringing something to the table either large or small. And as the world re-built, other countries wanted to get in on the good times and they voluntarily sold themselves to US Corp. Other countries were very reluctant to join our big happy company. Those countries fell into two groups. Either they were affiliated with Russia Corp or they wanted to stay neutral. But in a world that was moving fast towards globalization it became apparent that each country would have to choose a side lest they be shut out of the global market. For remember that the only way to gain access to US Corp’s vast array of markets and supplies is to be a part of the IMF/World Bank. It was the only way to convert your currency to other currencies (like the US Dollar to buy OIL!!).

I will end this history lesson there as I could get sucked in for hours explaining how US Corp and Russia Corp went to economic(and sometimes real) war with each other and how Russia Corp tried to have it both ways by linking themselves partially to the IMF to gain access to US Corps vast supplies and labor.

I will leave that to YOU to go out and study on your own as it is a story to rival any fictional book you have ever read. The important thing to take away here is that the International Monetary Fund and the World Bank are institutions that were created by the United States and Great Britain. It is a global system that allows countries using different currencies to exchange their goods and services with each other almost seamlessly. Remember also that the system was setup INITIALLY to allow US Corp to control the world’s most important supplies. Things like FOOD, OIL, COMMODITIES (gold,silver,etc) and the rest. At the time this system was created it was the United States that was supplying the lion’s share of these items. But as the decades have come and gone, these items have increasingly come from other parts of the world.  And a good portion of these countries are ones that were FORCED into our system either out of necessity or by direct manipulation of their country by forces outside their borders(meaning the US and the IMF).

CONFESSIONS OF AN ECONOMIC HITMAN

This next part of our story is centered on how the US has maintained its spot at the top of the economic order even in the face of massive budget deficits and seemingly unending debt loads. The title of this section is called Confessions of an Economic Hit Man, as I give a nod to a book of the same name written by a man named John Perkins. Mr. Perkins is a trained economists and his specialty was international finance. His job was to go out into the world and sell foreign leaders on US Corp and to convince them to get on board with our system. Or more importantly, it was his job to make sure that they were forever caught up in our system and that they did not attempt to leave our company.

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Our economic future – From best to worst case

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by Doug Casey of Casey Research
Posted originally June 7, 2011

THERE IS A GREAT DEAL OF UNCERTAINTY ABOUT WHAT THE FUTURE OF THE U.S. ECONOMY MAY LOOK LIKE – so I decided to take a stab at what’s likely to happen over the next 20 years. That’s enough time for a child to grow up and mature, and it’s long enough for major trends to develop and make themselves felt.

I’ll confine myself to areas that are, as the benighted Rumsfeld might have observed, “known unknowns.” I don’t want to deal with possibilities of the deus ex machina sort. So we’ll rule out natural events like a super-volcano eruption, an asteroid strike, a new ice age, global warming, and the like. Although all these things absolutely will occur sometime in the future, the timing is very uncertain – at least from the perspective of one human lifespan. It’s pointless dealing with geological time and astronomical probability here. And, more important, there’s absolutely nothing we can do about such things.

So let’s limit ourselves to the possibilities presented by human action. They’re plenty weird and scary, and unpredictable enough.

THE MARKET FOR PROGNOSTICATION

People are all ears for predictions, whether from psychics or from “experts,” despite the repeated experience that they’re almost always worthless, often misleading and more than rarely the exact opposite of what happens.

Most often, the predictors go afoul by underrating human ingenuity or extrapolating current trends too far. Let me give you a rundown of the state of things during the last century, at 20-year intervals. If you didn’t know it’s what actually happened, you’d find it hard to believe.

1911— The entire world is at peace. Stability, freedom and prosperity prevail almost everywhere. Almost every country in Europe is ruled by a king or queen. Western civilization has spread to nearly every corner of the world and is received with appreciation. Stunning breakthroughs are being made in science and technology. There’s no sign of a gigantic world war about to come out of nowhere to rip apart the political and cultural map of Europe and bankrupt everybody. Who imagined that a dictatorial communist regime would arise in Russia?

1931— It’s early in a disastrous worldwide depression. Attention is on economic troubles, not on the virtually unthought-of possibility that in less than 10 years a new world war would be under way against Nazism and a resurgent Germany.

1951— Except for Vietnam, all that remains of the colonies the West had established in the 19th century are quiescent. Nobody guessed almost all would either be independent, or on their way, in 10 years. China has joined Russia – and many other countries – as totally collectivist. Who imagined that Germany and Japan, although literally leveled, would be perhaps the best investments of the century? Who guessed that the U.S. was already at its peak relative to the rest of the world?

1971— Communist and overtly socialist countries all over the world seem to be in ascendance, soon to be buoyed further by a decade of rising commodity prices. The U.S. and the West are entering a deep malaise. Little significance is attached to rumblings from the Islamic world.

1991— Communism has collapsed as an ideology, the USSR has disappeared, and China has radically reformed. Islam is increasingly in the news.

2011—The world financial/economic crisis is four years old, but things are still holding together. Islamic terrorism and collapse of old regimes in the Arab world dominate the news. China is viewed as the world’s new powerhouse.

BAD AND WORSE

Regrettably, I’m not much of a linguist. But I do pick up interesting semantic trivia. In Spanish they don’t say “in the future,” as we do in English, which implies a definite outcome. Instead they say “en un futuro” – in a future – which implies many possible outcomes. It’s a better way of assessing reality, I think.
Here are three 20-year futures to consider. There are, obviously, many, many more – but I think these encompass the three most realistic broad possibilities.

• BEST CASE – FACTS GET FACED

Realizing what a disaster the complete destruction of their currencies would be, most governments decide to endure the pain of allowing interest rates to rise and limiting increases in the money supply. Poorly run corporations and banks are left to fail. Talk of abolishing the Federal Reserve, and using a commodity for money, becomes serious and widespread.

Shaken, the U.S. ends its profligate ways, in part because it lacks the means to continue, and in part because everyone but collectivist ideologues has actually learned something from the brutal ‘10s and ‘20s.

Amidst massive protests, the government closes much of its counterproductive apparatus, eliminates many taxes, and lets 30% of its employees go. It also, albeit reluctantly, liberalizes its regulation of the economy because it has become impossible to deny that the U.S. has been falling behind in all areas.

Although there is a resurgence of libertarian thought – reminiscent of the Reagan-Thatcher era – simple practicality is mainly responsible for forcing the government’s hand. For one thing, it can’t afford the bureaucracy needed to enforce detailed interference. For another, entrepreneurs are increasingly just doing what they please, partly from necessity and partly from a growing sense of righteousness. Interest rates go to 25%, to compensate for high levels of inflation. That’s high enough to make it worthwhile for people to save, and the capital base starts growing. The stock market has collapsed to its lowest level in living experience (in real terms), but the values available encourage people to become investors. Business is restructured on a sound, debt-free basis, with little speculation.

The U.S. radically cuts its military spending and pulls almost all troops out of their foreign bases and wars. The War on Drugs comes to an end, and the crime rate in both the U.S. and Mexico plummets.

The government solves most of its overhanging financial problems with a seriously devalued – but not hyperinflated – dollar. The Social Security deficit is eliminated by abstaining from benefit increases and by inflating away much of what had been promised before. Most Americans suffer a severe drop in their standard of living, as they’re forced into new patterns of production and consumption. A generation of college students find that their degrees in sociology, political science, economics, English lit, Black studies, gender studies and underwater basket weaving are of no real value.

When it’s all over, the tough times that started in ’07 prove to have been no more than a cyclical bump in the road, like all the other recessions since WW2, just much bigger.

A rough and memorable ride, but it ends with a return to prosperity.

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Don Coxe on everything from the markets rolling over, persistent food Inflation, the coming US Sovereign debt crunch

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by Don Coxe
Posted Zero Hedge
on June 5, 2011

Don Coxe’s (BMO Capital Markets) observations on sovereign risk moving from east to west, state finances, the ongoing correction in financial stocks which portends nothing good for the equity investors, the ongoing violence in MENA, why this inflationary spike in food may last far longer than previous ones, and naturally, some very spot on thoughts on gold, which conclude with: “The only gold bubble likely to burst is the bubbling ridicule of gold.”

Sovereign Risk Moves West

THE EUROZONE’S PROBLEMS ARE NOT THE ONLY existential challenge to the Capital Asset Pricing Model: the bonds at the very base of the risk-free classification in the Model – Treasurys – have come under critical concern since it began to appear that the record-breaking US fiscal deficits won’t be seriously addressed as long as investors can be found somewhere in the world prepared to buy Treasurys. Lots and lots and lots and lots of Treasurys.

When Obama’s State of the Union speech included no budget proposals apart from the hoary pledge to control costs and waste, and when the Obama budget that followed included no provisions for dealing with entitlement programs—and included higher pay increases for government employees than some analysts had expected, bond managers globally began voicing concern—and selling the dollar.

Fortunately, there was a buyer of first and last resort—QE2, as traditional buyers were gagging. China reduced its Treasury purchases, Bill Gross announced he was not just out of Treasurys—he was short—and then S&P announced that, if Washington didn’t do something soon about its multi-trillion-dollar deficits, the US would lose its AAA rating.

In one sense, a downgrade from S&P should be no problem for the USA: what credibility can one assign to such ratings? S&P and other ratings agencies happily assigned Treasury-equivalent ratings to more than a trillion dollars in putrescent derivatives issues masquerading as desirable mortgages. That the raters remain in business at all is a demonstration of Mr. Bumble’s expostulation, “The law is a ass!” Friendly judges have dismissed lawsuits against the rating agencies—who were paid far more than their services were worth for saying that the mortgage products they were examining were worth far more than they were worth.

The judges accepted the ratings agencies’ arguments that penalizing them for exercising their opinions would unconstitutionally penalize their right to free speech. It turns out that free speech that doesn’t come for free, but for fat fees, is as worthy of Constitutional protection as—we were going to say quoting the Bible in public, but that might get an American into real legal trouble these days. As a colleague remarked, “If a doctor sent you for an MRI, and it revealed four tumors, and he didn’t tell you, you or your heirs could successfully sue him. What’s the difference?”

So, according to a series of court decisions, demonstrating, on majestic scale, something between outright sloppiness and outright venality—that was a major contributor to the worst fi financial crash since the Depression—is protected behavior. Those who relied on those fee-for-service appraisals and then lost hundreds of billions go uncompensated. The investment banks who peddled the putrid products with the AAA ratings haven’t been forced to recompense their clients, the Congressmen who used their full power of office to force banks to make loans to borrowers who couldn’t service the debts haven’t been voted out of offi ce, and now the rating agencies have been given a pass by the courts.

So nobody—not bankers, not politicians, not raters—is legally to blame for the disaster which has already added more than $2.5 trillion to the national debtIf no Americans are to blame for a financially-caused global recession that began in the US, why should overseas investors trust the US to remain the world’s best credit?

We believe it highly probable that the US’s fiscal problems will not be seriously addressed for at least two years, and that Obama will be resoundingly re-elected in a campaign demonizing Republican budget proposals. All polls show that most Americans believe the deficits can be eliminated without any cuts in Social Security or Medicare.

We would expect that, in a year or less, long Treasurys will trade at higher yields than many high-grade corporate credits. In other words, we believe the Capital Asset Pricing Model is being driven into a ditch by reckless governments on both sides of the Atlantic, and that means endogenous risk within pension funds could be much higher than trustees realize.

Some thoughts on Gold

There is a new torrent of warnings of a “gold bubble”. We have been hearing that story from concerned clients, partly in response to George Soros’s highly-publicized liquidation of his holdings of the gold ETF: GLD. Another factor has been the debate about Barrick’s move into copper, which is being partially financed by a large bond issue. Despite Peter Munk’s passionate and articulate defense of that strategy at Barrick’s annual meeting, many observers seem to wonder whether this is a warning sign from the long-standing pre-eminent gold miner that gold’s future is problematic.

The financial press has been including many sneering observations that gold is a useless speculation on infl ation that is unlikely to occur. Why own an inflation hedge that pays no income? We dissent from that tiresome scorn: those trained in Keynesian economics about the “barbarous relic” never bother to reflect that Keynes expressed almost childlike faith that central banks, acting pursuant to the Bretton Woods agreement of which he was a major architect, would always exercise restraint in monetary policies that would make gold passé.  The Seventies proved him horribly, hopelessly wrong. But the Eighties and Nineties made it look as if he would ultimately be proved right.

However, the history of major monetary policies since then—and particularly since 2007—makes the case for gold appears as cogent as it was in the Seventies. This time, there’s no chance the Fed will drive interest rates to double-digit levels to fi ght infl ation and protect the dollar. It may be that, after years of getting by on Financial Heroin, the economy lacks the energy and élan vital to survive even normal interest rates—let alone Volcker rates.

As for the most basic argument—that gold is not an investment, because it pays no income—that seeming tautology is, at root, inherently false. Gold has always been an alternative currency. It is resuming that role as central banks switch from the sell to the buy side. A unit of paper currency pays no income. It can be exchanged for bonds, deposits or stocks that pay income, but a holder of a million euros or dollars in a safe deposit box earns no income on the hoard—just as a holder of a million dollars’ worth of gold earns no interest.

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Morning Update/Market Thread March 14 – OMG Edition…

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by Nathan A. Martin
Originally posted Monday, March 14, 2011

Good Morning,
Which disaster should we talk about first, the earthquake, the tsunami, our markets, or our economy?

Let’s start with the obvious stuff. To me the reaction in our futures markets is simply too muted to match reality. It is quite obvious to me that our markets are complete nonsense, taken over by computers fueled by money that’s simply made on other computers. None of it is real, the market I see more closely resembles a marketing tool in the hands of the “Fed.”

From my perspective, “investing” in THEIR markets at this juncture is as riskless as a stroll through the Fukushima Reactor #3 parking lot… you know, the one with the plutonium fuel.

The U.S. Navy has detected radiation up to 100 miles away, and they are repositioning their ships to avoid the fallout. Seventeen sailors who participated in rescue operations have tested positive for nuclear contamination.

The effects of the earthquake and tsunami are huge, both in terms of life and money. But the effects of the damage done to the nuclear energy industry will be felt for decades to come. America has not built a nuclear power plant since after the Three Mile Island accident – the last reactor was completed in 1974. And yet, the United States still gets nearly 20% of its electricity from nuclear plants. What will be the future with these events? I see this as further pressuring organic based fuels, although the initial reaction has the oil markets lower. Again, the markets are not real, so I would not pass judgment on any short term move.

And as I predicted, these events are equating to even more money printing as the Japanese central bankers jumped right in to provide 15 Trillion Yen stimulus and have said that they will DOUBLE the amount of debt they are buying up (which equals more printing). The numbers in Japan are momentous and getting larger by the day.

Our own “FED” meets today in their regular FOMC meeting and will make their indebt you further announcement tomorrow. I think these events in Japan equal even more market manipulation and more money printing here and around the rest of the debt saturated globe. They can’t stop, and the numbers will only get bigger. These disasters then, are a triggering/ accelerating event.

And what I’m seeing of the natural world is that we are not living in an era that’s as calm as the recent past for the human experience. We have to not be afraid to connect the dots: large increase in solar activity, large increase in volcanic activity, bigger and stronger storms in a more energized atmosphere, strange and unexplained animal deaths/behaviors, large increase in earthquake activity with stronger earthquakes and more damaging results.

Take the Japanese reactors for example, they were designed 40 years ago and benchmarked the largest earthquakes in recorded history up to then – and then they added a safety margin and built them to 7.9 earthquake standards. Boom, a 9.0 (revised up from 8.9) comes along. And this follows on the heals of TWO devastating earthquakes in New Zealand, one in Haiti, one in Peru, and not too long ago one of the largest ever recorded, a 9.2 that struck Indonesia.

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A Middle East warning: American-style democracy isn’t the answer

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by  Ron Holland
Originally posted March 12, 2011

The entire world except for government leaders and politicians are thrilled with the revolutionary spirit moving through the Middle East. The leaders of authoritarian regimes from Tunisia to Egypt have fallen and the rest are threatened in every nation in the region.

It is my hope that your brave spirit of rebellion against one party rule and foreign backed puppet governments will provide encouragement to people around the world to stand up and follow your example showing how your fear of government tyranny is over.

Most governments ultimately rule and generate tax revenue by threat and force of arms and the only difference is the degree of violence and police state actions. While here in the West, we join you in solidarity for freedom and representative government, please understand that our history over the last 100 years clearly shows how democracy isn’t the panacea claimed by most establishment politicians. Thomas Jefferson described democracy as nothing more than “mob rule, where fifty-one percent of the people may take away the rights of the other forty-nine”. Trust me, democracy can be just as bad and often less efficient than authoritarian dictators, fake monarchs and military rule.

Anthony Wile, chief editor of The Daily Bell has explained the problems of American, democracy better than anyone I know in his Middle East interview Wednesday on Russia Today (RT) which broadcasts in English to over 100 nations around the world.

US-style regulatory democracy is a government-intensive approach that seeks to regulate almost every facet of human behavior and uses concerns for people’s “safety” as a justification for tremendous authoritarianism at home, and I might add for our Middle East friends, a neocon military policy of aggression, occupation and natural resource control abroad.

The representative features of democracy also have major flaws because this model allows powerful domestic special interests at home or foreign power elites to easily buy off a majority of parliament members and control the government and monetary policies of the nation state. Just as your dictators or monarchies have been controlled by Western interests allowing the pillaging of your natural resources, it is a very simple matter to buy majority control of representatives who should be representing the citizens but instead sell their souls to outside interests.

The worst problem with US-style democracy is the illusion that individuals or voters have power or control over the government. Yes, you get to vote and protest which on the surface might appear an improvement over a government structure controlled by a few at the top but this brings up the fatal weakness of regulatory and representative democracy as is practiced in Europe and the West today.

In order to create the illusion of benefits to voters, these democracies have to borrow massive amounts of money to buy votes and benefits today and most of the burdensome costs are placed on future generations. Therefore sovereign-debt-financed democracy can only exist as long as investors are willing to purchase the treasury debt obligations to finance this kind of welfare/warfare state. Heavily indebted Europe and America are now rapidly reaching the end of this fatal debt Ponzi scheme cycle as the current and future tax revenues cannot service the debt.

The end of the debt spiral is here for the western democracies and this is why the world economy is crashing and inflation is now destroying the ability of the working poor around the world to feed themselves.

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Peaceful Saudi streets won’t curb oil prices

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by Rick Ackerman
Originally posted in Rick’s Picks, March 10, 2011

Don’t expect all hell to break loose in Saudi Arabia when demonstrators hit the streets today in a planned show of strength. Protests are likely to be subdued.

This is according to a Rick’s Picks subscriber who lives there.  “You need to take what the news and Internet are saying with a grain of salt,” he wrote. “I am currently living in Saudi and have been talking to the locals the past few weeks. Everybody I have talked to does not believe anything will happen this weekend, nor do they want change. I am not saying nothing is going to happen, but that is the ground report. Everybody I have talked to, regardless of which Muslim religion they practice, loves the king and is grateful for what has occurred in thecountry over the past generation. You need to remember that these people were 98% nomads less than 30 years ago.”

The “experts” would indeed have us braced for the worst. “Although most political analysts predict any demonstrations to be swiftly – and perhaps bloodily – suppressed by the government,” the Financial Times reported, “any hint that the protests enjoy wider-than-expected support is likely to spook investors once again.” We suspect that even if Riyadh remains relatively peaceful, however, that crude oil prices will continue to head higher.

A short while back, we wrote here that the spike in crude caused by mounting troubles in Egypt and Libya would seem relatively tame in comparison to what we might see if Saudi oil production were to come under threat. While we still think that’s true, we now expect a quiet weekend in Saudi Arabia to ultimately have little impact on energy markets that seem likely to remain in the grip of speculators. They are quite obviously determined to keep squeezing until the fever breaks, but will it?

The Saudi demonstration is not the only one planned for today. There’s another in Bahrain, where Shia protestors are planning to march on the Sunni-dominated royal court in Riffa. That doesn’t sound like a very mellow mix. And in Libya, the battle could drag on indefinitely, perhaps turning even uglier if the country’s energy resources come under attack in an escalated conflict.

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Wake Me, Shake Me

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by James Howard Kunstler
Originally posted February 28, 2011

A quickening of events pulses through lands where for so long time stood still, and the oil – what’s left of it – lies locked for the moment beneath hot sands – woe upon all ye soccer moms! – while Colonel Gadhafi ponders the Mussolini option – that is, to be hoisted up a lamp-post on a high-C piano wire until his head bursts like a rotten pomegranate.

Then the good folk of Libya can fight amongst themselves for the swag, loot, and ka-chingling oil revenues he left behind. Meanwhile, Hillary Clinton scowls on the sidelines knowing how bad it would look if US marines actually hit the shores of Tripoli (and perhaps how fruitless it might turn out to be). And Italian grandmothers across the Mediterranean wonder why there’s no gas to fire up the orecchiette con cime di rapa.

The fluxes of springtime run cruelly across the sands of Araby, clear into Persia where the ayatollahs’ vizeers toy with uranium centrifuges and thirty million young people wonder how long they will allow bearded ignoramuses to tell them how to pull their pants on in the morning. Along about now, I wouldn’t feel secure standing next to somebody lighting a cigarette in that part of the world.

Pretty soon we’re going to find out just how fragile things are in the Kingdom of Saudi Arabia, there at the heart of things oily. Last week, King Abdullah wobbled out of his intensive care unit to spread a little surplus cash around the surging population, but let’s remember that their share of the oil “welfare” has been going down steadily in recent years – a simple matter of numbers really. Putting aside even the common folk, a thousand princes from dozens of different tribes pace restively in the background awaiting the struggle that must follow King Abdullah’s overdue transmigration to the farther shore. All along the western coast of the Persian Gulf and down toward the Horn of Africa, dark forces stir. Fuses sputter in Kingdoms from Bahrain to the Yemen.

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