The Fuss About Oil

Its old news that the price of crude oil has fallen from around $110 to $43 dollars a barrel in a very short time, giving world markets quite the heart attack (along with yours faithfully). Since then the price has been hovering above $50 a barrel. Below is a six month chart of crude oil.

There have been all sorts of conspiracy theories about this event, one of the most popular

being that President Obama or even the US initiated the fall in the prices. My immediate reaction was one of surprise. "Really?" I thought...If Obama or the US initiated the collapse 

in the price of crude, why did they need to place sanctions on Russia? They could have just sat back and smiled. Why would anybody attempt to damage the US oil and shale industry which has been a key to kick-starting the US economic revival? Finally, the sixty four thousand dollar question. How was this done? The answer is simple. It cannot be done in a free market democracy (unless of course one believes that Hollywood is reality). That then begs the question of what exactly is the tale behind the drama?

Lets look at the facts. In 2008 US oil production was 5 million barrels a day. Today the production is 9 million barrels a day thanks to a boom in shale oil that contributes about 3 million barrels a day. At the same time strong growth in emerging markets like China and India resulted in major energy producers like Russia and Saudi Arabia increasing and diverting their production to these emerging economies. Together with alternative energies, increased oil and gas production and a slowdown in emerging markets a rare "perfect wave"  turned into a tsunami of supply. Amazingly, both Russia and Saudi Arabia increased production and continued to sell oil into this tsunami. Why? 

Its all about market share and a chess game where the Saudi Kingdom avoids a check mate and turns the match to its advantage. Russia, another player, has foreign currency reserves of about $400 billion. The Saudis have double that amount. With these cash reserves they can easily outlast their competitors and creates an opportunity to consolidate their market share. OPEC clearly has collapsed and its every man for himself. Iran, the Saudi rival needs oil revenue to survive. At these prices, they are caught between a rock and a hard place. The US Shale industry requires at least $65-70 a barrel to be cost effective and they are bleeding profits. The alternative energy field is almost bankrupt, unable to compete. So today the game is all about protecting market share.

Bloomberg: "The collapse of oil prices by more than half since June has forced major producers and drillers to cut more than $40 billion in spending and fire 50,000 workers. The number of oil-drilling rigs working onshore has declined by a third since October." Today the US announced record oil stocks and Saudi Arabia has upped production to more than ten million barrels a day. Initially the oil price fell to below $50 a barrel and then recovered to about $52 a barrel. Basically the oil market showed remarkable strength in the face of what could be considered really bad oversupply news. One conclusion might be that the market has discounted the bad news and it is already reflected in the price. For the strong of heart this might even be an opportunity to invest in oil as US producers cut back at a rapid pace, durable producers hold onto market share and the weaker ones disappear into the sunset. Are we witnessing the dawn of an approaching supply demand balance? Time will tell. This drama is still unfolding and a checkmate is not yet in sight. 

When two opposite points of view are expressed with equal intensity, the truth does not necessarily lie exactly halfway between them. It is possible for one side to be simply wrong ― Richard Dawkins 

When everybody thinks alike, everyone is likely to be wrong - Humphrey Neill

Barbarians at the Gate

The writing is on the wall. Whatever the Greek outcome with Europe, the wheels have been set in motion. The Europe we have seen in the last decades is no more. The European Union wagon and its wheels will continue to squeak, run, break an axle and then fall apart. The German driver will crack the whip but as my Dad (bless him) used to say "you can lead a horse to water, but you cannot make it drink". Or as the Americans say..."Elvis has left the building".

Whether we like it or not, history has a way of repeating itself. The European countries have never really believed there could be a marriage of convenience with Germany. It's more like kissing your sister. And then there are the multi-cultural policies of Europe. "We will let the Muslims immigrate, teach them our culture, and they will magically turn into Europeans. We will integrate the Ukraine with us, because our way is vastly superior to the Russian way". What arrogance.

As we are slowly finding out, "our way" might be superior, but nobody is buying it. As the economies of  Southern Europe crash, unemployment in some of these countries is higher than during the Great depression of the thirties. Muslim immigration is on the rise, taking jobs from Europeans. "No Go Zones" are all over Europe. Anti-establishment parties are growing more popular by the day. The man made money creation experiment known as  "Quantitave Easing" (QE) by the Americans, Japanese and now Europe is creating economic bubbles and social differences. The rich get richer, the poor get poorer while the middle classes are slowly eroded. This is an incredible breeding ground for Jihadists and their cronies. Manna from heaven.

The history of UN votes against Israel has been well documented. Leading the charge have been the multi-cultural Europeans. The name of the game is appeasement. The "peasants" of Islam need to watch and learn the art of Western culture. Truth be told, they have watched and learned. Just not what they were intended to learn. They learned that western society has many "convenient idiots". They learned that the weak underbelly of western society is saturated with fear. They smiled as the politically correct left allied themselves with the the poor under trodden Islamic masses. The great minds of Europe reached out to the crocodile: "We want you to have what we have. We will teach you about women's rights, gay rights and human rights". Then the law of unintended consequences took over.

When ISIS conquered Mosul, the first order of the day was to establish high speed internet connections, so the population could watch beheadings in hi-def. Nothing sells better than fear in most cultures, so thank the heavens for CNN. Fear sells advertising, creates monsters, helps us to turn to our leaders in time of need and all in the name of freedom of the press. We have a right to know! Then following the terrorist attacks against Jewish and Christian values in Belgian, France and Denmark, the panicked politicians explained to us wide eyed innocents that the attacks were not religious in nature, and nobody in particular had been targeted. Wow!

Thereupon city officials called off Braunschweig's (Germany) carnival parade only 90 minutes before it was scheduled to begin after uncovering what they called a "specific threat of an Islamist attack," BBC reported Feb. 15. Some 250,000 people attend the city's parade every year. The move came hours after a gunman killed 2 civilians and wounded 5 police officers in separate attacks in Copenhagen. This must be the European multi-cultural way of dealing with the threat. Good luck to them. The wheels are coming off and the barbarians are at the gate. Believe it!

How people treat you is their karma; how you react is yours-Wayne Dyer

The wise man does at once what the fool does finally-Niccolo Machiavelli

The Peanut Gallery

Statements, comments and forecasts that have no substance, but just might turn out to be relevant.

1. George Friedman about his new book "Flashpoints: The Emerging Crisis in Europe" -  The sense that Europe is shifting was visible in the European Central Bank's decision to ease austerity by increasing liquidity in the system. In my view, this is too little too late; although quantitative easing might work for a recession, Southern Europe is in a depression. This is not merely a word. It means that the infrastructure of businesses that are able to utilize the money has been smashed, and therefore, quantitative easing's impact on unemployment will be limited. It takes a generation to recover from a depression. COMMENT: Its interesting to note that Greece was NOT included in the European QE plan....signs of the future.

2. On Feb. 13, Argentine Federal Prosecutor Gerardo Pollicita requested that a federal judge allow him to continue an investigation into President Cristina Fernandez de Kirchner's alleged role in a cover-up of Iran's role in the 1994 bombing of a Jewish cultural center in Buenos Aires. Pollicita is broadly linked through professional connections to potential conservative presidential candidate Mauricio Macri. COMMENT: This might be political, but six gets you one that this story is going to become Hollywood material.

3. Ephraim Halevy (former Israeli intelligence chief): If Netanyahu were to win the upcoming elections and continue with his current policies toward the Palestinians, a third intifada is unavoidable, Halevy indicated. In a scathing interview, he also criticized the prime minister for propagating fear instead of hope, deploring Netanyahu’s constant mentions of the Holocaust and decrying his reported comparison of today’s Jews of France with pre-Inquisition Spanish Jewry.
COMMENT: The half-full cup for Bibi is empty. Is he wrong? ISIS, Hizbollah and Hamas clearly are filling their cups.
Read more: http://www.timesofisrael.com/ex-mossad-boss-fear-mongering-netanyahu-is-antithesis-of-churchill/#ixzz3Qsq7XMdo

4. Former Mossad chief: I don't trust Netanyahu, his actions will cost us.
Meir Dagan says PM's speech won't change Obama's mind on Iran, adds Sharon had arguments with US but kept it quiet while Netanyahu insists on making fights public. COMMENT: Iran is the Shiite version of ISIS. Obama is their type of a "useful idiot". Bibi has made his point and should now stay at home, unless he intends to join the Republican party.  read more: http://www.ynetnews.com/articles/0,7340,L-4620516,00.html

5. Stratfor: It is not hard to imagine the disaster that would ensue if the United States were to export 50 percent of its GDP, and half of it went to Canada and Mexico. A free-trade zone in which the giant pivot is not a net importer can't work. And that is exactly the situation in Europe. Its pivot is Germany, but rather than serving as the engine of growth by being an importer, it became the world's fourth-largest national economy by exporting half its GDP. That can't possibly be sustainable. COMMENT: Unfortunately, history has a way of repeating itself. Especially in Europe.

6. Gatestone: Sweden is now number two on the global list of rape countries. According to a survey from 2010, Sweden, with 53.2 rapes per 100,000 inhabitants, is surpassed only by tiny Lesotho in Southern Africa, with 91.6 rapes per 100,000 inhabitants. COMMENT: Do I need to comment? read more: http://www.gatestoneinstitute.org/5195/sweden-rape

7.Sao Paulo, Rio de Janeiro and Minas Gerais states in southeastern Brazil are experiencing the worst drought in a century. The nearly 30 million people living in the extended municipal complex of Sao Paulo have been dealing with extremely low reservoir levels for more than a year. In fact, the water reserves have fallen so low that they are now below the dead level, the point at which water must be pumped up to reach the pipes connecting the reservoir to the greater distribution system. COMMENT: India has enough water for the population, but not the infrastructure to reach all. Looks like water is becoming more and more vital than oil.

“Evil always wins through the strength of its splendid dupes; and there has in all ages been a disastrous alliance between abnormal innocence and abnormal sin.” 

― G.K. Chesterton.

Fill your mouth with marbles and make a speech. Every day reduce the number of marbles in your mouth and make a speech. You will soon become an accredited public speaker -- as soon as you have lost all your marbles - Brooks Hays.

Its only ISIS...Right!

"They burnt a teacher in front of the students in a classroom.  They literally set the teacher on fire with gasoline and made the kids watch." 

"The report indicates children as young as eleven years old faced an “unspeakable” reality: some were tied down or suspended from walls by their limbs, their genitals shocked by electrical currents, their toenails and fingernails ripped from their little bodies. Other children were heinously forced to watch their own relatives be tortured while others still were raped and/or sexually assaulted."

"Reem al Numeri is 14-years-old and recently divorced. She was 11 when she says her father forced her to marry a cousin more than twice her age.Reem says she has been stigmatized by her divorce and now lives the life of an outcast. Without a husband or father to support her, she cannot attend school."

"Children have reportedly been sent into crowded markets with bombs strapped to their small bodies."

" Hey...how many gay bars in islamic countries?"

ISIS? Sorry, not even near.

Once more the ridiculous Western media is doing it again. According to CNN and cohorts, ISIS are the bad guys, murdering innocent Muslims. They behead prisoners, burn a Jordanian pilot alive etc. etc. What wild animals....the poor innocent Muslim populations are being set upon by the Jihadists of ISIS, who do not represent Islam and are hardly Muslims themselves....LOL!

Having lived in the Middle East for twenty seven years, none of the happenings in that area surprise me. What does surprise me is a media band of puppets that continuously insists on placing a politically correct spin on Islamic fundamentalism. After all, they say, the jihadists (not Muslims) only make up about 10% of Islam. The rest are all innocents and victims. Conveniently nobody mentions that 10% of 1.4 billion Muslims is 140 million crazed bloodletting rapists murderers and psychopaths running around on our planet. They are multiplying at an accelerated rate and raising more baby jihadists by the minute...."oh how cute."

But is it only the Jihadists? In 2009 then newly elected President Obama swaggered into Egypt and with rolled up sleeves and a sparkling smile promised the arab world a new beginning and a new era. After shaking hands warmly with his new best friend Housni (Mubarak), he set off to bow to the King of Saudi Arabia and on one knee explained to the Saudis that he was almost one of them. "I know Islam" he said. Then before one could utter "ISIS" Mr Obama was onstage at CNN, cheered on by the adoring commentators and saying "Mubarak must go!" Mubarak went and the new era promised by Obama was aptly named "The Arab spring". No point in debating the consequences except to say that the road to hell is paved with the graveyards of good intentions. 

Cheered on by the adoring masses, the US withdrew from Iraq without leaving adequate arrangements. The same is happening in Afghanistan. America is tired of making war. "The Inconvenient Truth" warned of things to come. "The void will be filled. Islam is your enemy. Its not enough to say you are not their enemy. The don't care If you don't fight them over there, they will be all around you." From 200,000 dead in Syria, "no-go zones in Europe", politically correct media, home made terrorism, civil war in Yemen, Afghanistan, Nigeria, Somalia, Sudan and Pakistan. Lets face it, Islam is imploding, the barbarians are at the gate and the mismanagement comes straight from a naive professor sitting in a White House building castles in the air and hoping for a legacy.

Better to remain silent and be thought a fool than to speak out and remove all doubt.
 - Lincoln

The silliest woman can manage a clever man; but it needs a very clever woman to manage a fool - Kipling