Wednesday, January 13, 2016

saudi and iran conflict


THE SAUDI IRAN CONFLICT

I’m pretty sure most of you are either indifferent to or begrudgingly aware of geopolitics.  I love the stuff.  All you need to know to appreciate it, in this instance, is that this crap can crash your economy.  Good bye well paying job, goodbye trophy wife with silicon brains, goodbye retirement.  Hell, worse case scenario, goodbye to your rectal virginity.  Prior to the last week, Saudi Arabian oil, as important to the functioning of the global industrial/information economy as it can get, had two fear factors going for it.  We would lose control over its government to another super power, or terrorists would, in a fit of fundamentalist whatever, blow up the refineries or wells.  Well, as it turns out that wasn’t much of a big deal.  If you believe in CIA opium and crack cocaine supply lines, you could say that most terrorist organizations have been/are controlled by nation state intelligence groups.  It clearly wasn’t in nation states interests at the time of the KGB or the CIA to diminish the oil supply.  And our petrodollar while sickly and on life support, isn’t dead just yet.  But now Iran and Saudi Arabia are in a near state of war which could go hot, and the old rules and motivations don’t apply.

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I’m not hollering from the rooftops that the end is nigh and we could all die, nor am I giving advice such as to cash in your retirement fund ( although that wouldn’t be a bad idea anyway as any digits under the bankers control can disappear in a bank holiday ).  What I am saying is that this is a perfect example as to why the optimists hoping for another year of the same ( more gradual getting slightly worse ) might be blowing smoke up your ass.  Saudi Arabia executed some Shitte religious dude, which got the Iranians pissed off, a Saudi embassy was arsened and someone severed diplomatic ties.  It seems that the major oil region in Saudi is a Shitte majority population area.  The Saudi royals are Sunni.  Iran is Shitte.  Sunni Saudi’s cracked down on dissent in the region of the oil production to forestall more trouble.  This could be just another minor tiff, or not. 

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Let’s visit our smiling little Korean gentlemen.  It seems they just detonated a nuclear weapon.  The US response?  Obammy went golfing.  Iran might, in theory, also have some nuclear weapons.  If the US won’t confront North Korea, both because it has Chinese friends and nukes, will we confront Iran, with nukes and with Russian friends?  My Magic 8-Ball says “not too bloody likely”.  So, if Iran need not fear the US, and they and the Saudi’s get into a pushing match ( which the Saudi’s might not have a choice in as they are in a bit of a tight spot financially and politically ), what is to stop Iran from using conventional ordinance on Saudi oil production?  They aren’t a terrorist group with a white Toyota pick-up truck and a few Kalashnikovs.  They have a nice military to play with ( the Saudi’s are using theirs as occupational forces.  Not all, but some of their forces are nevertheless busy elsewhere ).  Will their Russian allies really object to the price of oil quadrupling ( and remember, Iran has oil to sell also.  China might just occupy the Saudi war zone and get its oil supply as part of an alliance with Russia and Iran )?  Take out the Saudi 10% and oil goes price ballistic and supply backlogs ( and no, this wouldn‘t save our fracking industry.  Our economy tanks first from the oil exports drying up and you need lots of financing to frack ). 

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Why would the Russians not object now when the KGB wasn’t interested in controlling the middle eastern oil?  Because back then the US could afford to fight for the oil ( we were mostly petroleum self sufficient strategically.  The disruption was all financial.  Now, we don’t have the energy independence to get into a prolonged war [ can anyone say “Axis powers”? ]).  Now, fifteen years after we tried to stop the threat to the petrodollar system, it is quite evident we have lost the ability to make a difference in the oil patch ( in a few months, the US weapons systems were demonstrated to be inefficient compared to the Eastern Powers.  Oops! If the American people were perceptive of our military impotence there would be a bit less flag waving.  I have a son over there and if SHTF because we don’t gracelessly backslide and slink home, I fear the worst ).

None of this necessarily will come to pass.  But Black Swans seem to be falling on our heads right now.  Pay attention.

END

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15 comments:

  1. I'm writing this while listening to Disturbed's The Vengeful One and it puts me in the mood for wanting to kick some ass, but I HATE war, having played a soldier on TV and the ME is a crap hole, that we should just let sink to Hell. I digress. My Son is slated for deployment soon, and thank God (Really) that my Son in law is done with that crap for a couple years. Anyhow I don't see how it ends well for the House of Saud. Running out of money to keep the Wahhabis quiet, and pumping like there is no tomorrow from THE oldest field over there. I think the jig is about up for them. I foresee Royal heads rolling. Of course the smart ones have compounds elsewhere, including in the U.S. and will get out of dodge. Inevitably timing the bug out is problematic, but many will make it. The rest will called Martyrs and sacrificed to the Radical Jihadists.

    Iran can and I think will set some oil fields and refineries to burning and there won't be much that we can do to stop it. As for retaliation, I believe the total destruction of their infrastructure in a week, will show that we do still have some teeth. Russia will bitch and moan and may even fly some combat air patrols over Iran, like they did in Korea and Nam, and have advisers, but will stay out of it. They don't want an official war with us. Putin has some balls for sure though and I may be dead wrong on this last bit of analysis.

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    1. Our military is totally dependent on oil, and imported oil at that. How much reserve do we have? Enough to mobilize, then attack, then win? We are certainly NOT completely impotent militarily, but neither are we all powerful as we think we are.

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    2. I agree, but we do have enough jet fuel to fly many missions to take out infrastructure. Take out power plants, water purification and go home. The Iranian people would be pissed at us, but they also aren't real happy with the current Ayatollah and his cronies, and may just chop some domestic heads. Depends on how full the rulers have their hands full. I suspect very full if there is no grid.

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  2. I'm glad you mentioned North Korea. One bloke (Burning Platform?) put forward the idea that if Fat Boy gets too silly...the Chinese may invade, topple him and put in a puppet regime. I reckon the idea is not so-o-o illogical. It surely can't suit the Chinese and the Russians that Kim keeps needlessly provoking the US. My (slightly paranoid) take on the present geopolitical situation is that the Chinese and Russians will go to enormous effort NOT to look for a fight with the US. Rather, they're prepared to wait, until the US collapses without any "prodding".

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  3. "no, this wouldn‘t save our fracking industry. Our economy tanks first from the oil exports drying up and you need lots of financing to frack"

    Pardon my ignorance High Haired One but hasn't much of this financing already taken place? The wells and rigs that are brought back online could easily finance even more wells and rigs without additional help from the bankers.

    -Novice

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    1. It is my belief that an oil disruption so completely freezes the US economy that no one finances anything. Not just the fracking fields but all their suppliers of equipment. Their transportation, etc.

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  4. About the only not in hand investment I would make beyond the company matching (aka instant doubling of money) would be toward the green growing sort- aka the legal marijuana growing and dispenser related businesses.
    Other wise all investments should be in hand and defensible (you don't really own it if you cant defend and control it.)
    As a vaguely related aside, the Playboy Mansion is up for sell should someone win the lottery and want to live with Hugh Hefner. (part of the sell terms includes letting Hugh live there the rest of his life, I guess he cant get a reverse mortgage instead).

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    1. Nah, apparently he would have his own wing of the mansion you get the rest and your guests get to hobnob with the former famous playboy himself...

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  5. Jim north Korea and Iran are playing their part at prodding US. China and Russia want to see what actions we respond to and how. China and Russia are using these pawns to Spread us thin. We bankrupted Russia in the 80s they are just using our playbook today. If the House of Saud falls we go with it.

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    1. Good point, I didn't think of that. Of course, Iran is a regional power player in her own right. Yet we are still viewer her as the home of a bunch of religious kooks who storm embassy walls.

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  6. Having been in the same army group as that other James blog guy....my specialty delt with NK's capabilities.
    This latest test concerns me, as it easily could well have been an EMP hydrogen bomb test. The yield did indicate smaller...which indeed an EMP launch able might.
    Gov knows this well, me tinks....

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    1. Ouch, a deniable scapegoat if anyone gets tired of waiting for the US to crumble...

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    2. Hmmm, possibly...Do it to ourselves to reduce the hungry hordes and blame it on NK ?
      This I think, not beyond the elites game plan.

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    3. The Elites have wonderfully insane plans for us. Of course, they aren't as smart as they think they are, having set in motion their own downfall by squeezing too much profit out of the system to the point of global die-off ( lack of redundancy, pollution, nuclear proliferation, ad infinitum ). If we are all going to die, remember the Lamp Post List. Take the humpers out with us.

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