The so-called recovery is only built on debt and printed cash declares our own Byron King. In the long term, the only option for the government to continue financing it's operations is to print too many dollars. Money printing has it's limits, however. It's Byron's opinion that at some point, perhaps very soon, the government will have to turn to more desperate measures. Namely, capital controls. In the following featured essay, Byron outlines 4 probably ways the government will take your cash and one play you can buy through your broker to prepare today. Read on...
Americans expatriate because they want to get out of the country. Corporations expatriate for similar reasons. Clem Chambers explains...
Say goodbye to your boring morning commute. New technologies are changing the way people drive their cars. It’s making them safer, more fuel efficient, and could reshape the way America builds its roads and cities. The only thing that could stand in the way...
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I was talking with one of my colleagues the other day, and he raised a very interesting question, one that deserves consideration by anyone worried about their digital privacy. He read an article that championed the idea that the more steps one took to protect their privacy by using anonymous Web-browsing tools like Tor, the […]
In the minds of many people around the world, including in the United States, the term “capitalism” carries the idea of unfairness, exploitation, undeserved privilege and power, and immoral profit making. What is often difficult to get people to understand is that this misplaced conception of “capitalism” has nothing to do with real free markets […]
When you type a website address into a browser, you might have noticed that the letters “http” appear at the front. “HTTP” stands for Hypertext Transfer Protocol. In typing a Web address, you are actually sending an HTTP command to transmit that website to you. Hypertext Transfer Protocol is the means by which information is […]
Some people are saying it is just what the doctor ordered. Others are saying that the cure is worse than the disease.The Affordable Care Act? Reengagement in Iraq? Tea Party bullying in the GOP?Not this time. Just as protracted in the corridors of Congress and the White House is the debate over the proposed reform […]
In 2012, money mandarins running the European Union chose stagnation over restructuring. Here’s a consequence of that choice: expectations for a self-sustaining economic recovery keep getting crushed.Two years ago, European Central Bank (ECB) chief Mario Draghi promised to do “whatever it takes” to hold the eurozone together. He bluffed nervous investors into believing in a […]
Picture the scene. It’s 2020. You’re at the checkout in a convenience store with a carton of milk. But you’ve got no cash and you’ve left your cards at home. No problem. You scan your right index finger; the green light flashes. Purchase approved and you leave. Easy.Is this a realistic vision of the future, […]
“In the beginning, all the world was America.” — John Locke“The Garden of Eden was a perfect place,” my friend Manuel explained. “Man had free will. He could live in harmony with nature and God — and everything would be fine. But if he defied God, the stain of original sin would be on his […]
After a week of reckoning about the American oil and gas boom… I’ve got to get something off my chest.I can’t stand it when a coworker takes credit for something I did.Whether it’s a special report I wrote or just a little investing trick I found on my own — if someone takes it and […]
It might sound like the latest new product from Apple, but IPAB is actually the newest major legal challenge to Obamacare.Recently, a three-judge panel in the 9th Circuit Court of Appeals in San Francisco heard arguments about the Independent Payment Advisory Board, or IPAB, a 15-member panel created by the Affordable Care Act and empowered […]
Americans have come to believe that the IRS and the income tax are inevitable parts of our lives. After all, most everyone alive today has lived his entire life under federal income taxation.It wasn’t always that way. For some 125 years, the American people lived without having any tax imposed upon their income.The obvious question […]
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Franklin Delano Roosevelt famously used the term “forgotten man” in a 1932 speech to describe those at the bottom of the economic pyramid who, he felt, government should aid.But the originator of the phrase “forgotten man” had a whole different meaning in mind. He aimed to expose the seeming good intentions of government to reveal […]
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Apparently, global markets rallied overnight on hopes that a conflict may be avoided if Syria gives up its chemical weapons. If that’s the case, it’s a rally that will fade later in the week.
That’s because the ongoing Syrian conflict has nothing to do with chemical weapons. It’s all about regime change, which is all about natural gas and pipelines.
But this is not just “another” Middle Eastern conflict. It’s much deeper, subtler, and potentially far more dangerous than preceding conflicts. As we’ll attempt to explain in today’s issue, the situation in Syria is a direct result of the relative decline of U.S. imperial power.
There’s little doubt that the U.S. want to see regime change in Syria. So it was a bit of a masterstroke that yesterday the Russians tried to diffuse the conflict by calling the U.S.’s bluff and playing the chemical weapons card. As reported by the Financial Times:
“Russia launched an unexpected diplomatic initiative to defuse the Syrian crisis on Monday when it called on the Assad regime to place its chemical weapons stockpile under international supervision, suggesting the move could head off a U.S. military strike.
“In a move that took Western diplomats by surprise, Sergei Lavrov, Russia’s foreign minister, announced that Moscow has proposed to the Assad regime that it should ‘not only put its chemical weapons storages under international control, but also have them destroyed subsequently.’”
Russia doesn’t want regime change, so it doesn’t want war. And if Russia plays for peace, then it makes it that much harder for the West to justify its belligerent actions.
But yesterday morning, the U.S. hit back, calling Russia’s bluff that called the U.S.’s bluff. That is, President Obama said that he’d call off any attack if Syria relinquished control of its chemical weapons. Or in Obama’s words, “If in fact that happens.”
This is getting almost laughable. So all Syria has to do to avoid a carpet bombing is relinquish control of its chemical weapons. And all the U.S. has to do to effect regime change is to say that Syria won’t give up all its weapons (it’s still hiding some, and we’ve got “proof”).
So let’s see how this diplomatic dance plays out. But in the meantime, all you have to do is understand that Russia wants peace because it doesn’t want its energy interests threatened, and the U.S. wants Assad out because it (and Saudi Arabia) wants to keep its foot on the throat of Iran.
Here’s the basic rundown:
On July 25, Iraq, Iran, and Syria signed a memorandum of understanding to build a pipeline running from the largest natural gas reservoir in the world (controlled by Iran and Qatar) through Iraq into Syria and Lebanon. The plan is to eventually extend the pipeline to Europe. The Wall Street Journal reported at the time:
“The oil ministers of Iraq, Iran and Syria Monday signed a preliminary agreement for a $10 billion natural-gas pipeline deal, the official Iranian News Agency IRNA and other Iranian media reported.
“The document was inked in the Assalouyeh industrial region, located in the southern province of Bushehr by Iranian oil minister Mohammad Aliabadi, Iraq’s oil minister Abdul Kareem Luaiby, and Syrian counterpart Sufian Alow, the agency said.”
Although bringing Middle Eastern gas into Europe is not in Russia’s best interests, the next best thing for Russia would be to have its hands all over the distribution of the gas. We’d guess that Gazprom, Russia’s state energy giant, would have a fair economic interest in any pipeline built through the region.
But monetizing Iran’s gas reserves and having euros flow in the billions to Iran doesn’t sit well with Saudi Arabia or the U.S. Neither wants a strengthening Persian force to reckon with in the future. Nor are they happy with Russia retaining dominance over the flow of gas into Europe.
In addition to the U.S. and Saudi Arabia having their noses out of joint, Turkey isn’t impressed with the pipeline proposal either. It wants to play the role as the transit nation for Middle Eastern gas to flow to Europe and thus cement its strategic importance in the region.
And as we mentioned yesterday, China is on the Russian side. It wants stability in the region (to ensure its own energy supplies) and sees Assad as a much more stable force than the unknown alternative. Right now the anti-Assad forces are a hodge-podge of extremists/terrorists/medieval psychos with perhaps a few genuine freedom fighters thrown in.
Any new ruling force to assemble from such a group would make Assad look like the Dalai Lama. So bringing down the regime without sending in ground troops would ensure carnage for the poor Syrian people, who are innocently caught up in this global geopolitical chess game.
Not that ground troops would really achieve anything. The massive U.S. military presence in Iraq seems to have bought the U.S. little influence. If we’re interpreting events correctly (and really, who knows when it comes to the Middle East) then it seems strange that the U.S. couldn’t prevent the Iraqis from agreeing to the pipeline before it even got to Syria. Although the pipeline is apparently running through the Shiite (and thus, Iran-friendly) part of Iraq, it just goes to show the lack of overall American influence there.
So much for 10 years of occupation and hundreds of billions of dollars spent. At least the oil boys and contractors got a few concessions out of it.
So where does this leave us?
Well, no war and no regime change would signal that the long-held Saudi/U.S. balance of power in the region is waning. It would also reflect a relative step up in power for Russia and Iran.
The other question you have to ask is why is the U.S. so keen to risk another deeply unpopular war in the region? The answer is that’s what “top dogs” do. When you’re the global superpower, you don’t let anyone threaten that position.
And this is where economics, the stock market and your wealth comes into it.
The U.S. as global superpower is made possible by the dollar being the world’s reserve currency. And supporting the dollar’s role as world’s reserve currency is the fact that global energy transactions take place through the dollar. Energy is what gives the U.S. dollar and America their power.
Russia and Iran have no real intention of maintaining the status quo. Longer term, neither does China. Saudi Arabia long ago decided to support the dollar by selling its oil for depreciating greenbacks, which is why the two are such strong allies.
So what you’re seeing in Syria is not another regional conflict. It’s a fight by the U.S. to maintain its top-dog status. But when dogs get in trouble, they’ll do anything to survive. They’ll even gnaw off their leg if they get it trapped.
So our guess is that the U.S. will continue to pick a fight and go for regime change. It will end up as a three-legged dog as a result, but fight it will. If it doesn’t, perhaps it’s already lame.
Original article posted here.