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Venezuela, Sheehan, Bushies, Falkland Islands, oil, oil, oil

 
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PostPosted: Sat, 2006 Feb 18 23:39:59    Post subject: Jag har nedan stuckit in en bra lägesbeskrivning Reply with quote

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Mitch Elder
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PostPosted: Sun, 2006 Feb 19 0:40:00    Post subject: Venezuela, Sheehan, Bushies, Falkland Islands, oil, oil, oil Reply with quote

Original here: http://life.lege.net/viewtopic.php?p=296#296

Hugo Chavez, Venezuela, Sheehan, the Bushies, the Falkland Islands and oil, oil, oil...

2006-02-18 13:40:39 -0800 updated 2006-02-24 01:10:00 +0200
by Mitch Elder

I just thought I'd take the opportunity to share some points of fact that might illuminate our current global situation. The last 25 years of history has been distorted by the corporate media conglomerates and government and most people really don't know the true reasons for "The War on Terror" the Bush Administration's hatred of Hugo Chavez and Iran, and of course, the Iraq war. So a little history please...

In 1971 Richard Nixon took us off the gold standard. He did this by Executive Order, which technically, was unconstitutional since the Constitution specifically demands the dollar be based on silver (gold has always been considered an acceptable substitute) but that's a story for another time. The point is, we had incurred a significant federal debt as a result of the Vietnam war and foreign countries who had bought Federal Reserve Bonds had been cashing them in for gold. Our strategic gold reserves had been cut in half and were on the verge of depletion. So Nixon severed the dollar/gold connection so he could repay our debts with worthless paper (fiat currency) which we still have today. Since then, incidentally, the value of the dollar has dropped (creating inflation) by over 300%. Taking us off the gold standard set the stage for everything that has transpired since.

With no solid basis of value for the dollar, the US economy would have imploded, but fortunately there was a de-facto standard waiting in the wings: oil. Prior to severing the gold connection, Kissinger negotiated an agreement with King Fahd of Saudi Arabia to accept only US dollars for oil. This placed the US dollar on an oil standard even though we didn't produce that oil and forced the rest of the world to continue complying with the Breton Woods Agreement which called for the US dollar to be the global reserve currency. Everyone on the planet was effectively forced to store US dollars in order to conduct business.
This arrangement was held in place by various political factors and relationships: 1) Saudi Arabia was, and is, the 900 pound gorilla of OPEC; 2) We held the Shah of Iran by the balls by virtue of our military presence on his soil; 3) the British played along; 4) There were (and still are) only two commodities exchanges on the planet where crude oil can be transacted: New York and London. This meant that regardless whether you were selling or buying, if you transacted oil, you had to do it in the New York Mercantile Exchange or the International Petroleum Exchange in London. And they don't take American Express - only dollars.

Now the stage was set for the oil embargo of the 70's, the hostage crises, the Falkland Islands war, the Gulf War, the Balkans War, the Iraq invasion, the rise of the neocons and a great many other things.

Now, hold that thought while I diverge for a moment. Islamic law dictates that only gold is to be used as money. It forbids the use of fiat currency. When the US dollar was taken off the gold standard, the acceptance of US dollars for oil violated Islamic law and this really pissed off the Muslim oil producing countries. So, meanwhile back at the ranch...

The other OPEC countries of Muslim persuasion ganged up on the 900 pound gorilla and refused to play along with production quotas. This led to the oil embargo of the 1970s which the Carter Administration inherited from Nixon. With the fall of the Shah of Iran, Arab hatred for US meddling, and our support for Israel, the whole thing boiled over and led to the hostage crisis. This just further complicated the oil production problems emanating from the Middle East. It would have gotten a whole lot worse (if you can imagine that) were it not for our own oil production from the north slope which hit its peak in the late 70's.

When the Reaganites hit Washington, they brought with them several key oil industry players, most of whom were, and still are, voting members of the Carlisle Group, a US/Saudi consortium of energy investors including George H. W. Bush, James Baker and Frank Carlucci. They were instrumental in convincing the Saudis to ignore the other members of OPEC and increase their own production to meet demand. In addition, the CIA instigated a war between Iraq and Iran who are well known in the region for having historical/cultural differences. This broke the embargo and the oil started flowing again. With the price of crude coming down, the 80's were a great big party for Wall Street. It had nothing to do with Reaganomics. The 80's heyday stock market was also, more than likely, heavily influenced by the changing of the guard at the Federal Reserve Board in 1982, when Alan Greenspan took over for Paul Volcker. Volcker had notoriously continued to raise interest rates throughout the oil embargo, placing an internal stranglehold on the economy in order to discredit the Carter Administration and launch the conservatives to power. It worked. Within a couple of years after Reagan took office, Greenspan began running the printing presses night and day and flooded the market with cheap money built on cheap oil.

The 80's saw several world events that would have a lasting effect on the oil economy. These were: 1) The fall of the Soviet Empire which led to the opening of Eastern Europe and set the stage for the construction of a pipeline to Western Europe through the Balkans and access to oil fields in the Caspian Sea. Thus, our military intervention in the former Yugoslavia. 2) The Iraq/Iran war lasted for ten years thus occupying the attention of Middle Eastern countries like Libya who would otherwise have had more incentive to attempt a disruption of the US economy through the oil flow. But fears of US military intervention in the region along side the ongoing Iran/Iraq war, all of which, might have resulted in a "spilling over" of the fighting into neighboring countries, led Middle Eastern leaders, especially the Fahd regime, to put a lid on Qaddafi. Our military bombing of Tripoli was simply used to send a message on behalf of King Fahd: Mohammar needed to sit down and shut up before everybody started losing money. 3) The Falkland Islands war. Y'ever wondered why in the hell the UK would be interested in a couple of barren rocks half-way around the world? Easy. Venezuela is a major oil producer and a member of OPEC. When Argentina attempted to take over the Falklands, it was a military attack on a strategic naval base location. Incidentally, the same holds true for Somalia. Look at where Somalia is in relation to the Persian Gulf. Only the US and British Navies are allowed to occupy such a key choke point on the shipping lanes.

But, I'm getting ahead of myself. We'll get to Venezuela in a minute.

The 90's brought an end to the Iraq/Iran war. Iran was beaten badly and Iraq was in debt. It needed to pay that debt off and like the US, it wanted to pay it off using someone else's resources. Kuwait was an easy target. Hussein didn't count on the resolve of the American and British commercial interests in the region. In fact, the whole world took notice of this one and moved to keep Hussein from controlling that much of the world economy. If you think the Gulf War was to liberate Kuwait, I've got some great beach front property in Kingman Arizona I'll let you have cheap.

Americans love their consumption lifestyle, but we can't really bear to look the true cost of it in the face. The Gulf War was just too ugly and G. H. W. Bush lost to Clinton as a result of that war, even though it was an economic necessity. An avoidable one, true, but necessary nonetheless. Had we followed the Carter plan for energy independence, we would not be where we are today. But the doves lost the propaganda war with the rise of Reagan and the puppet masters behind Washington have been pulling the strings ever since.

The economic boom of the 90's was not a result of Clintonomics. I hate to tell you folks, but the reality is no president has any real control over the economy. Even their influence on tax policy has little if any lasting effect. The Wizard of Oz was an illusion created by a man behind the curtain. And that man (or men) is the Federal Reserve Board.

Clinton inherited Alan Greenspan, a magician whose greatest trick is creating money out of thin air. Let me diverge again for a moment for a short economics lesson. The Federal Reserve Bank is neither federal nor a bank. It is a consortium of the nations largest banks - banks so large they must go direct to the federal government to borrow money.
These banks, banks like Citibank and JP Morgan Chase, send a representative to the Federal Reserve Board meeting a few times a year and they decide among themselves what the interest rate will be for money they loan each other on a short-term basis using money they first borrow from the US Mint. This is called the Prime Rate. So, wrap your mind around this logic. The nation's largest banks get together and decide how much money they want and what they are willing to pay for it. Then, they send the Chairman to Congress to make their demands.
The US Mint creates the amount demanded, out of thin air, (remember, our money is based on nothing) and these banks then lend this money out to the rest of us for a profit, which they pocket. Now, just to make things even more twisted, these same banks will also lend this created money they get for free, back to the government for a profit by buying US Treasury Bonds. And we get to pay the interest on this debt with our taxes. And that's the scam.

Greenspan ramped up the printing presses and lowered interest rates to ridiculously low levels, allowing anyone to borrow money, including many people who shouldn't have. This caused people to turn their homes into ATMs and led to real estate speculation and real estate prices that have gone through the roof. The US economy is like a bicycle: if it stops moving, it falls. This elaborate house of cards is solely dependent on consumption. If people stop spending money, the economy implodes. And since people don't make any money to start with, they must borrow it to spend it. You see, since the rise of the conservative movement and deregulation, the US has exported its manufacturing jobs. Our economy is now 80% service industry. Service jobs create nothing. Only manufacturing jobs create real wealth by creating things that people need and buy based on need. But since we are all service workers, everything we buy is now made overseas and we are nothing but consumers. Under this scenario, credit must be made cheap and easy in order to give people something to spend. The housing bubble created during the 90's with cheap credit provided that flow of easy money. But it's over now, so look out.

Okay, back to oil and dollars. Something must keep the US economy afloat. The real estate bubble followed on the heels of the Stock Market bubble which followed on the heels of the S&L junk bond bubble.
We no longer have a bubble of artificially synthesized equity to create. In the absence of the creation of any real wealth, we are out of options and the only thing holding the US economy together is the fact that dollars must be used to buy oil. This fundamental requirement demands then, that all nations hoard US dollars for use to drive their own economies. To get these dollars, they buy bonds - IOUs issued by the federal government which then pays an interest. This causes them to invest in our debt. Thus the rising federal debt levels. This house of cards was holding until something went very, very wrong...

Saddam Hussein decided in late 2001 (note the date folks) that he would sell his oil (oil for food program) for Euros instead of dollars. His decision was, to hell with everyone else, don't go to New York or London, come straight to Baghdad and I'll sell you my oil for Euros direct and we'll cut out the middle man. Other countries caught wind of this idea and liked it. It represents autonomy from US control and for Muslim nations, a chance to comply with Islamic law and sell oil for gold. But abandonment of the dollar standard would cause the collapse of the US economy by pulling the value rug out from underneath the dollar. The oil industry was not going to let this happen. A message had to be sent to the world: stop buying our dollars and debt, and we'll kick your ass.

The problem was, how to sell it to the public. There had to be a reason that the average schmuck could get behind. And then, something wonderful happened. A major terrorist organization was planning a big hit on US soil. This was the Pearl Harbor the neocons had been dreaming of. A full report even hit the president's desk a month prior. The front page read: "Bin Laden plans major attack on US." What a deal.
All that needed to happen was a major attack on our land and blame could be placed on Iraq. So the necons just got out of the way and let it happen.

And the Iraq invasion was on.

Iran - and this is getting absolutely no mainstream, corporate news coverage but is all over the financial networks on the Internet - is in the process of setting up in international commodities exchange in Tehran where they will sell oil for Euros. They plan on bringing this on line next month. Their "nuclear program" is almost nonexistent.
They don't have the money for a nuclear program. The REAL nuclear threat to the US is the severing of the dollar/oil connection. And guess who else wants to sell oil for Euros? That's right, Hugo Chavez.

But there is one thing that no one on the planet can avoid and that, is Peak Oil. All of the war, the scams, the shredding of the Bill of Rights, the corporate take over of America is, in the end, the fits and gasps of a dying Empire that was built on a diet of crude oil and is now starving to death.

In Summary:

1970's:
  • Gold standard abolished, oil standard established.
  • Nixon, the first, conservative Imperial President falls under the weight of scandal.
  • Carter is elected in the wake of the scandal.
  • Middle Eastern OPEC nations rebel against the dollar standard and create an embargo by refusing to bow to Saudi Arabia's production quota demands.
  • The Shah of Iran falls and the US loses Iran as an oil producing puppet state.
  • Paul Volcker, Chairman of the Fed and a member of the neocon inner circle, places additional pressure on the US economy by restricting liquidity through high interest rates knowing that the presidency will take the political blame.
  • Carter prepares and implements a 30-year plan to remove the US from foreign oil dependency.
1980's:
  • Reagan and the conservatives rise to power on the sad health of the economy.
  • The Carter energy plan is immediately abandoned by the Reagan White House.
  • James Baker and George H. W. Bush negotiate an agreement with King Fahd to ignore other OPEC members and increase production which, they agree to.
  • North Sea oil fields are opened by British Petroleum.
  • Iraq/Iran war begins and along with increased production from the North Sea, the Alaskan North Slope and Saudi Arabia, crude prices drop.
  • The new Chairman of the Fed, Alan Greenspan takes control in 1982 and abandons the Volcker choke hold on liquidity.
  • Cheap, plentiful and easy fiat currency through the Federal Reserve and Central Bank lending, along with relaxed controls on the financial community enacted by the conservatives, fuels the economy by allowing more and larger risky leveraged speculation investment.
  • Speculatory, leveraged investments on Wall Street lead to the Savings and Loan collapse (the first artificial bubble to be inflated for profit and then allowed to crash leaving naive investors holding the bag).
  • Soviet Empire crumbles on the worthless Ruble and the Eastern Bloc is opened to the West for petroleum exploitation.
1990's:
  • Iran/Iraq war ends and Iraq invades Kuwait to rob its oil wealth.
  • Gulf War begins.
  • Balkans War begins.
  • Greenspan continues easy lending practices and the second artificial bubble is created, this time in the general stock market which reaches artificial and ultimately unsustainable highs during the Clinton years.
  • Stock market crashes in the later part of the decade. The hardest hit are tech stocks. It goes down in history as "The Dot Com" bubble.
  • Housing market bubble begins to inflate on the heels of the stock market crash.
  • The Clinton financial house of cards is better built than the house that Reagan built and the federal debt owed to Central Banks and foreign interests is paid down significantly. Incidentally, Katherine Austin Fitts (www.solari.com) once Assistant Deputy Secretary of Housing and Urban Development under the first Bush and Clinton, points out that one of the things that the Clintons did to really piss off the neocons was to play the game better than they did. Clinton was, after all, an economics major.
2000 and beyond:
  • Having lost an election to both Carter and then Clinton, the neocons vow to never let something as trivial as a national election get in their way again and George W. Bush is appointed by the Supreme Court to the White House.
  • Already having personal reasons to hate Iraq (and then of course there IS all that oil, after all) the Bushies are itching to open up a can of whoopass on Saddam Hussein.
  • Hussein gives them another excuse by attempting abandon the dollar standard. For that transgression against The Empire, he pays dearly.
  • The neocons are handed a golden opportunity (or helped to create it, according to some) when the towers are attacked. Every flimsy excuse under the sun is used to justify the invasion, but never the truth.
  • Peak Oil threatens to unravel the entire ruse by eliminating the sole source of wealth for the planet. The neocons have now, apparently decided to turn back to a time tested wealth building strategy: indentured servitude.
And now you know the rest of the story.

Mitch Elder

(Posted with permission)
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