{Martin Wolf is canvassing a need for Debt Forgiveness. But one person's

Debt is another's Capital - Peter M.}

 

http://www.ft.com/cms/s/0/11f38928-ca6f-11e5-be0b-b7ece4e953a0.html

 

Why it would be wise to prepare for the next recession

 

Martin Wolf

 

Financial Times

 

February 4, 2016 11:49 am

 

It is crucial to recognise that something more unconventional might have

to be done - Mark Carney, governor of the Bank of England

 

What might central banks do if the next recession hit while interest

rates were still far below pre-2008 levels? As a paper from the

London-based Resolution Foundation argues, this is highly likely.

Central banks need to be prepared for this eventuality. The most

important part of such preparation is to convince the public that they

know what to do.

 

Today, eight-and-a-half years after the first signs of the financial

crisis, the highest short-term intervention rate applied by the Federal

Reserve, the European Central Bank, the Bank of Japan or the Bank of

England is the latter’s half a per cent, which has been in effect since

March 2009 and with no rise in sight. The ECB and the BoJ are even using

negative rates, the latter after more than 20 years of short-term rates

of 0.5 per cent, or less. The plight of the UK might not be that dire.

Nevertheless, the latest market expectations imply a base rate of

roughly 1.6 per cent in 2021 and around 2.5 per cent in 2025 — less than

half as high as in 2007.

 

What are the chances of a significant recession in the UK before 2025?

Very high indeed. The same surely applies to the US, eurozone and Japan.

Indeed, the imbalances within the Chinese economy, plus difficulties in

many emerging economies, make this a risk now. The high-income economies

are likely to hit a recession with much less room for conventional

monetary loosening than before previous recessions.

 

What would then be the options?

 

One would be to do nothing. Many would call for the cleansing depression

they believe the world needs. Personally, I find this idea crazy, given

the damage it would do to the social fabric.

 

A second possibility would be to change targets, possibly to ones for

growth or level of nominal gross domestic product or to a higher

inflation rate. It would probably have been wise to have had a higher

inflation target. But changing it when central banks are unable to

deliver today’s lower target might destabilise expectations without

improving outcomes. Moreover, without effective instruments a more

ambitious target might just seem empty bombast. So the third possibility

is either to change instruments or to use the existing ones more powerfully.

 

One instrument, not much discussed, would be to organise the

deleveraging of economies. This might need forced conversion of debt

into equity. But, while desirable in extreme circumstances, this would

be practically difficult.

 

Another would be a still bigger scale of quantitative easing. At the end

of the third quarter of last year, the BoJ’s balance sheet was 70 per

cent of GDP, against less than 30 per cent for the Fed, the ECB and the

BoE. The latter three could follow the former. Moreover, the assets they

buy could be broadened, one possibility being foreign-currency bonds.

But that would be provocative and unnecessary. The BoJ and ECB have

engineered big currency depreciation without making it quite so blatant.

 

Yet another instrument is negative interest rates, now used by the ECB,

the BoJ and the central banks of Denmark, Sweden and Switzerland. With

clever gimmicks, it is possible to impose negative rates on bank

reserves at the margin, thereby generating negative interest rates in

markets, without imposing negative rates on depositors. How far this can

be pushed while cash is still an alternative is unclear. Beyond a

certain point, people seek to move into cash-backed warehouse receipts,

unless a penal tax were imposed on withdrawal from banks or cash were

abolished altogether. Moreover, it is unclear how economically effective

negative rates would be, apart from lowering the currency.

 

A final instrument is "helicopter money" — permanent monetary emission

for the purpose of promoting purchases of goods and services either by

the government or by households. From a monetary point of view, this is

the equivalent of intentionally permanent QE. Of course, actual QE might

become permanent after the event: that is now likely in Japan. Again,

supposedly permanent monetary emission might turn out to have been

temporary, after the event. But if the money went directly into

additional spending by government or into lower taxes or to people’s

bank accounts, it would surely have an effect. The crucial point is to

leave control over the quantity to be emitted to central banks as part

of their monetary remit.

 

Personally, I would prefer the last instrument. But at this stage it is

crucial to recognise the great likelihood that something even more

unconventional might have to be done next time. So prepare the ground

beforehand. Central banks should be filling in these blanks now, not

after the next recession hits.

 

 

http://www.telegraph.co.uk/finance/economics/12138466/when-is-the-next-financial-crash-coming-oil-prices-markets-recession.html

 

Debt, defaults, and devaluations: why this market crash is like nothing

we've seen before

 

A pernicious cycle of collapsing commodities, corporate defaults, and

currency wars loom over the global economy. Can anything stop it from

unravelling?

 

By Mehreen Khan, graphic by Tom Shiel, Chris Newell

 

10:00AM GMT 06 Feb 2016

 

A global recession is on the way. This truism of economics holds at any

point in which the world is not in the grips of a contraction.

 

The real question is always when and how deep the upcoming downturn will be.

 

"The crash will come, but it would be nice if it came two years from

now", Thomas Thygesen, head of economics at SEB told over 200 commodity

investors and analysts in London last month.

 

His audience was rapt with unusual attention. They could be forgiven for

thinking the slump had not already arrived.

 

Commodity prices have crashed by two thirds since their peaks in 2014.

Oil has borne the brunt of the sell-off, suffering the worst price

collapse in modern history. Brent crude has fallen from $115 a barrel in

the summer of 2014, to just $27.70 in mid-January.

 

"They tell you should start your presentations with a joke, but making

jokes at a commodities seminar is hardly appropriate these days,"

Thygesen told his nervous audience.

 

Major oil price falls have a number of historical precedents. Today's

glutted oil market is often compared to the crash of 1986, the last

major episode over global over-supply. Back in the late 90s, a barrel of

Brent crude fell to as low as $10 in the wake of the Asian financial crisis.

 

A perfect storm

 

But is the current oil price collapse really like anything the world

economy has ever experienced?

 

For many market watchers, a confluence of factors - led by oil, but

encompassing China, the emerging world, and financial markets - are all

brewing to create a perfect storm in a global economy that has barely

come to terms with the Great Recession.

 

"We are in a very unusual situation where market sentiment is of a

different nature to anything we’ve seen before," says Thygesen.

 

Unlike previous pre-recessionary eras, the current sell-off has seen

commodity prices, equities and credit conditions all move in dangerous

lockstep.

 

The S&P 500 trading pit at the Chicago Mercantile Exchange

 

Although a 75pc oil price collapse should represent an unmitigated

positive for the world’s fuel thirsty consumers, the sheer scale of the

price rout is already imperiling the finances of producer nations from

Nigeria to Azerbaijan, and is now threatening to unleash a wave of

bankruptcies across corporate America.

 

It is the prospect of this vicious feedback loop - where low oil prices

create financial tail risks that spill over into the real economy -

which could now propel the world into a "full blown crisis" adds Thygesen.

 

So will it materialise?

 

The world economy is throwing up reasons to worry, as the globe's

largest emerging markets have shown signs of deterioration over the last

six months, says Olivier Blanchard, the former long-serving chief

economist of the International Monetary Fund.

 

"China’s growth is probably less than officially reported. Russia and

Brazil are doing very badly. South Africa is flirting with recession.

Even India may not be doing as well as was forecast," says Blanchard,

who left the Fund after seven years late last year.

 

As it stands however, he says market ructions still represent a classic

case of "herd" behaviour.

 

"Investors worry that other investors know something bad, and so just

sell, although they themselves have no new information."

 

Blanchard spent seven years firefighting the worst financial crisis in

history at the IMF

 

But a tipping point may well be approaching. According to Blanchard’s

calculations, a 20pc decline in stock markets that persists for more

than six months, will translate into a decline in consumption of between

0.5pc to 1.0pc.

 

"This would be a serious shock. My biggest fear is precisely that the

dramatic shift in mood becomes self-fulfilling".

 

The first domino to fall

 

For now, oil-induced financial stress is concentrated in the energy sector.

 

With Brent set to languish around $30-35 barrel for the rest of the

year, prices will persist below the $40-60 barrel break-even point that

renders the bulk of US oil and gas companies profitable.

 

Spreads on high yield US energy corporates have soared to unprecedented

highs. "They make Lehman look like a walk in the park" says Thygesen.

 

More than a third of the entire US high yield bond index is now

vulnerable to crude prices remaining low or falling even further,

according to calculations from Oxford Economics.

 

As a result, 2016 is set to see the first wave of corporate bankruptcies

in the oil and gas sector. Highly leveraged US shale companies will be

the first be picked off. Should escalating defaults have a further

depressant effect on oil prices, it could unleash a tidal wave of

corporate bankruptcies in the world’s largest economy.

 

Conditions that usually pave the way for mounting defaults are currently

met in the US Oxford Economics

 

Indebtedness is not just the scourge of the US. Globally, the oil and

gas industry has issued $1.4 trillion of bonds and taken out a further

$1.6 trillion in syndicated loans, driving the sector's combined debt to

$3 trillion, according to the Bank of International Settlements. They

warn of an "illusion of sustainability" that could quickly turn toxic as

the credit cycle unravels.

 

The question exercising the minds of economists and investors is the

extent to which this contagion could metastasize beyond the energy

sector, as banks cut off credit access, loans turn bad, and financial

conditions enter a critical tightening phase.

 

"Conditions that usually pave the way for mounting defaults – such as

growing bad debt, tightening monetary conditions, tightening of

corporate credit standards and volatility spikes – are currently met in

the US", says Bronka Rzepkowski at Oxford Economics.

 

Such levels of financial distress, more often than not, portend a global

recession.

 

In every instance of the US high yield spread rising above its long-term

average, a recession or financial crisis has been nigh, says Rzepkowski,

who cites 2011 as the only time the markets sent out a false signal,

lulled by the Federal Reserve’s mega quantitative easing programme.

 

US shale break-even prices remain closer to $60 a barrel

 

We are not there yet, but worryingly for market watchers, a series of

other indicators are also flashing red.

 

Global equity markets have endured their worst start to a year since the

dotcom crash. To paraphrase Nobel prize-winning US economist Paul

Samuelson, Wall Street has predicted nine out of the last five

recessions, but the current turbulence has an ominous precedent.

 

Over the last 45 years, the S&P500 has suffered a loss of more than

12.5pc on 13 occasions. Six of these have given way to a recession in

the US, providing a near 50pc probability that a global downturn is just

around the corner.

 

In Europe, stocks have now fallen by 10pc in the last six months.

 

"Of the 14 previous occasions equities have had a similar decline, seven

have been associated with recession, with lacklustre returns

thereafter," says Dennis Jose at Barclays.

 

He notes investors have begun to pile into "defensive" stocks, such as

healthcare and consumer industries.

 

"The weighting in defensives has increased to the highest levels seen

since 1980 suggesting that investors may have already embraced the risk

of a recession."

 

Dollar danger

 

Macroeconomic indicators from the world’s largest economy are also

beginning to turn sour. The US has already fallen prey to a

manufacturing collapse. Service sector data for December showed the

slowdown is spreading to the dominant driver of economic growth.

 

"The shine has come off the US", says David Folkerts-Landau, chief

economist at Deutsche Bank.

 

He notes the economy is "firing on one cylinder" with consumers the sole

bright spot in an environment of still weak capital investment, and a

crippling exchange rate that is hurting exporters and squeezing

corporate profits.

 

"It is not a very healthy situation," says Folkerts-Landau, who

forecasts US growth will fall below 2pc this year. "That is a precarious

number."

 

A crucial part of the story has been the relentless appreciation of the

US dollar. The greenback has risen by more than 22pc on a trade weighted

basis since mid-2014.

 

The effects have been felt far beyond the US. The soaring dollar has put

record pressure on China’s exchange rate peg, forcing Beijing to burn

through its reserves with interventions amounting to $140bn-a-month in

December to protect the renminbi.

 

Meanwhile, China’s capital outflows have accelerated to $676bn,

according to the Institute of International Finance.

 

This policy bind - known as the "Impossible Trinity" of managing a fixed

exchange rate, maintaining independent monetary policy, and a open

capital account - means a devaluation of some magnitude is all but

inevitable.

 

"It will definitely be in the double digits", says Folkerts-Landau. "We

will be lucky if the depreciation will be in the lower double-digits by

the end of the year."

 

"Once you anticipate that, and you are sitting in Indonesia or Latin

America, it has an immediate impact on how you think about the world".

 

A weaker renminbi would unleash a new wave of deflation in an already

fragile global environment, and hasten the pressure on emerging market

exchange rates as the world’s currency wars would renew apace.

 

Federal reverse?

 

What, if anything, could halt this pernicious cycle of events from

unfolding?

 

In the short-term, analysts are unanimous: all eyes are on the US

Federal Reserve. The central bank’s first rate hike in seven years last

December has come to look frighteningly premature in the space of just

eight weeks.

 

I have no doubt that the Fed would expand QE Olivier Blanchard

 

Events have forced the Fed’s policymakers to take to the airwaves and

soothe fears that another four rate hikes are on the way this year. It

is a welcome sign for jittery markets, but may not be enough to convince

them that the Fed will be nimble enough to reverse course and begin

easing should financial conditions worsen.

 

Others, like Blanchard, are more sanguine about the ability of central

banks to ride to the rescue again.

 

"I have no doubt that, if there was such a decrease in consumption, or

if the strong dollar proved to affect net exports more than is forecast,

or any other adverse event for that matter, the Fed would wait to do

further increases" he says.

 

"And if things got really bad, I have no doubt that the Fed would expand

QE."

 

Oil prices meanwhile are widely expected to rebound from their depths by

the second half of the year, as dwindling investment and the buckling of

the vulnerable shale players begins to bite on production levels.

 

This in itself presents its own set of challenges. The lower oil prices

fall, the faster buyers are expected to flood back in, with violent

upward movements already in evidence over the last ten days.

 

In the longer term, even the postponement of the next global recession

will do little to assuage fears that world could find itself defenceless

against another round of mania, panics or crashes.

 

Two of the world's three major central banks have slashed interest rates

in to negative territory. Monetary tools will need to be deployed more

creatively, perhaps going as far as injecting stimulus directly into the

veins of the economy.

 

Should the world manage to ride out the perfect storm of 2016, next time

round, answers will be difficult to find.

 

 

From: Paul de Burgh-Day <pdeburgh@lorinna.net>

Date: Thu, 28 Jan 2016 21:18:45 +1100

Subject: F. William Engdahl: What’s Really Going o n With Oil?

 

What’s Really Going on With Oil?

 

By F. William Engdahl

 

January 27, 2016

 

http://journal-neo.org/2016/01/24/whats-really-going-on-with-oil/

 

http://www.informationclearinghouse.info/article44049.htm

 

If there is any single price of any commodity that determines the growth

or slowdown of our economy, it is the price of crude oil. Too many

things don’t calculate today in regard to the dramatic fall in the world

oil price. In June 2014 major oil traded at $103 a barrel. With some

experience following the geopolitics of oil and oil markets, I smell a

big skunk. Let me share some things that for me don’t add up.

 

On January 15 the US benchmark oil price, WTI (West Texas Intermediate),

closed trading at $29, the lowest since 2004. True, there’s a glut of at

least some 1 million barrels a day overproduction in the world and

that’s been the case for over a year.

 

True, the lifting of Iran sanctions will bring new oil on to a glutted

market, adding to the downward price pressure of the present market.

 

However, days before US and EU sanctions were lifted on Iran on January

17, Seyyid Mohsen Ghamsari, the head of international affairs at

National Iranian Oil Company stated that Iran, "…will try to enter the

market in a way to make sure the boosted production will not cause a

further drop in prices…We will be producing as much as the market can

absorb."  So the new entry of Iran post-sanctions onto world oil markets

is not the cause for the sharp oil fall since January 1.

 

Also not true is that oil import demand from China has collapsed with a

supposed collapse of China’s economy. In the year to November 2015 China

imported more, significantly more, 8.9% more, year on year, to 6.6

million barrels a day to become the world’s

<http://www.platts.com/latest-news/oil/singapore/chinas-oct-crude-oil-imports-rise-94-on-year-26271128>

largest oil importer.

 

Add to the boiling cauldron that constitutes today’s world oil market

the political risk that has been building dramatically since September,

2015 and the Russian decision to come to the call of Syria’s

legitimately elected President, Bashar al Assad with formidable

airstrikes against terrorist infrastructure. Add as well the dramatic

break in relations between Recep Tayyip Erdog?an’s Turkey and Moscow

since Turkey, a NATO member, committed a brazen act of war by shooting

down a Russian fighter jet over Syrian airspace. All of this would

suggest prices of oil should be going up, not down.

 

Saudi’s Strategic Eastern Province

 

Then, for good measure, throw in the insanely provocative decision by

Saudi Defense Minister and de facto king, Prince Mohammed bin Salman, to

execute Sheikh Nimr al-Nimr, a Saudi citizen. Al-Nimr, a respected

Shi’ite religious leader was charged with terrorism for calling in 2011

for more rights for Saudi Shi’ites. There are approximately 8 million

Saudi Muslims loyal to Shi’ite teachings rather that the ultra-strict

Wahhabi Sunni strain. His crime was to support protests calling for more

rights for the oppressed Shia minority, perhaps some 25% of the Saudi

population. The Shi’ite population of Saudis is overwhelmingly

concentrated in the Kingdom’s Eastern Province.

 

The Eastern Province of the Kingdom of Saudi Arabia is perhaps the most

valuable piece of real estate on the planet, double the area of the

Federal Republic of Germany but with a mere 4 million people. Saudi

Aramco, the state-owned oil company is based in Dhahran in the Eastern

Province.

 

The main Saudi oil and gas fields are mostly in the Eastern Province,

onshore and offshore, including the world’s largest oil field, Ghawar.

Petroleum from the Saudi fields, including Ghawar, is shipped to dozens

of countries from the oil port terminal of the the Ras Tanura complex,

the world’s biggest crude oil terminal. Some 80% of the near 10 million

barrels of oil a day pumped out by Saudi goes to Ras Tanura in the

Persian Gulf where it is loaded on to supertankers bound for the

<http://www.saudiaramco.com/content/dam/Publications/portsterminals/Portof_RasTanura.pdf>

west.

 

The Eastern Province is also home to Saudi Aramco’s Abqaiq Plants

facility, their biggest oil processing and crude stabilization facility

with a capacity of 7 million barrels per day. It’s the primary oil

processing site for Arabian extra light and Arabian light crude oils,

and handles crude oil pumped from

<http://www.hydrocarbons-technology.com/projects/abqaiq-aramco/> Ghawar

field.

 

And it also happens that the majority of oil field and refinery blue

collar workers in of the Eastern Province are…Shi’ite. They are said

also to be sympathetic to the just-executed Shia cleric, Sheikh Nimr

al-Nimr. In the late 1980’s the Saudi Hezbollah Al-Hejaz, led several

attacks on oil infrastructure and also murdered Saudi diplomats. They

were allegedly trained in Iran.

 

And now there is a new destabilizing element to add to the political

tensions building between Saudi Arabia and Erdogan’s Turkey on the one

side, flanked by servile Arab Gulf Cooperation Council states, and on

the other Assad’s Syria, Iraq with a 60% Shi’ite population and

neighboring Iran, aided presently militarily by Russia. Reports are that

the instable 30-year old Prince bin Salman is about to be named King.

 

On January 13, the Gulf Institute, a Middle East think tank, in an

exclusive report, wrote that 80-year old Saudi King Salman Al-Saud plans

to abdicate his throne and install his son Mohammed as king. They report

that the present King "has been making the rounds visiting his brothers

seeking support for the move that will also remove the current crown

prince and American favorite, the hardline Mohammed bin Naif, from his

positions as the crown prince and the minister of interior. According to

sources familiar with the proceedings, Salman told his brothers that the

stability of the Saudi monarchy requires a change of the succession from

lateral or diagonal lines to a vertical order under which the king hands

power to his most

<http://journal-neo.org/2016/01/24/whats-really-going-on-with-oil/%20http://www.gulfinstitute.org/exclusive-saudi-king-to-abdicate-to-son-2/>

eligible son."

 

On December 3, 2015, the German BND intelligence service leaked a memo

to the press warning of the increasing power being acquired by Prince

Salman, someone they characterized as unpredictable and emotional.

Citing the kingdom’s involvement in Syria, Lebanon, Bahrain, Iraq and

Yemen, the BND stated, referring to Prince Salman, "The previous

cautious diplomatic stance of older leaders within the royal family is

being replaced by a new impulsive policy of

<http://www.mintpressnews.com/saudi-arabia-destabilising-arab-world-german-intelligence-warns/211768/>

intervention."

 

Yet oil prices fall?

 

The ominous element in this more than ominous situation revolving around

the center of world petroleum and natural gas reserves, the Middle East,

is the fact that in the recent weeks oil prices, which had temporarily

stabilized at an already low $40 range in December, now have plunged

another 25% to around $29, outlook grim. Citigroup has forecast $20 oil

is possible. Goldman Sachs recently came out saying that it may take

lows of $20 a barrel to restabilize world oil markets and get rid of the

glut of

<http://journal-neo.org/2016/01/24/whats-really-going-on-with-oil/2016,%20http://www.bloomberg.com/news/articles/2016-01-12/-20-oil-no-longer-mirage-as-world-confronts-price-at-12-year-low>

supply.

 

Now I have a strong gut feeling that there is something very big, very

dramatic building in world oil markets over the coming several months,

something most of the world doesn’t expect.

 

The last time Goldman Sachs and their Wall Street cronies made a

dramatic prediction in oil prices was in summer 2008. At that time, amid

the growing pressures on Wall Street banks of the spreading US sub-prime

real estate meltdown, just before the Lehman Brothers collapse of

September that year, Goldman Sachs wrote that oil was headed for $200 a

barrel. It had just hit a high of $147. At that time I wrote an analysis

saying just the opposite was likely, based on the fact that there was a

huge oversupply in world oil markets that curiously, was only being

identified by Lehman Brothers. I was told by an informed Chinese source

that Wall Street banks like JP Morgan Chase were hyping the $200 price

to convince Air China and other big China state oil buyers to buy every

drop of oil at $147 it could before it hit $200, an advice that fed the

rising price.

 

Then by December, 2008 the Brent benchmark oil price was down to $47 a

barrel. The Lehman Crisis, a deliberate political decision of US

Treasury Secretary a former Goldman Sachs chairman, Henry Paulsen, in

September 2008, plunged the world into financial crisis and deep

recession in the meantime. Did Paulsen’s cronies at Goldman Sachs and

other key Wall Street mega-banks such as Citigroup or JP Morgan Chase

know in advance that Paulsen was planning the Lehman crisis to force

Congress to give him carte blanche bailout powers with the unprecedented

TARP funds of $700 billion? In the event, Goldman Sachs and friends

reportedly made a gigantic profit betting against their own $200

predictions using leveraged derivatives in oil futures.

 

Killing the shale oil ‘cowboys’ first

 

Today the US shale oil industry, the largest source of risíng US oil

output since 2009 or so, is hanging by its fingernails on the edge of a

cliff of massive bankruptcies. In recent months shale oil production has

barely begun to decline, some 93,000 barrels in November, 2015.

 

The Big Oil cartel–ExxonMobil, Chevron, BP and Shell–began dumping their

shale leases onto the market two years ago. The shale oil industry in

the US today is dominated by what BP or Exxon refer to as "the cowboys,"

mid-sized aggressive oil companies, not the majors. Wall Street banks

like JP Morgan Chase or Citigroup who historically finance Big Oil, as

well as Big Oil itself, clearly would shed no tears at this point were

the shale boom to bust, leaving them again in control of the world’s

most important market. The financial institutions who lent hundreds of

billions of dollars to the shale "cowboys" in the past five years have

their next semi-annual loan review in April. With prices hovering at or

near the $20 range, we can expect a new, far more serious wave of actual

shale oil company bankruptcies. Unconventional oil, including Canada’s

huge Alberta Tar Sands oil will soon be a thing of the past, if so.

 

That alone will not restore oil to the $70-90 levels that the big oil

industry players and their Wall Street banks would find comfortable. The

glut coming out of the Middle East from Saudi Arabia and her Gulf Arab

allies has to be dramatically cut. Yet Saudis show no sign of doing so.

This is what disturbs me about the entire picture.

 

Is something very ugly brewing in the Persian Gulf that will

dramatically push oil prices up later this year? Is a real shooting war

between Shi’ite and Saudi Wahhabi oil states brewing? Until now it has

been a proxy war in Syria primarily. Since the execution of the Shi’ite

cleric and Iranian storming of the Saudi Embassy in Teheran, leading to

a break in diplomatic ties by Saudi and other Sunni Gulf Arab states,

the confrontation has become far more direct. Dr. Hossein Askari, former

adviser to the Saudi Finance Ministry, stated, "If there is a war

confronting Iran and Saudi Arabia, oil could overnight go to above $250,

but decline back down to the $100 level. If they attack each other’s

loading facilities, then we could see oil spike to over $500 and stay

around there for some time depending on the extent of the

<http://www.oilandgas360.com/iran-vs-saudi-arabia-if-current-actions-escalate-to-war-what-happens-to-oil-prices/>

damage."

 

Everything tells me that the world is in for another big oil shock. It

seems it’s almost always about oil. As Henry Kissinger reportedly said

back during another oil shock in the mid-1970’s when Europe and the US

faced an OPEC oil embargo and long lines at the gas pumps, "If you

control the oil, you control entire nations." That obsession with

control is rapidly destroying our civilization. It’s time to focus on

peace and development, not on competing to be the biggest oil mogul on

the planet.

 

F. William Engdahl is strategic risk consultant and lecturer, he holds a

degree in politics from Princeton University and is a best-selling

author on oil and geopolitics, exclusively for the online magazine

<http://journal-neo.org/> "New Eastern Outlook".

 

--

website: http://mailstar.net/index.html