Hello Haim, <<we will not move in a more balanced world but backwards to Brezhniev times ... and I do not like it a bit>>
... I just need to understand it, and like/dislike stands in the way of understanding.
Starting with that, let us generate some controversy to pep up the coming new year :0)
We need to find a strong point of pivot, and construct our schema around it to maximize the borrowed Strength, feel the Force, tap the Energy, modulate the Power, and collect the resultant spare Moolah, cold Cash, bothersome Change, itchy Scratch, heavy Gold, crisp un-cashed Check, fragrant Credit, and piping hot Bread.
<<I wish the world would be as you state - "mono-pole" headed by the US>>
... whichever way, as long as I know the rules ahead of time, in front of the crowd, and get to collect more, keep plenty, give away little, and spend a bit.
As to US mono-pole, however tidy, is not likely to last, if it is in fact happening at all, which I happen to doubt, since mono-poles throughout history seem more ferocious and effective in almost every conceivable way.
The US, as a debtor that is having trouble keeping its own mess hall safe from convinced believers, about a billion of them, and is bothering another 3 billion other on-lookers, all the while putting in office ever more but progressively less-knowing lawyers, actors, and make-belief cowboys, as does the Philippines, just more enormous, may not be able to keep what it already has, much less getting more.
The flaws, they cause more damage, accumulate, and eventually matter. The world works, as it must, in waves and cycles, on and onward.
The basic scenery is ugly simple, and the simple truth pretty unpalatable, that all the hardware and software of the US has been effectively fought to a stand-still by desert tribes, as was Great Britain, France, Russia, Italy, ... before it, each and every pretender to the mono-pole, in turn. Each protagonist had found enemies everywhere, but the foes nowhere to be seen. Each eventually resigned to react to the next inevitable and asymmetrical blow and counter-blow, and the very predictable sequential but chronically wasting nibbles, until eventual exhaustion set in. The process can take a long time, but time is precisely and only (pretty much) what the opposition has.
The trouble is that, to be precise, ‘time’ is a powerful pivot. The sure way to make a war pointless is to drag it out, this is why in Sun Tze’s schema, wars are the last resort, and best won without being fought.
The media and official propaganda must not blind us. If the war in Mesopotamia is not being won, with all the advantages of technology, strategic fortune and tactical mobility, it is then surely being lost, just as in the financial market place, if we are not long, then we are short.
The war is not being won on the battlefield, in the budget ledger, on homeland front, and most importantly, the war is definitely not being won in the hearts and minds of the believers, only making more and more avid believers still more enthusiastic.
Democracy building is now successfully portrayed as a bungled attempt at conquest, the bungled attempt at conquest has turned into a media farce, and the nasty opposition Saddam is transformed into implacable opponent Nationalism.
The enemy, or rather, the enemies, or rather still, the defenders of desert homeland, of a variety of flavors and tactics, united by central theme, are everywhere and nowhere, and their command/control, as structured, is like a gigantic parallel computer with many redundant and uninterruptible power supplies, seemingly impervious to eradication attempts.
In the mean time, the US is deliberately (perhaps not so much thoughtfully) not gathering the necessary allies, depending instead on the coalition of the toady, and insisting on making a nuisance of itself with all major countries around just about the entire planet.
In effect, and in a sentence, the US is not treating the war seriously enough, a classic mistake of under estimation and over confidence, and definitely appears, to the untrained eye, incapable of executing the necessary with modicum of professionalism. As a backstop, the war Administrators of the Willing seem singularly unable to keep a lid on the unhelpful publicity.
I mean, precisely, by god, wrapping prisoners in Star of David flag and abusing them is just so, well, what can anyone say in defense, and what does anyone need to say in critique? What’s next? Mock executions? Oh, yeah, they did that already. Sexual abuse of teenagers, and humiliation of grown man? Done that too. Collective punishment? We are long past that one as well. All these are allegedly not sanctioned, are admittedly an improvement on the past doings of Saddam, but only by degrees, not by nature.
The reasons for the conflict in its current incarnation was perhaps a strategic necessity, and now, when inextricably linked to the 1,000-years long conflict between faith and belief, is a cannot-win strategic blunder; 1,000 years proves the point for most practicable purposes.
Back to the subject of Yukos, Putin, power, moolah, and black gold ... my thinking is that, with all that oil and plenty of gas, Putin will make a lot more friends, gather plenty of allies, and Russia will unlikely be isolated, whatever the US may or may not wish for, because it is only a matter of cycles and just an issue of waves, and in comparison, as far as the ROW is concerned, Russia is not as rogue.
I suspect that Mr. Bush fully understands what oil can do and Mr. Cheney comprehends what gas can accomplish.
We, the investors, only need to know the rules, understand the explications, and suspect the implications.
Maurice (testing 1, 2, 3, Maurice, did you read this far, and do you comprehend?), being an oilman, forever expecting crude price to reach for USD 2.00 per barrel (and anticipating QCOM to scratch Euro 2,000/share), does not actually understand crude power, and so cannot not appreciate carbon leverage.
Many others on SI will take my post the wrong way, interpreting it as a simplistic pro vs con, ignoring that it does more than hint at what needs to be said, however in conflict with what they hope for but fear cannot be. Alas, hope has naught to do with reality, and truth has something to do with facts.
Bottom line, the US got itself into an untenable situation and a cannot-win fight. It has two choices at the end of every day, withdraw, setting of a global panic due to planet-wide realization that the King has no clothing and the sheriff is out of town, or persevere until the end of next day, until the days run out. I suspect the financial market has not taken full account of the current quagmire and eventual debacle.
Maurice will, and I will do it for him, respond … ‘oh Jay, don’t be an alarmist, Iraq is just a few million folks out of 6 billion CDMA light-sabre waving wannabies’.
Russia’s now more secure place at the head-table is a net-net positive, else when the mono-pole spins apart, hell opens up.
Anyway, my earlier mumblings on Russia, somewhere …
Message 20701937 <<October 29th, 2004>>
… and now this … where we must think of Yukos as the extended middle finger of Putin’s, in possession of the financial wherewithal to stay in power long after, and still has full inventory of strategic MAD capability, newly enabled by counter-NMD capabilities.
Bi-polar, here we come, and for the US sake, best to start wishing for a strong Europe and stronger-still China, i.e. multi-poles, just so that there are some cards to play.
Same same from the perspectives of China, Europe, … and so back to samo samo.
The Kremlin and the Slippery Issue of Yukos
By Rodger Baker for Stratfor.com
A bankruptcy court in Houston, Texas, issued a ruling on Dec. 16 that aimed to disrupt the Kremlin's efforts to strip assets away from Yukos, Russia's second-largest oil producer, at a state auction. However, the Russians were not about to let themselves be overly inconvenienced by something as insignificant as a U.S. court ruling and the auction was held anyway on Dec. 19, with just a few minor adjustments.
The court explicitly acted to hobble state-run natural gas firm Gazprom's ability to bid by issuing an injunction on a consortium of Western banks that had agreed to provide it with a $13 billion credit line. If anything, the court decision only emboldened the Kremlin, and will result in Moscow having an even tighter grip over the country's energy industry -- at a lower price.
The asset in question was Yuganskneftegaz, a Yukos subsidiary that produced about 1 million barrels per day of crude oil -- about 11 percent of the total Russian production.
BaikalFinansGroup, a previously nonexistent shell company that was created specifically for the auction, won with a bid of $9.34 billion to be paid to the state. As a private entity -- sources across the Russian government tell us BaikalFinansGroup is backed by a coalition of Gazprom and oligarchs friendly to the Putin government -- it would need to pay this sum to the state to acquire Yuganskneftegaz.
But before the Jan. 6 payment deadline, on Dec. 23, Rosneft -- a wholly state-owned oil firm -- purchased BaikalFinansGroup for an undisclosed (and likely miniscule) sum. While BaikalFinansGroup now owns Yuganskneftegaz, BaikalFinansGroup has not yet paid for the Yukos asset, so the shell company's debt more or less equals its assets.
That means that Rosneft has not only acquired BaikalFinansGroup's assets (which consist of nothing but Yuganskneftegaz) but also BaikalFinansGroup's debt to the state of $9.34 billion.
Rosneft, a wholly state-owned firm, now owes the state $9.34 billion. Once the government finishes paying itself the money it has decided is owed to itself -- Stratfor expects a bit of creative bookkeeping -- Rosneft's oil output, and hence its value, will triple.
The next step in the process will simply be a modification of a previously existing plan. The government will sell Rosneft to Gazprom. Unlike Rosneft, Gazprom is only state-run, not state-owned. The government owns only about 38 percent of Gazprom's shares. However, Gazprom can use the 15 percent to 20 percent of the shares its own various subsidiaries hold -- shares whose value has skyrocketed ever since the markets understood that Gazprom would be the final resting place for most Yukos assets -- to purchase Rosneft from the government outright.
Doing so would not only make Gazprom one of the world's largest oil firms in addition to its existing title as the world's largest natural gas firm, but the transaction also would seal government control of Gazprom as a majority state-owned firm.
When all is said and done, Gazprom will have acquired both Rosneft and Yuganskneftegaz without paying a dime, and the Russian government will have asserted majority control over Gazprom.
The question some people are probably asking is: Why should I give a whit about Gazprom? There are several answers.
We are now entering the post-post-Cold-War era, in which the Russian experiment with democracy and free markets has come, failed and gone. Gazprom's state-funded quest to control the Russian energy market -- be it oil, natural gas or electricity -- marks a return to a centralized Russian economy, or at least a centrally controlled and state-owned oil and gas sector. Transneft, which owns all the Russian oil pipelines, is 75 percent state-owned, United Energy Systems, which controls the country's power grid and most of its generating assets, is 52 percent state-owned. The endgame for the Kremlin is to ultimately roll all of these individual companies under the umbrella of Gazprom to create what -- by any measure -- will be the world's largest energy company.
A more centralized Russian economy makes Putin far more powerful. Oil and gas revenues accounted for an estimated 25 percent of the Russian Gross Domestic Product in 2003 and about half of the government revenues. He who controls the industry controls the economy, and he who controls the economy controls the politics. Before the breakup of Yukos, private energy companies with vast wealth and oil/gas reserves were able to mount significant political opposition to the Kremlin. The best example of this is Mikhail Khodorkovsky, the former chairman of Yukos who funded opposition groups and dabbled in all manner of economic subterfuge. He was taken down by Putin not only so that Yukos could come under state control, but also to serve as an example to other oligarchs to keep to their place.
Moscow's success in controlling the country's oil and gas industry will extend far beyond just that sector. Europe and Turkey are -- and in time China or Japan might become -- heavily dependent on Russian oil and gas; even the threat of a shutoff is enough to make countries seriously consider any "requests" from Moscow. Although Europe would like to be able to hold all the cards in its dealings with its Eastern neighbor, the fact that it must rely on Moscow for energy means Russia will always have a lever against its Western neighbors.
Although Putin has been friendly to the United States up to now, he has begun to send out warning signs that he is not to be trifled with. Speaking at a Dec. 23 press conference, Putin warned Washington against any plans to "isolate the Russian Federation". Recent Russian geopolitical defeats in Georgia and Ukraine are not minor matters, and the Russian descent since the Soviet breakup has been dizzying. Russia feels besieged, but for the first time since 1992 it has both a sober leader and an effective non-military tool with which it can influence regional events.
That tool will be used. |
