June 10, 2008
Elaine Meinel Supkis
A huge number of thunderstorms are heading this way fast! Hope to get this story in as fast! Oil is no longer rising fast. Aren't we lucky? But the causes of high oil prices are still there and indeed, getting worse by the day. The problem is war. The US and Israel are very obviously pushing the planet into a totally ridiculous confrontation with Iran. Saudi Arabia hopes to control world oil prices but they really never could in the past nor in the future. This is due to the royals being big playboy spenders. They will just have to kiss Citibank bye-bye. And diesel is being ruthlessly bid up. I see no end to oil's climb. But hark! The dollar is strong thanks to everyone heaving and hoeing until the yen got very weak. Happiness for everyone and the US goes off the cliff.
The U.S. trade deficit widened in April as the surge in oil prices propelled imports to a record, overshadowing the biggest gain in exports in four years.
The gap grew 7.8 percent to $60.9 billion, more than forecast and the most since March 2007, the Commerce Department said today in Washington. Excluding petroleum, the shortfall was little changed. March's deficit was revised lower.
The figures led some economists to estimate that first- quarter growth was greater than previously estimated by the government, even as fuel prices push imports higher. The dollar's two-year slide, coupled with stronger growth in Europe and Asia, is spurring demand for planes built by Boeing Co. and machinery made by Deere & Co.
``The hyper-competitiveness of the dollar, plus reasonable growth in our export markets, that combination has proven to be very powerful,'' said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York. ``Trade's been a buffer; it's kept GDP in positive territory. It's clearly a cushion.''
It doesn't matter ONE FIG how much we export if our trade DEFICIT grows. This simple equation should be shouted out whenever anyone talks about trade. So what, if we sell more Boeings? This is NOT BRINGING JOBS HERE! Far from it. I have written a great deal about Boeing. All the nations with trade surpluses with us fix this by buying our food or Boeing jets. Period. They buy little else! The Boeing contracts are virtually NEVER with buyers, they are always negotiated by DIPLOMATS. And they are characterized by a lot of tit for tat trading. And one of the teats of tit is for Boeing to install facilities in the countries bidding for the jets. Period. Either Boeing has half of the work done overseas so they buy other jets! I have Boeing readers here. People who work for the parent organization in Seattle. They send emails detailing how this works.
So Boeing may make the bottom line look better but IT IS NOT GOOD. It is not making us a greater industrial power. Boeing is being stripped of a lot of its technological and machinery work force. Also, the article above has our foolish representatives who deal with our continuous and terrible trade deficits talking happily about how 'powerful' it is to have a weak dollar! Only today's news is all about how the dollar is...STRONGER. Certainly, the yen is dropping rapidly to the intense delight of the Japanese! I do wish our 'experts' had bigger brains than an addlepated hen hit by a shovel.
Diesel, the world's most-used transport fuel, is so prized by traders they'll pay the biggest premiums in at least 15 years to buy it.
Because refiners can't make enough, diesel sells for $145 a ton, or 14 percent, more than gasoline as China halts exports, the Middle East boosts imports and power shortages force mines from Australia to Chile to run oil-fed generators. For the first time, refiners Valero Energy Corp. and ConocoPhillips this summer will make more money from diesel than gasoline in the Northern Hemisphere, said Andrew Reed, an analyst at Energy Security Analysis Inc. in Boston.
``Diesel is in the driver's seat now, and will be at least in the next few years,'' said Anthony Nunan, assistant general manager for risk management in Tokyo at Mitsubishi Corp., Japan's largest trading company. ``About 43 percent of the world's gasoline is consumed in the U.S., and with high prices and a soft economy, that market is stalling.''
Diesel is way up. I buy diesel and it is screamingly expensive now. The weak dollar means we can't compete in world markets for diesel. And we don't produce enough. Those giant super big ships pouring into the US from Asia and Europe use diesel in gigantic quantities. The 'free trade' dynamics=high diesel prices to fuel these massive ships that transfer goods from where they are produced to mainly the US or the Arab oil pumping kingdoms.
The Arab oil kingdoms don't worry about the price of diesel going way up. They are the sellers. The US has an energy deficit as well as a trade deficit so we get hit with a double whammy. During the last year, the US roiled world oil markets on two fronts: the idiotic, continuous and ruinous push to isolate Iran and shut off all of Iran's oil sales and our cutting interest rates to make our currency worthless. So we are all suffering from painful inflation even as our exports rise but this does NO GOOD AT ALL since we have to import so much fuel! Since many American elites make oodles of money doing this, I doubt any of this will change any time soon. We could tax them all and if they refuse to pay, confiscate their estates, raid their bank accounts, sail our huge, expensive navy to all those lovely UNDEFENDED offshore pirate coves and thus, fix our budget imbalances, our finances, etc. How about it?
Frightened rich people have suddenly surrounded Obama and are forming a phalanx around him to insure he serves them and not us. If they gave Senator Clinton and her wayward husband over $120 million in 5 years, they certainly can pay Obama double that since he will have real power. Rubin has shuffled over to Obama's side this weekend and is now advising him. So much for 'change'. More about that later, after the thunderstorms.
The investment superstar has been Oil. It keeps chugging along and this week, as if to remind everyone that it still had some game in it, it put together back to back records, record single day advances and record high closing prices.
Fundamentals are strong and getting stronger for oil. Consumption keeps going up and supply can’t keep up. Then throw in the potential for a new Middle Eastern war, (take your pick, it could be the US vs Iran or Israel vs Iran or ???), and you add on a war premium that could go up to …. We won’t even speculate.
This is yet another area that the Fed has no control over. Unless the Fed has been dabbling in shuttle diplomacy on the side, this is an area way out of their sphere of control.
This guy is a financial wizard and advisor. Note how stupid he is. The US has total control over war with Iran. All we have to do is warn Israel, they attack Iran, we will stop giving them billions and billions and billions in free money as well as letting them hijack our entire diplomatic corps, our Congress and our President! Since we won't do this and Obama has decided to be a Zionist puppet, we get more and more wars in the Middle East which will only end with the Apocalypse. The Fed can stop this looming war by stopping the war. We are not helpless leaves in the gutter, spinning towards the drain. We are supposedly the greatest power on earth, HAHAHA.
People betting on oil futures better beware: if we do have a war, all of this will be confiscated by the government. They have an ugly history of doing this. Of course, they will only hammer the little speculators, not Exxon/Mobile. Be forewarned. This is why even Wall Street bettors better be antiwar.
By the end of 2007, it was also apparent that the Saudis no longer believed they could substantially affect prices by increasing production. Now, Saudi oil experts believe that the price run-up is due to such factors as investor speculation, the weak dollar and limited output from such key producers as Iraq, Iran and Venezuela.
"They see themselves as having lost control of the market," Priddy said.
The weakening of the economic ties between the United States and Saudi Arabia comes when the Saudi government has increasingly sought to distance itself politically from Washington.
Even as the United States has tried to forge a coalition of Persian Gulf states to counter Iran, Saudi officials have grown skeptical about a security alliance with Washington.
Instead, leaders of the overwhelmingly Sunni Arab kingdom worry that the U.S.-led invasion of Iraq has weakened their security and fret about the Shiite Muslim domination of Iraq. Stephen Hadley, the national security advisor, recently acknowledged to reporters that the war has been a "stress" on the relationship.
The Saudis are not 'distancing themselves'. The US is rushing off screaming, 'Hug me, kiss me, I'm your slave for life,' at Israeli leaders under inditement for taking bribes! The Saudis have been sending out feelers and already are discounting Obama as a potential ally. If Obama hands Jerusalem over to the Jews only, this means the Saudi Royals will invite the Chinese into their golden palaces and make a deal we refused. The Chinese are very aware of this and most anxious to please the Saudis and gain control of Saudi oil export markets. In return, they will defend Saudi Arabia and guess what WWIII will look like?
Saudi Arabia says it will call for a meeting of oil producing countries and consumers to discuss soaring oil prices and work to prevent an unjustified rise in prices.
Information and Culture Minister Iyad Madani says the kingdom will work with OPEC to "guarantee the availability of oil supplies now and in the future."
In a statement following the weekly Cabinet meeting on Monday, the minister said Saudi Arabia will also work to control "unwarranted and unnatural" price hikes.
They will eventually not care what a pint of oil costs in the US once they let go of the dollar. This will happen in harmony with the Chinese who will deep six our monetary rule of the planet. The Chinese do not want this burden....yet. But we are already ripe and ready to fall off the tree and go splat on rocky soil. What if the Saudis cease investing in the US? We better think about this possibility.
There is more than twice as much oil in the ground as major producers say, according to a former industry adviser who claims there is widespread misunderstanding of the way proven reserves are calculated.
Although it is widely assumed that the world has reached a point where oil production has peaked and proven reserves have sunk to roughly half of original amounts, this idea is based on flawed thinking, said Richard Pike, a former oil industry man who is now chief executive of the Royal Society of Chemistry.
Current estimates suggest there are 1,200 billion barrels of proven global reserves, but the industry's internal figures suggest this amounts to less than half of what actually exists.
The misconception has helped boost oil prices to an all-time high, sending jitters through the market and prompting calls for oil-producing nations to increase supply to push down costs.
Oil was at an all-time high in the early 1970s due to wars. The Iran/Iraq war in 1980 did the same thing. The Gulf War I also raised the cost of oil. And Gulf War II did the exact same thing. The looming Jewish/Shiite war will be the Mother of all Oil Price Hikes. Period. The world might not yet be at the Hubbert Oil Peak but the US passed its own peak long ago. Namely, we consume far more oil than we pump. If we confined our actions to only oil we pump, we would be just fine. But then, we would have no gas guzzlers or McMansions, either.
There are many, many misconceptions about the Hubbert Oil Peak and all of them are due to wishful thinking, not hard examination of reality. Fact #1: We cannot tell if we are at the peak except after we are at the peak!
This means, we prepare for the inevitability of this peak, not wait passively until it hammers us. Scrambling to retrofit advanced cultures to a world with reductions in availability of oil is murderously hard! Example: all the exurban McMansions will become uninhabitable and utterly worthless. Our transportation system will collapse. Our farming methods will cease. Heating our houses will be hard and cooling them impossible as they stand today!
Fact #2:But we can build for a depressed oil future! It really isn't all that difficult. The more we do to prepare for this, the more the Peak recedes into the future. If we start now by CONSUMING LESS OIL, we will enjoy the remaining oil much longer. The more we do this, the better.
Many years ago when I talked about all this, I said, 'The window of opportunity to rebuild America for a future with less oil will begin to close in 2000.' This is now happening. It will be more and more expensive to retrofit as the years spin past us. We misspent the last 35 years doing the exact opposite of what we should have done. We bought gas guzzlers and built in ridiculous places and climates. We refused to force builders to put solar energy panels on all rooftops. We still fight off wind energy. Everything is totally out of whack and time will run out on us! If the Peak is 40 years from now, my children will be very much alive and my grandchildren will be entering their prime earning years. If we are past the peak then, they will all suffer unless we CHANGE COURSE NOW. Not next year. NOW.
The lifting of EU sanctions would put the 27-member bloc at odds with Washington over Cuba policy.
U.S. Commerce Secretary Carlos Gutierres urged Europe last week to uphold the measures to prevent authorities being able to give the impression human rights were improving on the island. European Union states are nearing agreement on ending sanctions on Cuba in defiance of U.S. calls for continued pressure for democratic reform on the communist island, diplomats said on Tuesday.
Speaking of wars and the above story where that genius idiot claimed the US government doesn't control wars over oil, look at this Cuba story! The US is pushing every button and hitting very hard and using all our diplomatic capital to enforce an embargo on an important oil pumping nation. Europe goes along with this madness. But NOT with Cuba! Poke in the eye, eh? This is because the US won't punish Europe if they kill our embargo. This article also quotes a State Department tool yapping about 'They torture prisoners in Cuba and put them on trial after years of torture! And want to execute people they kidnap from the Middle...OH MY GOD.'
I hope the Europeans help Cuba close our wicked torture prison facility at Gitmo. Wipe this blight off the map. Ship the guards to Siberia and let them work there.
The EU and the US have threatened Iran with further sanctions unless it verifiably suspends nuclear enrichment.
The measures were announced after US President George W Bush held talks in Slovenia, during what is expected to be his last official tour of Europe.
The "additional measures" will include "steps to ensure Iranian banks cannot... support proliferation and terrorism", said a joint statement.
Mr Bush said a nuclear-armed Iran would be "incredibly dangerous" to peace.
So here it is: our banking system is collapsing and our oil situation is totally whacked and we want to wreck Iran's banks and oil pumping abilities. We will die if we don't stop. Stop! Please! Well, Ron Paul is running his own convention when the Republicans crown McCain and Bob Barr is running on a third party ticket. We have a choice. Might as well vote for one of them if there are NO antiwar candidates!