Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
The S&P 500 appears ready to correct, and that is a good thing - 18th Sep 20
It’s Go Time for Gold Price! Next Stop $2,250 - 18th Sep 20
Forget AMD RDNA2 and Buy Nvidia RTX 3080 FE GPU's NOW Before Price - 18th Sep 20
Best Back to School / University Black Face Masks Quick and Easy from Amazon - 18th Sep 20
3 Types of Loans to Buy an Existing Business - 18th Sep 20
How to tell Budgie Gender, Male or Female Sex for Young and Mature Parakeets - 18th Sep 20
Fasten Your Seatbelts Stock Market Make Or Break – Big Trends Ahead - 17th Sep 20
Peak Financialism And Post-Capitalist Economics - 17th Sep 20
Challenges of Working from Home - 17th Sep 20
Sheffield Heading for Coronavirus Lockdown as Covid Deaths Pass 432 - 17th Sep 20
What Does this Valuable Gold Miners Indicator Say Now? - 16th Sep 20
President Trump and Crimes Against Humanity - 16th Sep 20
Slow Economic Recovery from CoronaVirus Unlikely to Impede Strong Demand for Metals - 16th Sep 20
Why the Knives Are Out for Trump’s Fed Critic Judy Shelton - 16th Sep 20
Operation Moonshot: Get Ready for Millions of New COVAIDS Positives in the UK! - 16th Sep 20
Stock Market Approaching Correction Objective - 15th Sep 20
Look at This Big Reminder of Dot.com Stock Market Mania - 15th Sep 20
Three Key Principles for Successful Disruption Investors - 15th Sep 20
Billionaire Hedge Fund Manager Warns of 10% Inflation - 15th Sep 20
Gold Price Reaches $2,000 Amid Dollar Depreciation - 15th Sep 20
GLD, IAU Big Gold ETF Buying MIA - 14th Sep 20
Why Bill Gates Is Betting Millions on Synthetic Biology - 14th Sep 20
Stock Market SPY Expectations For The Rest Of September - 14th Sep 20
Gold Price Gann Angle Update - 14th Sep 20
Stock Market Recovery from the Sharp Correction Goes On - 14th Sep 20
Is this the End of Capitalism? - 13th Sep 20
The Silver Big Prize - 13th Sep 20
U.S. Shares Plunged. Is Gold Next? - 13th Sep 20
Why Are 7,500 Oil Barrels Floating on this London Lake? - 13th Sep 20
Sheffield 432 Covid-19 Deaths, Last City Centre Shop Before Next Lockdown - 13th Sep 20
Biden or Trump Will Keep The Money Spigots Open - 13th Sep 20
Gold And Silver Up, Down, Sideways, Up - 13th Sep 20
Does the Stock Market Really "See" the Future? - 12th Sept 20
Basel III and Gold, Silver and Platinum - 12th Sept 20
Tech Stocks FANG Index Nearing Critical Support – Could Breakout At Any Moment - 12th Sept 20
The Tech Stocks Quantum AI EXPLOSION is Coming! - 12th Sept 20
AMD Zen 3 Ryzen 4000 Questions Answered on Cores, Prices, Benchmarks and Threadripper Launch - 12th Sept 20
The Inflation Mega-trend is Going Hyper! - 11th Sep 20
Gold / Silver Ratio: Slowly I Toined… - 11th Sep 20
Stock Market Correction or Reversal? The Jury Isn't Out! - 11th Sep 20
Crude Oil – The Bearish Outlook Remains - 11th Sep 20
Crude Oil Breaks Lower – Sparking Fears Of Another Sub $30 Price Collapse - 11th Sep 20
Inflation by Fiat - 10th Sep 20
Unemployment Rate Drops. Will It Drag Gold Down? - 10th Sep 20
How Does The Global Economy Recover After This Global Pandemic? - 10th Sep 20
The Best Mobile Casino - 10th Sep 20
QE4EVER! - 9th Sep 20
AMD Ryzen Zen 3 4800x 10 Core 5ghz CPU, Cinebench Benchmark Scores (Est.) - 9th Sep 20
Stock Traders’ Dreams Come True – Big Technical Price Swings Pending on SP500 - 9th Sep 20
Should You Be Concerned About The Stock Market Big Downside Rotation? - 9th Sep 20
Options Traders Keep "Opting" for Even Higher Stock Market Prices - 8th Sep 20
Gold Stocks in Correction Mode - 8th Sep 20
The law of long-term time preference and Gold ownership - 8th Sep 20
Gold Bull Markets: History and Prospects Ahead - 8th Sep 20
Sheffield City Centre Coronavirus Shopping Opera Ahead of Second Covid-19 Peak - 8th Sep 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

The Financial Consequences of the Middle East Protest Movement?

Politics / Middle East Mar 13, 2011 - 04:25 AM GMT

By: Bob_Chapman

Politics

Just as we pointed out after the Tunisian episode, this was the beginning of CIA, MI6 and Mossad planned activities in the Middle East. As usual there were several objectives. The first was a distraction to cover up the financial troubles in the US, UK and Europe. The second was to remove Mubarak from his dictatorial position, because of his refusal to participate and agree to an invasion of Iran and to cause chaos in the region, so that those who were pro-Iran would not give it assistance in the event of war. There was also the matter of controlling Libya’s oil and toppling its dictator Gadhaffi. The US and the Brits want Libya’s oil among other things.


The result of this western intervention has been and will continue to be a collective general collapse of current regimes. The replacement will supposedly be populist governments, when in fact that will not be the case. From behind the scenes will emerge leadership tied to the CIA, MI6 and the Mossad. These new governments will look like they are anti-west and anti-capitalist, but that will not be the case. Their overthrows have been in the works for years and all the new players are in place. Unrest will probably continue over several months perhaps for a year. A solution will be found for Libya and the west hopes their puppet regime in Saudi Arabia stays in place.

Nigeria has its own problems and seems calm except for the ongoing civil war between Christians and Muslims. That has been progress for 50 years between the Ibo and the Hunza tribes. The Christians have learned to live with the majority Muslim government.

Iraq has its own set of problems politically, but the country is still guarded by 50,000 or more US troops, as western oil interests pump their oil as fast as possible.

We believe any major disruption in Saudi Arabia would not only be met by local troops, but by US forces as well. Saudi pumps more than 8 million barrels of oil a day and the west cannot stand such a disruption. The region produces almost 17 million barrels a day, or almost 23% of total world production or 56% of OPEC production. Political upheaval should not last more than 3 to 6 months. The result will be turmoil for some time to come; a social and political situation that neutralizes any opposition to the regional aims of the US and Israel. It won’t take long for Mr. Gaddafi to be deposed and sent on his way and it could be with the help of US troops. Western oil interests would like that very much.

Many experts believe the surviving regimes will be anti-west and anti-capitalist, but we think that will not be necessarily so. These countries will want to pump oil and pump it as fast as possible, because generally speaking they have no other source of income. There will be lost oil production, but if Saudi Arabia is not involved in upheaval they can make up most of the lost production. Presently the only obvious problem is with Libya. The Saudi’s have said they will make up the lost Libyan production knowing full well they will have to pump three times Libyan production due to high sulphur content in Saudi production. Overall it can be expected that regional production overall will fall perhaps as much as 30% to 50% under new governments. That is only a guess. We won’t know the result for some time to come and such developments will prompt other non-regional producers to increase production and that includes the US as well. One might say the key is Saudi Arabia. If its government were overthrown then the world would be in serious trouble. From a practical viewpoint looking at world production 10% to 12% could be lost, but it could be augmented elsewhere, perhaps over a few years.

During such a period oil demand could slow by partial elimination of growth and less consumption due to higher pries and slowing economies. Overall that could bring about a reduction in consumption of about 5%. That would only make up 50% of the shortfall. Such a calamity could take oil prices to $200 a barrel or more and gasoline prices could rise 150% that is from $6.00 to $9.00 a gallon. Such higher prices would cause major changes in society. In places where petrol products are subsidized there would be great shock. Mind you these assumptions include Saudi Arabia being sacrosanct. If Saudi falls the result would be a nightmare.

All in all the average American would see petroleum based costs increase $2,500 a year, which would reek havoc on consumption and GDP growth. This kind of factor is what deflationary depressions are made of. $300 oil would increase the balance of payments deficit by $800 billion annually and erase 4% of GDP. Inflation would rage, especially when assisted by higher food prices. Wall Street doesn’t as yet understand this, but when it does the stock market will certainly fall. If you pencil in the increase in monetary aggregates by the Fed and the rising fiscal deficit you end up with hyperinflation and stagnation simultaneously. We could be looking at budget deficits of $2.5 trillion annually and a balance of payments deficit of $800 billion. This means 14% inflation this year and perhaps 30% in 2012. These events would produce a dollar collapse. It would also collapse the economies, China and India, their currencies, and many others as well in non-oil producing countries.

Theinternationalforcaster.com

Global Research Articles by Bob Chapman

© Copyright Bob Chapman , Global Research, 2011

Disclaimer: The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of the Centre for Research on Globalization. The contents of this article are of sole responsibility of the author(s). The Centre for Research on Globalization will not be responsible or liable for any inaccurate or incorrect statements contained in this article.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules