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Just don't.<br>
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<div class="moz-cite-prefix">On 12/18/2014 09:08 PM, David Johnson
via Peace-discuss wrote:<br>
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<p class="MsoNormal"><b><span>In conjunction with this
development is the sudden announced ending of the embargo
against Cuba.</span></b></p>
<p class="MsoNormal"><b><span>It makes sense if you look at what
it appears their new priorities are in regards to
encircling Russia and destabilizing Putin. The U.S. elites
don’t want a Russian ally so close to the U.S.</span></b></p>
<p class="MsoNormal"><b><span> </span></b></p>
<p class="MsoNormal"><b><span> </span></b></p>
<p class="MsoNormal"><b><span>US Risks Economic Crash In Oil War
With Russia</span></b></p>
<p class="MsoNormal"><span><img id="Picture_x0020_1"
src="cid:part2.02070609.08030205@pigsqq.org"
alt="Description: Putin" width="555" height="387"></span><span></span></p>
<p class="MsoNormal"><span><a moz-do-not-send="true"
href="https://www.popularresistance.org/category/educate/"
title="View all posts in Educate!"><span>Educate!</span></a>
<a moz-do-not-send="true"
href="https://www.popularresistance.org/tag/economy/"><span>Finance
and the Economy</span></a>, <a moz-do-not-send="true"
href="https://www.popularresistance.org/tag/oil-gas/"><span>Oil
& Gas</span></a>, <a moz-do-not-send="true"
href="https://www.popularresistance.org/tag/russia/"><span>Russia</span></a>,
<a moz-do-not-send="true"
href="https://www.popularresistance.org/tag/syria/"><span>Syria</span></a>,
<a moz-do-not-send="true"
href="https://www.popularresistance.org/tag/usa/"><span>usa</span></a>
<br>
By Mike Whitney, <a moz-do-not-send="true"
href="http://www.counterpunch.org/2014/12/16/the-oil-coup/"
target="_blank"><span>www.counterpunch.org</span></a><br>
December 17th, 2014</span></p>
<p class="MsoNormal"><span> </span></p>
<p class="MsoNormal"><span>“John Kerry, the US Secretary of
State, allegedly struck a deal with King Abdullah in
September under which the Saudis would sell crude at below
the prevailing market price. That would help explain why the
price has been falling at a time when, given the turmoil in
Iraq and Syria caused by Islamic State, it would normally
have been rising.” (<a moz-do-not-send="true"
href="http://www.theguardian.com/business/economics-blog/2014/nov/09/us-iran-russia-oil-prices-shale"
target="_blank"><span>Stakes are high as US plays the oil
card against Iran and Russia</span></a>, Larry Eliot,
Guardian)</span></p>
<p class="MsoNormal"><span>U.S. powerbrokers have put the
country at risk of another financial crisis to intensify
their economic war on Moscow and to move ahead with their
plan to “pivot to Asia”.</span></p>
<p class="MsoNormal"><span>Here’s what’s happening: Washington
has persuaded the Saudis to flood the market with oil to
push down prices, decimate Russia’s economy, and reduce
Moscow’s resistance to further NATO encirclement and the
spreading of US military bases across Central Asia. The
US-Saudi scheme has slashed oil prices by nearly a half
since they hit their peak in June. The sharp decline in
prices has burst the bubble in high-yield debt which has
increased the turbulence in the credit markets while pushing
global equities into a tailspin. Even so, the roiled markets
and spreading contagion have not deterred Washington from
pursuing its reckless plan, a plan which uses Riyadh’s
stooge-regime to prosecute Washington’s global resource war.
Here’s a brief summary from an article by F. William Engdahl
titled “The Secret Stupid Saudi-US Deal on Syria”:</span></p>
<p class="MsoNormal"><span>“The details are emerging of a new
secret and quite stupid Saudi-US deal on Syria and the
so-called IS. It involves oil and gas control of the entire
region and the weakening of Russia and Iran by Saudi Arabian
flooding the world market with cheap oil. Details were
concluded in the September meeting by US Secretary of State
John Kerry and the Saudi King…</span></p>
<p class="MsoNormal"><span>..the kingdom of Saudi Arabia, has
been flooding the market with deep discounted oil,
triggering a price war within OPEC… The Saudis are targeting
sales to Asia for the discounts and in particular, its major
Asian customer, China where it is reportedly offering its
crude for a mere $50 to $60 a barrel rather than the earlier
price of around $100. That Saudi financial discounting
operation in turn is by all appearance being coordinated
with a US Treasury financial warfare operation, via its
Office of Terrorism and Financial Intelligence, in
cooperation with a handful of inside players on Wall Street
who control oil derivatives trading. The result is a market
panic that is gaining momentum daily. China is quite happy
to buy the cheap oil, but her close allies, Russia and Iran,
are being hit severely…</span></p>
<p class="MsoNormal"><span>According to Rashid Abanmy, President
of the Riyadh-based Saudi Arabia Oil Policies and Strategic
Expectations Center, the dramatic price collapse is being
deliberately caused by the Saudis, OPEC’s largest producer.
The public reason claimed is to gain new markets in a global
market of weakening oil demand. The real reason, according
to Abanmy, is to put pressure on Iran on her nuclear
program, and on Russia to end her support for Bashar
al-Assad in Syria….More than 50% of Russian state revenue
comes from its export sales of oil and gas. The US-Saudi oil
price manipulation is aimed at destabilizing several strong
opponents of US globalist policies. Targets include Iran and
Syria, both allies of Russia in opposing a US sole
Superpower. The principal target, however, is Putin’s
Russia, the single greatest threat today to that Superpower
hegemony. (<a moz-do-not-send="true"
href="http://www.boilingfrogspost.com/2014/10/24/the-secret-stupid-saudi-us-deal-on-syria/"
target="_blank"><span>The Secret Stupid Saudi-US Deal on
Syria</span></a>, F. William Engdahl, BFP)</span></p>
<p class="MsoNormal"><span>The US must achieve its objectives in
Central Asia or forfeit its top-spot as the world’s only
superpower. This is why US policymakers have embarked on
such a risky venture. There’s simply no other way to sustain
the status quo which allows the US to impose its own
coercive dollar system on the world, a system in which the
US exchanges paper currency produced-at-will by the Central
Bank for valuable raw materials, manufactured products and
hard labor. Washington is prepared to defend this
extortionist petrodollar recycling system to the end, even
if it means nuclear war.</span></p>
<p class="MsoNormal"><b><span>How Flooding the Market Adds to
Instability</span></b><span></span></p>
<p class="MsoNormal"><span>The destructive and destabilizing
knock-on effects of this lunatic plan are visible
everywhere. Plummeting oil prices are making it harder for
energy companies to get the funding they need to roll over
their debt or maintain current operations. Companies borrow
based on the size of their reserves, but when prices tumble
by nearly 50 percent–as they have in the last six months–
the value of those reserves falls sharply which cuts off
access to the market leaving CEO’s with the dismal prospect
of either selling assets at firesale prices or facing
default. If the problem could be contained within the
sector, there’d be no reason for concern. But what worries
Wall Street is that a surge in energy company failures could
ripple through the financial system and wallop the banks.
Despite six years of zero rates and monetary easing, the
nation’s biggest banks are still perilously
undercapitalized, which means that a wave of unexpected
bankruptcies could be all it takes to collapse the weaker
institutions and tip the system back into crisis. Here’s an
excerpt from a post at Automatic Earth titled “Will Oil Kill
the Zombies?”:</span></p>
<p class="MsoNormal"><span>“If prices fall any further, it would
seem that most of the entire shale edifice must of necessity
crumble to the ground. And that will cause an absolute
earthquake in the financial world, because someone supplied
the loans the whole thing leans on. An enormous amount of
investors have been chasing high yield, including many
institutional investors, and they’re about to get burned
something bad….. if oil keeps going the way it has lately,
the Fed may instead have to think about bailing out the big
Wall Street banks once again.” (<a moz-do-not-send="true"
href="http://www.theautomaticearth.com/will-oil-kill-the-zombies/"
target="_blank"><span>Will Oil Kill the Zombies?</span></a>,
Raúl Ilargi Meijer, Automatic Earth)</span></p>
<p class="MsoNormal"><span>The problem with falling oil prices
is not just mounting deflation or droopy profits; it’s the
fact that every part of the industry–exploration,
development and production — is propped atop a mountain of
red ink (junk bonds). When that debt can no longer be
serviced or increased, then the primary lenders
(counterparties and financial institutions) sustain heavy
losses which domino through the entire system. Take a look
at this from Marketwatch:</span></p>
<p class="MsoNormal"><span>“There’s ‘no question’ that for
energy companies with a riskier debt profile the high-yield
debt market “is essentially shut down at this stage,” and
there are signs that further pain could hit the sector, ”
senior fixed-income strategist at U.S. Bank Wealth
Management, Dan Heckman told Marketwatch. “We are getting to
the point that it is becoming very concerning.” (<a
moz-do-not-send="true"
href="http://www.marketwatch.com/story/junk-bond-contagion-fears-rise-as-oil-extends-drop-2014-12-11"
target="_blank"><span>Marketwatch</span></a>)</span></p>
<p class="MsoNormal"><span>When energy companies lose access to
the market and are unable to borrow at low rates, it’s only
a matter of time before they trundle off to extinction.</span></p>
<p class="MsoNormal"><span>On Friday, the International Energy
Agency (IEA) renewed pressure on prices by lowering its
estimate for global demand for oil in 2015. The announcement
immediately sent stocks into a nosedive. The Dow Jones
Industrial Average (DJIA) lost 315 points by the end of the
day, while, according to Bloomberg, more than “$1 trillion
was erased from the value of global equities in the week”.</span></p>
<p class="MsoNormal"><span>The world is awash in cheap petroleum
which is wreaking havoc on domestic shale producers that
need prices of roughly $70 per barrel to break-even. With
West Texas Intermediate (WTI) presently headed south of 60
bucks–and no bottom in sight–these smaller producers are
sure to get clobbered. Pension funds, private equity, banks,
and other investors who gambled on these dodgy
energy-related junk bonds are going to get their heads
handed to them in the months ahead.</span></p>
<p class="MsoNormal"><span>The troubles in the oil patch are
mainly attributable to the Fed’s easy money policies. By
dropping rates to zero and flooding the markets with
liquidity, the Fed made it possible for every Tom, Dick and
Harry to borrow in the bond market regardless of the quality
of the debt. No one figured that the bottom would drop out
leaving an entire sector high and dry. Everyone thought the
all-powerful Fed could print its way out of any mess. After
last week’s bloodbath, however, they’re not nearly as
confident. Here’s how Bloomberg sums it up:</span></p>
<p class="MsoNormal"><span>“The danger of stimulus-induced
bubbles is starting to play out in the market for
energy-company debt….Since early 2010, energy producers have
raised $550 billion of new bonds and loans as the Federal
Reserve held borrowing costs near zero, according to
Deutsche Bank AG. With oil prices plunging, investors are
questioning the ability of some issuers to meet their debt
obligations…</span></p>
<p class="MsoNormal"><span>The Fed’s decision to keep benchmark
interest rates at record lows for six years has encouraged
investors to funnel cash into speculative-grade securities
to generate returns, raising concern that risks were being
overlooked. A report from Moody’s Investors Service this
week found that investor protections in corporate debt are
at an all-time low, while average yields on junk bonds were
recently lower than what investment-grade companies were
paying before the credit crisis.” (<a moz-do-not-send="true"
href="http://www.bloomberg.com/news/2014-12-11/fed-bubble-bursts-in-550-billion-of-energy-debt-credit-markets.html"
target="_blank"><span>Fed Bubble Bursts in $550 Billion of
Energy Debt: Credit Markets</span></a>, Bloomberg)</span></p>
<p class="MsoNormal"><span>The Fed’s role in this debacle
couldn’t be clearer. Investors piled into these dodgy
debt-instruments because they thought Bernanke had their
back and would intervene at the first sign of trouble. Now
that the bubble has burst and the losses are piling up, the
Fed is nowhere to be seen.</span></p>
<p class="MsoNormal"><span>In the last week, falling oil prices
have started to impact the credit markets where investors
are ditching debt on anything that looks at all shaky. The
signs of contagion are already apparent and likely to get
worse. Investors fear that if they don’t hit the “sell”
button now, they won’t be able to find a buyer later. In
other words, liquidity is drying up fast which is
accelerating the rate of decline. Naturally, this has
affected US Treasuries which are still seen as “risk free”.
As investors increasingly load up on USTs, long-term yields
have been pounded into the ground like a tentpeg. As of
Friday, the benchmark 10-year Treasury checked in at a
miniscule 2.08 percent, the kind of reading one would expect
in the middle of a Depression.</span></p>
<p class="MsoNormal"><span>The Saudi-led insurgency has reversed
the direction of the market, put global stocks into a
nosedive and triggered a panic in the credit markets. And
while the financial system edges closer to a full-blown
crisis every day, policymakers in Washington have remained
resolutely silent on the issue, never uttering as much as a
peep of protest for a Saudi policy that can only be
described as a deliberate act of financial terrorism.</span></p>
<p class="MsoNormal"><span>Why is that? Why have Obama and Co.
kept their mouths shut while oil prices have plunged,
domestic industries have been demolished, and stocks have
gone off a cliff? Could it be that they’re actually in
cahoots with the Saudis and that it’s all a big game
designed to annihilate enemies of the glorious New World
Order?</span></p>
<p class="MsoNormal"><span>It certainly looks that way.</span></p>
<p class="MsoNormal"> </p>
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