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Will Gaza War Spark Global Economic Shock?

November 12th, 2023 Comments off

 

Sheldon Filger-blogger for GlobalEconomicCrisis.com

 

 

Economist Nouriel Roubini has written an article for Project Syndicate that looks at the probable scenarios for the trajectory of the Israel-Gaza war, and their likely consequences for the global economy. Bottom line: Roubini thinks that economists, investors, and markets in general are underestimating the risk factors of a worst-case spillover of the Gaza conflict.

Roubini assigns a 35% probability that the Gaza war is transformed into an all-out regional war, with Iran unleashing its proxies against Israel and its U.S. ally. Ultimately, in this scenario, Israel attacks Iran’s nuclear facilities, with American support.

What are the economic implications of such a scenario? A geopolitical shock similar to the oil shock of the 1970s. This would result in global stagflation, with Europe and China in particular being vulnerable. Ironically, the United States would suffer economic dislocation somewhat less, as it is now the number one oil producer in the world, a sharp contrast with the 1970s. However, a regional war in the Middle East would create further political instability in the U.S., with negative economic implications.

Essentially, Nouriel Roubini is warning that global markets are only pricing in a 5% probability of a worst-case scenario, where 35 % is more realistic. This unwarranted optimism, posits Roubini, leaves the global economy highly vulnerable to the worst possible economic consequences.

Russia Intervenes In Syria’s Civil War–Will This Be the End For Vladimir Putin?

September 16th, 2015 Comments off

A mythology surrounds the man who has been President or Prime Minister of the Russian Federation for the past sixteen years, particularly among a clique of sycophants in Western Europe and the United States. This Putin myth, embellished by the Kremlin’s international television propaganda arm “Russia Today,” has convinced some that Mr. Putin is much smarter and more thoughtful in his long-term thinking than his peers in the West. My question to those who still believe in the Putin myth of infallibility is this: why did the Russian president recently decide on sending his armed forces to Syria to participate in that sad country’s interminable and ever more bloody civil war?

Not even the Russian president bothers to deny that Russia is establishing a forward operating base adjacent to the Syrian port of Latakia. The evidence is so overwhelming in an age of Internet access to satellite photography, why refute the obvious? Putin does offer a rationalization of sorts; the Kremlin, so says the Russian president, has decided to join the fight against the Islamic State, or ISIS. In reality, with Russia’s Syrian ally (and Iran’s puppet) Basher al-Assad on the ropes , President Putin has made a strategic decision to join with the Iranian Shiite theocracy and its Hezbollah proxy to continue to wage war on Syria’s Sunni Arab majority, primarily to save a long-time client from total collapse.

If Putin is as smart and savvy as his fans in the West maintain, why has he not learned from America’s failed overseas intervention in Iraq, not to mention Vietnam? Then there is the example closer to home, the Russian geopolitical disaster of a quarter of a century ago; the Soviet Union’s invasion of Afghanistan. If an army of 150,000 soldiers backed by massive airpower could not defeat the Islamist fighters in the mountains of Afghanistan, what calculus leads the Kremlin to believe that the much weaker Russia of today can have anything but a temporary and localized impact on the horrendous Syrian Civil War?

It appears that prestige, and a desire not to lose Russia’s version of Guantanamo Bay, Cuba–the Russian naval base in Tartus, Syria– are the basis of the deployment of Russian military assets to Latakia. Whatever the short-term benefits are for Assad and his Alawite minority regime, the long-term impact for Russia will be brutally punishing. The appalling Russian experience in Afghanistan should have informed Russia’s decision makers of the dangerous path they have embarked upon.

When Iran deployed its Hezbollah militia, paid mercenaries and Iranian Revolutionary Guard Corps to Syria in the earlier stages of the Syrian Civil War, there were predictions outside the Middle East that this marked an irredeemable turn in the tide of battle in favor of Assad. A much more knowledgeable observer, the Beirut-based Palestinian-American journalist Rami Khouri, warned that Iran’s intervention in the Syrian Civil war would only inflame sectarian passions, leading to a regional Sunni-Shiite conflict. That predication had been vindicated in all its horror. Now Putin is doubling-down on the hell that he and his Iranian ally have contributed towards creating. Russia, which today has only a fraction of the military capability of the former Soviet Union, cannot achieve victory for Assad. However, as with Iran’s intervention in Syria, Vladimir Putin will succeed in galvanizing hatred towards his nation, unleashing a jihad against the Kremlin that will not only involve evermore fighters from the Sunni Arab world joining in a holy war against Russia’s invasion of the Arab world. In all probability, the festering discontent within Russia’s own borders among a disaffected and increasingly militant Muslim minority in regions such as Chechnya will be exacerbated. In the early years of Putin’s rule, Russia was subjected to a wave of terrorist attacks that killed hundreds of Russian civilians, all attributed to unrest in Chechnya. That is but a harbinger of what will come, a predictable bloodbath on Russia’s own soil as blowback for Mr. Putin’s ill-fated attempt to show he can militarily intervene in the Muslim world without incurring the consequences his Soviet-era predecessors experienced over Afghanistan.

 

 

 

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Barack Obama Meets Neville Chamberlain And Joseph Stalin? Unsettling Parallels With The Infamous Munich Agreement of 1938 And Its Aftermath

July 15th, 2015 Comments off

President Obama has made America’s worst strategic blunder by empowering the anti-American regime in Iran, acquiescing in its burgeoning hegemonic role in the Middle East, while legitimating its status as a nuclear threshold power. In all probability, this will mean the attainment of full nuclear weapons capability in a decade, if not sooner, by the theocratic dictatorship in Iran, unless a power other than Washington decides to stop them.

In the wake of the nuclear deal with Iran consummated officially by the P5 plus 1, but in reality between Secretary of State John Kerry and his Iranian counterpart, Javad Zarif, political adversaries in Washington are weighing in on the nuclear treaty, their positions largely pre-determined by their partisan politics and ideologies rather than by a cogent analysis. This applies to those supporting and opposing Obama’s Iran deal. What is being ignored is the true basis for President’s Obama’s historic gamble on Iran and its implacably anti-American regime.

In a private meeting with leftwing progressive activists in the Democratic Party held in January 2014, Obama’s Deputy National Security Advisor, Ben Rhodes, spelled out the administration’s intentions. Unknown to Rhodes, his confidential briefing was secretly recorded, and details would subsequently leak out (http://freebeacon.com/columns/the-coming-detente-with-iran/). The core of what he had to say about the negotiations with Iran:

“So no small opportunity, it’s a big deal. This is probably the biggest thing President Obama will do in his second term on foreign policy. This is healthcare for us, just to put it in context.” He went on to say, “We’re already kind of thinking through, how do we structure a deal so we don’t necessarily require legislative action right away. And there are ways to do that.”

Largely in secret, and based on a belief that the American people lacked the sophistication to fully understand the Iran issue as thoroughly as President Obama and his expert advisors, a policy decision was apparently made to engage in a grand act of appeasement, allowing Iran to maintain intact its illicit nuclear infrastructure designed solely to fabricate fissile materials suitable for ultimately only one purpose–manufacturing nuclear weapons. A fig leaf of a 10-year moratorium on full-scale use of that capacity by Iran, with a supposedly strict inspection regime that is obfuscated by a complex treaty that is so arcane, it allows Iran numerous opportunities to thwart its intent and cheat successfully, has been presented as largely a public relations exercise. The real intent of the Iran deal, as Ben Rhodes suggested 18-months ago, is to transform Iran from an adversary to a regional ally of America’s and serve as the Middle East policeman, allowing the United States to finally extricate itself from military involvement in that region.

This is where parallels with the Munich agreement of 1938 resonate most strongly, for reasons largely forgotten. Neville Chamberlain signed an agreement with Adolf Hitler, sacrificing Czechoslovakia in a grand act of appeasement, not solely to achieve “peace in our time.” The British political establishment of that era viewed communism and Soviet Russia as a far greater menace than Nazi Germany. It was their hope that the Munich agreement would focus Hitler’s attention towards the East, and use Nazi Germany’s military power against Stalin’s Russia.

It was the reaction of Soviet dictator Stalin to the Munich agreement that resonates with the contemporary thinking of the Obama administration on Iran. He decided to play his own game of appeasement with Hitler, signing the notorious Soviet-German non-aggression pact that enabled Hitler to launch the Second World War. Stalin was fully aware that in Nazi ideology, the Russian people were viewed on the same level as the Jews, with Hitler boasting in Mein Kampf of his future intentions to destroy Russia as a nation and conquer its lands. Stalin convinced himself that the non-aggression treaty ushered in an era of pragmatism in German policy towards Russia, and Nazi ideology had faded away. As history was to reveal, he was fatally wrong is his calculation, and the result was that his country was nearly annihilated, and escaped total destruction at the cost of tens of millions of lives.

Barack Obama, John Kerry and Ben Rhodes apparently believe in a manner similar to Stalin’s that the Ayatollahs’ vehemently anti-American hatred is not a core value of the Islamic Republic of Iran, and will be sublimated by pragmatism. Yet, even as the Iran Deal was being finalized, the Supreme Leader of Iran, Ayatollah Khamenei publicly chanted “death to America!” American flags were burning on Iranian streets as Kerry and Zarif exchanged smiles. And the regime’s most militant instrument of power, the Iranian Revolutionary Guard Corps, was staging naval exercises that involved the “sinking” of a replica of an American aircraft carrier.

President Obama has apparently convinced himself that Tehran’s hostility is only a passing phase, and that in time it will become the trustworthy guardian of the Middle East, protecting the United States from what the administration seems to regard as the unruly Sunni Arab world. Decades of alliances with the broader Arab world, and especially Saudi Arabia and the Gulf countries, along with Israel, are in the process of being abandoned, in what must be regarded as the most reckless crapshoot in American geo-strategic planning.

Unfortunately, the administration has lulled itself into sleepwalking with a hegemon whose core ideology, as the leaders of the Islamic Republic have repeatedly stated, is centered on hatred of the United States. Unless other forces can prevent what at this point seems inevitable, the ultimate outcome of the Iran deal is that Americans will one day awaken to the reality of an apocalyptic regime pointing nuclear-tipped intercontinental ballistic missiles at their shores.

 

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Islamic State–aka ISIS, ISIL– is Winning its War as President Obama Stumbles

May 26th, 2015 Comments off

Amid the flurry of Obama administration official statements promulgated by its various presidential and departmental spokespersons, reality is setting in. Despite the happy talk from Washington about ISIL (the Obama administration’s preferred acronym for describing the Islamic State), military facts on the ground cannot be eradicated by press briefings and political spin.  The recent and significant victories by the armies of the Islamic State in Palmyra, Syria and Ramadi, Iraq are a clear testament to the undiminished military efficacy and capability of the nascent caliphate.

Last  October I penned a piece in the Huffington Post, “President Obama Wages War on the Islamic State: Anatomy of a Disaster in the Making” (http://www.huffingtonpost.com/sheldon-filger/president-obama-wages-war_b_5933642.html), in which I predicted failure for President Obama in his role of Commander-in-Chief in the evolving military confrontation with the Islamic State and its appointed Caliph, Abu Bakr al-Baghdadi. I specifically highlighted four areas I saw as flaws in the President’s approach towards the struggle with the caliphate: 1. Propensity to underestimate the enemy and his capabilities; 2.Overreliance on insufficient means, primarily airpower; 3.Lack of a grand strategic vision, essential for prevailing in the conflict; 4. Intellectually myopic in recognizing the full dimensions of the threat posed to America by the Islamic State.

Regrettably, all the deficiencies I outlined seven months ago remain intact, as evidenced by the recent strategic victories gained by the Islamic State’s military forces in Syria and Iraq. It should be pointed out that the distance between Palmyra in Syria and Ramadi in Iraq is more than 600 kilometers, or nearly 400 miles. The fact that the Islamic State could simultaneously deploy major forces and prevail in those two widely separated battle arenas is concrete evidence to knowledgeable military experts of a highly competent military staff, and a mastery of the operational art of war. The choice of where the Islamic State advances or withdraws also pinpoints the highly strategic nature of the Islamic State’s military operations, which appear geared towards dominance of road networks, essential for controlling the large areas of Syria and Iraq currently claimed by the caliphate.

When America first began its confrontation with militant Islam in the form of al-Qaeda post 9/11, the jihadists were characterized and described as non-state actors. This description is no longer tenable in comprehending the challenge of the Islamic State. This entity may not follow the pattern of a traditional nation-state that participates in the international arena. However, in terms of its structure and the threat it poses, the Islamic State is in fact what it declares itself to be– a state, and one with an army with a skilled general staff, effective logistics and disciplined and highly motivated foot soldiers, able to employ combined arms, including armor and artillery support. Far from the “jayvee team” Barack Obama suggested as a metaphor for the Islamic State in January 2014, this entity has morphed into a most serious and capable military threat, transcending the conventional description of such Islamist phenomena as terrorist non-state actors.

While confusion and disarray reign within the circles of power in Washington, clarity seems to be the defining characteristic of the Islamic State. Despite attempts by U.S. policymakers with no comprehension of the history of Islam to downplay and distort its Islamic credentials, Abu Bakr al-Baghdadi and the Islamic State’s leadership circles are firmly welded to their historical narrative, which they fully comprehend. Their model is the Prophet Mohammed, who first brought his religious revelation to the Arabian peninsula through the sword. In the century after the Prophet’s death, his companions conquered the largest empire in history up to that time through an unparalleled application of religious fanaticism, combined with innovative military tactics. They were harsh and uncompromising towards the unbelievers, and it is that identical religious zeal that underpins the fierceness and tenacity of the soldiers of the Islamic State.

As the Obama administration gropes for answers to the challenge of the Islamic State, it appears that their new stratagem is to place their hopes in Shiite-dominated Iran, a theocracy that hates America as much as the Islamic State, and which itself is despised by the Sunni Muslim community al-Baghdadi and his caliphate represent. On top of the already monumental mistakes and strategic miscalculations President Obama has been the architect of in addressing the Islamic State, it seems that an even more dangerous error is in the process of being engineered–supporting the anti-American ayatollahs in Tehran as the protector of the Middle East from the Islamic State. I can think of no other policy decision by the Obama administration that would serve the highest hopes and aspirations of the Islamic State so well.

In the ongoing battle between the 21st and 7th centuries, it must be unfortunately concluded that the seventh century is in ascendance.

 

Hillary Clinton is running for President of the United States  in 2016. See the video about the book that warned back in 2008 what a second Clinton presidency would mean for the USA:

 

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Hillary Clinton Nude

Hillary Clinton Nude

Why Does Iran Want Nuclear Weapons? An Alarming Possibility

March 3rd, 2015 Comments off

A heavy cloak of surrealism encapsulates the negotiations the Obama administration is conducting with Iran over the latter’s nuclear enrichment program. Though the premise of the diplomatic negotiations being spearheaded by U.S. Secretary of State John Kerry is to permit Iran to retain a substantial uranium enrichment program so long as the Iranian nuclear project is “peaceful,” there is a clear consensus by senior members of America’s intelligence community, past and present,  that Iran’s nuclear activities are solely geared towards eventual weapons production. An example of that viewpoint was expressed recently by the former deputy director of the Central Intelligence Agency,  Michael Morell.

 

In a February interview with Charlie Rose on Bloomberg TV, the former CIA deputy director, commenting on leaks indicating that the Obama administration proposed to allow Tehran to retain more than 6,000 functioning centrifuges utilized for uranium enrichment, said “If you are going to have a nuclear weapons program, 5,000 is pretty much the number you need.” Morell added, “If you have a power program, you need a lot more. By limiting them to a small number of centrifuges, we are limiting them to the number you need for a weapon.” (http://www.politifact.com/punditfact/statements/2015/feb/25/michael-morell/odd-reality-irans-centrifuges-enough-bomb-not-powe/) In the same interview, the former number two man at the CIA stated that he is convinced that Iran’s supreme leader, Ayatollah Ali Khamenei, has already made a decision to acquire nuclear weapons capability, most probably through an undetected covert program. (https://archive.org/details/BLOOMBERG_20150219_000000_Charlie_Rose#start/2640/end/2700)

 

Having made the leap in recognizing that Iran’s claimed “peaceful” nuclear project is  without question a weapons program, functioning alongside Tehran’s large-scale ballistic missile development and production project, the intelligence experts, including Michael Morell, provide explanations for the motivation behind Iran’s nuclear weapons program deeply rooted in Western concepts, including regime preservation and enhancing Iranian hegemony in the Middle East. In my view, this is a mistaken approach, because it is based solely on speculation from analysts schooled in secular geopolitical theories.

 

I offer a dissenting view on the purpose of Iran’s nuclear weapons project, which is based on what the supreme leader of Iran has communicated to his own Iranian constituents. On July 9, 2011 Ayatollah Ali Khamenei delivered a speech to teachers and graduates of Mahdaviat, a term referring to the belief in Shia Islam in the return of the 12th Imam or Mahdi, an eschatological figure that will supposedly herald in an era of global Islamic justice through an apocalyptic annihilation of the present world order. The speech the supreme leader delivered is extraordinary in its content, and can be viewed on YouTube, complete with English subtitles (http://youtu.be/MtzvMkV3V-g). What is most striking about Khamenei’s discourse is that the most senior political leader of a geographically complex nation of 80 million people, with major economic and social challenges, spoke for more than twenty minutes without a single reference to the myriad of secular issues confronting Iran. The entirety of the speech delivered by the supreme leader of Iran was devoted to the return of the 12th Imam as the Mahdi from a state of occultation. He closed his address with the following words: “I hope we will be among his followers both when he is in occultation and when he re-appears. By Allah’s favor, we will be among the soldiers who will fight alongside Imam Mahdi and I hope we will be martyred for his cause.”

 

In the second decade of the 21st century it staggers the Western mind to have to intellectually confront a nation-state conducting its policy for a theological and possibly eschatological purpose. However, based on what Iran’s supreme leader has clearly communicated is his top priority, namely the martyrdom of the Iranian people for the sake of the return of the 12th Imam, the possible connection of Tehran’s nuclear weapons project with the theological agenda of that nation’s rulers should not be discounted by policymakers in Washington. The Obama administration and the State Department may find it inconceivable that a nation in our contemporary world would create a vast uranium enrichment capability, much of it at hardened or underground locations, for the objective of bringing about an apocalyptic event that will set the stage for the return of the 12th Imam. However, ignoring the words of Ayatollah Ali Khamenei  and transposing our own Western concepts on how we perceive Iran’s motivation for creating its nuclear project is a perilous course for America and the world to pursue.

 

If Hillary Clinton runs for President of the United States  in 2016, see the video about the book that warned back in 2008 what a second Clinton presidency would mean for the USA:

 

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Hillary Clinton Nude

Hillary Clinton Nude

Obama, Iran and the late William Buckley

February 16th, 2015 Comments off

There are growing indications that the Obama administration will sign a nuclear agreement with Iran that will allow Tehran to become a nuclear-threshold state. It seems the only issue being contested at present is the extent of the cosmetic and temporary concessions the Iranians will grant so that Iran does not fully emerge as a nuclear weapons state until after the expiration of the Obama presidency.  The disarming body language and genuine warmth that characterizes the public interaction between U.S. Secretary of State John Kerry and Iran’s Minster of Foreign Affairs Mohammad Javad Zarif seems to point in that direction, belying the fact that these two nations have not had diplomatic relations for 35 years because the government of one of those states ordered its armed thugs to attack and seize the embassy of the other nation, in the most flagrant violation of international law, holding its diplomats hostage for 444 days.

Of course, Barack Obama has promised on more than one occasion that he would never permit Iran to become a nuclear armed state. Then again, this is the same President Obama who warned Syria’s president not to use poison gas on his own people, or there would be consequences for crossing that red line. And let us not forget the President’s assurances that the war in Iraq was over and it was safe to withdraw all U.S. forces, or that the emerging Islamic State was nothing more than a “jayvee team” or that Yemen was a great success story for America’s anti-terrorism strategy–the same Yemen where Washington was recently forced to close its embassy after a coup in that country staged by anti-American rebels loyal to Iran.

The consequences involved in permitting Iran to become a nuclear weapons state are, obviously, far more consequential. Barack Obama is not the first president confronting a rogue regime about to acquire nuclear weapons capability. In the early 1990s, evidence mounted that North Korea was embarking on a nuclear weapons program. As with President Obama, then President Clinton pledged to the American people that the North Korean regime would never be permitted to obtain nuclear weapons. Then former President Jimmy Carter came to the rescue. He flew to North Korea, met with the reigning dictator and laid the groundwork for what became the 1994 Agreed Framework treaty, which supposedly froze North Korea’s attempt to develop atomic weapons through plutonium production in exchange for U.S. economic aid. However, the treaty collapsed after Clinton left office when U.S. intelligence learned that North Korea had cheated on the agreement by secretly developing a uranium enrichment program as an alternative path towards developing nuclear bombs. In 2006, North Korea conducted its first test detonation of a nuclear bomb.

It appears that the Obama administration is following in the path originally set by President Clinton. In addition to tolerating a vast nuclear enrichment facility, much of it underground, that can only have been established for the eventual mass production of nuclear bombs to mate with Tehran’s increasingly powerful and longer-range ballistic missiles, the current administration has been passive in the face of Iran’s growing hegemony in the Middle East, as witnessed by Tehran’s virtual  occupation of Lebanon through its proxy militia, its massive intervention in the Syrian civil war on the side of Bashar al-Assad, and increasing military involvement and control in Iraq and the recent pro-Iranian coup in Yemen. This passivity is inexplicable, considering the potential  and dire strategic and economic consequences for the United States.

What about the character of the regime that President Obama and his national security team seem about to trust with the most destructive weapons on earth? Amid  the long list of Iranian terrorist attacks against the U.S. and its interests aboard  unleashed by Tehran since 1979, there is one which, more than any other, defines the essence of the regime of the Ayatollahs and its contempt for the United States.

In 1984 the CIA station chief in Beirut, William Buckley, was kidnapped by the Iranian controlled Hezbollah  militia. The fate of William Buckley was disclosed by Washington Post columnist Jack Anderson in an article published the following year (http://news.google.com/newspapers?nid=1979&dat=19851210&id=ZqUiAAAAIBAJ&sjid=1a0FAAAAIBAJ&pg=3231,8626261). According to Anderson, who based his account on confidential sources within the U.S. intelligence community, Buckley was smuggled into Iran, and subjected to numerous bouts of brutal interrogation under barbaric torture in the basement of the Iranian foreign ministry, the same building being presided over today by John Kerry’s Iranian counterpart, Zarif.  The barbarous torture eventually induced a heart attack, leading to the death of Buckley. As Jack Anderson stated in his article, Iran was responsible for the horrific murder under torture of an American patriot.

President Obama seems determined to move forward on a nuclear agreement with the regime that tortured and murdered William Buckley. He should reflect on how this dedicated CIA agent must have felt, abandoned by his government and alone with his Iranian torturers, enduring a hellish nightmare in the basement of the Iranian foreign ministry.  Is the nation William Buckley died for now about to be abandoned, for the sake of a presidential legacy?

If Hillary Clinton runs for President of the United States  in 2016, see the video about the book that warned back in 2008 what a second Clinton presidency would mean for the USA:

 

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Hillary Clinton Nude

Hillary Clinton Nude

Oil Prices Continue To Contract As OPEC Maintains Production Levels

December 10th, 2014 Comments off

Since mid-June the price per barrel of petroleum has collapsed by a staggering 37 percent. This almost perfectly  mirrors–in reverse- -the steep rise in oil prices  in mid-2008, which was followed by an equally sharp contraction when the Great Recession–the onset of the global economic and financial crisis–struck with full fury.

Only a few years ago, the talk in global investment circles was about the phenomenon of Peak Oil.  However, several factors have converged to precipitate the collapse of oil prices. Not only has the continued slump in the Eurozone  softened global demand for petroleum exports; the production of shale-derived oil in the United States, enabled by cost-effective technological breakthroughs in extraction, has greatly increased the global supply of oil, while dampening demand in the U.S. for oil imports. Furthermore, China’s growing appetite for imported oil has been at least partially retarded by lower rates of economic growth. In addition, OPEC has failed to cut global production, thus maintaining high global output of oil.

Oil remains a volatile commodity. A new crisis in the Middle East, particularly with Iran, could easily spike oil prices. However, if the economic forces that have propelled the downward  pressure on petroleum prices prove stable, the result could very well be fiscal calamity for several oil-dependent economies, particularly those of Venezuela and Iran, and to a slightly lesser degree Russia. Left uncertain is the long-term impact of shale oil extraction in the United States, which requires prices above the cost of extraction, currently in the mid-forty dollars per barrel range, to remain economically viable. With the current per barrel price of oil below 70 dollars, it is not inconceivable that further declines may place the booming shale oil industry in the U.S. in a serious quandary.

The current collapse of oil prices, combined with other negative economic trends, opens up long-term implications that will further upset the already fragile state of the global economy. The short-term befits of lower prices at the gas pump will be likely offset by the worldwide ramifications of shrinking fiscal resources for major oil-exporting emerging economies, which may place financial institutions and investment firms at risk that are highly exposed to debt by sovereigns that are highly reliant on oil exports.

 

If Hillary Clinton runs for President of the United States  in 2016, see the video about the book that warned back in 2008 what a second Clinton presidency would mean for the USA:

 

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Hillary Clinton Nude

Hillary Clinton Nude

President Obama Fires Secretary of Defense Hagel: Barack Obama and the Audacity of Failure

November 25th, 2014 Comments off

It is often remarked that the Ship of State  is the one ship which leaks from the top. Thus even before the blatantly theatrical political funeral dirge conducted at the White House in which President Obama announced that Secretary of Defense Chuck Hagel, the sole remaining Republican in his cabinet, would  be leaving of his own accord after serving only 22 months, the usual “unnamed senior sources” representing the administration were already telling their media contacts that Hagel was, in effect, fired.

The New York Times reported that  “officials characterized the decision as a recognition that the threat from the militant group Islamic State will require different skills from those that Mr. Hagel…was brought in to employ.” (http://www.nytimes.com/2014/11/25/us/hagel-said-to-be-stepping-down-as-defense-chief-under-pressure.html?_r=0) The implication was that Hagel was a timid man, originally brought in to implement Obama’s stated policy of withdrawing from first Iraq and then Afghanistan, while downsizing  the Defense Department. With the emergence of the Islamic State in Iraq and Syria, a new policy was called for, and a new defense secretary, the unnamed White House source proclaimed, one more muscular and forceful in confronting the Islamic State.

While the passage of time will undoubtedly provide more leaks, perhaps a book of memoirs by Chuck Hagel and further context, this much is clear; President Barack Obama’s national security strategy in relation to Islamist threats stemming from the Middle East, in particular the Islamic State, has been an unmitigated disaster, and soon-to-be former Secretary of Defense Chuck Hagel, a Vietnam combat veteran and moderate Republican with a strong streak of bipartisanship, has been set up as a scapegoat for the administration’s failures.

What we do know for sure is what both the President and his Defense Secretary had stated on the public record in connection with the Islamic State, also, known  as ISIS, and which President Obama insists on calling ISIL.

In January 2014 Obama told David Remnick of The New Yorker, after Islamist forces in Iraq seized Fallujah and raised the Al-Qaeda flag,  “The analogy we use around here sometimes, and I think is accurate, is if a jayvee team puts on Lakers uniforms that doesn’t make them Kobe Bryant.”  (http://www.newyorker.com/magazine/annals-of-the-presidency)

In contrast, Chuck Hagel had this to say about the Islamic State at a Pentagon press briefing conducted on August 21, 2014:  “They are an imminent threat to every interest we have, whether it’s in Iraq or anywhere else… They are beyond just a terrorist group. They marry ideology, a sophistication of military prowess. They are tremendously well-funded. This is beyond anything we’ve seen.” (http://www.reuters.com/article/2014/08/21/us-usa-islamicstate-idUSKBN0GL24V20140821)

While the President was initially dismissive of the Islamic State, and has remained tentative and uncertain in his at times awkward responses, Hagel was far from the passive and timid defense secretary he is now being portrayed as by the masters of spin in the White House. His very forceful and articulate warning displays an impressive level of sober realism that is sorely lacking within the President’s national security council, and from Obama himself.

Turning Chuck Hagel into a scapegoat cannot obfuscate the glaring failures cascading out of the ruins of the administration’s inept foreign policy and national security strategy. Obama is a president who loudly proclaims red lines in the sand, such as use of chemical warfare agents by the Syrian regime, and when President Bashar al-Assad defied those red lines with a grotesque massacre of innocents in the Damascus suburb of Ghouta, Obama grasped onto the flimsy straw tossed at him by Russia’s President Putin, rendering his red line invisible. His is an administration which sends presidential letters proclaiming friendship to the tyrannical “Supreme Leader” of Iran, who almost daily dishes out hatred and contempt for America, while permitting–perhaps encouraging–a senior unnamed official to tell journalist Jeff Goldberg of The Atlantic that Israel’s Prime Minster Netanyahu was, in effect, a fool for trusting President Obama’s pledges on preventing Iran from acquiring a nuclear weapon, because what the administration really sought was to delay an Israeli military operation until the Iranian nuclear program progressed to the point where it was beyond the capacity of the Israel Defense Forces to take it out. (http://www.theatlantic.com/international/archive/2014/10/the-crisis-in-us-israel-relations-is-officially-here/382031/) No wonder few world leaders maintain trust in the President’s word and integrity.

Beyond the Middle East, President Obama has “engineered” the radical deconstruction of Russia-U.S. relations. It must be recognized that the President himself bears a major responsibility for the deterioration in ties between Moscow and Washington. In previous blog pieces, I have pointed out what I believe have been President Putin’s miscalculations. But why did the President send CIA  Director John Brennan to Kiev at a sensitive point in the emerging Ukrainian-Russia crisis? Not only did the administration engage in needlessly provocative acts that exacerbated the crisis over Ukraine; President Obama has given evidence that he harbors deep contempt-as well as profound ignorance-towards Russia. In an interview with The Economist conducted aboard Air Force One in August 2014 the President proclaimed boldly, “Russia doesn’t make anything.” (http://www.economist.com/blogs/democracyinamerica/2014/08/economist-interviews-barack-obama-2) Perhaps the President is unaware that America’s Atlas V rockets, the vehicle used by the Defense Department to launch U.S. spy satellites into orbit utilize the RD-180 rocket engine in their first stage–and this component is not made in America, but in Russia, the land Barack Obama believes  “doesn’t make anything.”

Like the good soldier he is, Chuck Hagel stood stoically and with his dignity intact, beside President Obama and Vice President Biden in the White House’s State Dining Room, as his thinly-disguised termination was being ceremoniously performed. In time, just as with his predecessors Leon Panetta and Robert Gates, he may pen a tell-all book of memoirs, highly critical of the President. However, we need not wait for a future book to conclude that it is the President and his tightly-knit national security team–a clique which largely excluded and isolated Chuck Hagel– and not the fired defense secretary–who bear the historical responsibility for a record of disastrous decision-making.

In 2008, candidate-for-president Barack Obama proclaimed the audacity of hope in a time of despair, and wrote a very thoughtful and sensible op-ed piece in The New York Times, entitled “My Plan For Iraq,”  in which Obama advocated the retention of a residual military force in Iraq and warned that,  “we must be as careful getting out of Iraq as we were careless getting in. ” ( http://www.nytimes.com/2008/07/14/opinion/14obama.html?_r=0)

As with so much else connected with President Obama and national security, he has acted contrary to his past words and proclaimed intentions. There is no longer hope; the despair remains. Amid  the debris of a ruined national security strategy, we are left with the audacity of failure, glaring and unhidden, in spite of the best efforts at scapegoating Chuck Hagel.

 

If Hillary Clinton runs for President of the United States  in 2016, see the video about the book that warned back in 2008 what a second Clinton presidency would mean for the USA:

 

CLICK ON IMAGE TO VIEW VIDEO

Hillary Clinton Nude

Hillary Clinton Nude

 

Will Oil Prices Surge Again?

June 21st, 2009 Comments off
It was only a year ago when the price of a barrel of oil surged above $140. Indeed, amid charges of oil price manipulation by greedy speculators, several leading contenders for the 2008 U.S. presidential race seized on the escalating petroleum price as a major campaign issue. Remember when senators Hillary Clinton and John McCain offered to eliminate Federal gas taxes as an inducement to desperate voters?
The Global Economic Crisis, emerging with full fury after the near collapse of the world’s financial system last fall, brought about an even more spectacular collapse in oil prices. Recently, amid reduced demand sparked by a synchronized global recession, the price of a barrel of black crude descended below $40 a barrel, sending OPEC into fits of despair.

Now, however, the price of oil is once again moving upward. In part, suggest analysts, this is due to a perception that the worst of the economic free fall is behind us. Whether those perceptions are valid or not (and I don’t believe they are), psychology is an important factor is establishing commodity valuation. However, I believe there are other forces at work, or which may intervene in the future, that could radically escalate the price of hydro-carbon energy irrespective of recessionary constraints on consumption. Here, briefly, are factors to consider in anticipating any future oil shock:

  1. China hedging on oil. Apparently, the Chinese are shifting investments allocated from their sovereign wealth fund from U.S. Treasury bills to commodities, including oil. With a sharp drop in exports only partially redressed by a stimulus-funded drive at boosting domestic consumption, it appears that China is building up an oil reserve in anticipation that this commodity will eventually rise greatly in price, simultaneously with the future depreciation of the American dollar. Should China’s oil hoarding increase in tempo, a significant upside in the price of petroleum will become highly probable.
  2. Political instability in the Persian Gulf. The political upheaval occurring in Iran in the aftermath of a presidential election widely perceived by the Iranian people to have been rigged has an unpredictable dynamic. However, most scenarios, either involving prolonged violence or the perpetuation of a radical regime committed to acquiring nuclear weapons, will likely facilitate events that will impact the supply of oil from the most energy-intensive real estate on the planet. Even the mere perception that things might go bad will be enough to drive up the price of oil. Actual events, including internal and external violence, will impose a significantly higher cost penalty.
  3. A terrorist attack involving a strategic target related to the oil industry. Al-Qaeda is well aware of the vulnerability of the global economy, at a time of profound financial and economic crisis, to a targeted attack on a vital element related to the oil industry. Only one single but highly significant target would be enough to send the price of oil to a much higher level. Unfortunately, Al-Qaeda and its allies have many choices to select from a menu of targets. In terms of extraction, transportation to consumers as well as refining and storage infrastructure, there are literally thousands of targets across the globe, any one of which would prove impactful to the stability of oil prices. It would be unduly optimistic to assume that Al-Qaeda is not focussed on such an objective, or that security forces are so effective that they can protect every possible target.

The fall in oil prices from their record highs of last summer amounts to, in effect, a tangible economic stimulus program. Unlike government stimulus spending programs, the fall in oil prices required no deficits, and meant an immediate infusion of money into the pockets of private and corporate consumers. Conversely, the return to higher energy prices at a time in which the world is experiencing its worst economic crisis since the Great Depression of the 1930s would, in terms of impact, be a major tax penalty being imposed on any attempt at a sustained recovery. In essence, the entire global economy is being held hostage to the volatile pricing forces of an essential commodity. Clearly, when it comes to oil price levels, the market does indeed rule.

 

 

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