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Oil politics and global markets
By Edward Tapamor
PARIS (ResourceInvestor): Another week, another record. As you will no doubt have seen, the Nymex crude oil price for delivery to Cushing jumped to more than $92 per barrel this week.
We are now being told that this figure is near the “inflation-adjusted” price for an all-time high. Yet we are also told there is little worry for the economy. We are told that modern economies do not react in the same way as before; we are told to rest easy.
This is not the case - it is not accurate. As readers of this column note, there is little love lost here for the current economic system and its charlatanesque moniker of “free markets.” The markets are most certainly not free and quite often they are hardly markets. Especially in the United States and Europe.
What we have instead is a series of financial instruments that back up basic right wing ideology. They are designed to make sure the poor are kept in their place, promote war as noble, promote deference as “meritocracy” and tell people that making demands on those in authority is an illegitimate pastime.
The grasp and grab for resources, including and most obviously oil and gas, has been going on since the end of World War II in its current state. It was spoken about openly when the media was more constrained and less widely available. Churchill spoke eloquently about how debt was a far better weapon against rowdy natives than the Gestapo or the state-capitalists in the Soviet Union’s KGB.
Debt would allow “great men” to reach their destiny without insufferable wretches, the public, getting in their way. Institutionalize debt internationally and it would also allow great nations to rule quietly and with Adam Smith’s “silent hand.” “Or else we should be forever trapped within our mansions.” said Churchill.
Adam Smith however would today be classed as a left wing economist, the Joseph Stiglitz of his age. He wrote, also eloquently, about how markets needed justice in order to function, otherwise the merchant class would spew despair and misery around the world. He was correct. In the crude oil market - on a day-to-day level - there is a term of justice between buyer and seller, even more so on the purely paper side. In terms of using a resource there is no justice, the global poor simply do not get to use crude oil. They are the 2 billion or so who have no access to modern energy forms. This is neither equitable, free or a market. It is the powerful deciding on their own terms who should get – and profit from – a resource.
Over the 60 years since the end of World War II there is little doubt that crude oil has become far harder to find. There is still a lot to be discovered, there are many ways we - especially the U.S. - could use a lot less. But the control over that resource has become a proxy for domination of the economic sphere by rich nations and the juntas they protect around the world - juntas like Saudi Arabia, Kuwait, Chad, Nigeria and so on.
So, we are told that $92 per barrel is not having an effect. This is not so, it has been for years. Now it is getting a bit more obvious. In a week where the U.S. has accused Iran of “bullying,” it may be noted the U.S. has troops in Turkey, Iraq, Afghanistan, Yemen, Djibouti, Saudi Arabia, Qatar, Kuwait, Azerbaijan, Kazakhstan, Uzbekistan and floating all over the Mediterranean.
The reason they are there is because oil is a commodity that can reach $92 per barrel. So the effect that it has on local economies, the obvious one being Iraq, is a very potent one. Of course it has less effect on Western markets because those markets are subsidised by taxpayers, where dollars are recycled for the benefit of the great men and the institutions they run.
Where biodiesel is paid for by taxpayers, U.S. farmers who get 50% of their income from the state - even the Soviet Union would have had trouble passing that one - then sell their corn to the great institutions who demand the taxpayer also subsidise them to develop it as a fuel.
Peak oil - the long slow grind since 1945 - has created a political ideology dressed up as economics. The markets created by the zealots and “economists” are fractured into pieces, where justice and regulation is needed where markets are used by the powerful - such as oil - and the other side where rules and inconvenient things like law are forgotten. You say $92 per barrel has no effect? Read the news.
By Edward Tapamor
PARIS (ResourceInvestor): Another week, another record. As you will no doubt have seen, the Nymex crude oil price for delivery to Cushing jumped to more than $92 per barrel this week.
We are now being told that this figure is near the “inflation-adjusted” price for an all-time high. Yet we are also told there is little worry for the economy. We are told that modern economies do not react in the same way as before; we are told to rest easy.
This is not the case - it is not accurate. As readers of this column note, there is little love lost here for the current economic system and its charlatanesque moniker of “free markets.” The markets are most certainly not free and quite often they are hardly markets. Especially in the United States and Europe.
What we have instead is a series of financial instruments that back up basic right wing ideology. They are designed to make sure the poor are kept in their place, promote war as noble, promote deference as “meritocracy” and tell people that making demands on those in authority is an illegitimate pastime.
The grasp and grab for resources, including and most obviously oil and gas, has been going on since the end of World War II in its current state. It was spoken about openly when the media was more constrained and less widely available. Churchill spoke eloquently about how debt was a far better weapon against rowdy natives than the Gestapo or the state-capitalists in the Soviet Union’s KGB.
Debt would allow “great men” to reach their destiny without insufferable wretches, the public, getting in their way. Institutionalize debt internationally and it would also allow great nations to rule quietly and with Adam Smith’s “silent hand.” “Or else we should be forever trapped within our mansions.” said Churchill.
Adam Smith however would today be classed as a left wing economist, the Joseph Stiglitz of his age. He wrote, also eloquently, about how markets needed justice in order to function, otherwise the merchant class would spew despair and misery around the world. He was correct. In the crude oil market - on a day-to-day level - there is a term of justice between buyer and seller, even more so on the purely paper side. In terms of using a resource there is no justice, the global poor simply do not get to use crude oil. They are the 2 billion or so who have no access to modern energy forms. This is neither equitable, free or a market. It is the powerful deciding on their own terms who should get – and profit from – a resource.
Over the 60 years since the end of World War II there is little doubt that crude oil has become far harder to find. There is still a lot to be discovered, there are many ways we - especially the U.S. - could use a lot less. But the control over that resource has become a proxy for domination of the economic sphere by rich nations and the juntas they protect around the world - juntas like Saudi Arabia, Kuwait, Chad, Nigeria and so on.
So, we are told that $92 per barrel is not having an effect. This is not so, it has been for years. Now it is getting a bit more obvious. In a week where the U.S. has accused Iran of “bullying,” it may be noted the U.S. has troops in Turkey, Iraq, Afghanistan, Yemen, Djibouti, Saudi Arabia, Qatar, Kuwait, Azerbaijan, Kazakhstan, Uzbekistan and floating all over the Mediterranean.
The reason they are there is because oil is a commodity that can reach $92 per barrel. So the effect that it has on local economies, the obvious one being Iraq, is a very potent one. Of course it has less effect on Western markets because those markets are subsidised by taxpayers, where dollars are recycled for the benefit of the great men and the institutions they run.
Where biodiesel is paid for by taxpayers, U.S. farmers who get 50% of their income from the state - even the Soviet Union would have had trouble passing that one - then sell their corn to the great institutions who demand the taxpayer also subsidise them to develop it as a fuel.
Peak oil - the long slow grind since 1945 - has created a political ideology dressed up as economics. The markets created by the zealots and “economists” are fractured into pieces, where justice and regulation is needed where markets are used by the powerful - such as oil - and the other side where rules and inconvenient things like law are forgotten. You say $92 per barrel has no effect? Read the news.