Hillary Clinton is still lying about her illegal war.
October 22, 2015
Hillary Clinton has only one accomplishment; the Libyan War. Bombing Libya in support of a Muslim Brotherhood takeover was Hillary’s pet project.
Obama unenthusiastically signed off on a war that he had told members of Congress “is all Secretary Clinton’s matter.”
The Pentagon fought Hillary’s illegal war every step of the way. Both the Secretary of Defense and the Chairman of the Joint Chiefs opposed Hillary’s plan to bomb Libya. One of the Chairman’s top aides said that he did not trust the reports coming out of the State Department and the CIA, then controlled by Clinton loyalist Leon Panetta. When it was clear that the Clintonites had gotten their war on, an irritated Secretary of Defense Gates resigned after failing to stop Hillary’s war and was replaced by Panetta.
As the State Department set the military agenda, the Pentagon retaliated by taking over the diplomatic agenda attempting to arrange a ceasefire with the Gaddafi regime over Hillary’s objections.
Hillary was using the State Department to start a war while the military was trying to use diplomacy to stop a war. The Pentagon lost the power struggle and one of her minions took over the military to make sure that the Muslim Brotherhood’s Jihadists would be able to overrun another country.
Huma Abedin had beaten the Secretary of Defense.
Panetta, unlike Gates, shared Hillary’s Arab Spring agenda. After the war, he paid a visit to Tripoli and claimed that similar “uprisings” would be taking place around the Middle East, including in Syria.
Military people never stopped loathing Hillary Clinton for her war and its consequences, the usurpation of a defense matter, the Al Qaeda training camps and the abandonment of Americans in Benghazi. That came to the surface during the Democratic debate when Senator Webb challenged Clinton on Libya.
Hillary Clinton smugly recited the same old lies about Gaddafi “threatening to massacre large numbers of the Libyan people” and European allies begging her to stop a “mass genocide.”
In reality, Hillary Clinton was the source of the claim that Gaddafi was about to commit genocide. This claim had no basis in reality and defense officials quickly shot it down. But that didn’t stop Obama from claiming during his war speech that he had bombed Libya to save Benghazi from a massacre. There was no massacre in Benghazi. At least not until Obama helped make a massacre of four Americans happen.
By September, the New York Times was asking where all the dead were. Morgue records showed that the dead on both sides actually numbered in the hundreds. The International Red Cross put the number of missing persons at around a thousand. The largest mass grave found had 34 bodies.
Obama claimed that he had seen Gaddafi “kill over a thousand people in a single day.” That never happened. It never happened when Gaddafi had actually captured a rebel city before.
“Imagine we were sitting here and Benghazi had been overrun, a city of 700,000 people, and tens of thousands of people had been slaughtered,” Hillary Clinton had said. That would be more than the entire number of people, combatants and civilians, who had died in the Libyan Civil War.
Gaddafi was an insane dictator, but he had never done anything on that scale, nor were his forces, which had been beaten by Chad in the Toyota War (Chad militias had fought using Toyota pickups), remotely capable of pulling off Saddam level of atrocities or he might have won the war.
Hillary Clinton claimed at the debate, “We had the Arabs standing by our side saying, ‘We want you to help us deal with Gadhafi.’” But by the second night of bombing, the Secretary-General of the Arab League had already condemned the “bombardment of civilians.”
“We did not put one single American soldier on the ground in Libya,” Hillary Clinton said. That’s technically true and also a lie. It was Panetta’s CIA people who were on the ground.
Tyrone Woods and Glen Doherty, two of the Americans murdered in Benghazi, were former Navy SEAL commandos who were working as contractors for the CIA. American soldiers still died in Libya. They were just officially contractors, more of the CIA’s “Sneakers on the Ground” approach that let hacks like Hillary and Obama claim that there were no American soldiers on the ground.
“The Libyan people had a free election the first time since 1951,” Hillary Clinton said. “And you know what, they voted for moderates, they voted with the hope of democracy.”
When Hillary says “moderate”, she means Islamist. The election was fake. It was rigged between the “moderate Islamist” Muslim Brotherhood and the “moderate Islamist” National Forces Alliance. While the media was repeating talking points about the fake election, fighting in Benghazi continued. But even though Hillary and Obama had used Benghazi as the basis for the war, no one was paying attention.
That would change soon enough. And before long every American would know the name Benghazi. But Benghazi was only an early warning. Before long entire Libyan cities would fall to Al Qaeda and ISIS.
Hillary closed by insisting, “Unless you believe the United States should not send diplomats to any place that is dangerous, which I do not, then when we send them forth, there is always the potential for danger and risk.”
Sending diplomats to dangerous places means providing them with adequate security.
Hillary’s State Department failed to do that. Even the whitewashed report of her cronies admitted that much. Benghazi’s compound was being protected by “moderate Islamist” terrorists who overlapped with the other “moderate Islamist” terrorists who attacked the diplomatic compound.
While Hillary’s State Department was spending fortunes on bad art, the Benghazi compound didn’t meet security standards in a city that had more terrorists than police officers.
And, best of all, the Muslim Brotherhood Martyrs of the Feb. 17 Revolution Brigade terrorists Hillary was paying to protect the ambassador, hadn’t even been paid.
Benghazi was a city that was effectively under the control of Jihadists, some of them blatantly identifying with Al Qaeda. Hillary Clinton might as well have sent Ambassador Stevens into an Al Qaeda training camp with terrorists providing his security. And that’s effectively what she did.
Her dismissive line about sending diplomats to dangerous places whitewashes what happened.
Now that we’ve cleared away Hillary’s lies, let’s get to the truth. The Libyan War, like the rest of the Arab Spring, was about empowering the Muslim Brotherhood.
And there were cruder motives in the mix.
Hillary Clinton hid emails discussing the exploitation of Libya’s oil fields. The Clintons had made an art out of merging their political and financial agendas. They had extensive ties with figures in the energy industry and the companies that dug into Libya’s energy sector, Royal Dutch Shell and BP, were Clinton Foundation donors.
Some of the deleted emails discussed this with Clinton Foundation employee Sidney Blumenthal, who was also providing Hillary Clinton with supposed intel from business interests while promising that the Libyan War would be an easy matter. Blumenthal encouraged “shock and awe” bombing in Libya.
According to Congressman Gowdy, who has been investigating the events in Benghazi, “Blumenthal pushed hard for a no-fly zone in Libya before the idea was being discussed internally by senior U.S. government officials.” He blasted Obama for being “unenthusiastic about regime change in Libya.”
Blumenthal called for providing the Jihadists with “armor piercing weapons” and called Secretary of Defense Gates a “mean, vicious little prick” who is “losing” the debate. Blumenthal also offered the very specific “national interest” argument that Obama would later echo, suggesting that he was unknowingly repeating the talking points of a man he loathed which had been handed to him by Hillary Clinton.
He also told Hillary Clinton that the war had to be ramped up or Obama would lose the election.
Having dragged Obama into Hillary’s war, Blumenthal was now pushing Hillary to blackmail him with the threat of losing the election if he didn’t escalate the conflict. Meanwhile he was pursuing his interest in getting the Libyans to pay for military training from a private military company he was linked to.
The entire nightmarish mess of Democratic conspiracy theories about Iraq, Blood for Oil, politicians fighting wars to win elections, corporate conflicts of interest and even private military companies are all here and no one will touch it. A roster of Democratic candidates still running against the Iraq War won’t talk about an illegal dirty regime change war that took place with their backing and support.
Bernie Sanders, who sputters incoherently about the Iraq War, co-sponsored the Senate resolution supporting a No Fly Zone in Libya. This was the Senate resolution that Obama exploited as a fig leaf of Senate approval for his illegal war.
Senator Sanders can’t criticize Hillary’s illegal war because he helped make it happen.
Hillary’s war has been an unmitigated disaster. Her lies about the war have been disproven. But not even the Democrats running against her are ready to hold her accountable for it.
The big global banks have begun to warn clients that the blistering rally in oil and industrial commodities in recent weeks has run far ahead of economic reality, raising the risk of a fresh slump in prices over the summer.
Barclays, Morgan Stanley and Deutsche Bank have all issued reports advising investors to tread carefully as energy and base metals fall prey to unstable speculative flows in the derivatives markets.
Oil has jumped 40pc since January even as the US, China and the world economy as a whole have been sputtering, falling far short of expectations.
“Watch out: this rally may not last. The risks for a reversal in recent commodity price trends are growing,” said analysts at Barclays.
“There is a huge disconnect between the price action in physical markets where differentials are signalling over-supply and the futures markets where all looks rosy.”
Miswin Mahesh, the bank’s oil strategist, said a glut of excess oil is emerging in the mid-Atlantic, with inventories rising at a rate of 1m barrels a day. Angola and Nigeria are sitting on 80m barrels of unsold crude and excess cargoes are building up in the North Sea and the Mediterranean.
Morgan Stanley echoed the concerns, warning that speculators and financial investors have taken out a record number of “long” positions on Brent crude on the futures markets even though the world economy keeps falling short of expectations. “We have growing concerns about crude fundamentals in the second half of 2015 and 2016,” it said.
Shale producers in the US are taking advantage of the artificial surge in prices to hedge a large part of their future output, more or less guaranteeing that the US will continue to pump 10m b/d and wage a war of attrition against high-cost producers in the rest of the world.
A comparable dynamic is playing out in the copper market, where net long positions have jumped 60pc since the start of the year and helped power the longest rally in copper prices since 2005, even as industrial output grinds to a halt in China.
The warnings come as a draft report from OPEC painted a gloomy picture of energy industry, predicting that oil wouldn’t touch $100 in the next 10 years.
The mini-boom in energy and metals has taken on huge significance since it is being taken as evidence that global recovery is under way and that the dangers of a deflationary spiral have abated. Barclays said that this in turn is a key factor driving up global bond yields, and therefore in repricing the cost of global credit.
If the commodity rally is being driven by investor exuberance in the derivatives markets – rather than a genuine recovery in the world economy – it is likely to short-circuit before long and could even lead to a relapse into deflation. It is extremely difficult for central banks to navigate these choppy waters, raising the risk of a policy mistake.
Fresh data suggest that the US economy may have contracted in the first quarter, and is currently growing at a rate of just 0.8pc, below the US Federal Reserve’s stall speed indicator.
Deutsche Bank has also warned that the energy rally is showing “signs of fatigue”, with near-record inventories in the US, and little likelihood of further stimulus from central banks at this stage to keep the game going. “We see fresh downside risks to crude oil prices heading into the summer,” it said.
Durable oil rallies are typically driven by OPEC cuts but this time the cartel has boosted supply by 500,000 b/d to 31m as Saudi Arabia tries to drive marginal drillers out of business across the world.
Contrary to expectations, America’s shale producers have yet to capitulate. The rig count has fallen by more than half but output has held up longer than expected. While a few drillers have gone bankrupt, others are already signalling plans to crank up production.
Houston-based EOG said it expects to boost output in the third quarter at the Eagle Ford basin in Texas, benefiting from dramatic gains in technology that are cutting shale costs at an astonishing speed. Devon Energy has raised its growth target to 25pc to 35pc this year, having cut its production costs by a fifth in the first quarter.
Tactical stockpiling of crude oil by China and other countries has masked the scale of oversupply but oil analysts say this effect may be fading. The deep economic slowdown in resource-hungry emerging markets has snuffed out the commodity supercycle. There is little sign yet of a durable rebound.
China is still slowing as President Xi Jinping deliberately engineers a deflation of the country’s investment bubble.
A series of cuts in the reserve requirement ratio and interest rates – including a 25pc reduction over the weekend – merely offsets “passive tightening” caused by capital outflows and rising real borrowing costs.
It is not yet a return to ‘”stimulus as usual”.
Not everybody is willing to throw in the towel on crude oil.
Michael Wittner, from Societe Generale, said US output will decline in the coming months as the delayed effects of lower investment start to bite, ultimately vindicating the Saudi’s shock strategy of flooding the market.
Crude stockpiles tend to build up from March to May. This is the “window of greatest vulnerability for a crude price correction”, Mr Wittner said. That window will be closing within weeks.
by Bassam Tawil
February 13, 2015 at 5:00 am
Iran, with its proxies in Lebanon, Syria, Iraq, Bahrain and Yemen, has surrounded all the oil fields in the region and is currently busy encircling Jordan, Israel and Palestine.
Iran not only reaches now from Afghanistan to the Mediterranean, but Iranian Shi’ites have been spreading out through Africa and South America.
By the time U.S. President Barack Obama leaves office, Iran will not only have nuclear breakout capability, but also the intercontinental ballistic missiles to deliver its nuclear warheads to Europe and North America.
If Iran can finally drive the U.S. out of the Gulf by threatening U.S. assets, it will be free to pursue still further expansion.
If the deal signed with Iran is full of loopholes, it is Obama who will be blamed. Does Obama really want his legacy to be, “The President who was even a bigger fool than Neville Chamberlain”? He will not be seen as “Nixon in China.” He will be seen as the Eid al-Adha lamb.
Recently, foreign ministers from the European Union (EU) have been holding meetings with representatives of the Arab and Muslim world, including Turkey and Qatar, with the intention of forming a “joint task force to fight Islamist terrorism.”
Turkey and Qatar, for example, directly encourage Islamist terrorism, thus there is no way they can be part of a task force to act against it.
In some Islamic thinking, such nonsense, because of its certain lack of ever seeing the light, is merely a prologue to the ultimate war between Gog and Magog (“yagug wamagu”), and heralds the End of Days.
The Arab-Muslim world engages in perpetual internal strife. Iran, for instance, with its proxies in Lebanon, Syria, Iraq, Bahrain and Yemen, has surrounded all the oil fields in the region, and is currently busy encircling Jordan, Israel and the Palestinians. Iran not only reaches now from Afghanistan to the Mediterranean, but Iranian Shi’ites have been spreading out through Africa and South America. Another sign of the End of Days is the United States’ collaboration with Iran against the Islamic State in Iraq and Syria. It means the world will eventually pay for America’s looking the other way while the Iranians are building nuclear bombs in their cellars.
These cellars may currently be distant from the shores of the United States, but they are close to all the oil fields in the Middle East. By the time U.S. President Barack Obama leaves office, Iran will not only have nuclear breakout capability, but also intercontinental ballistic missiles to deliver its nuclear warheads. Its next target will be U.S. assets in the Gulf. If Iran can finally drive the U.S. “Great Satan” out of the Gulf by threatening U.S. assets, it will be free to pursue still further expansion.
These are or will be the victims of America’s determination to drag out the problem of an exploding Middle East. That way, U.S. President Barack Obama can hand the region over to the next president, while forever pretending that the vacuum created by pulling U.S. troops out of the Middle East — now being filled by Iran, the Islamic State and other terror groups — had nothing to do with him.
This situation leaves, ironically, the lone voice of Israeli Prime Minister Benjamin Netanyahu crying in the wilderness. As much as many of us may not like him or the people he represents, he is one of the two world leaders in the West telling the truth, warning of what is to come (Geert Wilders of the Netherlands is the other). This burden of responsibility for his people (how many of us wish our leaders had even a bit of that?) has earned him only the venom of the Obama Administration, who see him as trying to spoil their strategy of leading by procrastination.
It is also becoming increasingly clear that the Obama Administration’s policy consists of running after Iran, in order to concede everything it wants, just to be able wave a piece of paper not worth the ink on it, claiming there is “a deal.” Iran, for its part, would probably prefer not to sign anything, and most likely will not. Meanwhile, both sides continue strenuously to claim the opposite.
Western leaders just seem not to be programmed to understand the capabilities of other leaders, and how they, too, negotiate, manipulate and hide behind lies. Obama’s Russian “Reset Button” did not work; his “Al Qaeda is on the run,” did not work; “We shall never let Russia take the Ukraine” did not work; and the unwinnable Israel-Palestinian “Peace Process” did not work.
Obama, in order to wave a piece of paper not worth the ink on it, seems eager to fall victim to bogus promises, worthless treaties and other leaders’ outright lies — only to look an even bigger fool than Britain’s former Prime Minister, Neville Chamberlain. After meeting with Germany’s with Adolf Hitler in 1938, Chamberlain returned to Britain boasting of “peace in our time.” But Chamberlain did not have the luxury of seeing a Chamberlain duped before him. If the deal signed with Iran is full of loopholes, it is Obama who will be blamed. Does Obama really want his legacy to be, “The president who was an even bigger fool than Neville Chamberlain”? He will not be seen as “Nixon in China.” He will be seen as the Eid al-Adha lamb.
Bassam Tawil is a scholar based in the Middle East.
Tuesday, 27 January 2015 05:24 Brandon Smith
My theme for 2015 has been the assertion that this will be a year of shattered illusions; social, political, as well as economic. As I have noted in recent articles, 2014 set the stage for multiple engineered conflicts, including the false conflict between Eastern and Western financial and political powers, as well as the growing conflict between OPEC nations, shale producers, as well as conflicting notions on the security of the dollar’s petro-status and the security and stability of the European Union.
Since the derivatives and credit crisis of 2008, central banks have claimed their efforts revolve around intervention against the snowball effect of classical deflationary market trends. The REAL purpose of central bank stimulus actions, however, has been to create an illusory global financial environment in which traditional economic fundamentals are either ignored, or no longer reflect the concrete truths they are meant to convey. That is to say, the international banking cult has NO INTEREST whatsoever in saving the current system, despite the assumptions of many market analysts. They know full well that fiat printing, bond buying, and even manipulation of stocks will not change the nature of the underlying crisis.
Their only goal has been to stave off the visible effects of the crisis until a new system is ready (psychologically justified in the public consciousness) to be put into place. I wrote extensively about the admitted plan for a disastrous “economic reset” benefiting only the global elites in my article ‘The Economic End Game Explained’.
We are beginning to see the holes in the veil placed over the eyes of the general populace, most notably in the EU, where the elites are now implementing what I believe to be the final stages of the disruption of European markets.
The prevailing illusion concerning the EU is that it is a “model” for the future the globalists wish to create, and therefore, the assumption is that they would never deliberately allow the transnational union to fail. Unfortunately, people who make this argument do not seem to realize that the EU is NOT a model for the New World Order, it is in fact a mere stepping stone.
The rising propaganda argument voiced by elites in the International Monetary Fund and the Bank For International Settlements, not to mention the ECB, is not that Europe’s troubles stem from its ludicrous surrender to a faceless bureaucratic machine. Rather, the argument from the globalists is that Europe is failing because it is not “centralized enough”. Mario Draghi, head of the ECB and member of the board of directors of the BIS, tried to sell the idea that centralization solves everything in an editorial written at the beginning of this year.
“Ultimately, economic convergence among countries cannot be only an entry criterion for monetary union, or a condition that is met some of the time. It has to be a condition that is fulfilled all of the time. And for this reason, to complete monetary union we will ultimately have to deepen our political union further: to lay down its rights and obligations in a renewed institutional order.”
Make no mistake, the rhetoric that will be used by Fabian influenced media pundits and mainstream economic snake-oil salesmen in the coming months will say that the solution to EU instability as well as global instability is a single global governing body over the fiscal life of all nations and peoples. The argument will be that the economic crisis persists because we continue to cling to the “barbaric relic” of national sovereignty.
In the meantime, internationalists are protecting the legitimacy of stimulus actions and banker led policy by diverting attention away from the failure of the central planning methodology.
Mario Draghi has recently announced the institution of Europe’s own QE bond buying program, only months after Japan initiated yet another stimulus measure of its own, and only months after the Federal Reserve ended QE with the finale of the taper.
I would point out that essentially the moment the Fed finalized the taper of QE in the U.S., we immediately began to see a return of stock volatility, as well as the current plunge in oil prices. I think it should now be crystal clear to everyone where stimulus money was really going, as well as what assumptions oblivious daytraders were operating on.
The common claim today is that the QE of Japan and now the ECB are meant to take up the slack left behind in the manipulation of markets by the Fed. I disagree. As I have been saying since the announcement of the taper, stimulus measures have a shelf life, and central banks are not capable of propping up markets for much longer, even if that is their intention (which it is not). Why? Because even though market fundamentals have been obscured by a fog of manipulation, they unquestionably still apply. Real supply and demand will ALWAYS matter – they are like gravity, and we are forced to deal with them eventually.
Beyond available supply, all trade ultimately depend on two things – savings and demand. Without these two things, the economy will inevitably collapse. Central bank stimulus does not generated jobs, it does not generated available credit, it does not generated higher wages, nor does it generated ample savings. Thus, the economic crisis continues unabated and even stock markets are beginning to waver.
As demand collapses due to a lack of strong jobs and savings, it pulls down on the central bank fiat fueled rocket ship like an increase in gravity. The rocket (in this case equities markets and government debt) hits a point of terminal altitude. The banks are forced to pour in even more fiat fuel just to keep the vessel from crashing back to Earth. No matter how much fuel they create, the gravity of crashing demand increases equally in the opposite direction. In the end, the rocket will tumble and disintegrate in a spectacular explosion, filled to capacity with fuel but unable to go anywhere.
Oil markets have expressed this reality in relentless fashion the past few months. Real demand growth in oil has been stagnant for years, yet, because of stimulus, because of the real devaluation of the dollar, and because of market exuberance, prices were unrealistically high in comparison. The crash of oil is a startling sign that the exuberance is over, and something else is taking shape…
The disconnect within banker propaganda could be best summarized by Mario Draghi’s recent statements on the ECB’s new stimulus measures. When asked if he was concerned about the possibility of European QE triggering currency devaluation and hyperinflation, Draghi had this to say:
“I think the best way to answer to this is have we seen lots of inflation since the QE program started? Have we seen that? And now it’s quite a few years that we started. You know, our experience since we have these press conferences goes back to a little more than three years. In these 3 years we’ve lowered interest rates, I don’t know how many times, 4 or 5 times, 6 times maybe. And each times someone was saying, this is going to be terrible expansionary, there will be inflation. Some people voted against lowering interest rates way back at the end of November 2013. We did OMP. We did the LTROs. We did TLTROs. And somehow this runaway inflation hasn’t come yet.
So the jury is still out, but there must be a statute of limitations. Also for the people who say that there would be inflation, yes When please. Tell me, within what?”
Firstly, if you are using “official” CPI numbers in the U.S. to gauge whether or not there has been inflation, then yes, Draghi’s claim appears sound. However, if you use the traditional method (pre-1990’s) to calculate CPI rather than the new and incomplete method, inflation over the past few years has stood at around 8%-10%, and most essential goods including most food items have risen in price by 30% or more, far above the official 0%-1% numbers presented by the Bureau of Labor Statistics.
But beyond real inflation numbers I find a very humorous truth within Draghi’s rather disingenuous statement; yes, QE has not yet produced hyperinflation in the U.S. (primarily because the untold trillions in fiat created still sit idle in the coffers of international banks rather than circulating freely), however, what HAS stimulus actually accomplished if not inflation? Certainly not any semblance of economic recovery.
Look at it this way; I could also claim that if international bankers lined up on a stage at Davos and danced the funky-chicken, hyperinflation would probably not result. But what is the point of dancing the funky chicken, and really, what is the point of QE? Stimulus clearly has about as much positive effect on the economy as jerking around rhythmically in tight polypropylene disco pants.
Japan and the ECB are in fact launching sizable stimulus measures exactly because the QE of the Federal Reserve achieved ABSOLUTELY NOTHING except the purchase of 5-6 years without total collapse (only gradual collapse). And what is the real cost/benefit ratio of that purchase of half a decade of fiscal purgatory? When the breakdown of debt and forex markets does occur, it will be a hundred times worse than if the Fed had done nothing at all. Which brings me to our current state of affairs in 2015, and the IMF plan to take advantage…
IMF head Christine Lagarde put out a press release this past week, one which was probably drafted for her by a team of ghouls at the BIS, mentioning the formation of what she called the “New Multilateralism”.
Lagarde begins with the same old song about accommodative monetary policy:
“Besides structural reforms, building new momentum will require pulling all possible levers that can support global demand. Accommodative monetary policy will remain essential for as long as growth remains anemic – though we must pay careful attention to potential spillovers. Fiscal policy should be focused on promoting growth and creating jobs, while maintaining medium-term credibility.”
Of course, as we have already established, monetary policy does nothing to inspire demand. So, what is a global syndicate of bankers to do? Promote maximum interdependency! Lagarde laments the impediments of the sovereign attitude:
“No economy is an island; indeed, the global economy is more integrated than ever before. Consider this: Fifty years ago, emerging markets and developing economies accounted for about a quarter of world GDP. Today, they generate half of global income, a share that will continue to rise.
But sovereign states are no longer the only actors on the scene. A global network of new stakeholders has emerged, including NGOs and citizen activists – often empowered by social media. This new reality demands a new response. We will need to update, adapt, and deepen our methods of working together.”
And here we have a more subtle insinuation of the planning and programming I have been warning about for years. Because national sovereignty is no longer “practical” in an economically interdependent world (a world forced into economic interdependency by the globalists themselves), we must now change our way of thinking to support a more globalist framework.
The first big lie is that interdependency is a natural economic state. Historically, economies are more likely to survive and thrive the LESS dependent they are on outside factors. Independent, self contained, self sustaining, decentralized economies are the natural and preferable cultural path. Multilateralism (centralization) is completely contrary and destructive to this natural state, as we have already witnessed in the kind of panic which ensues across the globe when even one small nation, like Switzerland, decides to break from the accepted pattern of interdependency.
Also, take note of Lagarde’s reference to the growing role that developing nations (BRICS) are playing in this interdependent globalized mish-mash. As I have been warning, the IMF and the international banks fully intend to bring the BRICS further into the fold of the “new multilateralism”, and the supposed conflict between the East and the West is a ridiculous farce designed only as theater for the masses.
Lagarde reiterates the IMF push for inclusion of the BRICS (new networks of influence) into the new system, as well as the IMF’s role as the arbiter of global governance:
“This can be done by building on effective institutions of cooperation that already exist. Institutions like the IMF should be made even more representative in light of the dynamic shifts taking place in the global economy. The new networks of influence should be embraced and given space in the twenty-first century architecture of global governance. This is what I have called the “new multilateralism.” I believe it is the only way to address the challenges that the global community faces.”
The IMF head finishes with my favorite line, one which should tell you all you need to know about what is about to happen in 2015. I have for some time been following the progress (or lack of progress) in the IMF reforms presented in 2010; reforms which the U.S. Congress has refused to pass. Why? I believe the reforms remain dormant because the U.S. is MEANT to lose its veto powers within the IMF, and the IMF has already made clear that lack of passage will result in just that.
“Against this backdrop, the adoption of the IMF reforms by the United States Congress would send a long-overdue signal to rapidly growing emerging economies that the world counts on their voices, and their resources, to find global solutions to global problems.
Growth, trade, development, and climate change: 2015 will be a rendezvous of important multilateral initiatives. We cannot afford to see them fail. Let us make the right choices.”
Why remove U.S. veto power? Because BRICS nations like China are about to be given far more inclusion in the IMF’s multilateralist order. In fact, 2015 is the year in which the IMF’s Special Drawing Rights conference is set to commence, with initial discussions in May, and international meetings in October. I believe U.S. veto power will probably be removed by May, making the way clear (creating the rationale) for the marginalization of the U.S. dollar in favor of the SDR basket currency system, soon to be boosted by China’s induction.
In 2015 what we really have is a sprint towards currency and market devaluation across the spectrum. India, Japan, Russia, Europe, parts of South America, have all been debased monetarily. The U.S. has as well, most Americans just don’t know it yet. The value of this for globalists is far reaching. They have at a basic level created an atmosphere of lowered economic expectations – a global reduction in living standards which will at bottom lead to third world status for everyone. The elites hope that this will be enough to condition the public to support centralized financial control as the only option for survival.
It is hard to say what kind of Black Swans and false flags will be conjured in the meantime, but I highly doubt the shift towards the SDR will take place without considerable geopolitical turmoil. The public will require some sizable scapegoats for the kind of pain they will feel as the banks attempt to place the global economy in a totalitarian choke hold. While certain institutions may be held up as sacrificial lambs (including possibly the Federal Reserve itself), the concept of banker governance will be promoted as the best and only solution, despite the undeniable reality that the world would be a far better place if such men and their structures of influence were to be wiped off the face of the planet entirely.
by Raul Ilargi Meijer via The Automatic Earth blog
There are many things I don’t understand these days, and some are undoubtedly due to the limits of my brain power. But at the same time some are not. I’m the kind of person who can no longer believe that anyone would get excited over a 5% American GDP growth number. Not even with any other details thrown in, just simply a print like that. It’s so completely out of left field and out of proportion that you would think by now at least a few more people understand what’s really going on.
And Tyler Durden breaks it down well enough in Here Is The Reason For The “Surge” In Q3 GDP (delayed health-care spending stats make up for 2/3 of the 5%), but still. I would have hoped that more Americans had clued in to the nonsense that has been behind such numbers for many years now. The US has been buying whatever growth politicians can squeeze out of the data and their manipulation, for many years. The entire world has.
The 5% stat is portrayed as being due to increased consumer spending. But most of that is health-care related. And economies don’t grow because people increase spending on not being sick and/or miserable. That’s just an accounting trick. The economy doesn’t get better if we all drive our cars into a tree, even if GDP numbers would say otherwise.
All the MSM headlines about consumer confidence and comfort and all that, it doesn’t square with the 43 million US citizens condemned to living on food stamps. I remember Halloween spending (I know, that’s Q4) was down an atrocious -11%, but the Q3 GDP print was +5%? Why would anyone volunteer to believe that? Do they all feel so bad any sliver of ‘good news’ helps? Are we really that desperate?
We already saw the other day that Texas is ramming its way right into a recession, and North Dakota is not far behind (training to be a driller is not great career choice going forward), and T. Boone Pickens of all people confirmed today at CNBC what we already knew: the number of oil rigs in the US is about to do a Wile E. cliff act. And oil prices fall because global demand is down, as much as because supply is up. A crucial point that few seem to grasp; the Saudis do though. Good for US GDP, you say?
What I see more than anything in the 5% print is a set-up for a Fed rate hike, through a variation on the completion backward principle, i.e. have the message fit the purpose, set up a narrative that makes it make total sense for Yellen to hike that rate. And Wall Street banks (that’s not just the American ones) will be ready to reap the rewards of the ensuing chaos.
And I also don’t understand why nobody seems to understand what Saudi Arabia and OPEC have consistently been saying for ever now. They’re not going to cut their oil production. Not going to happen. The Saudis, probably more than anyone, are the guys who know what demand is really like out there (they see it and track it on a daily basis), and that’s why they’ll let oil drop as far as it will go. There’s no other way out anymore, no use calling a bottom anywhere.
In the two largest markets, US demand is down through far less miles driven for a number of years now, while domestic supply is way up; at the same time, real Chinese demand is way below what anybody projects, and oil is just one of many industries that have set their – corporate – strategies to fit expected China growth numbers that never materialized. Just you watch what other – industrial – commodities fields are going to do and show in 2015. Or simply look at prices for iron ore, copper etc. today.
In an unusually frank interview, Ali al-Naimi, the Saudi oil minister, tore up OPEC’s traditional strategy of keeping prices high by limiting oil output and replaced it with a new policy of defending the cartel’s market share at all costs. “It is not in the interest of OPEC producers to cut their production, whatever the price is,” he told the Middle East Economic Survey. “Whether it goes down to $20, $40, $50, $60, it is irrelevant.” He said the world may never see $100 a barrel oil again.
The comments, from a man who is often described as the most influential figure in the energy industry, marked the first time that Mr Naimi has explained the strategy shift in detail. They represent a “fundamental change” in OPEC policy that is more far-reaching than any seen since the 1970s, said Jamie Webster, oil analyst at IHS Energy. “We have entered a scary time for the oil market and for the next several years we are going to be dealing with a lot of volatility,” he said. “Just about everything will be touched by this.”
Saudi Arabia is desperate alright, but not nearly as much as most other producers: they have seen this coming, they’ve been tracking it hour by hour, and then made their move. And they have some room to move yet. Many other producers don’t. Not inside OPEC, and certainly not outside of it. Russia should be relatively okay, they’re smart enough to see these things coming too, and adapt accordingly. Many other nations don’t and haven’t, perhaps simply because they have no room left. Anatole Kaletsky makes quite a bit of sense at Reuters:
… the global oil market will move toward normal competitive conditions in which prices are set by the marginal production costs, rather than Saudi or OPEC monopoly power. This may seem like a far-fetched scenario, but it is more or less how the oil market worked for two decades from 1986 to 2004.
Whichever outcome finally puts a floor under prices, we can be confident that the process will take a long time to unfold. It is inconceivable that just a few months of falling prices will be enough time for the Saudis to either break the Iranian-Russian axis or reverse the growth of shale oil production in the United States. It is equally inconceivable that the oil market could quickly transition from OPEC domination to a normal competitive one.
The many bullish oil investors who still expect prices to rebound quickly to their pre-slump trading range are likely to be disappointed. The best that oil bulls can hope for is that a new, and substantially lower, trading range may be established as the multi-year battles over Middle East dominance and oil-market share play out. The key question is whether the present price of around $55 will prove closer to the floor or the ceiling of this new range. [..]
… the demarcation line between the monopolistic and competitive regimes at a little below $50 a barrel seems a reasonable estimate of where one boundary of the new long-term trading range might end up. But will $50 be a floor or a ceiling for the oil price in the years ahead?
There are several reasons to expect a new trading range as low as $20 to $50, as in the period from 1986 to 2004. Technological and environmental pressures are reducing long-term oil demand and threatening to turn much of the high-cost oil outside the Middle East into a “stranded asset” similar to the earth’s vast unwanted coal reserves. [..]
The U.S. shale revolution is perhaps the strongest argument for a return to competitive pricing instead of the OPEC-dominated monopoly regimes of 1974-85 and 2005-14. Although shale oil is relatively costly, production can be turned on and off much more easily – and cheaply – than from conventional oilfields. This means that shale prospectors should now be the “swing producers” in global oil markets instead of the Saudis.
In a truly competitive market, the Saudis and other low-cost producers would always be pumping at maximum output, while shale shuts off when demand is weak and ramps up when demand is strong. This competitive logic suggests that marginal costs of U.S. shale oil, generally estimated at $40 to $50, should in the future be a ceiling for global oil prices, not a floor.
As Kaletsky also suggests, there is the option of a return to an OPEC monopoly and much higher prices, but I personally don’t see that. It would need to mean a return to prolific global economic growth numbers, and I simply can’t see where that would come from.
Meanwhile, there’s the issue of ‘anti-Putin’ sanctions hurting western companies, with an asset swap between Gazprom and German chemical giant BASF that went south, and a failed deal between Morgan Stanley and Rosneft as just two examples, and that leads me to think pressure to lift or ease these sanctions will rise considerably in 2015. Why Angela Merkel is so set on punishing her (former?) friend Putin, I don’t know, but I can’t see how she can ignore domestic corporate pressure to wind down much longer. Russia is part of the global economic system, and excluding it – on flimsy charges to boot – is damaging for Germany and the rest of Europe.
Finally, still on the topic of oil and gas, Wolf Richter provides another excellent analysis and breakdown of US shale.
It’s showing up everywhere. Take Samson Resources. As is typical in that space, there is a Wall Street angle to it. One of the largest closely-held exploration and production companies, Samson was acquired for $7.2 billion in 2011 by private-equity firms KKR, Itochu Corp., Crestview Partners, and NGP Energy Capital Management. They ponied up $4.1 billion. For the rest of the acquisition costs, they loaded up the company with $3.6 billion in new debt. In addition to the interest expense on this debt, Samson is paying “management fees” to these PE firms, starting at $20 million per year and increasing by 5% every year.
KKR is famous for leading the largest LBO in history in 2007 at the cusp of the Financial Crisis. The buyout of a Texas utility, now called Energy Future Holdings Corp., was a bet that NG prices would rise forevermore, thus giving the coal-focused utility a leg up. But NG prices soon collapsed. And in April 2014, the company filed for bankruptcy. Now KKR is stuck with Samson. Being focused on NG, the company is another bet that NG prices would rise forevermore. But in 2011, they went on to collapse further. In 2014 through September, the company lost $471 million, the Wall Street Journal reported, bringing the total loss since acquisition to over $3 billion. This is what happens when the cost of production exceeds the price of NG for years.
Samson has used up almost all of its available credit. In order to stay afloat a while longer, it is selling off a good part of its oil-and-gas fields in Oklahoma, North Dakota, Wyoming, and Colorado. It’s shedding workers. Production will decline with the asset sales – the reverse of what investors in its bonds had been promised. Samson’s junk bonds have been eviscerated. In early August, the $2.25 billion of 9.75% bonds due in 2020 still traded at 103.5 cents on the dollar. By December 1, they were down to 56 cents on the dollar. Now they trade for 43.5 cents on the dollar. They’d plunged 58% in four months.
The collapse of oil and gas prices hasn’t rubbed off on the enthusiasm that PE firms portray in order to attract new money from pension funds and the like. “We see this as a real opportunity,” explained KKR co-founder Henry Kravis at a conference in November. KKR, Apollo Global Management, Carlyle, Warburg Pincus, Blackstone and many other PE firms traipsed all over the oil patch, buying or investing in E&P companies, stripping out whatever equity was in them, and loading them up with piles of what was not long ago very cheap junk bonds and even more toxic leveraged loans.This is how Wall Street fired up the fracking boom.
PE firms gathered over $100 billion in their energy funds since 2011. The nine publicly traded E&P companies that represent the largest holdings have cost PE firms at least $12.7 billion, the Wall Street Journal figured. This doesn’t include their losses on the smaller holdings. Nor does it include losses from companies like Samson that are not publicly traded. And it doesn’t include losses pocketed by bondholders and leveraged loan holders or all the millions of stockholders out there.
Undeterred, Blackstone is raising its second energy-focused fund; it has a $4.5 billion target, Bloomberg reported. The plunge in oil and gas prices “has not created a lot of difficulties for us,” CEO Schwarzman explained at a conference on December 10. KKR’s Kravis said at the same conference that he welcomed the collapse as an opportunity. Carlyle co-CEO Rubenstein expected the next 5 to 10 years to be “one of the greatest times” to invest in the oil patch.
The problem? “If you have an asset you already own, it’s probably going to go down in value,” Rubenstein admitted. But if you’ve got money to invest, in Carlyle’s case about $7 billion, “it’s a great time to buy.” They all agree: opportunities will be bountiful for those folks who refused to believe the hype about fracking over the past few years and who haven’t sunk their money into energy companies. Or those who got out in time.
We live in a new world, and the Saudis are either the only or the first ones to understand that. Because they are so early to notice, and adapt, I would expect them to come out relatively well. But I would fear for many of the others. And that includes a real fear of pretty extreme reactions, and violence, in quite a few oil-producing nations that have kept a lid on their potential domestic unrest to date. It would also include a lot of ugliness in the US shale patch, with a great loss of jobs (something it will have in common with North Sea oil, among others), but perhaps even more with profound mayhem for many investors in US energy. And then we’re right back to your pension plans.