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Page added on October 5, 2014
World on the brink of oil war as Opec bickers over price
A secretive group of the world’s most powerful oil ministers will soon gather in Vienna to take arguably one of the most important decisions that could affect the still fragile world economy: whether to cut production of crude to defend prices at $100 per barrel, or keep open the spigots as winter looms among the biggest energy-consuming nations?
A sudden slump in the price of crude has exposed deep divisions within the Organisation of Petroleum Exporting Countries (Opec) ahead of its final scheduled meeting of the year next month to decide on how much oil to pump.
Some members, led by Iran, have called for immediate action to stem the drop in oil prices, while the Arab sheikhdoms of the Gulf have so far argued that it could be another three months before it becomes clear whether the group should cut production for the first time since December 2008.
Whatever they decide, oil remains the lifeblood of the global economic system due to its direct impact on inflation and input prices. Brent crude – a global benchmark of oil drawn from 15 fields in the North Sea, dipped last week to multi-year lows below $92 per barrel as a perfect storm of a strong US dollar, oversupply in the system and declining demand shattered confidence in the market. Brent has tumbled 20pc in the last three months after touching $115 per barrel in June.
In the US – the world’s biggest consumer – crude for November delivery at one point last week dropped below the psychologically important $90 pricing level, raising fears that a prolonged slump could put many of America’s shale drillers out of business. Shale oil, which can cost up to $80 per barrel to produce, has spurred an energy revolution in the US, which has started to threaten the dominance of producers in the Middle East.
However, at current price levels many of these new so called “tight oil” wells are approaching the point when they will soon become unprofitable.
Like the situation in the US, falling oil prices are also a double-edged sword for Britain’s economy and investors. Although George Osborne, the Chancellor, is less reliant on tax revenues from the North Sea than some of his predecessors, prices are approaching the point when many of the developments planned offshore west of Shetland by international oil companies could be placed on ice.
A sharp drop-off in domestic oil production and associated tax receipts from the North Sea would give Mr Osborne an unwelcome hole to fill in the government’s public finances heading into next year’s general election. However, falling oil prices will help to keep inflation low.
For Britain’s motorists the current declines have been good news that has trickled through to the price of petrol on forecourts. A litre of unleaded petrol in the UK has fallen a few pence over the past month to an average of around 127.21p on average, a figure last seen in 2011, just before Mr Osborne raised the value added tax on fuel to 20pc, from 17.5pc.
All eyes are now firmly focused on the next move by Opec, which controls 60pc of the world’s oil reserves and about a third of daily physical supply. The group has been branded an unaccountable “cartel” by free-market critics in North America who claim its system of limiting production by setting an output ceiling and quotas is tantamount to price rigging.
Although this is an accusation that the group’s secretariat which is based in Vienna strongly denies, its mostly unelected group of policymaking oil ministers undeniably pull the strings of the global energy industry in the same way that central bankers can control currencies.
Opec states have largely managed to maintain cohesion over the last decade as prices over $100 per barrel have enriched their economies and encouraged adherence to quotas. This consensus is now starting to break down, creating more uncertainty in the market and a potentially destabilising situation for the global economy.
Next month’s meeting promises to be the most tense held since the onset of the Arab Spring in 2010, with the Shi’ite Muslim faction of Iran and Iraq already appearing to line up against Saudi Arabia and the United Arab Emirates (UAE).
Iran’s Oil Minister Bijan Zanganeh has placed his cards on the table early by calling for Opec to urgently cut output to stem the sharp recent decline in prices, which threatens the Islamic Republic’s fragile economy after years of restrictive sanctions.
According to research from Deutsche Bank, Iran has the highest fiscal break-even price for its budget at over $130 per barrel of Brent, compared with the UAE at around $70 per barrel and Saudi Arabia at about $90.
However, the Gulf’s Arab states are all sitting on huge cash piles that are held overseas through sovereign wealth funds and foreign currency assets that can be drawn upon to help them weather any short-term drop in oil export revenues.
Iran, possibly supported by Iraq, will push hard for a change in Opec’s production targets at the meeting and a cut to its overall output by 500,000 barrels per day (bpd) from the 30m bpd limit that it currently sets for members. The latest figures suggest that level has already been breached with Opec members perhaps pumping as much as 1m bpd above the group’s agreed quota.
“Considering the downward trend in prices, Opec members should try to temper production to avoid further price instability,” Mr Zanganeh was quoted saying by Iranian state media at the end of last month, even before crude fell to its current lows.
Mr Zanganeh is at odds with his most powerful rival in Opec, Saudi Arabia’s influential oil minister, Ali Naimi, who has so far dismissed calls for an emergency meeting to be held ahead of November. Nevertheless, the kingdom has taken the precaution of trimming its own output and reducing the price of crude it offers to customers in Asia in an apparent move to defend its market share.
According to Opec figures, Saudi Arabia cut its output over the summer by more than 400,000 bpd to 9.6m bpd. Although the kingdom’s dominant role in global oil markets is increasingly being challenged by the rise of US shale, Saudi retains its place as the swing producer due to the almost 3m bpd of physical capacity it currently holds in reserve.
Demand for crude normally spikes during the northern hemisphere’s winter season and some Opec officials have argued that the group should wait to see if there is a repeat of the “polar vortex” conditions that shut down the eastern seaboard of the US and led to a brief contraction in the country’s economy in the first quarter.
“Winter is coming,” a senior Opec delegate from the Arab side of the Gulf recently pointed out to The Sunday Telegraph when asked about the meeting. “This softness in the market is not long enough to be called a correction so let’s wait until we’re sure it is a correction before taking any action.”
“Within Opec we are not concerned about the price; what concerns us is that the market is well supplied,” he said.
Saudi enjoys some of the lowest production costs, excluding capital expenditure on new projects, in the region of $2 per barrel, giving it a large margin to soak up a sudden drop-off in price. This compares with estimated production costs in the North Sea which are in the region of $50 per barrel, according to Oil & Gas UK figures. This leaves drillers offshore in Britain more susceptible to price fluctuations.
To further complicate the forthcoming meeting, Arab Gulf states remain deeply suspicious of Iran as the leadership in Tehran edges towards a settlement with Western powers over its nuclear programme. An end to Tehran’s economic isolation could trigger the opening up of its oil industry to foreign investment, a move that would bring more crude onto an already flooded market.
Iran is currently producing around 3m bpd of crude but it is thought with access to Western technology this figure could be easily doubled. Combined with Iraq, which aims to eventually increase production capacity to as much as 9m bpd by the end of the decade, both countries could challenge the current dominant position of Saudi Arabia and the Arab Gulf states within Opec.
The looming issue of global over-capacity has been further complicated by the sudden return to the market of light, sweet Libyan crude. Exports from Es Sider have returned to levels of around 800,000 bpd over the last month, adding to the pressure on Brent. In the background is the surge in US shale oil production and the mounting pressure on President Barack Obama to lift the US crude export ban that has been in place since the 1970s to guarantee America’s energy security.
Fracking has helped the US achieve its highest oil production levels since 1986 over the last two months at a rate of 8.5m bpd. The threat of a full lifting of the ban on exports has also helped the US to drive down the price and potentially cripple the Russian economy. Moscow is largely dependent on crude sales for foreign currency earnings and oil trading at around $80 per barrel for a period of months could bring the country to its knees.
Indeed, losing market share to shale drillers in the US and the potential growth of unconventional oil and gas in other regions is a risk that traditional Opec producers are increasingly having to confront. Recent data from the US Department of Energy has revealed that Nigeria, also a member of Opec, has dropped out of the list of countries supplying America with oil.
According to Deutsche Bank analysis “tight oil” in North America would be unlikely to attract investment at a cost of $90 per barrel, close to its current levels. Certain members of Opec are also keen to see countries like the US take more responsibility for maintaining price stability instead of solely focusing on increasing production.
The German investment bank estimates that if Opec fails to cut production in response to the current trend in falling oil prices then around 9pc of US “tight oil” output would be immediately rendered uneconomic at a level of $90 per barrel. This figure would rise to 39pc should prices slump as low as $80 per barrel.
However, some officials within the group already believe that the US should itself shoulder some of the burden.
“The culture of blaming Opec needs to change,” said the Opec delegate. “The responsibility for the market has to be shared.”
On the demand side, a number of leading energy think tanks have recently revised their estimates for demand based on the unexpected slowdown of the Chinese economy in the second half of the year. These worries escalated in August with the latest data showing a slowdown in industrial production in the world’s second-largest economy.
China has picked up much of the slack as the US has moved over the last five years to reduce its dependence on Middle East oil and a longer term slowdown could trigger Opec nations to slash output aggressively to defend prices.
Beijing is now viewed by many Gulf oil producers as a more important energy trading partner than the US, which has been the traditional focus since the end of the Second World War.
The International Energy Agency – the world’s top oil watchdog – revised down in September its forecast for demand for both 2014 and 2015 in response to China’s sudden slowing. The Paris-based group cut 900,000 bpd from demand growth this year and 1.2m bpd from its forecast in 2015, when it expects the total global draw on oil to be in the region of 93.8m bpd.
To complicate the decision that Opec oil ministers face in November, the region is now confronted by the sinister rise of the Islamic State jihadists in northern Iraq and a bitter row between some of its Arab Gulf members over the support of extremists. In Iraq and Syria, the group known as Isil, is itself thought to be profiting from the sale of oil to the tune of $2m a day.
Given that Gulf states have pulled in the major powers led by the US and the UK into taking military action against Isil they may feel obliged to keep pumping at current rates, at least while Western forces carry out strikes and destroy the biggest single threat to their own borders.
“Nothing has changed on the international stage since our last meeting,” said the Opec delegate, adding. “Arguably, it has just got worse.”
60 Comments on "World on the brink of oil war as Opec bickers over price"
Makati1 on Sun, 5th Oct 2014 7:23 am
ISIL is a drop in the bucket. At $100/bbl, the daily oil sales is about $8 Billion per day. $2 Million is less than .03% of that. The rounding error on daily oil sales is higher than that.
And the IEA is another propaganda mouth for the corporates. Statistics to fit all arguments. Maybe it is because it is voting time in the US? Or some other political/corporate play by our masters? Only time will tell.
Mike999 on Sun, 5th Oct 2014 8:08 am
Is the UK telegraph a legitimate news source?
Isn’t it right-wing-hysterical?
Davy on Sun, 5th Oct 2014 8:39 am
Wow, that article sure smacks the ideologues upside the head seeing the reality of all those poster girls of the ideologue anti-American block on the PO board in dire straits. Let us rise above the propagandists here and look at this from a systematic viewpoint without prejudices. We have to get back to oil and globalism’s dynamics when turbulent economic events arise. These events are characterized by a regime of chaotic economic property changes resulting in system instability. The results are an unhealthy exceedance of the economic envelope globalism functions properly in. Globalism being fragile and brittle to disruptions in finance, production, and distribution cannot function properly in turbulence. Globalism’s vital functions having little resilience to change. Commenters are ideologues if they claim any region has comparative advantage in this situations. Some regions have more or less comparative disadvantages. There are no positives in negative turbulence except by individuals who profit at the expense of the whole. Even these individuals are profiting generally in a non-tangible abstract way. A very small fraction of Billionaires wealth can ever be realized in a collapsed BAU. We are closing in on the inflection point for a monumental correction. A correction that is in effect the end of growth. We may see the “long Emergency” or a collapse. Probably both like ball bouncing down stairs. The compression of oil, interest rates, sovereign budgets, and social fabric cannot last. We know this from common sense in our personal lives. It is the macro arena that is difficult to see this process of actions and reactions. Our globalism lives within the laws of thermodynamics. The time frames are different from our personal lives just as geologic time frames are hard to fathom personally. Phase change is occurring and like water the turbulence is increasing even though the temp is stable at its boiling point. BAU is at its boiling point but the water is changing state eventually the water is gone.
Stabilizer on Sun, 5th Oct 2014 10:20 am
Opec has relatively little power to control prices these days, because there are too many non-OPEC producers. However, OPEN has a LOT of power in the financial markets.
Never forget that just before we invaded Iraq and Venezuela, Saddam Hussein was the Chair of OPEC and Hugo Chavez was the #2 guy. Both argued to reprice oil in a basket of currencies, eliminating the dollar as the reserve currency used to buy all oil world wide. I for one don’t think the US send troops into Iraq and Venezuela to support Democracy.
paulo1 on Sun, 5th Oct 2014 10:38 am
I think a lot of these events are about Russia and how to counteract their apparent gains and achievements in domestic and foreign policy.
Funny, one hears nothing anymore about Russia supporting Assad and running the ME confrontation ‘show’ with the ever-growing coalition now bombing and fighting in Syria. While it appears that this action against ISIS actually helps Assad (on the surface)there wilkl be many ‘oops moments’ when his forces are attacked, and of coursee when the FSA is finally armed and in the battle forefront.
Is there a deal with KSA to keep production up to further weaken Brent prices thus hurting Russia and driving her to its economic knees?
Even wacky North Korea fat boy just visited South Korea, which is huge, (excuse the pun).
Hey Plant, maybe Obama and his advisors are actually effective and crazy like a fox?
Maybe the international trading price drop being a weapon against Putin is the sole reason for this supposed ‘glut’?
Paulo
andya on Sun, 5th Oct 2014 10:40 am
Giving a ‘budget breakeven’ price for OPEC countries in USD is a bit naïve. The budgets of these countries are not in USD but local currencies. Therefore the breakeven price in USD will change as the currencies rise and fall against the USD. It’s hardly as simple as the author makes out.
Rick Tofte on Sun, 5th Oct 2014 10:50 am
Voting time.. Look at the chart
Northwest Resident on Sun, 5th Oct 2014 10:58 am
paulo1 — I like the way you think. These days, nothing is ever as it seems to be when it comes to oil and global politics. Simpler minds of course interpret world events at face value (and lay blame on ONE man – the president – as if he is the one sitting in the captain’s chair calling the shots), without ever considering that there may be (and probably are) much more sophisticated schemes being implemented.
GregT on Sun, 5th Oct 2014 11:16 am
Paulo,
Russia is a big hurdle standing in the way of the globalists. The ultimate goal is ‘full spectrum global domination’. The time to achieve that goal is rapidly running out. Expect even more ridiculous propaganda, promoting more violence, bloodshed, and war.
Davy on Sun, 5th Oct 2014 11:18 am
Paulo, I have seen some ugly divorces and what we are seeing now in the global arena is similar to the common divorce where both sides seek to screw each other (no pun intended) but in effect both get screwed. This is no win situation. If the battles lines are draw as they appear the trade, energy, and finance wars will hurt everyone. This is especially true now with the global system in turbulence and lock in a phase change. A forced decouple of economies in the current tightly woven system cannot end well. This is true in the best of times. With a system at limits of growth and diminishing returns adding further costs and further efficiency drags will only cause further harm for everyone. Oil is particularly a problematic weapon. The oil market is international and producers both nationals and the majors are vital to maintaining supply. All producers will be hurt by these actions. Unintended consequences are going to be unleashed. The compression of the oil markets economic production and consumption affordability is a “c” hair away from being incompatible with normal market functions i.e. shortages and wild price fluctuations.
Raul Viramontes on Sun, 5th Oct 2014 11:19 am
Once the oil is tapped it no longer cost 80. dollars a barrel. The hard part being done, more they want to keep oil high. The war against Russia requires 90. or less to win. The US is on that course another 6 months to a year and Russia will be in revolution. So it comes down to are Western oil companies with us or against us. Sacrifice is what happens to win a war. And we are in a war.
bobinget on Sun, 5th Oct 2014 11:35 am
Would you call the Syrian ‘proxy’ Civil War a brink?
http://en.wikipedia.org/wiki/Casualties_of_the_Syrian_Civil_War#Overall_deaths
It appears Russia, Iran, and Saudi Arabia are willing to fight to the death, to the last Syrian that is.
What could go wrong?
Now as predicted by everyone except the CIA that Syrian War has spread to Iraq. What would you call a war between oil states (majority of incomes from oil)
Saudi Arabia, Iran and Russia?
In the past week OVER 156,000 (war) refugees have fled into Turkey, Jordan. Just days ago the number was ‘only’ 70,000 for the WEEK
http://www.worldbulletin.net/politics/144822/syrian-refugee-flight-to-turkey-one-of-the-worst-since-war-began-un
http://www.unhcr.org/54214cfe9.html
It isn’t that complicated. When a million people load mattresses and flee the only homes they have ever known, that’s a war.
This oil war will last for yet another generation.
When US forces alone use 300,000 barrels per day,
how much oil will total allied and enemy use combined?
Dats why it’s called an “OIL WAR” dummy. It’s just control of oil assets, it’s mixed up with twisted racial and religious hatred.
In no time wars take on all sorts of other issues, it’s
true. One tends to blame ‘enemy’ fighting forces, even your own officers and politicians for the mess.
OPEC is fighting for its present form existence.
I’ve been predicting for months Russia and Iran will prevail. If nuclear talks break down between Iran and US, Israel will doubtless attack Iran. Now, instead of an ‘oil war’ we have a nuclear one.
John Pilgrim on Sun, 5th Oct 2014 11:40 am
You know if I was to build a business and have a price structure agreement with my competitors it would be illegal.. Price fixing and creating a monopoly is illegal in the USA. So why does the USA accept OPEC which is no different, OPEC should be abolished and a free competitive market should be allowed to mature. Oil prices would drop and the market would stabilize, realistically instead of the manufactured and artificially inflated system that is taking advantage of the global economy and everyone’s pocket book.
Mentallect on Sun, 5th Oct 2014 11:48 am
Supply and Demand equals $50 oil.
Perk Earl on Sun, 5th Oct 2014 11:56 am
“Brent crude – a global benchmark of oil drawn from 15 fields in the North Sea, dipped last week to multi-year lows below $92 per barrel as a perfect storm of a strong US dollar, oversupply in the system and declining demand shattered confidence in the market. Brent has tumbled 20pc in the last three months after touching $115 per barrel in June.”
Recent discussions about why oil has dropped are partially covered above and listed below:
– Dollar gaining value
– Oil over supply
– Declining world demand
From 115 in June, Brent is down 20 percent! That’s a sizable decrease.
I think though two things they miss on their list are:
– Investor anticipation of QE tapering to zero in late October, as a threat to bull market.
– Interest rates will rise once the Fed begins selling bonds purchased during QE and to help increase banks revenue.
Is it also possible OPEC will continue to pump all out to push prices lower to nix US fracking?
I’m very curious to see how the economy fairs post QE and when interest rates begin rising.
Northwest Resident on Sun, 5th Oct 2014 12:07 pm
When you think about it, when has there NOT been “oil war” going on these last ten years or so. If you ask me, the “war on terror”, the Iraq war, the war in Afghanistan, all the fighting in Syria — and more — ALL fall under the category of “oil war”.
bobinget on Sun, 5th Oct 2014 12:20 pm
Here’s an oil war almost everyone missed.
http://www.huffingtonpost.com/2014/10/04/yemen_n_5923602.html
If you need a break from all this bleak shit, try this:
http://www.huffingtonpost.com/2014/10/04/snl-ebola-fault-in-our-stars_n_5933628.html
rockman on Sun, 5th Oct 2014 12:21 pm
“Giving a ‘budget breakeven’ price for OPEC countries”. IMHO way too much focus on “budget short falls”. All one needs to do is look back at the KSA budget of just a couple of years put the recent hype into perspective. The KSA is not “suffering” a budget crisis nor is it “being hurt” by the drop in oil prices. Consider the revenue/price dynamics of 2013:
“The Saudi cabinet meeting Saturday reported that revenues in 2012 amounted to $330 billion with $227 billion expenditure, leaving a $103 billion surplus. That surplus was due to the government’s calculating oil prices at $70 per barrel, while the actual price stood at around $100 per barrel.”
It should be obvious to anyone with minimal math skills that the KSA budget is determined by it’s revenue. Unlike Norway’s sovereign fund TPTB in the KSA spend nearly every penny the receive. So the price of crude is down 20%. That means current oil prices ($90/bbl) are still more then 25% higher ($70/bbl) the KSA used to base their 2012 budget upon.
Poor little “broke” KSA…cry me a river. LOL.
Brent on Sun, 5th Oct 2014 12:23 pm
I am curious to learn how much of this oil slide is due to more or production or due to a slowing economy. It seems we never quite got out of the first recession.
marmico on Sun, 5th Oct 2014 12:45 pm
Unlike Norway’s sovereign fund TPTB in the KSA spend nearly every penny the receive
What a crock. KSA foreign exchange reserves
baptised on Sun, 5th Oct 2014 1:19 pm
GregT you got it. I am sure that the prez. get’s daily e-mails, phone calls, text from every neo-con. ” The time to act is now”. The sad fact is it has already past.
shortonoil on Sun, 5th Oct 2014 1:26 pm
“Saudi enjoys some of the lowest production costs, excluding capital expenditure on new projects, in the region of $2 per barrel,”
When you see a statement this absurd in an article, it immediately makes you wonder if there is any value to the rest of the article. The cost of pumping 320 lbs of oil (one barrel) up 4000 feet is more than $2. Saudi has at least $1 trillion in infrastructure; the depreciation on that would be about $14.50/barrel. And of course, these fields have to be continually pressurized, which is a lot of big pumps, pumping a lot of water at very high pressures. Also, someone has to pay for the thousands of people it takes to operate, and maintain these fields
Think I’ll file this one in the circular file.
http://www.thehillsgroup.org/
baptised on Sun, 5th Oct 2014 1:32 pm
The greater minds in the world are coming together and the ones that like to throw temper tantrums are not welcome.
GregT on Sun, 5th Oct 2014 1:52 pm
“The Great Challenge: China, Russia is an informative documentary focused on the United States’ relationship with Russia and China after the 1990 dissolution of the Soviet Union. Through newsreel footage and interviews with journalists, politicians and strategists, we learn about the US attempt to maintain world power in the aftermath of this dissolution, the current status of Russia under the leadership of Vladimir Putin, and the present relationship between Russia and China as imposing competitors to the US.
As explained by Daniele Scalea, Editor-in-Chief of Geopolitica Journal, the US strategy after the fall of the Soviet Union was to prevent potential rivals from growing powerful by strengthening US military power in key locations adjacent to the energy resources of the Middle East. Journalist and politician Giulietto Chiesa cautions that America’s desire to control global resources creates a situation that gets increasingly dangerous with time.
Highlighting the establishment of the Greater Middle East Project by the second Bush administration, it is explained that the project’s intent was to impose America’s influence throughout the Middle East, a move that helped the US maintain economic and political domination in the area.
Political Activist Ginette Skandrani cautions that Russia and China are currently taking control of the global economy as they’ve managed to gain independence from the US and Middle East despite US efforts to block their economic growth. With these countries regaining strength in the world market, it is questioned whether the United States’ attempt to dominate through globalization will neutralize the growth in Russia and China, or if we are on a course of conflict with the two.
http://topdocumentaryfilms.com/great-challenge-china-russia/
This documentary is from a mainly European viewpoint, and is well worth watching IMHO.
The US (neocons) still dictate foreign policy, Obama is a neocon in democrat clothing, and is a member of the ‘Council on Foreign Relations’.
ht tp://www.youtube.com/watch?v=gEnuhSScLgc
JuanP on Sun, 5th Oct 2014 1:58 pm
Bobinget “Now as predicted by everyone except the CIA that Syrian War has spread to Iraq.”
My interpretation of events differs from yours.
The way I see it ISIS was created, trained, and armed by US allies, including Israel and KSA among others, with the knowledge and consent of the CIA, specifically, to destabilize both Syria and Iraq. The endgoal being to remove Maliki in Iraq and Assad in Syria because they had agreed to build a pipeline from Iran to Syria going through Iraq. Something the US government is against because they want an alternative pipeline built. Maliki is gone now, so the real reason we are fighting there is to depose Assad.
ISIS is the same BS as Al Quaeda was, a horrible story to manipulate the masses of the Western world to consent to violating Syria’s sovereignty. The same goes for those beheadings, nothing more than a false flag to get people mad and continue making billions.
I am constantly amazed at how easily people are manipulated.
GregT on Sun, 5th Oct 2014 2:12 pm
JuanP,
Bingo!
And like I have said so many times here before, Iran is next on the list of countries to destabilize.
How much longer China and Russia will continue to exhibit restraint, is the big question. The globalists will stop at nothing, up to, and including, Global Thermonuclear War. “All options are on the table.”
baptised on Sun, 5th Oct 2014 2:48 pm
I view the USA as chicken shit. Look at history, we joined WWI&WWII after most of the slaughter was done, nuked a country already on it’s knee’s only went to war with countries we were sure we could defeat since, Vietnam, Iraq. Always doing behind the seen things. USA will turn in on itself ” Get it’s house in order”.
baptised on Sun, 5th Oct 2014 2:55 pm
A bully is always a bully. As time passes their circle of power just get’s smaller.
JuanP on Sun, 5th Oct 2014 7:33 pm
Baptised “nuked a country already on it’s knee’s”
The purpose served by Hiroshima and Nagasaki was not defeat Japan, because Japan was already on its knees by that time. The bombs were both tests and messages. Two tests of a nuclear bomb explosion on highly populated areas to study the effect of the explosion and consequent radioactivity on the population. And, also, a message to the world, in general, and the USSR, in particular, not to mess with the USA or risk getting nuked.
IMO, these bombs were a statement of the new global balance of power in 1945 and America’s military edge.
JuanP on Sun, 5th Oct 2014 7:39 pm
GregT, I believe Russia and China are playing a waiting game and waiting for the crisis we all know is coming to make their move and split the world into a multipolar one. Why fight the US, if you can wait until it falls of its own weight. I hope I am right and China and Russia continue this waiting game rather than pick a fight.
I prefer a multipolar world system to total US global hegemony.
Perk Earl on Sun, 5th Oct 2014 7:45 pm
You do realize there was an attempted coup to stop Hirahito from capitulating by many Japanese military brass just before the surrender, but after the two atom bombs had been dropped? So I think it can be said it definitely ended the war.
But, I do agree the military was very happy for an opportunity to test it on people. ‘If’ they had already developed a thermo-nuke, they would have tested it too, as devastating as that would have been.
Perk Earl on Sun, 5th Oct 2014 7:47 pm
As a follow-up, I think they could have allowed more time after the first one to see if that was enough to end it, which also substantiates an interest in testing.
Makati1 on Sun, 5th Oct 2014 8:35 pm
The US has hit the brick wall with Russia and China. The Hong Kong protests are a US sponsored attempt to disrupt China, as are the other interior areas where protests are happening. Russia is also dealing with interior disruption caused by US funded groups.
The US is sending 3,000 troops into Africa to ‘fight Ebola’ with guns, the only way they know how to deal with problems. (Has your local high school received their armored vehicles yet?)
There is a war going on as many above mention. It is an asymmetrical one, mostly out of the sight of the sheeple. But, time is running out for the Empires goal of world domination and they are running out of control in desperation. THAT is becoming obvious even to the sheeple as their Golfing Prez keeps putting his foot in his mouth and his caddy, Kerry makes a fool of himself all around the world. Will Hillary be the one to push the button or be on the receiving end? We shall see.
Nukes coming soon or …?
Davy on Sun, 5th Oct 2014 8:59 pm
I knew it! I was just waiting for the words. Thanks Yoda Mak! You win the prize.
“The Hong Kong protests are a US sponsored attempt to disrupt China”
I almost commented something earlier that an anti-American would come on and blame Hong Kong on the US. Here is some blame game psychology:
The blame game…..is linked to the inborn capacity to evaluate, which an organism uses to decide whether something is beneficial or a threat to its survival. Borrowing terminology from legal philosopher Joel Feinberg, Alicke says creatures use blame to “stain” things, marking them as harmful. Blaming is an essential “adaptive strategy,” he says—reflexive and “primitive.”
http://www.ohio.edu/research/communications/blamegame.cfm
Dave Thompson on Sun, 5th Oct 2014 9:05 pm
Low prices for crude will not last. The economy is being set up for another tail spin for the remainder of Obama’s term. When the price of oil starts back up the economy is going to sputter quickly. Something like what happened at the end of the last guy’s presidency. History repeats it’s self.
Northwest Resident on Sun, 5th Oct 2014 9:17 pm
Makati1 — Epic rant dude! None of it substantiated. Pure opinion and speculation stated as fact. Bias so thick you’d need a steak knife to cut it. A litany of accusations unsupported by any fact.
Same as usual!
Davy on Sun, 5th Oct 2014 9:24 pm
My thinking is more focused on the dominos of finance than oil at this point. This is a good read from zerohedge. IMA there is nothing soothing for the Asia lovers on this board in this article. This news is plain and simple bad news for us all.
http://www.zerohedge.com/news/2014-10-05/us-dollar-about-inflict-carnage-all-around-planet
Just An Observer on Sun, 5th Oct 2014 9:53 pm
Call it serendipity as far as crippling Russia’s economy with lower oil prices. On the other side of the coin the Boom In The Bakken won’t last if oil prices stay low for long. That would put OPEC back in control so if they want to derail the American oil output, they’ll keep the prices below the Bakken breakeven point.
Long term trends in higher MPG’s for vehicles combined with a lesser growth in the Chinese economy will help to hold down prices on their own. If Iran and Iraq want market share, they’ll have to lower their prices instead of cutting back production. The world of the 2010’s and 2020’s is far different than the one of the 1970’s and 1980’s since so many new factors are in play. Oil is still a Big Deal but it’s influence is waning in the long term. Higher prices brought out new explorations and exploitations as well as new technologies.
The consumer at the pump will see short term drops in prices but if they last longer than expected, some of those savings will be taken back by government taxes on per gallon prices in order to fund infrastructure improvements that are overdue.
In conclusion, water, er, oil, will find it’s level and that can be considered as the working out of supply and demand irrespective of OPEC, Big Oil, governments, political agendas or any other “reason” that gets tossed out there for why stuff happens.
MKohnen on Sun, 5th Oct 2014 11:02 pm
GregT,
I love how the guy at the end of the documentary states that the US has no option but to seek peaceful paths since the world has gone multipolar. I guess he may have underestimated how far the west is willing to go to hold on to BAU.
Apneaman on Mon, 6th Oct 2014 2:04 am
Davy
Anti-American & Un-American. Funny how the nation that can’t shut up about loving freedom, long ago came up with two derogatory terms for non-conformists and free thinkers. Just two little words to shut any and all debate down. I guess they start you in kindergarten with your chanting and pledging to symbols. The Nazi’s used similar tactics with the Hitler youth to great effect. Yours is much more subtle, but combined with TV, sports & Hollywood the result is the same. Since your so fond of psychology you should read up on tribalism, group think and herd mentality. The U.S. gov did not manufacture the malcontent in Hong Kong, they just took advantage of it. A fairly standard move for great powers through out history, so no big surprise there. The problem with the neo-cons is they are ideologues and ideologues are emotional creatures who are obsessed with “winning” at any cost. They do not care about the common person; just cannon fodder and bullet bags. They will take you to ruin with their over confidence and knee jerk emotional reactions. Just look at what happened to the countries that succumbed to nationalism in the last century. Hopefully there is still some rational people in the military who will not allow the worst to happen. Many of them tend to be more realistic and grown up than the politicians and their corporate advisers.
Davy on Mon, 6th Oct 2014 7:10 am
Apnea, the anti-Americanism is as bad as the DC/Wall Street Mafia dirt. Your mentality is you feel like a free thinkers because you are anti-American. You and your band of brothers are just as bad as the DC mafia in principal because you blame then praise your bright horse. The DC/Wall Street Mafia is so big and powerful there is little true comparison in the grand scheme of things. Yet, it matters in our world here on this board where we are trying to make sense of a world coming apart at the seams. Disinformation, distortions, and outright lies are dangerous at this point when the end of BAU may be a few years out. I seek balance and fairness and this is not available from the anti-Americans here who are as bad as the DC folks they seek to battle against. That is the problem with war you become as bad as your enemy because you are both in a fight to the bottom of human nature. You and Yoda Mak are belittling what is going on in Hong Kong. The leaders of this movement would spit in your face if they could. This is a place that China made promises to that have been broken plain and simple. HK is tiered of the lies and the mainland corruption. China is a hollow dragon bent on regional domination at minimum and world domination if it ever could. PO spends a significant amount of time both on blog and comments confronting the DC/Wall Street propaganda. This is important but this vital work is getting diminished by a counter terrorism hijacking of the anti-Americans here on this board. The Geneva Convention was set up to have rules of war. It is a pity there are no rules of war with the propaganda war. If you read my posts you will see I dedicate a fair amount of time bashing TPTB of all strips including the DC/Wall street mafia. I also have to battle the anti-American jerks here which is a shame.
JuanP on Mon, 6th Oct 2014 9:21 am
Mak, There is no doubt in my mind that the CIA is involved in Hong Kong’s protest, just like it was involved in Moscow’s insignificant one a few weeks ago. The US has been messing in Hong Kong since it was British.
One of my neighbors for more than ten years was a former Army Ranger and a retired career CIA operative, analyst, and bureaucrat. He was my closest friend at the time and we got high and drunk together almost every day and talked until the sun came up countless times.
He was the person who was with me when we heard of 911. The Agency called him to Washington while we were partying, and then we turned on the TV and watched the second plane crashing on the twin towers, and sat there in shock killing that Bourbon bottle while we watched replays of it.
My understanding of these issues comes mostly from what I learned from him. An amazing man with incredible mental and physical capabilities, and a deeply disturbed mind. I’ve always called him Superman in my mind because he was the closest to it I ever met. He was my wife’s first martial arts teacher, among other things.
Davy on Mon, 6th Oct 2014 9:55 am
Juan, it is one thing to mention “involved”it is a huge step to a Yoda Mak “cause”. I have the highest respect for you Juan. You are far more popular here on PO than I but there are limits in this day an age to the CIA. They are a has been power. The world has change so dramatically as to leave all the security services scratching their heads. This is nothing like the 911 era. I agree with your many allusions to the CIA/NSA/MIC involvement along with the other global powers but I disagree with the level of potency.
JuanP on Mon, 6th Oct 2014 9:59 am
Wiki on US-Hong Kong relationships. Read between the lines. 😉
en.m.wikipedia.org/wiki/Hong_Kong–United_States_relations
There are no secrets here. We never wanted Hong Kong and China to reunify. We have been trying to split Hong Kong from China since and also use it to try to weaken China.
This makes total sense in view of US wishes of total global hegemony, IMO. It would be unreasonable for the US not to be involved in Hong Kong.
From a US government hegemonist’s point of view, Russia and China need to be broken in many pieces so they can not defy the USA openly any longer.
This is very clear to me. But I understand these things are extremely difficult for patriotic Americans to understand and accept. We all have limits to our rationality. I know mine, where my mother is concerned I am completely irrational because my dark emotions completely cloud my judgment. Patriotism is a similar limit for many.
Davy on Mon, 6th Oct 2014 10:10 am
Juan, I hate the word patriotic. I reminds me of the fake flag waving and stupid bumper stickers. I am a defensive American. I am trying to criticize between a Rock and a hard place. On the one hand I have the anti-Americans on the other the DC/Wall Street Mafia. Are you trying to tell me mainland China is the bright horse having no crimes on their hands in HK? They have broken promises and are exploiting a great people. What you are telling me and others here are trying to tell me is the people demonstrating the world over for change are in the end CIA operative controlled. We know the CIA will exploit opportunities but come on I see no omnipotence here.
JuanP on Mon, 6th Oct 2014 10:13 am
Davy, The US government helps promote, finance, and organize multiple organizations actively involved in “promoting democracy, freedom, human rights, education, etc” all over the world. I believe many of these organizations are promoting chaos, crises, collapse, divisions, and other nasties.
I hope you understand that I don’t have anything against the USA, however hard to believe that may be at times. Any country that was in the USA’s position would abuse its power, so the solution is to remove whatever country from that positiom. My perspective would be the same for any other country that found itself in this position.
I believe that power corrupts and an hegemonic US government would be even more corrupted than the one we have, which is already the least popular ever, even worse than Jr.’s.
A multipolar world is better for all the people in the world including the American people. If you saw things from my perspective you would want the same.
Like I said above. I have limits, we all have limits. In issues like politics, religion, family, and other beliefs, we are bound to see things different now and then. If we could be completely rational would we be where we are?
GregT on Mon, 6th Oct 2014 10:14 am
“The US has become increasingly sophisticated in helping to build “democracy” movements in countries where the US is in conflict. Through groups like the National Endowment for Democracy, the National Republican Institute and the National Democratic Institute the US funnels money help create social movements that serve US interests. The protests in Hong Kong had many of the hallmarks of the types of protests the US helps to create and manage in other countries. No doubt there are many in Hong Kong who want democracy, but the US involvement confuses who Occupy Central represents. The exposure of the US role comes at a critical time in the Hong Kong revolt as the chief executive has made a Mubarak-like speech refusing to resign, the protesters have amassed outside government buildings and the police have threatened action if the protests escalate. No doubt, if these documents become widely known it will undermine the movement as people do not like the US meddling in their internal affairs.”
http://www.popularresistance.org/us-role-in-occupy-central-exposed/
GregT on Mon, 6th Oct 2014 10:18 am
“A number of US-financed non-government organizations (NGO’s) operate in Hong Kong. Similar groups, notably the US National Endowment for Democracy, were involved in attempts to overthrow the governments of Georgia, Ukraine, Iran and Russia. They very effectively used social media to stir up discontent and spark large anti-government rallies.”
http://www.informationclearinghouse.info/article39867.htm
JuanP on Mon, 6th Oct 2014 10:24 am
Davy, Of course China is the same thing, but a balance of power is better for the world than a terrible government in the pockets of who knows who that can get away with murder everywhere ithe world, including at home. All powerful governments abuse their power.
I want Russia and China to break up, too, but after or at the same time the USA crashes, not before. I hope China and Russia continue resisting the USA for everyone’s good.
Everything I write is nothing more than my own personal opinions and I take for granted that I am wrong in many things based on previous experience. 😉
My biggest concern is the USA’s wellbeing, to be honest, this is my home, and it is being ruined by these creeps in DC
JuanP on Mon, 6th Oct 2014 10:28 am
If those poor idiotic hopeful kids in Hong Kong escalate this, they could get Tiananmened. The Chinese government will take no risks. I remember when I was a naive idealist like most of them are. Fools is what they are, and pawns.