Part 5: The Root Of Sunni Jihadism—-Washington’s Erroneous Notion That The Persian Gulf Is An American Lake
The terrorist threat that has arisen from the Sunni side of the Islamic divide is largely of Washington’s own making; and it is being nurtured by endless US meddling in the region’s politics and by the bombing and droning campaigns against Washington’s self-created enemies.
At the root of Sunni based terrorism is the long-standing Washington error that America’s security and economic well-being depends upon keeping an armada in the Persian Gulf in order to protect the surrounding oilfields and the flow of tankers through the straits of Hormuz.
That doctrine has been wrong from the day it was officially enunciated by one of America’s great economic ignoramuses, Henry Kissinger, at the time of the original oil crisis in 1973. The 45 years since then have proven in spades that its doesn’t matter who controls the oilfields, and that the only effective cure for high oil prices is the free market.
Every tin pot dictatorship from Libya’s Muammar Gaddafi to Hugo Chavez in Venezuela to Saddam Hussein, to the bloody-minded chieftains of Nigeria, to the purportedly medieval Mullahs and fanatical Revolutionary Guards of Iran has produced oil. And usually all they could because almost always they desperately needed the revenue.
For crying out loud, even the barbaric thugs of ISIS milked every possible drop of petroleum from the tiny, wheezing oilfields scattered around their backwater domain before they were finally driven out. So there is no economic case whatsoever for Imperial Washington’s massive military presence in the middle east.
The truth is, there is no such thing as an OPEC cartel——virtually every member produces all they can and cheats whenever possible. The only thing that resembles production control in the global oil market is the fact that the Saudi princes treat their oil reserves not much differently than Exxon.
That is, they attempt to maximize the present value of their 270 billion barrels of reserves. Yet ultimately they are no more clairvoyant at calibrating the best oil price to accomplish that objective at any given time than are the economists employed by Exxon, the DOE or the International Energy Agency.
For instance, during the run-up to the late 2014 collapse of the world oil price, the Saudis over-estimated the staying power of China’s temporarily surging call on global supply.
At the same time, they badly under-estimated how rapidly and extensively the $100 per barrel marker reached in early 2008 would trigger a flow of investment, technology and cheap debt into alternative sources of supply. That is, the US shale patch, the Canadian tar sands, the tired petroleum provinces of Russia, the deep offshore of Brazil etc—to say nothing of solar, wind and all the other government subsidized alternat…
Today's Contrarian Reads
The Reaganite Tax Cut Myth—It Was Just Trumpian/GOP Fiscal Snake Oil, Part 1
As the market continues to crater, we are not sure who is more delusional: The chart-monkeys clinging to their DMAs and Fibonacci pivots or the true believers who think that the fiscal abomination known as the Christmas Eve Tax Cut will actually forestall the next recession and stimulate the current aging business cycle into permanent […]
The Eurozone’s Trillion Dollar Bank Problem
The total volume of Non-Performing Loans across the European Union is still at around EUR 900 billion, well above pre-crisis levels, with a provision ratio of only 50.7%, according to the European Commission. Although the ratio has declined to 4.4%, down by roughly 1 percentage point year-on-year, the absolute figure remains elevated and the provision ratio […]
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The Intolerable Scourge of Fake Capitalism
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Washington’s Real Threat To Freedom Of The Press—-Pending Prosecution Of Julian Assange
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Imperial Washington’s So-Called War On Terrorism—–$6 Trillion Spent, 500,000 Dead
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Wither Red Capitalism? The Dead End Of Chinese Keynesianism Versus Hard Money
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The Race Is On—Towards 6.0% Mortgages And Housing Bust 2.0
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Tech Bubble 2.0: When Dotcoms Became Unicorns
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