[seahorse]

As we all know, there are many political/economic events unfolding simultaneously that are cause of great concern, all are very interrelated to each other and oil. Those are: dollar devaluation, fannie mae, Iran.

Dollar Devaluation - As Greenspan said today, Our huge deficits will cause foreigners to someday quit buying our bonds. There are only two ways out of the deficits: (1) quit spending money and increase taxes (not!), or (2) deflate your currency and inflate the debts away. Its patently obvious, based on what Greenspan said today, that we are now planning on deflating the currency to inflate our way out of the debts. This will not work. These statements will cause other countries, as well as investors, to run from the dollar, no question.

Another issue is the Fannie Mae fiasco. About a year ago, Greenspan said that if Fannie Mae went insolvent, it could "destabilize" our system. They are the largest bank in the world next to Citicorp. So, with all their accounting scandals, EOC and congressional investigations involving Fannie Mae, and statements that their solvency is being questioned, this is a huge problem that could destablize our system. The next 12 months will be telling.

Next, watch Iran. Klare's book "Blood and Oil," defintely forecast the events unfolding in Iran. Klare says we will never allow Iran or any other country to dominate the Middle East (Carter Doctrine, U.S. has to control flow of oil). Iran is the biggest upcoming threat to our control of the flow of oil (not related to their religious culture). Iran is a threat bc of their physical proximity (border the straights), have a stable gov't (somewhat democratic), they are highly educated, wealthy (lots of oil), and developing the bomb. Under our policy of dominance, we can't allow this to continue. Two weeks ago, the Chinese thumbed their nose at our long standing threat of sanctions against anyone doing business with Iran: the Chinese signed a huge energy deal with Iranians (obvious, Chinese need oil and we won't sanction one of our biggest trading partners). Everyone wondered if the rest of the world would follow suit and also break against our threat of sanctions - they did. The Europeans now agree to start some joint ventures.

Whether doing business with Iran is right or wrong doesn't matter, it leads the U.S. to their next move- miliatry action. Since sanctions aren't working, the military seems the only option. The Israelis state unequivically they will not allow the Iranians to develop the bomb. In the presidential debates, both candidates said the Iranians can't be allowed to have the bomb. So, since sanctions aren't working, what other options are there? This can't be good. So, I think within the next 4 years, we will act to stop Iranian bomb development militarily, bc our threat of sanctions is not working. At a minimum, any attack would cause an oil crisis, worse, start a huge war, possible world in scale. WWI started for a lot less.


It begins to bother me that the world doesn't have a peak oil problem, the United States does, and that is in turn dangerous for the world. If we weren't here, or if we weren't using 26% of more of all world oil, then no one else would have a problem. There would be a glut of oil. Further, peak oil is not the same issue for every country, bc the Russians have lots, the ME has lots, we don't, but we are making our problem, their problem. It seems that rather than force an alternative to other sources and solve our own problem, we will take the Japanese approach or the German approach in WWII, and try to secure oil by force, which of course, didn't work for either country. Interestingly, the only major western powers that assisted the U.S. militarily in Iraq were also the islands of Britain and Australia, which, like the U.S., depend on ships to transport oil - just like Japan in WWII.

I"m interested to here other thoughts.

[Rhinestones]

First post. Hi! I just woke up...

A perfect storm it is too. And it arrives hopefully in time to save the planet from an environMental Hurricane as well.

I'm with George. Bring it on. Before the theocrats get any stronger.

[Colorado-Valley]

It's all kind of interesting to watch, isn't it? The thrashing about and soon to be imploding U.S. military industrial empire.

Jimmy Carter told us 30 years ago we had a choice -- change the way we use energy or suffer the consequenses in a couple of decades.

The blame for what's going to happen can be fairly blamed on the oil companies and their political minions who since 1980 have ensured that we would hit the brick wall someday by discouraging alternative-fuel development.

That means millions of people are going to die this decade fighting over the last of the oil. It's sick.

[chargrove]

$this->bbcode_second_pass_quote('', 'S')o, I think within the next 4 years, we will act to stop Iranian bomb development militarily, bc our threat of sanctions is not working

[backstop]

Seahorse - Good to see the fact of fossil oil dependence being primarily a US problem posed by an American. This has of course been pretty clear to those in other countries considering the issue over the years.

Maybe we've just been too polite to mention it on this site !

However, if the US were only using say half its present oil volume, all this would do is to push back the date of the peak, with far greater populations being more dependent than at present, leading to far greater turbulence when the peak hit.

The real failure of US policy has been one of leadership down the blind alley of dependence on finite resources - plainly for the corrupt self-interest of oil-dollar hegemony. The greater failure would be that of the US attempting to sieze oil resources in the coming years rather than spending the same funds on the sustainable energies.

Iraq (which is officially costing $5Bn /month) will, God willing, be the object lesson to the US public in this regard. There is no economic or strategic case for fighting over remaining stocks ; doing so is merely a distraction and diversion of resources from the development of alternatives.

With regard to Iran, a couple of points:

First, the US has X thousand nuclear weapons, Israel could have several hundred by now, and Iran has none, and has declared it is not seeking them. To view Iran as a threat, (with Pakistahn having got the bomb) seems a little bizarre. For the neo-cons to claim secret evidence once again is just silly. Apart from the neo-cons' evident interest in destabilizing ME oil supplies, I see no US interest in attacking Iran.

Second, British forces are in Iraq IMHO not for oil or Wasp solidarity, but rather to hold the ring, (and Iraq's only port) thus constraining US forces from invading either Syria or Iran, both of which were on the neo-cons hit-list. As Blair has just stated (at the annual Guildhall speech) he is "Not, repeat not, in favour of a series of wars to spread democracy." Plainly it is central to UK interests that ME oil supplies are not destabilized any more than can be helped, and that the US comes to its senses ASAP.

regards,

Backstop

[gg3]

Seahorse, what I think you're hinting at (paraphrase: the world does not have a PO problem if the USA is not in the picture) is something I was concerned about a ways back: that some combination of players in the world team up against the USA on the basis that a) we consume too much for everyone else's good and b) we don't produce anything useful any more (China is the new industrial force).

What I'm interested to know is, what combination of players you see acting to team up against the USA, and how do you see that happening?

Backstop, if I read your posting correctly, you're suggesting that the UK could act to limit any USA military move against Iran, is that correct? If so, how would they do that?

BTW, I seriously doubt the US is going to try something against Iran. We are spread so thin militarily that we could evaporate. The only way it's going to happen is if we can get our troops out of Iraq, and it would seem that's going to take another ten years.

Don't forget that the bad intel upon which the Iraq war was based, was planted by a sophisticated Iranian spy network led by Chalabi, who himself was the darling of the Bush white house until he fell from grace over one of his more obvious blunders, and then the whole spy scandal thing came out in the press over the summer. So it would seem that USA into Iraq was engineered by Iran precisely to keep us tied up so we can't take on Iran while Iran becomes a major regional power. Very f***ing clever of them. Grrr!

[chargrove]

$this->bbcode_second_pass_quote('', 'A')part from the neo-cons' evident interest in destabilizing ME oil supplies, I see no US interest in attacking Iran

[miquel21]

I don't know if someone has already posted this link, but it covers quite a bit of the information you have mentioned in your post.

It may require sanitizing to clean it of any other political agenda, but it seems to be fairly balanced and reasonable.

Here is the link

http://www.globalresearch.ca/articles/CLA410A.html

Cheers
Miquel

[Roy]

First of all, I'd like to say that I agree with much of what Seahorse is saying.

Although I don't have the understanding or the eloquence of so many posters on this board, I would like to take a shot at GG3's question:

"What I'm interested to know is, what combination of players you see acting to team up against the USA, and how do you see that happening?"

IMO. no one country in the world can stand up to the US militarily. Our air and naval forces make us nearly invulnerable to foreign invasion. And they allow us to project significant power just about anywhere in the world. We're much more of a strategic player than any of our major rivals (China, Russia). Those two countries, while they are well equipped for defense of their borders, don't have the naval assets to challenge us directly in international waters, nor outside their own spheres of geographical influence. No country does at this time.

That being said, I believe we'll see Russia, Iran, and perhaps the EU and China "team up" to defeat the US economically. It is well known (at least to members of PO.com) that the US is vulnerable due to our reliance on imported oil and foreign investment to keep our currency and our economy afloat.

IF our rivals can't beat us miliitarily, then their only other option would be to attempt to cripple us economically IMO. Which, with the establishment of the Iranian oil bourse, they will have the means to do so legitimately by trading oil in Euros instead of $.

I'm not saying that they will do so, only that they'll have the means to punish the US. Given the expected military adventurism from the Bush Regime, it seems to me a likely outcome.

Thanks for reading...

[backstop]

gg3 -

in response to your question:

"if I read your posting correctly, you're suggesting that the UK could act to limit any USA military move against Iran, is that correct? If so, how would they do that?"

I'd say first that the UK constrains a land invasion, and can only discourage air or seaborne assault. For the former there are a number of options, the quietest of which are already in use. They range from:

Breifings and speeches against a further invasion, (viz Guildhall above) bringing into question the durability of the coalition,
through:
declining to agree any timetable for offloading US materiel in British-controlled Basra's docks,
to:
publicly airing the possibility of withdrawing from the coalition if the US were so unwise as to try to invade Iran.

If push came to shove there are further options of course, such as launching a European petro-euro trading floor. However, I'd well agree that US forces are already in pretty obvious overstretch, so I guess cooler heads in the pentagon are now making themselves heard.

With regard to Chalabi's colleague being a senior Iranian agent, I wonder if you heard that this was well known to the CIA prior to the war ? (source: BBC). It means that while Iran was keen to see Saddam toppled, there's no way that the US was fooled into doing the toppling, for all it's now convenient for the neo-cons to have an Iranian scapegoat for the nebulous intel which they claim to have believed.

Chargrove - yes, of course the issue of a Teheran bourse is relevant, but IMO it's secondary to the supply of Iranian oil to world markets with oil already at $48/barrel. Also, if we discount a land invasion as being impracticable, an air assault on Iran's nuclear power plants would do nothing to prevent such a bourse being started, rather it would focus global attention on it, and so expose the US as acting dishonestly, again. In present circumstances a run on the dollar could well be the outcome.

Furthermore, there are other centres (Saudi, Rotterdam etc) from where a bourse would be just as effective, and US aggression against Iran would quite likely advance their development.

With the US having grossly abused Bretton Woods for two decades, other nations are thus free to trade oil in whatever currency they wish without censure by the international community.

regards,

Backstop

[seahorse]

Thanks for all the posts, I've learned a lot. More and More I believe that the problems caused by U.S. oil dependency will manifest before peak oil becomes a problem. That was the purpose of this thread. The issues of course are very much related, and one can't be separated from the other.

(1) I do think the U.S. or Israel will strike against Iran, even with the U.K. in Basra. Simply bc Israel has stated it will not allow Iran to get a nuke (it could hit Israel and literally wipe out Israel's dense population in such a confined area), and the U.S. will not allow any country to become dominant in the ME and control the flow of oil.

Since U.S. political sanctions are not working, there is only one option, military. As will all previous military strikes, Bosnia, Iraq, we would probably start off with an air-strike or missile strike against known targets. The U.S. obviously doesn't have the manpower to mount an invasion, which would be political and economic suicide anyway. So, air power would be the way to try to accomplish the goal and try to contain the repercussions (which can't be contained). Its possible that we would use some form of tactical nuke. Remember Bush in the first time opened the door to those options when they affirmatively stated the U.S. was pursuing design of tactical nukes against hardened targets (this scared everyone of course). Its been forgotten now, but depending on what the targets look like, Bush may invoke the option.

Best case scenario is that no one else gets involved militarily. In fact, I think that the major powers would try to sit back and let the U.S. dig its own economic/political grave, just as they are sitting back while we dig a grave in Iraq. Other powers no that eventually, the repercussions of such a strike would be the downfall of U.S. military and economic hegemony. People would quit trading oil in dollars, people would quit selling oil to U.S. We would tank.

The problem for the world is, when we tank, we will probably thrash out like a drowning person and pull down with us anyone close by. I can foresee the U.S. using its navy to illegally redirect oil shipments to the U.S. or even possibly seizing Saudi Oil fields (definitely seizing anything in the Americas). If we began seizing anything in the ME or any tankers, I think the rest of the world, Europeans/Russians/Chinese would have to get involved in some way. Hopefully, without further military confrontation, the Americans would be confined to hash out their oil/economic problems in the Americas and leave the rest of the world alone (wishfull thinking)

In the best case scenario, a strike against Iran would cause oil to be traded in Euros (tanking the dollar), cause outrageous price increases in oil, causing an economic crisis in the U.S. for sure, probably cause all ME countries to stop selling oil to the U.S., cause a draft in the U.S. (to quickly build an army to handle any contingency).

I would hope that any type of confrontation could be limited, very limited, just enough to force our policy makers and citizens in the U.S. to start thinking "green."

In the end, I believe that peak oil is a problem for the world now simply bc it is a problem for America. Every year that America's oil dependency grew, which now imports over 50% of its oil, our oil problem increasingly became a problem for the world. If we didn't use so much, there would be a lot more to go around. Of course, I'm not blaming this just on America. The reason its a problem now and not later its bc we are sucking so much oil, but the Chinese are sucking a lot too, and India, and they would cause the same problem eventually.

America and the rest of the world won't change from oil willingly, so the world will be forced to change, probably through some kind of war - and Iran seems to be the obvious flashpoint, and all within the time frame that peak is manifesting itself as a potential problem for the world. Maybe Michael Lynch in right, politics, not geology, will determine the flow/demand of oil.

[seahorse]

Will the U.S. strike Iran even though our intelligence was so bad with Iraq? I think yes. First, Iran is still branded as within the "Axis of Evil." If Bush had learned his lesson in Iraq, and was going to change his way of thinking with all the obvious political/econimic fallout, he wouldn't replace Colin Powell. Look at his new cabinet, they are all neoconservatives, more so than ever. I think this shows that, despite failures in Iraq, they are more entrenched than ever in their neocon "axis of evil" way of thinking. If Rumsfeld was gone and Powell staying, I might feel differently about what we may do in Iran, but I don't think these changes in cabinet give us any hope. In fact, Powell, Bush's only moderate voice, is still saying he thinks Iran is trying to make the bomb, which is the same kind of stuff he said in front of the U.N. The parralles between Iraq and Iran are uncanny. Powell says there's evidence of wrongdoing, Europe doesn't believe him, and the U.S. states we keep our options open. So, it doesn't give me a lot of hope.

[big_rc]

I agree with everything that you've said and what scares me about this whole situation is Bush keeps claiming a strong "mandate" because of the last election. The majority of Americans looked at everything from faulty intelligence to an inept post war situation and still voted for Bush. And let's not even talk about the actions of the Republicans so far. Arlen Specter pledging fealty to Bush, the Tom Delay mess and the potential changing of the Senate rules. Is the US becoming a banana republic?

[Permanently_Baffled]

$this->bbcode_second_pass_quote('seahorse', '
')
Interestingly, the only major western powers that assisted the U.S. militarily in Iraq were also the islands of Britain and Australia, which, like the U.S., depend on ships to transport oil - just like Japan in WWII.

I"m interested to here other thoughts.

[JLK]

Very interesting posts, Seahorse. I pretty much agree with you across the board.

I'm fearful as to what might happen if the US attacks Iran. I'd agree that the best the US can do at this point would be bomb the known nuclear related facilities. However, Iran has the capability to retailiate by sinking practically any ship that traverses the Persian Gulf, including oil tankers and US Navy vessels, even aircraft carriers. Iran has hundreds of Russian made Sunburn missiles that could be fired directly from its Persian Gulf coastline, from planes or from patrol boats. The US could partially interdict this threat by taking away the sea/air launch threat, but it would be virtually impossible to reliably locate and destroy mobile missile launchers along the long coastline.

This is why the US generally keeps its carriers outside of the Persian Gulf. The Sunburn missile was designed by the Russians to take out US carriers.

To make matters even worse, virtually all of the supplies for US troops in Iraq and transported by sea through the Gulf. By cutting this off, Iran could put the 200K plus US force in Iraq in a desperate situation.

I think that the potential threat of shipping disruption in the Gulf will convince the US to try to get its way by means other than military. I'm fearful, though, that I'm wrong about this.

[seahorse]

I agree with all of you that any form of military action against Iran would be stupid politically/economically. I agree that even if the U.S. won the first salvo, that we cannot win on the ground in any case, and even if I a ground war did not ensue that the economic/political repercussions would be the final nail in American political/economic/military dominance (maybe a good thing, assuming the war can be contained to us and them.

The problem is, no matter how stupid it is to take any kind of military action against Iran, I think the neocons in office are dumb enough to do it, and the recent cabinet reshuffle seems to suggest we're hell bent on the axis of evil concept and have learned nothing from the Iraq war, about how that war did not produce the sought after results, economically or politically. I did an internet search of Wolfowitz for example, read his bio and history, and to sum up his philosophy, the purpose of power is go maintain dominance and increase power. This philosophy, if shared by the other neocons in office, suggests that, no matter how dumb it may seem to all of us, the U.S./Israel or both will take action against Iran. There is an interesting article written by William Clark on this very issue. Titled "The Real Reasons Why Iran is the Next Target" dated October 27, 2004, a very interesting piece.

Someone raised the issue as to why Britain and Spain joined us in the war on Iraq. First, their public support before the invasion wasn't strong for the war, and of course, Spain got out fairly quickly. Second, the British now no they were lied to, just like the Americans, so we now see the British, thankfully, categorically ruling out any attack on Iran. I don't think Britain is as influence as America by the Israeli ME position. However, I do think oil had something to do with Britain's initial support of the Iraqi war (a war which I feel was for oil). I don't think that both British and American intelligence was so bad that they both thought Iraq had weapons of mass destruction. Again, William Clark wrote a piece before the Iraq invasion that predicted the war, discussed Britain's support of it, and said the war was related to several issues, euro, peak oil and I can't remember what else. Its also a very good read.

Its interesting how the British people no longer support these general wars over their, yet the American population apparently does with the recent reelection of Bush. The only explanation I can see that accounts for the difference of popular support is the attack of 9-11, which Bush was able to make a big campaign issue out of, and that Blair was not to make an issue out of in the U.K. I don't know, that's only a guess on my part.

I hope we don't do anything against Iran b/c:

(1) its not a guaranteed military victory;
(2) at best its a classic "pherric" victory if I spelled that right;
(3) at a minimum, its the final nail for American military/economic/political influence, would probably be the birth of Russian dominance again;
(4) worse, drags the whole world into a economic mess, possible war;
(5) I think the neocons are dumb enough to consider doing it, if nothing else, bc they will do anything not to lose American dominance, even though no matter what happens, that day is coming, hopefully peacefully, but I fear the worse.

[Blaster]

I have invested in energy stocks and while researching ended up reading with great interest the peak oil articles. It seems there might be"peaking" going on in many countries all over the world. The USA is a big consumer and probably a big part of the problem. It is going to be very interesting to see what happens in the future with this issue. When we consider the amount of energy used, the USA IS an amazing place. I wonder how much fuel is used each year to power boats, motorcycles, snowmobiles, jet skis, quads (Yamaha "Blaster"), dune buggies, Nascar events, Cruising, drag racing. Here in Michigan there is a weekly exodus to northern Mich. every weekend. I have a northern home also that is 230 miles away. Sometimes my wife and I drive up seperatly for a 2 or 3 day weekend. On the lakes there are hundreds of thousands of boats,(propellers and jet pumps) talk about an ineffecient way to propell something .OK OK you get the idea. I went to the you be the president thingy that lets you chose all the energy saving options. It was surprising to see how little effect dialing down the thermostat and other tricks had. Its like, hey we found this resource and the world took off, building, living good, driving, etc. and no one ever stopped and said hey after we build all this are we going to be able to keep powering it? When I was young I wondered well how much oil is there? No one worried about it, no disscusion about it. When I talk about these issues at work (GM truck plant)people think Im nuts. I tell them pretend your holding the earth in your hand, if no oil is entering it from space aliens,wouldnt it seem that if it holds a certain amout of something inside it with no more of that item entering it that the item could be depleted.They think Im nuts! Im sure there will be many changes in the future!

[Grimnir]

Experts Fear Price Pressures Could Worsen

$this->bbcode_second_pass_quote('', '
')Inflationary pressures have led some economists to worry about a possible nightmare scenario: The dollar weakens dramatically, which drives up import prices; as terrorists attack overseas oil production facilities, which drives up energy prices; and like that, America's productivity miracle, a main reason for moderate inflation in recent years, disappears.

[Dvanharn]

you touch Iran, and we float our currency - or cut back on oil output.

The former is more likely, because reducing global oil supply would hurt every oil importing country equally, but floating the currency would hit the U.S. extremely hard - Walmart and Kmart prices would double immediately. And it's the cheap consumer merchandise that has kept the "working class" of America from feeling the effect of the dollar's drop against other currencies. Wouldn't it be a bitter-sweet experience to see the majority of Americans turn on Bush? Or would Karl Rove and company be able to spin their way out of it and externalize the blame, leaving Bush and his administration innocent in the eyes of his beloved constituency?

Unfortunately, it's all very complex, and President Bush is not a complex thinker. In fact, some describe him as absolutely lacking in intellectual curiosity. I don't think that he's really even as aware of the enormous complexity of the current global energy and economic situation as many of us here at PeakOil.

Dave

[gg3]

The calculus re. Iran is just so bad that I can hardly imagine a serious case for attacking.

Now here's where the difference between conservatives and "neo-cons" comes out: The conservative assessment says that it's inherently unwise to take steps that would destabilize a dangerous situation further. And I have to believe that senior military are lobbying against an Iran adventure on the usual commonsense grounds.

The neo-cons appear to believe they can control the outcome and/or, equally as dangerously, "wing it" and find a way to benefit from whatever outcome occurs (similar to the "creative destructionists" in the stock market). So the neo-cons are in effect predisposed to act recklessly.

I don't think Europe wants to see a real decline of the US. I think what Europe is after is a bit of a competitive edge in an otherwise stable political and economic environment. But if we keep flipping off the rest of the world, and frankly keep behaving as though we have ideological nutcases at the helm, then Europe itself might adopt a go-it-alone economic policy that could care less what happens to us.

The most sensible policy re. Iran is some kind of containment. How to achieve that in the present climate is anyone's guess.