DEMONS AND THEIR BLACK GOLD - OIL

Enough of the accusations and finger pointing, how about taking action to stop the nonsense before the world becomes the victim of the hoarders of black gold. Oil prices continue to set daily records while politicians, industries and economists twiddle their thumbs and speculate on the speculators while accomplishing nothing.

More than anything else the spiraling price of black gold is a reflection of the attitude of the world toward the United States foreign policy and the last few years America has taken a beating in international relations. What we as a nation do in the Middle East, in Asia, in South America and in Eastern Europe has directly impacted on oil prices as many nations that produce the precious oil oppose our foreign policy.

Take the Middle East for example where we have propped up the Saudi Arabia kingdoms for decades, a Muslim nation, while giving a blank check and unlimited arms to Israel to oppose the Muslim nations. Along the way we save Kuwait from an invasion by Saddam Hussein and Iraq and then we obliterate Hussein because of phony “weapons of mass destruction” intelligence. Now we occupy Iraq and after five years nothing is even approaching the life they had under Hussein.

First let us look at oil production in the world. As of February 2008 the following are the top oil producers shown in millions of barrels per day. Russia 12.93, Saudi Arabia 8.81, United States 7.40, Iran 3.93, China 3.82, Canada 3.50, Mexico 3.46, UAB 2.59, Venezuela 2.44, Norway 2.44, Iraq 2.37, Kuwait 2.29 and UK 1.65.

These are the top oil consumers of the world again in millions of barrels per day. United States 20.7, China 6.5, Japan 5.6, Germany 2.6, Russia 2.5, India 2.4, Canada 2.3, Korea 2.1, Brazil 2.1, France 2.0, Mexico 2.0, Italy 1.9, Saudi Arabia 1.9 and UK 1.8.

Finally these are countries with the most oil reserves in the world reflected in billions of barrels of oil. Saudi Arabia 266.8, Canada 179.0, Iraq 130.0, Iran 105.0, Kuwait 100.0, United Arab Emirates 100.0, Venezuela 80.0, Russia 60.0, Libya 41.5, Nigeria 36.2, United States 21.0 and Mexico 20.0. Five of the top six are Arab OPEC members and they control 55% of the world oil reserves, while all of OPEC controls 70% of all the world reserves.

Saudi Arabia has the largest oil reserves in the world, while Iraq has the third largest oil reserves in the world. The United States has spent hundreds of billions of dollars defending those countries yet these two countries have made little effort to help us during the recent oil price increases. Iran is yet another oil giant and ever since our ill-fated backing of the Shah of Iran over the people we have struggled to benefit from their oil reserves.

In fact, of all the Arab countries with substantial production and reserves, Saudi Arabia, Iraq, Iran, Kuwait, UAB and Qatar, only Iraq which we occupy has not reduced oil production this year and over the past year. In the case of Iraq they were producing 2.6 million barrels per day under Saddam. Five years after our invasion they are still only producing 2.3 million barrels a day with the third largest reserves in the world. Oil experts have predicted Iraq could produce up to 6 million barrels a day in four years but they didn’t count on the extent of corruption in the Iraq rebuilding budget. All the other Middle East nations have lowered production. Some friends.

Hopefully our leaders understand when people have the reserves and they lower oil production it means they are probably trying to cause economic damage to the USA. Venezuela seems to hate us and they have lowered oil production. On the other hand, we alienated Russia but they still increase oil exports. Our relationship with China is not particularly good but even China has increased production while lowering their projected oil needs. Canada and Mexico, our neighbors, have increased production yet we seem to ignore them or take actions against immigrants for example that contributes to our negative image. In spite of that Canada and Mexico are still trying to help.

So we can count on our friends Canada, Mexico, Russia and China to help with the oil price mess. I doubt many people consider Russia and China friends of the USA but at least they are working to minimize oil prices. In Russia they took care of the speculators and crooked oil companies by nationalizing the companies. It seems to work as they produce nearly 10 million more barrels than they need and refuse to be part of OPEC.

So is there a problem with inventories? Not really. Although U.S. crude oil inventories may be down according to Tim Evans, an energy futures analyst at Citigroup's Futures Perspective, the gasoline inventories are at their highest level since March 1993. In spite of OPEC world oil production was up 2.5% in the first quarter of 2008 over the same period in 2007 while world oil consumption rose just 2%. World production is projected to be 3.3% higher in the second quarter and 4.1% higher in the third quarter than the same periods a year ago while world demand is projected to rise by just 1.6% over the next six months.

The tenuous nature of the economy has caused oil demand to fall in some countries. According to economist John Kemp at the commodities firm Sempra Metals, the U.S. consumed 4% less petroleum in January 2008 than it did the year before. With China reducing the expected increase in oil demand world surplus oil production capacity has gone from a very tight 1.5 million barrels per day a couple of years ago to more than 3 million barrels today, says petroleum economist Michael Lynch.

So supply is up and relative demand is down. Inventories are up and reserves are more than adequate, yet the price of oil continues to rise. Why? Exxon Mobil CEO Rex Tillerson blamed a third of the recent run up in oil prices on the weak dollar, another third on geopolitical uncertainty, and the rest on market speculation.

I have my own reasons and they can’t be any worse than Mr. Tillerson. We can blame a fourth of the rise on the Demon Retribution for Bush foreign policy, a fourth on the Demon Manipulation for oil company tax and refining capacity shenanigans, a fourth on the Demon of Deceit for conflicts of interest in our financial institutions, banks and media where expert oil analysis profits the companies with no disclosure of the analyst ownership conflicts, and a fourth Demon of Greed in market speculators who are probably the same financial institutions, banks and media experts manipulating the price through the futures markets.

Note that I have not mentioned congressional inertia, Administration bungling, the federal agency non-responsiveness nor the media ignorance as major factors in the price run up because I can’t imagine they have any ability to react quickly to anything while the coffers of the national political parties and candidates are so bloated from oil company contributions their reaction would be highly impaired. As for the media, well look where the advertising revenue comes from to pay for the network news team that covers the news.


Is there hope? Sure. The Mayan calendar says the world will end in the last year of the new presidents 1st term, 2012. That would certainly bring an end to foolish politics, haphazard enforcement of corruption laws, rampant greed and spiraling oil prices.

OIL ANALYSTS DRIVE OIL PRICE RECORDS HIGHER

Today, Tuesday, May 6 oil analysts again predicted more records for the oil prices and in response the market again set a new record reaching over $122 per barrel before settling at $121.84 a barrel. The analysts predicted prices could reach $150 and then $200 per barrel. Sure enough the market responded with a new record.

A team of analysts from Goldman Sachs made the prediction in the media and triggered the price increase and NBC News then had their own oil specialist, John Kilduf of Fimat USA confirm the numbers. So what do you think?

Well, Goldman Sachs is an investor and the lead broker for the IntercontinentalExchange, Inc., owner of the London Futures Exchange one of the two leading oil futures markets in the world. In the old days such action by Goldman might be construed as a conflict of interest and an effort to manipulate the price of oil.

Then there is the NBC news report. It seems their independent analyst works for Fimat whose name has been changed to NewEdge who just happens to be a wholly owned subsidiary of a wholly owned subsidiary of Societe Generale (SG), one of the largest banks in the world from Paris.

Surprise, Societe Generale was a founding partner of the IntercontinentalExchange (ICE) and benefits significantly every time the price of oil increases. So now both Goldman Sachs and NBC have offered experts whose companies directly benefit from the oil chaos and neither Goldman, NBC or Societe Generale disclosed the insider position they have in ICE and the oil prices.

Now where is Congress, the Justice Department, the Bush Administration, the presidential candidates, or even the news media in exposing this farce? How long do the American citizens and citizens of the world have to be victimized by such tactics before someone says “Stop” and investigates? Before you vote for any congressman or candidate for president ask them why they are not stopping these market manipulations.

If they continue to ignore them or you then vote them out of office. This is still the country of the people, by the people and for the people, we just have too many politicians who forgot.

J.P. Morgan Chase buyout of Bear Stearns – A Trillionaires Delight

Somewhere in the trillionaires room of Heaven three old codgers are sitting around a table smoking cigars and chuckling over the J. P Morgan Chase & Company buyout of Bear Stearns for a paltry $2.00 a share. Not so much because the price had been over $130 a share a few weeks earlier but because the Federal Reserve Board put up $30 billion of the government’s money to guarantee the sale.

Yes, Mayer Amschel Rothschild, J. P. Morgan and John D. Rockefeller, patriarchs of three of the most powerful family fortunes in history have waited nearly two centuries to see their dreams fulfilled. Perhaps such patience is why their families have remained successful by steadfastly maintaining the rules of the game as set down by their founders.

It was 248 years ago, in 1760 that Mayer Amschel Rothschild created the House of Rothschild that was to pave the way for international banking and control of the world’s resources on a scale unparalleled and somewhat mysterious to this date. He disbursed his five sons to set up banking operations throughout Europe and the various European empires.

"Give me control of a nation's money and I care not who makes the laws."
Mayer Amschel Rothschild

In time the House of Rothschild was able to take control of the Bank of France and Bank of England and relentlessly pursued an effort over two centuries to control a national bank in the USA. By 1850 it was said the Rothschild family was worth over $6 billion and owned one half of the world’s wealth.

From oil (Shell) to diamonds (DeBeers) to gold (from 1919 until 2004 a Rothschild was permanent Chairman of the London Gold Fixing committee which met twice a day in the Rothschild offices in London) the Rothschild’s quietly accumulated a foothold in critical industries and commodities throughout the world.

A master at building impenetrable walls around his family assets the current value of the Rothschild holdings are estimated to be between $100 and $300 trillion, yes that is trillion dollars! Now for a point of reference the current United States National Debt is $9.4 trillion.

J. P. Morgan began as the New York agent for his father’s business in London in 1860 and by 1877 was floating $260 million in US Bonds to save the government from an economic collapse. In 1890 he inherited the business and in 1895 bought $200 million in US Bonds with gold to again save the US economy.

“If you have to ask how much it costs, you can't afford it.”
J. P. Morgan

By 1912 he controlled $22 billion and had started companies such as US Steel and General Electric while he owned several railroads. Morgan was also an American agent for the House of Rothschild in London and used the Rothschild resources to help people like John D. Rockefeller.

Rockefeller, who started Standard Oil in 1863 with the help of Morgan, grew his company into the largest oil company in the world and by 1916 Rockefeller was the first billionaire in American history. In 1909 he had set up the Rockefeller Foundation with $225 million and donated nearly a billion more dollars to various causes. The Rockefeller family fortune is estimated to be around $11 trillion today.

“The way to make money is to buy when blood is running in the streets.”
John D. Rockefeller

So what did they have in common these extraordinary capitalists? They all were dedicated to owning a national bank in America so they could determine the fiscal policies of the nation and earn interest on the debt of the nation.

Rothschild agents in 1791 formed the First Bank of the United States but intense opposition to foreign ownership by President Jefferson and others helped kill it by 1811. A Second Bank of the United States was formed in 1816 once again by Rothschild agents and this time they secured a 20-year charter. However, President Andrew Jackson was also opposed to foreign ownership and withdrew the federal deposits in 1832 as part of his plan to kill the bank charter in 1836.

An attempt to assassinate Jackson in 1834 left him wounded but more determined than ever to stop the central bank. Thirty years later President Lincoln refused to pay international bankers extremely high interest rates during the Civil War and ordered the printing of government bonds. With the help of Russian Czar Alexander II who also blocked a similar national bank from being set up in Russia by the international bankers they were able to survive the economic squeeze.

Lincoln said, "The money powers prey upon the nation in times of peace and conspire against it in times of adversity. The banking powers are more despotic than a monarchy, more insolent than autocracy, more selfish than bureaucracy. They denounce as public enemies all who question their methods or throw light upon their crimes. I have two great enemies, the Southern Army in front of me and the bankers in the rear. Of the two, the one at my rear is my greatest foe. Corporations have been enthroned, and an era of corruption in high places will follow. The money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until the wealth is aggregated in the hands of a few, and the Republic is destroyed."

Both Lincoln and Alexander II were assassinated. In 1881 James Garfield became president and he was dedicated to restoring the right of the federal government to issue money like Lincoln did in the Civil War and he was also assassinated.

Finally along came 1913 and the US was again suffering from a weak economy and there was a threat of another costly war, a world war this time, and business tycoons J.P. Morgan, John D. Rockefeller and E.H. Harriman were part of a group that got Woodrow Wilson to sign into law the Federal Reserve Act creating a network of 12 privately owned banks as part of a new Federal Reserve network.

One of the largest stockholders in the new Federal Reserve was the House of Rothschild through their direct and indirect holdings. A few years later it was disclosed that the Rothschilds also owned about 20% of J. P. Morgan. In time Morgan would merge with the Chase Manhattan Bank of the Rockefellers.

Years later John F. Kennedy opposed a private national bank and was assassinated in 1963 and Ronald Reagan opposed a private national bank and in 1981 an attempt was made to assassinate him. Coincidence or not the opposition to a privately owned national bank was a common characteristic to all these successful assassinations and assassination attempts.

Which brings us full circle to the present bailout of Bear Stearns by J.P. Morgan Chase & Company and we find the Rothschild, Morgan and Rockefeller families are all conveniently part of the same group benefiting from the bailout and the $30 billion guarantee by the Federal Reserve. This is the third time the J. P. Morgan Company has come to the rescue of the American banking system and economy.

IS OIL BAILING OUT THE SUB-PRIME MORTGAGE MESS?

The Big Fix?

We all know how the investment banks, financial institutions and brokers tried to manipulate the American mortgage market and in their greed lost site of good business practices and created a stock scam called sub-prime mortgages which were then packaged and sold by Wall Street. With the feeding frenzy created by this illusion of housing prices raising ad infinitum the greed moguls and the greed mongers accepted millions of mortgages from people with no ability to pay them.

Stock was sold over and over again until the very citadels of our financial sector, the very banks and investment houses we rely on to protect our savings, protect our retirement and manage our economy were inundated with high risk holdings. Then a very unusual thing happened, truth prevailed. Housing prices stopped increasing because they were already way beyond the real value of the property.

Suddenly our trusted money managers were left holding billions and billions of dollars in inflated adjustable rate mortgages, and the home purchasers had no chance to make the escalating monthly payments. Mortgage defaults by the millions were set in motion and the money managers, also entrusted with our hard earned savings, retirement funds and stock holdings, lost billions and billions of real dollars, a total estimated at over $215 billion on mortgages alone.

Then the stock market prices collapsed as the backbone of our financial sector was swamped in losses and unable to explain how greed overshadowed laws and how they were willing to sacrifice the financial well-being of their clients to protect their own jobs, bonuses and buys out to the tune of hundreds of millions of dollars. So where do the pillars of finance stand today?

To avoid bankruptcy and avoid sending the world into economic crises they secured massive amounts of money from China, other Asian countries and the oil rich Arab world. So what is the price they paid to be bailed out by foreign money? Better still, what is the price we paid for our financial citadels to be bailed out by foreign money?

Today we see the same laundry list of financial powerhouses trying to regain their strength and stability in the market and lo and behold what happens to the market? First the oil prices defy every law and principle of accounting and keep skyrocketing at a pace never seen before. Second, virtually all other sectors of the market with the exception of gold collapse, almost as if being forced down so SOMEONE can step in and buy stock at depressed prices to salvage their balance sheets.

If this were a thoroughbred race, yet another industry being taken over by the Arab oil money, one would say the big fix is on. Something very crooked is being done to make someone an awful lot of money and they are playing with grey areas of the law to make it happen.

Well Congress and the presidential candidates should ask who is benefiting from the spiraling oil and gold prices and the collapse of the stock market. Then Congress and the candidates should do something we haven’t seen in many years. Do something about it! If the financial institutions that lost $200 billion of our dollars, not theirs, have decided to artificially maintain high oil and gold prices and low stock prices so they can regain their credibility and stave off any investigations by a gutless congress and the more gutless international group called the World Bank then maybe it is time to repopulate the jails with people who deserve to be there.

Every financial institution in the world should be investigated to determine if they are profiting from the rigged oil prices of today. Expose their layers of hidden equity to see if they are owners of oil related companies or markets responsible for setting the oil and gold prices. See if they invested in such companies for themselves or if they allowed their little investors to benefit by including them in the holdings.

See if there is collusion between the oil producers, futures markets and banks and investment houses to prop up the oil price in order to offset the billions in sub-prime mortgage losses. And when you find the evidence, then do something about it. Oh yes, and while you are at it you better stop taking the millions of dollars in campaign contributions being thrown at you by these blood-sucking profit rich companies or you are also part of the corruption that has cast a dark shadow over the lands.

Public enemy number one in the oil crisis are the energy analysts and while there used to be just a conflict of interest involved because some analysts work for companies with major oil holdings, recently the government analysts like the U.S. Department of Energy have further fueled the oil price spiral with dismal forecasts for summer prices.

These analysts cannot explain what is happening in economic terms, as there is no justification for the profit gouging. So why are they not probing into the financial collusion that may exist and may be driving the prices up? If an analyst cannot tell us what is going on in the market then they have no business speculating on the future prices.

If there is market manipulation to virtually guarantee excessive profits then why is the U.S. Justice Department silent? What about the Federal Trade Commission or the Securities and Exchange Commission or the Interstate Commerce Commission or all the committees in the House and Senate looking out for our interests? Don’t any of them see that their continued silence is allowing the worst-case scenario to happen?

In the end, no matter what government action does or does not take place, every member of the House and Senate that ignored the public during this time of crisis should be thrown out of office for benign neglect of the public interest and if they accepted campaign contributions from these industries and they are proven guilty of price manipulations then the members of Congress should be impeached.

THE JOYS OF CAPITALISM – PROFITING FROM CRIME

Once upon a time we were taught the amazing benefits of capitalism. How it can fuel the engine of state and raise the standard of living. How everyone had an equal chance to become the next American billionaire. How the accumulation of wealth had far reaching consequences and could be a tool for good.

That line of teaching dates back to the beginning of our nation and has been refined and updated over the years. Created by the public relations offices of corporate American and the Madison Avenue ad agencies whose lifeblood was the contracts they received from those corporations, it was not created for the common good.

There is a charade of benevolence, philanthropy and improved quality of life that may have resulted from the capitalism driving America but it was way down the distribution chain from the board rooms where the art of greed, the accumulation of power, the total disregard for law and the manipulation of governments ruled.

This is not to suggest that all corporations share the same outlook but once they join the elite group of major corporations in America the ethics, loyalty to the nation and upholding of the law seem to become secondary to the quest for the almighty dollar.

Yet it is more than that because questing for dollars is not bad in and of itself, it is the methods one chooses to use that become the choice between good and evil. The Bible says St. Michael cast Lucifer out of Heaven and down to Earth. Well Lucifer must having been wearing a suit and tie and he has certainly made himself at home here on Earth. Remember Lucifer; he’s the bad guy.

So what’s the point you might ask? Well let the facts speak for themselves. Today I am highlighting one of the most critical sectors of our capitalistic society, one upon which every aspect of your life in America is dependent.

Our first look is at the financial institutions which rule the nation from the powerful houses controlling the stock, commodities and real estate markets to the banks throwing credit cards at you. Like them or not you depend on them because they own you. Your homes are mortgaged to them, your pension, 401k, IRA and investments are managed by them, and probably about everything you buy is financed by them.

The really big boys have powerful names like Bank of America, Bear Stearns, Citigroup, Credit Suisse, J. P. Morgan, Merrill Lynch, Goldman Sachs, Lehman Brothers, UBS Warburg, and US Bancorp. Between them and a handful of others they rule the world financial markets.

So what do they have in common other than being the custodian of everything you have spent your life working toward? Well, how about criminal acts of such magnitude that they have been fined billions, yes billions, of dollars in the last 8 years. What were the crimes? Price fixing, fraud in stock deals, illegal charges to consumers, cheating on taxes, cheating stockholders, filing false financial statements, and cover-ups are just a sample of the actions charged against them.

AMERICA’S ELITE FINANCIAL INSTITUTIONS
FINES BY GOVERNMENT AGENCIES

Citigroup $3,062,150,000
Bank of America/Citigroup $2,750,000,000
Credit Suisse $450,000,000
Merrill Lynch $418,500,000
Morgan Stanley $281,200,000
J. P. Morgan/Chase $2,290,000,000
Goldman Sachs $112,000,000
Lehman Brothers $130,000,000
Bear Stearns $130,000,000
UBS Warburg $180,000,000
US Bancorp/Piper Jaffray $32,500,000
American Express $32,350,000
MasterCard $1,000,000,000
VISA $2,000,000,000

Okay, that is just a sampling of what fines we could find and the total is already nearly $13 billion. That does not count the billions and billions of dollars in sub-prime mortgage losses many of the companies absorbed by backing highly suspect loans. Now don’t you feel better about how your money and investments are being managed?

Of course this isn’t even all of the tragedy of our obsession with capitalist promises. Most of the fines were negotiated with the government and settled without trials, a pretty good sign of guilt. However, the settlements also meant the companies did not have to plead guilty, just admit to the practices and pay the fines. Now that seems efficient doesn’t it? An organization called CorpWatch whose purpose is to hold corporations accountable for their actions explains it as follows.

“Ever wonder why it is that when a company gets caught lying to, and/or cheating investors that they so often settle the case quickly, agreeing to pay millions of dollars back but "without admitting or denying" they did anything wrong?

Simple -- because the IRS kicks back a big hunk of the fine to them in the form of a tax write off.

That's right, you and I -- through the IRS -- subsidize corporate wrongdoing by providing substantial tax breaks to companies that settle shareholder lawsuits or regulatory actions in the right way.

For example, the Wall Street Journal reports that Merrill Lynch will likely harvest a fat $30 million tax write off this year -- a 30% kickback of the $100 million it agreed to cough up to settle fraud charges with New York prosecutors. The key here is that company officials insisted that the following magic words be included in their settlement agreement -- "without admitting guilt." The company had been charged with an elaborate pump and dump scheme in which its analysts falsely promoted stocks in companies underwritten by Merrill Lynch.

By being allowed to not admit guilt, the $100 million payment could be classified for tax purposes as "compensatory" damages rather than as a "fine" for wrongdoing.

This is a longstanding practice with both the SEC and IRS. And, in spite of the cascade of corporate evildoing, the IRS reinforced it in a similar case this April. The IRS ruling not only enshrines the practice but also appears to concede that getting caught and fined for lying and cheating is now a legitimate expense of doing business.

"It appears that the proximate cause of the litigation was the dissemination of false and misleading statements and press releases. Such dissemination of financial information is a routine business activity and therefore the expense of settling allegations regarding disseminating inaccurate information may be considered ordinary."(IRS ruling, April 2002)

Under the IRS's corporate tax rules settlements that result in a company having to pay "compensatory" damages are fully deductible as legitimate business expenses. This includes both compensatory as well as punitive "compensation."

The Political Connection

There you have it, the government rewards the corporations for criminal acts and regulatory violations. These are the same organizations pumping hundreds of millions of dollars into the political campaigns of our elected officials. Now just who is being protected?

Perhaps this massive infusion of dollars into campaigns of every major candidate has something to do with the fact they can get away with this practice. So when your favorite politician tells you he or she is looking out for you ask what they are doing to stop rewarding the criminals. If they look perplexed tell them the ones in the suits and ties.