Somewhere amidst the cognitive dissonance of world events, the recent announcement by OPEC that they intended to force oil to stabilize at $50, and NOT a whimper of protest from the USA was kind of missed by many pundits, in all the ferment of world events.
Not that many months ago, we had protested vigorously at $20 and similar OPEC vows. Why are we seeming to acquiesce now, and with record deficits forecast? Answer: noovoodoo Hmmm. And does it have anything to do with recent allegations that the US, with the tacit support of Kuwait, has opened up secret oil fields in Southern Iraq through Kuwait ? and are now pumping two to three times more oil than is claimed "on the books" - and helping to finance the war to a degree that way? After all, with the deficits racked up in the past four years, the dollar should be worth pennies next to the Euro, and one can only suspect that it is being propped up by some hidden force. The voodoo part is pretty obvious. Gasoline is still about $2 in California and the wholesale price dropped significantly AFTER the OPEC announcement. Traditionally the wholesale price is 35% of the selling price with most of the rest going to Fed/State/County/City taxes bribes and assorted payoffs, along with chump-change for the dealer. At $50 per 42 gallon barrel for crude, gasoline at the pump "should" cost at least as $3.50-3.75 now but it is still at $2; and yes, it does cost over $5 in Europe now, and probably will here as well... as soon as the political climate permits it. Bush doesn't want a civil war at home in places like California, who generally hate his administration with an visceral intensity that other parts of the country do not even begin to understand. This is a state that can elect Reagan and Swartznegger, and really any decent person - especially if they have charisma, humor, character and intelligence... but cannot tolerate high-level greed... at least not without the other three in excess. California is closer to actaul "seccession" than most Easterners realize http://tinyurl.com/67dzy ...and civil disobedience will happen here with with absolute certainty with $5 gasoline, at least until DC gets the troops back home to maintain order. He can then let the price rise in 2008 to as far above $5 at the pump as possible, and at the same time try to make it look like it is the Dem/wits fault. And it probably will be... for not trying harder to get him out of office. But I have to admire his moxie with this noovoodoo plan. It is brilliantly concieved. One can only suspect that the brains behind it truly have the initials "DC" but are not located anywhere near Capitol Hill. We are claiming to the world "officially" that Iraqi production is about 2 million BBD or about $35 billion per year at the new higher price... yet at OPEC they openly laught at that assertion. OTOH compare that reality with the fact we have already spent, according to real estimates about $500 billion on the war (only half of it out-of-pocket and that is the difference between estimates). Is there a payback to recoup most of this, through the noovoodoo scheme of DC? Yup. It looks that way. Way to go, Dick. If the contested fields are really pumping - you remember the fileds in South Iraq bordering Kuwait, which Saddam coveted for decades, and was a big part of his motivation for the Kuwait invasion - because they hold more oil than all of Kuwait; and as some OPEC ministers have confided to reportes - that Halliburton is now pumping secretly through the new pipeline an estimated 2-2.5 BBD... yes, the sand-storm is clearing and now, and it is becomming clear WHY we did not officiall protest the OPEC cartel's new higher oil price. This off-the-book oil goes to Europe anyway. The logic is that they have not paid for our invasion, and cannot do so politically, though we are all "in the same boat together" - ERGO, they should be made to pay the "new" artificial price through market manipulation... ...sounds logical to me, and yes, there are many any claim that even the older "voodoo model" worked in the long run. Three of fours years of this and Europe has effectively paid its fair share. It does not hurt that the Hubbert curve, ect makes it "look like" oil has nearly peaked, but even if it has, the $50 price was "too much, too soon" for normal market moves even in a partially free-market that is dominated by US interests, even if those "interests" are wearing abayas and shailas in front of the Arab press... Most of them were educated here anyway, know economics better than most CPas, and have mansions and bank accounts in the US and Europe... just in case... Remember these haunting words from a man who even managed to "beat the hangman": "Voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is tell them they are being attacked, and denounce the peacemakers for lack of patriotism and exposing the country to danger. It works the same in any country." -- Hermann Goering, After being sentenced to death at the Nuremberg trials, and also seen on a framed and signed autograph in DCs former office at Hallibuton in calmer times... long before getting interested in politics, of course.
