2015 DRIVERS - 5 Macro Themes to Watch

3- Big Things Happen - When Geo-Political Conflicts Dominate the Nightly News SoundBites.
PUTIN - THE NEW COLDER WAR
In Putin's last two major media events he has dramatically raised the rhetoric regarding the mounting Russia-USA conflict. It is very reministic of the Cold War Era between John F Kennedy and Nikita Kruzchev that led to the Cuban Missile Crisis. This time it is about Nato missiles in the Ukraine.
Over a year and half ago I interviewed F William Engdahl on MACRO ANALYICS and he was very clear that the encroachment of Nato into the Ukraine, the US Missile shield and "First Strike" capaibilites would lead to a crisis. It clearler has.
As former congressman and Presidential candidate Dr Ron Ron Paul says, the neocon think tanks and mainstream media have painted Putin as Stalin Jr and the Cold War has restarted!
What is true is Putin’s has consolidated and nationalized the Russian energy industry which is now:
- The second-largest oil exporter, set to soon pass even Saudi Arabia;
- The largest uranium exporter in the world, powering 1 in 10 American homes;
- The country with the largest natural gas reserves in the world, doled out with an iron fist, willing to shut off those valves and watch harsh winters kill thousands to get its way
Natural gas, oil, and uranium are all controlled by the state and overseen by an ultra loyal group of Putin’s childhood chums. These enterprises have never been more profitable or powerful. As a result, Europe is now reliant on Russian natural gas and oil—a third of its fuel needs come through Putin’s pipelines. He can potentially bend the EU to his will simply by twisting the valve shut. No need for military intervention. Crimea and the eastern Ukraine are his.
PETRODOLLAR
What is at stake is the Petrdollar. Specifically, the pricing and trading of all crude and gas in US dollars.
Putin cut a landmark deal to build pipelines and sell natural gas to China for the next 30 years. This fills Russia’s coffers, but more important, not a dime will transacted in US dollars. This is a direct threat to the current petrodollar system, in which the majority of the energy trade is priced in US dollars and sold in dollars.
Along with China, Putin delivered another crushing blow to the US dollar with the New Development Bank, which will make large strategic investments in developing nations in Africa, Latin America, and Asia through a non-dollar international payment clearing system.
Each month that passes, Putin forges new alliances and deals like these. He’s using Russia’s vast energy and resource wealth as the ultimate economic weapon.
THE NEW GAME OF "FINANCIAL WARFARE"
The US is not standing idle back and has initiated through sanctions and other covert activites the new game of Financial Warfare. Presently the only thing falling faster than global energy prices is the Russian Ruble. A devastating problem to the stability of Russia and potentially Putin's regime.

PUTIN RAISES THE BAR

During Putin's latest press conference he specifically again addressed tensions with the West. It was reported:
"Our Western partners decided that they won and that they are an empire, and they began to squeeze everyone else out," he said.
He also referenced the Berlin Wall, saying that new "virtual" walls were being built through a NATO expansion.
"We want our partners to understand that the best way is to stop building those walls and to build a united humanitarian space," Putin said.
Putin later implied that the West is trying to disarm Russia.
He compared the country to a bear and said the West would "always try to put it in chains and ... take out its teeth and claws, which in this case means our strategic nuclear deterrent.
"Sometimes I think, maybe they'll let the bear eat berries and honey in the forest; maybe they will leave it in peace," he added. "They will not."
Putin concluded by asking: "Do we want our bear to just become a stuffed animal?"
When a journalist asked Putin about talk of a "new Cold War" brewing, Putin said that Russia had just been defending its interests, and he implied that the US was the aggressive party, not Russia. He insisted that Russia was not attacking anyone.
He then said the sanctions that had been imposed on Russia were "illegitimate and illegal."

This is not going to end well!
nor is the ongoing Sunni-Shite-ISIS conflict.
THE SUNNI-SHITE BOMB

Conrad Black now out of US prison for running afoul of US Neocons penned from Canada this explanation of the deteriorating alliances in the middle east:

OPEC naturally seeks to disguise the fact that Saudi Arabia is trying to discourage the use of Iranian and Russian oil revenues to prop up the blood-stained and beleaguered Assad regime in Damascus, to finance Iran’s nuclear military program, and to incite the continuing outrages of Hezbollah and Hamas in Lebanon and the Palestinian Territories against Israel. The exotic community of interest that has suddenly arisen between the historically Jew-baiting Saudis and the Jewish state is because the countries in the area fear, with good reason as far as can be discerned, that the UN Security Council members, plus Germany, may be on the verge of acquiescing in Iran’s arrival as a threshold nuclear military power. The oil-price weapon, in the face of the terminal enfeeblement of the Obama administration, is the last recourse before the Saudis and Turks, whatever their autocues of racist rhetoric, invite Israel to smash the Iranian nuclear program from the air.
It is perfectly indicative of the scramble that ensues when a mighty power like the United States withdraws, fatigued but undefeated, from much of the world, that Saudi Arabia, a joint venture between the nomadic and medieval House of Saud and the Wahhabi establishment that propagates jihadism with Saudi oil revenues, makes common cause with Israel in a way that inadvertently relieves much of the Russian pressure on Ukraine, which was not an objective in Saudi calculations at all. From the Western standpoint, this is a lucky bounce of the political football. But it is Saudi judgment of its self-interest opposite the contending factions in Syria and the hideous prospect of a nuclear-armed Iran that is discommoding the Saudi leaders, not the ineluctable exploitation by the United States of its own oil resources. It need hardly be added that any conventional definition of “speculation” has nothing to do with it; nor that the Western panic at the bonanza of a $500-billion reduction in the West’s energy costs or the obdurate failure of most Western commentators to understand the implications of the oil price reduction, are an unflattering reflection on the financial and political acuity of the pundits of our society.

Drop in oil prices was about:
- Control of oil and gas in the Middle East and
- The weakening of Russia, Iran and Syria by flooding the market with cheap oil.
Historic Foreign Policy Tool
- 1973: RAISED PRICES - Egyptian President Anwar Sadat convinced Saudi King Faisal to cut production and raise prices, then to go as far as embargoing oil exports, all with the goal of punishing the United States for supporting Israel against the Arab states. It worked. The “oil price shock” quadrupled prices.
- 1986, 1990: LOWER PRICES - in 1986, Saudi Arabia-led OPEC allowed prices to drop precipitously, and then in 1990, when the Saudis sent prices plummeting as a way of taking out Russia, which was seen as a threat to their oil supremacy & prior to the invasion of Iraq.
- 1998: LOWER PRICES - In 1998 oil price was halved from $25 to $12, Russia defaulted on its debt.
- 2008: HIGHER PRICES - Oil peaked at $147 a barrel
Strategic “Proxy War” for Syria Between Iran & Saudi Arabia
- Sept. 11 meeting between US Secretary of State John Kerry and Saudi King Abdullah. A deal hammered out whereby the Saudis would support Syrian airstrikes against Islamic State (ISIS), in exchange for Washington backing the Saudis in toppling Assad.
- By opposing Syria, Abdullah grabs the opportunity to strike a blow against Iran, which he sees as a powerful regional rival due to
- Its nuclear ambitions,
- Its support for militant groups Hamas and Hezbollah, and
- Its alliance with Syria, which it provides with weapons and funding.
- The two nations are also divided by religion, with the majority of Saudis following the Sunni version of Islam, and most Iranians considering themselves Shi’ites.
- $140 a barrel oil to balance its budget; at sub-$60 prices, the Saudis succeed in pressuring Iran's supreme leader, Ayatollah Ali Khamanei, possibly containing its nuclear ambitions and making the country more pliable to the West, which has the power to reduce or lift sanctions if Iran cooperates.
- 2011 agreement between Syria, Iran and Iraq that would see a pipeline running from the Iranian Port Assalouyeh to Damascus via Iraq. The $10-billion project would take three years to complete and would be fed gas from the South Pars gas field, which Iran shares with Qatar. Iranian officials have said they plan to extend the pipeline to the Mediterranean to supply gas to Europe – in competition with Qatar, the world's largest LNG exporter. “The Iran-Iraq-Syria pipeline – if it’s ever built – would solidify a predominantly Shi’ite axis through an economic, steel umbilical cord,” wrote Asia Times correspondent Pepe Escobar.
- Global Research, a Canada-based think tank, goes further to suggest that Assad's refusal in 2009 to allow Qatar to construct a gas pipeline from its North Field through Syria and on to Turkey and the EU, combined with the 2011 pipeline deal, “ignited the full-scale Saudi and Qatari assault on Assad’s power.”
RUSSIAN PRIVATE SECTOR EXPOSED
Eric Reguly, writing in The Globe and Mail last Saturday, points out that with foreign exchange reserves at around $400 billion, the Russian state is “in no danger of collapse” even in the event of a deep recession. Reguly predicts the greater threat is to the Russian private sector, which has a debt overhang of some $700 billion. “This month alone, $30-billion of that amount must be repaid, with another $100-billion coming due next year. The problem is made worse by the economic sanctions, which have made it all but impossible for Russian companies to finance themselves in Western markets,” he writes.
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