Iraq, Oil, and the American elite agenda


Richard Moore


The article below is one of the best analyses I've seen
for some time.  No punches pulled, to the point, and

There are some longer-term considerations that may have
been overlooked, and I'll comment on that at the

Lots of interesting sound bites these days.  On one
channel, Bush tells us that the liberation of the noble
Iraqi people is his only goal.  On another channel, a
US field commander, after the first salvo of cruises,
says, "The punishment of Iraq has only begun."  At
least he's honest.  And how refreshing to see respected
political leaders making impassioned speeches in
Parliament (UK & Ireland both) against the war and its

in historic times,

From: "Boudewijn Wegerif" <•••@••.•••>
To: <Undisclosed-Recipient:;>
Subject: THE PERFECT STORM - Part I 
   by Michael C. Ruppert - The Real Stakes in Iraq
Date: Fri, 21 Mar 2003 09:40:38 +0100


THE PERFECT STORM - Part I by Michael C. Ruppert
 Part I of a Special Two-Part FTW Series -

March 19, 2003 - Copyright 2003, From The Wilderness
Publications, All Rights Reserved. May
be reprinted, distributed or posted on an Internet web
site for non-profit purposes only. -


1700 PST, (FTW) - Diplomacy ended on Monday and the
reality and risks of a global war are now placed in the
immediate and unavoidable focus of a world which has
for the most part chosen not to understand what is at
stake. This war will not be fought solely with bullets
and bombs. The chain of events which is about to be set
in motion dictates that the United States, assuming its
Iraqi conquest is successful, continue upon a series of
global military occupations to control the last
remaining significant oil reserves on the planet. With
the shedding of the first blood, the dropping of the
first bomb, the killing of the first Iraqi child, and
the death of the first American serviceman, a one-way
border will have been crossed. And with that crossing
economic and political forces that might combine to
form the Perfect Storm aimed at America have made
themselves visible.

George W. Bush's United States will punish its recent
adversaries at the UN. They will be cut out of the
Iraqi spoils. But Germany, France, Russia and China
have a much more realistic view of Iraqi oil than the
U.S. does. Bush and his corporate allies have marketed
to the markets that sometime in the next month or two
we're going to see a real bonanza as oil prices fall
back to $15-20 dollar per barrel and stay there. It is
not going to happen. On March 7, FTW Contributing
Editor for Energy, Dale Allen Pfeiffer broke down the
reality of Iraqi oil. It's not what's in the ground
that counts now, it's what can be gotten to market. The
Bush gamble is a big long shot and getting longer by
the minute. Iraqi oil infrastructure is crumbling after
twelve years of sanctions and there won't be any
increase in Iraqi production without major investment
and rebuilding. That takes time. The Guardian disclosed
on January 26 that the U.S. is currently buying more
than a million barrels per day (Mbpd) from Iraq out of
the ten million that it imports from around the world.
What might happen if just that million barrels went

For a detailed look at the current state of Iraq's oil
industry please visit:

What we know from previous stories in FTW is that the
world has no spare production capacity to make up for
any significant loss of supply in Iraq. Sure OPEC has
stated that they will increase production by three to
five Mbpd. Venezuela has staged a remarkable recovery
after the recently failed "strike" to reach 3 Mbpd of
its pre-strike level of 4 Mbpd. But Venezuelan fields
are old, tired, depleting fast and the oil is heavy and
expensive to refine. Venezuela offers no cushion. The
promises of Saudi Arabia and the other mid east OPEC
nations, on their face, sound comforting but they mean
nothing because the planet is consuming a billion
barrels (Gb) of oil every 12 days and that rate of
consumption is increasing. Recent stories by the Agence
France Presse (March 12) and the BBC (March 10) tell us
that auto sales jumped 48% last year in Thailand and
50% in China respectively. This is the double edged
sword behind Peak Oil. Without increased sales of
consumer goods and autos, the Western economies
collapse anyway and the emerging economies of the Far
East are steadily increasing both consumption and

So if Iraqi production drops as a result of war, where
will the U.S. make up the difference and how much will
it cost? Bush has indirectly threatened to punish
France, Germany and Russia by locking them out of the
promised booty. All of them, especially France and
Russia have major investments there. But those
countries still have something the U.S. does not,
access to a ready supply of oil in the short term from
Russia which no doubt has guaranteed its allies supply
to make up for any losses from Iraq. If he really
wanted to play hardball Russian President Vladimir
Putin could bifurcate his pricing structure to favor
the Moscow-Berlin-Paris alliance. He would find ready
sympathy from Russian oil companies now eliminated from
collecting on approximately $40 billion worth of new
oil construction contracts and an $8 billion Iraqi
debt. Russia has not forgotten how it was shamelessly
looted out of an estimated $500 billion by Goldman
Sachs, The Harvard Endowment and the U.S. Treasury
during the 1990s. That shameless episode, which
rendered Russia incapable of resisting U.S. military
moves post-9/11, resulted in what a committee chaired
by Congressman Christopher Cox, R-CA described as three
times worse than the Great Depression.

The whole issue of Peak Oil has been moved ahead of
schedule by Europe. Within a few short years the entire
planet will begin to suffer societal collapse as a
result of diminishing non-renewable resources. Russia
has long passed its production peak and cannot continue
pumping at wildly expanded rates for very long. It
might take two to five years before production costs
for the dregs inevitably shrink exports. But Moscow,
Paris and Berlin don't need three years. The complete
devastation of the U.S. economy might be a sure thing
in three to six months.  That's how fragile it is.

And what has Putin got to lose? He knows that the
American agenda is to secure those reserves that have
not yet peaked (i.e. The Persian Gulf sans Iran), drive
the price of oil down to $13-20 per barrel, break
OPEC's back and simultaneously destroy the economic
recovery that $40 oil is bringing to Russia which
spends much more to produce its oil than OPEC does.
France, Germany and Russia have not opposed the
American Empire lightly, nor will their resistance end
now. In fact, it must intensify. The fact that these
nations have not introduced a Security Council
resolution condemning the invasion might signal that
they are hedging their bets and it might also signal
that they are just awaiting the first U.S. misstep
which is sure to come. But a clue is that, of the
three, Russia has bluntly labeled the U.S. invasion
illegal. These countries know that the Bush
administration has placed the United States in a
violent, all-or-nothing position and that it has less
than a 50-50 chance of winning.

While the blood is being shed the real battle will be
economic and political; the dollar vs. the Euro, images
of bombs and tanks vs. images of reason, caution and
diplomacy. In the meantime the U.S. economy has placed
all its hopes and stability on a bonanza of cheap oil
which careful analysis shows is more fantasy than
probable outcome. Even the Council on Foreign Relations
agrees on this point.

In a brilliant Feb. 11th analysis of the current oil
situation, Marshall Auerback, writing for The Prudent
Bear web site quoted from a recent CFR report
co-sponsored by Bush crony, oil man and former
Secretary of State James Baker:

"Notwithstanding the value of Iraq's vast oil reserves,
there are severe limits on them both as a source of
funding for post-conflict reconstruction efforts and as
the key driver of future economic development. Put
simply, we do not expect a bonanza."

Worse, according to a March 17 story in the Miami
Herald revenues from Iraqi oil would not cover the
costs of rebuilding the bridges, dams, power generating
stations and roads that are sure to be destroyed in the
coming weeks. The U.S., of necessity, will turn all
cash flow toward rebuilding the oil fields while it
must leave the devastated Iraqi populace to live in
pestilence among the rubble. In light of America's
unilateral bullishness the EU announced last week that
there might be limits to how much assistance it could
render to the Iraqi people, especially if their
countries were prevented from performing on their legal

Multiple recent reports from the oil industry state
clearly that recent price hikes are the result of
over-stretched production capacity and historically low
reserve levels. Currently U.S. oil reserves are at a
28-year low and the White House has acknowledged plans
to tap the 700 million barrel Strategic Petroleum
Reserve at the start of the conflict. That's enough to
protect the U.S. economy from further price shocks for
about 70 days. Then what? Under the best of
circumstances it takes mid-east oil about six weeks to
get from the oil fields into your gas tank.

Further confirmation of Peak Oil's arrival is found in
recent stories from AP and The Guardian stating that
Norway, once a major exporter, is expecting a decline
in production and drilling due to dwindling reserves
and that Shell has just eliminated one fifth of its
North Sea jobs. And on March 18 Hong Kong announced
that it will allow eight airlines to levy an emergency
fuel surcharge of between $8.50 and $13 per passenger.

At home soaring gasoline prices are just the ticket the
Bush administration wants to curb demand and exploit a
subliminal unspoken deal with consumers that will
sanction the slaughter and keep the poll numbers
manageable for a while. But economic demons are bashing
down the door. Americans vote with their wallets says
the cliché. On March 16, angry black residents staged a
protest in Los Angeles claiming that they could not
afford to drive to work while paying two dollars a
gallon. On the one hand they don't have a clue about
what the global oil reality is and on the other they
will achieve nothing by demanding lowered prices and
more supply without realizing that there is no more
cheap oil to supply them - or anybody else for that
matter. At least there is certainly not enough to make
a difference for more than a few months or a year. But
with less discretionary income to absorb the price
shocks, the inner city poor are the prototypes for what
the rest of us will be doing soon enough.

The poor always die first. And this is just one of the
many signs that the Empire is starting to crumble from


- The Bush Administration refuses to put a price tag on
the war as budget deficits approach all-time record
levels and the tax base is shrinking. Both the U.S.
government and its people are awash in debt. Employment
is skyrocketing as consumer confidence crashes. State
and local governments are screaming for money and
facing their worst budget shortfalls in sixty years.

# -  Writing at The Ether Zone,, Ed Henry notes that with the
national debt at over $6 trillion the U.S. government
is bouncing along the debt ceiling which means that it
legally cannot borrow any more money. Its options are
to sell more bonds (not likely with an anemic dollar,
bad management, and an expanding trade deficit) or
liquidate assets. One of the few assets available to
Treasury Secretary John Snow is the stock portfolio of
the Federal Employees Thrift Savings Plan which has
about $44 billion in stock investments. What do you
think would happen on Wall Street if Uncle Sam dumped
$40 billion in stock?

# - Backbones of the housing mortgage market Fannie Mae
and Freddie Mac which, according to the New York Posts'
brilliant reporter John Crudele, own or guarantee $3.1
trillion or 45 per cent of outstanding residential
debt, are in serious trouble. They don't have enough
cash to handle what might be a serious economic shock
as the housing bubble collapses. Their collapse could
imperil the entire economy and Crudele observed that
the Federal Reserve was taking serious note of the way
these "mortgage cowboys" had managed their business in
inflating share prices which are now in steep decline.

# - Market Oracles Warren Buffet and George Soros are
issuing dire predictions about the U.S. and world
economies. Soros is blasting at George W. Bush's
management style and Buffet is warning of derivatives
time-bombs in what Britain's Telegraph calls an
"apocalyptic warning."

There are serious signs of a major political revolt
brewing in the United States - one that could end the
Bush Presidency - George W. Bush still has his finger
on the trigger and he knows that his only hope for
survival is to pull it. U.S. and British intelligence
agencies are leaking documents left and right disputing
White House "evidence" against Iraq that has repeatedly
been shown to be falsified, plagiarized and forged.
Quiet meetings are being held in Washington between
members of Congress and attorneys like Ramsey Clark
discussing Bush's impeachment. Leaders of the World
Trade Organization (WTO), as reported in a March 15
story in the International Herald Tribune have said,
"All international institutions would suffer a loss of
credibility if the one superpower appeared to be
choosing which rules to obey and which to ignore." And
a Rockefeller has called for an investigation of a
Bush. On March 14 The Associated Press reported that W.
Va. Senator Jay Rockefeller has asked the FBI to
investigate forged documents which were presented first
by Britain and then the United States showing that Iraq
had been trying to purchase uranium from the African
country of Niger for its weapons program. Of all the
glaring falsehoods told by the administration the fact
that these forgeries were noted by a Rockefeller may
make them the second-rate Watergate burglary of the
21st century. (See Part II)

There a few things more closely connected to or
identified with Bush family power than globalization
and the Rockefellers. He has most likely failed both of
them and both have the power to remove him.

Too much, too little, too late; at least as far as
preventing a war and massive carnage is concerned. But
these developments suggest that the real powers that be
might be getting ready to have Bush impeached just as
soon as he has humiliated the United States, started a
World War leading to the deaths of perhaps millions of
people, destroyed the efficacy of the United Nations
and secured the Iraqi oil fields. This is a playing
field which the biggest money might desire and for
which it might be willing to offer a sacrifice if it
becomes necessary. If the war turns out to be a dismal
failure then the scapegoat has volunteered for his own
hanging and there are signs that it is being prepared.

One thing is certain. If George W. Bush is removed from
within, it will signal nothing other than a new
"kinder, gentler" set of managers pursuing the exact
same agenda as before. The dirtiest work will have been

COMING IN PART II - The signs of a pending coup as
Bush, Cheney, Powell and Rumsfeld are betrayed by a
litany of former allies.




Ruppert sees the big picture rather well, in my humble,
and projects it forward in a way that makes a lot of
sense, taking much into account.

But he does not take into account certain very likely
possibilities.  He assumes a degree of continuity that
may not exist - in terms of the regime's game plan.

In particular, he predicts a business-as-usual strategy
regarding the * Peak Oil * phenomenon.  You know what
that is: the point at which known oil reserves start
declining, when world production can only go down and
never again up.

He also assumes that a collapsed US economy is a bad
thing, from an elite point of view.  He may be right,
but he may be wrong.

Here's how it might look from an elite perspective...

    Oil is running out, while demand is increasing.  We can
    struggle to keep the system running, but we won't be
    able to do it.  Besides, you can't make money on
    increased consumption [capital makes money on growth,
    not on revenues] if supplies are dwindling.  We need
    some creative thinking.
    How about if we encourage the scarcity of oil?  Hoard
    it a bit, let the price go up, let the chips start
    falling where they may?   How better to maximize the
    returns on the remaining supplies?  There are going to
    be collapses and depressions in any case, so why not
    position ourselves to profit from those bear-market
    times?  Every time the price of a barrel of oil goes
    up, the value of our fixed asset (oil reserves) goes up

To me this makes a great deal of sense.  It's simply
facing reality, and a very in-our-face reality it is. 
The perspective also happens to be consistent with the
regime's game plan as it systematically takes over oil
regions. If you're planning to turn oil into a
premium-priced luxury item, you must first secure an
effective monopoly position.  That's elementary
economics, dear Watson.

There is little doubt that the inflated,
over-producing, super-hyped global economy is a bubble
waiting to burst.  It's only a matter of time.  You
know it, I know it, and "They" know it.  We've already
seen little bubbles bursting for the past several years
(such as the Asian Tigers), buffering and delaying the
more global collapse.  The carnivores are beginning to
eat one another, and that's a sure sign of dire times
on the savannah.

The mistake many analysts make, in my humble, is that
they assume elites are not aware of the coming
collapse, that they aren't preparing for it.  Perhaps
such analysts have a vision of a Roman Emperor, with
Rome crumbling around him.  Visions of barbarian hordes
taking over.  We need to recall that Rome didn't
collapse until after many, many centuries.  The
US-managed elite empire is more in its Julius Ceaser
stage, not in its dispirited death throes.

Suppose we have a global collapse, something like the
Great Depression of the 1930s, or perhaps a bit worse. 
Some stock traders may have jumped out of buildings
when the market collapsed, but generally speaking it
was not a bad time for elites.  In fact it was a time
of bargain hunting.  The Bank of America, for example,
seized on the opportunity and ended up with the lion's
share of California's incredibly valuable farm land. 
When you own the world, in some sense, then you don't
really care what it's worth in currency.  You care more
about what percent you own when it gets up and running
again under a revised set of rules.  "Deal the cards
and play again."

If people are homeless and starve, as they did in The
Depression, what is that to elites?  Why should they
care?  The only problem for them is the potential
adverse political consequences.  The people might rise
up and reject capitalism.  They might do like they did
in the 20s and 30s, under banners ranging from
Anarchism to Communism to Unionism, but translated to
current conditions and sentiments.  The solution then
was either the New Deal or Fascism.  The New Deal is no
longer possible.

Our Homeland Security and our Patriot Act reveal the
solution elites have chosen to deal with the collapse
which they know is coming and which they are astutely

We need to be as astute.



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