It Was All about the Oil

The U.S. real estate meltdown and liquidity crisis show no sign of abating. The U.S. dollar is still caught on the horns of its dilemma, forced to choose between the Scylla of lower rates and the Charybdis of higher ones.

Meanwhile the crooked man from the crooked house spins his crooked tales from coast to coast his piggy banking blather as unctuous an oink as ever heard on the animal farm.

Self-servingly justifying all via his intellectually and morally stunted Ayn Rand theftology.

Endlessly invited for fawning interviews to pump the sales of his fairy tale fictions, as adored as ever by the sycophantic chattering classes. The ink stained wretches who serve so well those in the financial class that made off with the loot under the cover provided by the Greenspan Fed.

And why would a man in his 80’s, a man lionized by those he served so well, idolized by the scriveners and courtiers they long ago bought, be on a book tour designed to help him deny his part in shaping our present? Why would a man so completely beyond the reach of the law or even public opprobrium, a man soon to be beyond even the laws of nature herself, care?

Tough question.

And in any case does he not see that by trying to deny that his 17 years as the head of the Fed had any part in where we are today at best robs his life work of any meaning? Does he not see that even if we were to believe such a patently self-serving absurdity then at best it says that his office was primarily ceremonial and that the real decisions and power lay elsewhere? (Now if he were to come out with that…..)

Does he not see that even if this were true, that even then he is still guilty by association?

Guilty of being the principal puppet in a show meant to distract the public from what was really going on while their pockets were being picked?

Does he not see any of this? Again a tough question and one probably even the man himself does not know the answer to so crooked has his path led him to become.

What can be known however is that this man obviously feels sufficiently driven by how badly things are going to spend a good chunk of his remaining time on the planet trying to deny his part in the biggest smash and grab since the kleptocrats took Russia in 1991.

Perhaps as good an indication as any of the ferocity of the economic storm clouds we in North America have now entered.

How soon this will all start impacting on North America’s real debt and deficit, our energy deficit is impossible to predict. We cannot know how soon the multiplying economic evils of the Reagan & Bush war and debt creation machine will impact on the U.S. 12 million barrels of oil a day deficit. Or how substantially the housing meltdown in combination with the Iraq war, a tax cut led $10 trillion debt, and a $800 million current account deficit will impact on America’s plans to globalize their way out of the looming natural gas production crash. Given the very substantial impacts this is and will continue to have on liquidity, it seems safe to say “Quite a lot.”

Today, Greenspan tells us what every one on the street long ago knew about Iraq. “It was all about oil.” If he hopes by such “truth telling” to prove he is one of the people he is more than a dollar short and a day late. What the man in the street does not know is that with these words Greenspan is involved in a much deeper truth telling than even he knows.

For as appropriate as it is to link these words to the crime perpetrated against the Iraqi people they are even more true when applied to the entirety of the 20th Century. And as bad as the economic mismanagement of America has been, and as painful as the resolution of these problems will be, this pales in comparison to the level of economic privation that will be experienced by Americans once their energy mismanagement chickens start coming home to roost. And for those of you new to these truths do yourself a favour and greatly steepen your learning curve by substituting the word energy every time you hear the word oil, gas, coal or uranium.

At present the picture that can tell us how soon America’s energy consumption will be forced downward by its financial and geopolitical problems is at best murky. For now all we can be certain of is that the fossil fuel scarcity deniers like Daniel Yergin at CERA who have been claiming for years that its price will be plummeting “any day now” will finally be relegated to the appropriate historical dustbin.

Jeff Berg is a freelance writer and activist whose focus is Energy & Emissions and their micro and macro implications ecologically, economically and socially. Read other articles by Jeff, or visit Jeff's website.

11 comments on this article so far ...

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  1. iyamwutiam said on October 22nd, 2007 at 6:59am #

    Oil- is THE vehicle for dollar hegemony – and Greenspan’s commentary was about THAT – and not just a simplistic utterance of the obvious- remember he IS/WAS the central banker of the mother of all fiat currencies. I am continually CONFOUNDED by how people miss the rather obvious link. The fact that the price of oil is spiralling ever upwards is a BENEFIT for the United States. Why? Because – if 70 percent of the world’s oil is traded exclusively in oil – than central banks in Asia and Europe MUST hold onto tons of worthless dollars instead of dumping them.

    For example – if a country imports a million barrels of crude a day at $50 a gallon – it NOW must hold instead of 50 million dollars of wothless US currency/day= $18,250,000,000 a year. Now the price is 85 and going to say 100= $36,500,000,000 a year. The net effect is propping up and extending the debt of the United States which has reached $9,000,000,000,000 and growing!! A more than cursory look at the numbers would increase one’s insight into this situation. One more number -please bear with this is that – the interest expense for the first three months of FY 2005 (Oct., Nov., & Dec.) was $120,248,160,823.07. So as you can CLEARLY see – our ability to pay interest payments (mainly to privte banks -called the fedral reseve which holds 70 percent of US debt) is GREATLY increased by the price of oil.

    It is because of this need to hoard dollars that the Chinese. Japanese and Germany (our biggest holders of US treasuries) are FORCED not to cash in their chips. It is because of this that Iraq HAD to be invaded and with as much haste as possible. It shold be noted – that it is historical fact that he was supported and placed in Iraq by the US and that the US DID have something to do with him invading Kuwait- which is why he was NOT replaced at the time. The US government recognized by the mid 1990s that Reagan’s legacy of supply side economics was a failure and started focusing on Iraq since then – particularly when Saddam was trying to circumvent caps imposed on production of oil to get around the ruinous sanctions imposed by the US. Saddam subsequently tried Oil for Food and finally in desperation moved off the ‘dollar standard’- which led to his death.

    I digress- suffice it to say that having Saudi Arabia, Kuwait, Iraq, Nigeria and other smaller fry (Mexico, Canada, Norway, etc) – is more than sufficient for the US to continue to rack up debt that it can never repay. Oil being the vehicle is the key and despite the plethora of brain-washing – oil is not a fossil fuel nor is it peaking.
    Once this view is understood – everything – EVERYTHING makes sense. Iran/ a new Kurdistan, the supposed reluctance of the overwhelmingly elected Democrats to dfo anything, the new bankruptcy legislation, IRS legislation, SS legislation, exhorbitant fines at EVERY level from traffic tickets to property tax increases as well as the recent decision of the IRS to hire private collectors etc that seeks to bleed the the majority of populance dry from all monies- to pay this stageering amount of interest – as it is or will be apparent that the US can NOT pay off the debt.

    The central bankers would PREFER war with a dozen countries for decades not because of private contracters making billions but because they would be wiped off the face of the earth if the US ever defaulted on their debt. Since Europe is interwined in this mess – that is why – all these governments appear to say the same thing and you have this globalized neo-con agenda all over the Western world. They KNOW they MUST uphold the status quo by any means necessary or risk the largest financial meltdown the world has ever seen – and go back to the dark ages.

  2. Deadbeat said on October 22nd, 2007 at 9:50am #

    It Was All about the Oil

    Yeah right here we go again. This is the continuous mantra by those who want to shift the focus away from Zionism’s role in the destruction of Iraq. It clearly was not all about the Oil.

  3. Shabnam said on October 22nd, 2007 at 5:56pm #

    Another paper on “No Blood for Oil” type of message which ignores the political impulse behind the “project for the New American Century and more important, the Neocon’s project that you can be found in Richard Perle, David Wurmser and Douglas Feith’s devotion to “greater Israel” according to “A Clean Break.” This slogan is suited for liberal and radical antiwar circles who want to mobilize the pro Zionist into the movement as well and that’s why the antiwar movement is so impotent since no one can debate or bring the agenda of the Zionists and Israel into the discussion or the slogan and they are still working on petition to send it to the senators who are elected on AIPAC’s contribution to their position.
    We had similar situation 30 years ago when the “Zionist left” dominated the political scene and would not allow discussion on question of Palestine because they thought it was not worthy of their attention since they regarded Palestinian struggle as a “nationalist movement.”
    Now we are told the main reason behind the bloody war and destruction of Islamic countries, disintegration of their societies, stolen of their civilization remains from their museums and sending them abroad are due to “American addiction to Oil.” Therefore, US needs to control the oil and that’s why “It Was All about the oil”, especially when Greenspan confirms it too.
    According to Professor Cyrus Bina, distinguished Research Professor of Economics at the University of Minnesota, Morris, USA, the slogan “No Blood for Oil” is a misleading slogan that contradicts the globalization of oil and mischaracterizes the motivation for war. In addition, this view overlook the pricing according to market and also mimicking the neoclassical fiction of competition and relying on the tautology of market-structure theory and ignores the fact that OPEC prices are constrained by the worldwide competitive spot and future oil prices. Furthermore, the war for OIL does not realize that speaking of “access,” dependency,” “control,” etc., is redundant in today’s oil sector and oil market. Therefore, the root cause of war should come into domain of discussion. The professor even does not believe in US-China rivalry; for god’s sake forget about the “control of oil.” He thinks the globalization brings the decline of American hegemony, therefore, increases American appetite for domination through military means. Therefore, Bush with the help of Zionists will escalate the war into other countries.
    Thus, the underlying cause of the war with Iraq is the loss of American hegemony combined with the plan of the Zionist for the region, his political base. In Zionist’s plan we see the use aggression to change the entire geography of the Middle East, piece by piece. Country by country, NOT FOR OIL but according to “A Clean Break.” change of geography of the Middle East.

    Please read the article.

  4. Al said on October 23rd, 2007 at 12:11am #

    If there is World War 3, it will be beacuse of the terrorist nation of israel!

  5. Deadbeat said on October 23rd, 2007 at 10:27am #

    If there is World War 3, it will be beacuse of the terrorist nation of israel!

    While I agree that Israel is a terrorist nation, what is more problematic is that Zionism has been allowed to flourish unchallenged in the United States. Even if Israel was “wiped off the map” tomorrow, it would not eliminate Zionism. Zionism is a racist ideology that can implant itself anywhere and clearly Zionism has found a home in the racist United States.

    Today on Democracy Now! Amy Goodman interviewed Ted Glick who was emphatic that the war in Iraq is all about oil and that the consumption of oil via wars is leading to global warming. Then segue into the California fires.

    However what Amy Goodman didn’t tell us was that Ted Glick was part of the “DemoGreens” who sabotaged the desires of the Green Party members by supporting David Cobb and then supported the “safe states” strategy that really was a way of supporting war-monger John Kerry.

    So rather than support anti-war candidate Ralph Nader for the Green Party nomination, the desires of the majority of the Green Party members, and who would have expanded the Green Party ballot lines, Glick went along with the faction that did actual damage to the Green Party and their members.

    The fact that their has been via Jimmy Carter and others who have provided space to start an examination of Zionism and its influence on U.S. foreign policy we’ve now been seeing a flurry on the racist “left” to distract people from any notion that Zionism has any influence in the war on Irag. We’re seeing this tactic from articles like the one posted here as well as the supposed connection to “global warming”.

    Alexander Cockburn has express his skepticism toward the issue of “global warming”. He first expressed skepticism toward “peak oil” that his skepticism is correct. There is no “peak oil”. Chavez himself has refuted that notion by accounting to the fact that Venezuela has even larger reserves than Saudi Arabia.

    Folks like the betrayer Glick and the racist/warmonger/welfare repealer/Hollywood award winning, Al Gore, have associated themselves with “global warming” is a reason to pause and to ask questions. I am inclined to believe as spezio as pointed out that like “peak oil” these are ruses to alter the public perception.

    It is one thing to look for alternative energy source that are much more sustainable but it seems to me that this is once again especially by the Zionist “left” to divert and to obfuscate this virulent form of racism.

  6. Jeff Berg said on October 23rd, 2007 at 4:30pm #

    While these posts are more amusing than I expected I must say that I am disappointed at the level of the discussion. Ah well, despite the very little time I’ve had to get to know you all I’m still very sure that I am right in saying that you will manage to maintain your high opinion of yourselves notwithstanding my disappointment 🙂

    As to who I am I will, incautiously, answer the distressed feeding calls sent out by Gerald via his very silly chickadee like chirpings . Though I will indulge myself by answering in emotive kind to his post as he did after all in the words of the schoolyard A) Start it & B) Establish what he considers ‘fair’ play.

    For starters I am not of the Jewish faith. I am a 15th generation francophone Quebecois/Canadian on the maternal side (Toupin) and a first generation Canadian via the U.S. and Denmark on the paternal side. (Berg means hill or small mountain in and is a Germanic not a Yiddish or Hebrew word etymologically.)

    And not that any of this should be germane, but with the level of the discourse found here it is not at all clear with you folks that this baseline truth holds, I was raised as a Roman Catholic and am not today nor have I ever been a convert to Judaism. As to what my spiritual beliefs are today that is quite frankly none of your business.

    Now it is true I guess that I could be a non-Jewish Zionist in the mould of say the Evangelical right but that too is not the case. If you would like “proof” of this I suggest you simply Google my name and American Empire or follow this link to my essay titled ‘Israel’s Superiority isn’t Moral’.

    As for my aptitude for science you find out all you need to know about the depth and breadth of Gerald Specious and his mind by the very grave upset he evinces in his not having found scientific credentials amongst the Post Carbon Toronto group. (Albeit a much graver lack is to be found in his research abilities:-) As any even halfway witted person knows credentials are immaterial in the area of scientific inquiry. What matters is not who says what but what they say. Take notes Gerald you really do need them.

    The second most important thing to know about science is that the most important attribute for scientific inquiry is the ability to see the world without preconceived notions of what you will find. This is one you realllllllly should pay attention to Gerald as it would help you a great deal in seeing beyond the end of your nose. Now this is not to say that training in scientific precepts and methodology is not needed for the opposite is in fact true. Such training is instead de rigeur and a sine qua non to its proper practice. Einstein after all could not have done what he did if he had been a beggar in Bangladesh no matter how great his talents. Where I received this training was at Dalhousie University and the University of Western Ontario where I studied political philosophy, the philosophy of science and linguistics.

    Today I am 47 years of age and while my intellectual journey has been for the most part as close to a random walk methodology to learning as can be found in any one person, thanks to exceedingly catholic tastes and insatiable appetite for reading, I am quite secure in the belief that I have come out the other end with an interesting, able and even original mind. No small accomplishment really. Especially given how pretty much insanely badly I was socialized. ( A story for another time)

    On the plus and show off side of the ledger I can tell you that I speak four languages fluently. (If you include music as a language:-) I’ve even written a new Canadian National Anthem!

    One of the verses:
    Canada is my country, my heart and my home,
    Canada is a north land from sea to sea,
    And as northlanders differ from southlander folk,
    We have our differences from the land of the free. 🙂

    On the minus and confession of weakness side despite an almost deranged intensity and sponge like absorption for what I was learning I was the world’s worst student from an attendance point of view. The result of this being that despite spending four years at university I finished two credits short of my degree.

    My fellow PCT board members however were nowhere near so derelict in their studies. By the by Mr. Specious you show an appalling lack of competence for research and have got all of your asserted “facts” dead wrong. But, hey, why bother with facts, eh Gerald, when opinion is sooooooooo much easier to bring to the table. (Facile is the French word for easy mon boy)

    Like every junior mint wannabe Gerald won’t/can’t do his research properly because he simply lacks the discipline, patience and just plain hard work required. So to do the work for you that you obviously can’t do yourself Gerald A) Ms. Kudlac has a degree in engineering & B) she is our Outreach Coordinator not our Chair. Our Chair/Director on the other hand has a Masters in Physics (I guess Gerald doesn’t count physics among the sciences). As to the rest of the group all but a very few are unlike me in that they have all received degrees of one kind or other.

    Greg Allen, P.Eng., for example is one of the leading environmental and energy efficiency engineers in all of Canada.

    Dr. Gilbert is a trained clinical psychologist who has morphed via a fifteen year career in politics into a transportation consultant to the U.N. and OECD member countries. Look for his book Transportation Revolutions written with Dr. Anthony Perle coming out in Europe in December. (N.A. will have to wait until February)

    As for the most impressive mind in our group, Mr. Oslund, he received training in architecture and information and systems theory. Though as is true with every person with a true life of the mind he will tell you that he has learned far, far more since his “credentialing” days than he ever learned during them.

    Enough. I’ve real work to do. Thank you though, it’s good every once in a while to just let loose and have a good rant:-)

    Though I caution you Gerald with all solemnity when these are the sum of your contribution you are in danger of becoming a caricature of what you would like to be.

    ton confrere,

    Jeff Berg Aka Jean-Francois Toupin

  7. iyamwutiam said on October 23rd, 2007 at 7:54pm #

    Some links regarding the other side of peak oil:

    There are many more if one googles.

    I would remind Mr. Berg – with all respect – that even scientist’s are not immune to getting o bandwagons’. In medicine for example – there are numerous instances where many ‘respected’ scientists waxed fervent on many fallacies:
    1. X rays as an effective screening tool for Lung Cancer
    2. Drug coated stents

    As in the book – the Tale of the Troika by the Arkady Brothers – it is often possible to lose objectivity when one is placed in theposition forjockeying for recognition, salary and job security.

  8. Hue Longer said on October 26th, 2007 at 2:22am #

    Thank you Gerald and Jeff, that was some truly entertaining reading that makes me long for the days when Gore Vidal and William Buckley could dance without choreography getting in the way

  9. Jeff Berg said on October 26th, 2007 at 12:08pm #

    Il n’y a pas de quoi mon chere Hue.
    (Which literally translates to “There is no what.”, and even we Quebecois don’t really know what that means:-)

    As to your allusion I would very much like know who’s who in your mind. And as I have no desire of any kind to be fair to my insignificant other (how Vidalian no?:-) I will here attempt to bias the case in advance for my being Vidal and so he Buckley.

    My piece in Canadian Dimension deconstructing Diane Francis’s obscurantist doggerel and stressing Canada’s Obligations in relation to Global Warming, the Kyoto Accord and our Blessings.

    My piece in Counterpunch on the day the American Empire jumped the shark: (The day by the by was August 31, 2005)

    My piece in Countercurrents on the criminality of the U.S. and Israeli occupations:

    My piece published in the Tehran Times on DU and the Bush families 4.5 Billion year legacy/infamy.

    And how about you my automatic writing goat herd from outer Mongolia? Apart from the pleasure you share with GW, your direct link to your Gawd, who has been willing to listen to your scribblings?

    For one last final treat before I sign off this thread I send you to a piece of mine posted by the World Crisis Web: It was written in the spirit of being a “very scary” piece for Halloween a few years ago and still very much applies to us and today. (The comments are exceedingly illuminating as well. Rather more so than the piece frankly.)

    ton confrere,

    Jeff Berg

  10. Jeff Berg said on October 26th, 2007 at 1:07pm #

    “As in the book – the Tale of the Troika by the Arkady Brothers – it is often possible to lose objectivity when one is placed in the position for jockeying for recognition, salary and job security.”


    Which is very much why you should be very much more attentive to the fact that those geophysicists who are illuminating for the public what the data is really saying are the RETIRED ones.

    Almost without exception the scientists who are telling us that our Emperors are oil naked are the ones who have reached the stage in their careers where they can no longer be touched by their paymasters and so now need no longer fear the very real peril that controversy brings to careers.

    The situation today is very much akin to the 1956 case of Dr. Hubbert versus James McElvey of the U.S.G.S. A really great story that will resurface to very wide renown when the energy chickens come home to roost.

    Speaking of which for those of you who think America’s fiscal position is a grave danger to herself, Canada and the World (in that order, and it is) it is as nothing compared to the energy withdrawal shock she is going to be forced to endure. The effects of which Canadians will very much not be immune to. As our economic pundits like to say “If America sneezes Canada catches a cold.” What then when America catches double pneumonia? (The first pneumonia is fiscal, the second pneumonia fossil fuelled, Iraq befitting her Mesopotamian roots is of course the straw that broke this camel’s back.)

    EWG is a energy research group put together by the former German Parliamentarian most responsible for creating the legislative support that led Germany to the highly enviable renewable energy potency she enjoys today. (Hans-Josef Fell) Again, a man who has achieved sufficient status and material comfort that he no longer needs be bound by anything but the rules of empiricism and reality itself.

    EWG’s report from two days states that their analysis shows we have already reached peak and may see a halving of oil production as early as 2030.,,2196435,00.html

    I now challenge you all to read this article and see who among you can spot and explain the mathematical error that the journalist for the Guardian, Ashley Seager, makes in her reporting on this seismic report. (seismic = earthshaking)

    Canada by the by:
    A) Does not have a Strategic Petroleum Reserve. The Americans have one, the Brits have one, we are in fact the only country in the OECD to not have one.

    B) Has signed away her right to first access to her own oil and gas “regardless of scarcity”. Aka. In times of emergency or scarcity. “Thanks” to the FTA & Chapter 6 NAFTA.

    Mulroney was worried about his legacy versus Trudeau’s before? Wait til this shit hits the fan. Trudeau’s NEP is going to look like godlike prescience when compared to our betrayal by this misnamed gang of “free traders”. Rather better named a gang of American Empire loyalist quislings who betrayed our sovereingty and energy independence for a wheelbarrow full of rapidly declining in value Yankee greenbacks.

    Harper and his SPP being but a continuation of these very useful to American interests and very anti-Canadian machinations.

    C) Has peaked in terms of natural gas production. “The average decline rate for natural gas wells in Canada is 21%, in the U.S. it is 24%.” – David Hughes, Senior geoscientist for the Canadian Gas Potential Committee, 35 years a geoscientist for NRCan and the Canadian Geological Survey.

    He retires November 15, 2007. The day after he flies to Japan for a week of lectures and seminars he has been asked to give on the global energy situation. He and Dennis Meadows (of Limits to Growth fame) are considering setting up a consulting business together so as to better communicate the fact that our planetary and resource limits are a knife that cuts both ways. I.e. The danger to us all presented by excess AND privation.

    ton confrere,

    Jeff Berg

  11. Hue Longer said on October 27th, 2007 at 1:22am #

    Jeff (and Gerald),

    I just enjoy when intelligent debate livens up and gets downright funny (funny ha ha). Though neither one of you reminds me of Vidal or Buckley as far as style or stances, the looks on their faces as they did their famous dance was what came to mind reading the two of you…

    I am fascinated by the dynamics of about oil/not about oil debate and even were terms to be accurately defined prior to engaging in these debates, there is still uncertainty (on my part anyways) as to absoluteness…I find myself agreeing with sometimes conflicting conclusions.

    I do sincerely enjoy a good riposte (how you like that French!) and encourage the two of you to cut deep and often while educating me on peak oil, Israeli influence, subversive plants, internet misinformation and French.