The occurrence of the sub prime crisis and oil price hike at the same time defies conventional theory and logic
Things wouldn’t have been as bad, had the US not failed to invade Iran and finish off the remaining threats to its dollar hegemony – as Iran too has been planning to trade in the euro. But the US found the Iranian resolve a bit too tough to handle. Further, its anti ballistic systems, for all their hype, might be good for outdated Iraqi Scuds, but not for Iranian systems.
A control over Iran would have made the US control on global oil trinity absolute. What happened instead was the sub-prime crisis leading to the losses of more than a trillion dollars (IMF data) for US financial giants, with many on the verge of bankruptcy. A closer look at the chronology of the oil price hike in the last one year reveals that it has gone hand in hand with the sub prime crisis. Rationality would demand that a near $1 trillion loss in sub prime would invariably mean economic slowdown and the eventual fall in the price of oil as demand recedes. But that didn’t happen. And incidentally, some of the biggest losers in the sub-prime crisis, like CitiGroup, Morgan Stanley, Merrill Lynch and JP Morgan are also some of the biggest players in the oil futures markets. Noted analyst Michel Morkos writes in Dar Al-Hayat, “Oil price speculations are a security valve for financial institutions, speculators and oil companies even. Through long-term deals, speculators cannot but pass through a financial institution, which opens credits, turning buying and selling into book activities. Hence, profits go to credit-opening institutions.”
He further states, “Hence, we cannot ignore daily heated speculations of oil, led by major financial institutions, aiming at compensating their losses.” It’s quite evident that all this is happening in open political connivance with Bush and Saudi Arabia, who are quite content waltzing around while their cohorts loot the world. And if the world smells something fishy anytime in the future, be sure, they’ll just blame it all on Bush’s bad breath! And all he requires for resolving that is mint... a money mint for Chrissake!
Things wouldn’t have been as bad, had the US not failed to invade Iran and finish off the remaining threats to its dollar hegemony – as Iran too has been planning to trade in the euro. But the US found the Iranian resolve a bit too tough to handle. Further, its anti ballistic systems, for all their hype, might be good for outdated Iraqi Scuds, but not for Iranian systems.
A control over Iran would have made the US control on global oil trinity absolute. What happened instead was the sub-prime crisis leading to the losses of more than a trillion dollars (IMF data) for US financial giants, with many on the verge of bankruptcy. A closer look at the chronology of the oil price hike in the last one year reveals that it has gone hand in hand with the sub prime crisis. Rationality would demand that a near $1 trillion loss in sub prime would invariably mean economic slowdown and the eventual fall in the price of oil as demand recedes. But that didn’t happen. And incidentally, some of the biggest losers in the sub-prime crisis, like CitiGroup, Morgan Stanley, Merrill Lynch and JP Morgan are also some of the biggest players in the oil futures markets. Noted analyst Michel Morkos writes in Dar Al-Hayat, “Oil price speculations are a security valve for financial institutions, speculators and oil companies even. Through long-term deals, speculators cannot but pass through a financial institution, which opens credits, turning buying and selling into book activities. Hence, profits go to credit-opening institutions.”
He further states, “Hence, we cannot ignore daily heated speculations of oil, led by major financial institutions, aiming at compensating their losses.” It’s quite evident that all this is happening in open political connivance with Bush and Saudi Arabia, who are quite content waltzing around while their cohorts loot the world. And if the world smells something fishy anytime in the future, be sure, they’ll just blame it all on Bush’s bad breath! And all he requires for resolving that is mint... a money mint for Chrissake!
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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