Tuesday, Aug 12, 2008
How the cheap money era led to the war in Georgia
MoneyWeek: How the cheap money era led to the war in Georgia
Russia has built its recent might on high fuel prices. But as the credit bubble pops and the economy slows down, oil prices are falling. Russia is flexing its muscles while it can...
Posted by damien @ 12:10 PM (1705 views) Add Comment
48 Comments
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1. Jayk said...
I look forward to the next article: "How the cheap money era led to the assassination of President Kennedy".
2. Stevie Dee said...
And the other article: "How cheap money enabled Elvis to be taken away by Aliens"
3. mountain goat said...
I am confused why the oil price hasn't reacted to this conflict. Unconfirmed reports of a hit on the Baku-Supsa pipeline by Russian jets shows the problem.
"The conflict in Georgia is placing grave doubt on the country's reliability as an energy corridor bringing Caspian crude to global oil markets."
This pipeline is an alternative to Russia's control of oil supplies to Europe, so they want to control it. The stakes are high indeed.
4. fahrenheit451 said...
Unfortunate but true.
I doubt if there will be a 3rd world war started in Georgia, but then we've already started it in another way. "Money has no friends", also true, of both the person who owns it and the commodity itself. True friends can be relied on to help in times of need. Now, just how many of your "friends" fall into that category.
As I've said before it's time to get back to family values, the bank of mum & dad (both financial & social), and a decent social life (not the TV with it's marvellous Technicolor images of halfway-round-the-world).
As for Russia, China, etc, they will soon find out that behaving like "spoilt brats" just will not cut-the-mustard in a modern society. Just what will they do if the rest of the world pulls its investments out anything unstable. Well for a start they will mobilise the army, use propaganda to start a war (even if by using espionage techniques they make it seem like the other side started it first)! Just pick the closest playground weakling, have a good old punch-up that you aren’t going to lose over a small toy that wasn't yours in the first place. Then stand back and admire your handiwork.
Works fine until mummy comes along and spanks your bottom, when big bully starts to cry about how unfair it was to pull to those investments, causing unemployment, civil unrest, and another revolution in the bedroom when daddy removes the bicycle and says "You're Grounded" !!!
This is going to get nasty, the "Cold War" (political subversion) has nothing on an Economic War (trade & investment), and a Military War is really just for children because there are no winners - ever.
It's about time the "Superpowers" behaved like adults. They need to work together a good old "good cop - bad cop" works in most cases, but sooner or later they have to form a wall and stand side by side, so that the playground bully knows that there is no escape.
5. harold said...
"Just what will [China] do if the rest of the world pulls its investments out anything unstable. Well for a start they will mobilise the army, use propaganda to start a war.."
...or they'll just threaten to dump all their £s and $s on the currency markets and collapse our economies (even more quickly than they are being collapsed already).
6. fahrenheit451 said...
Hi Mountain Goat ...
Isn’t it simple? The "Pipeline" is just a line on the map (or tube on the ground). Just how difficult will it be for the line to be drawn in a completely different direction? There are no winners from this conflict, short-term moral boost to one side in some remote office that is a completely safe tree-house miles away, and misery to all the local people in the area affected. It's time to spank somebody’s bottom !!!
7. fahrenheit451 said...
Hi Harold ...
Inflation will soon devalue those £ & $ assets. Then it's back to the good old basics of paying off your loans before buying that expensive new car that you don't really need anyway.
8. Dave The Dog said...
#4 from Mountain Goat
150,000 barrels a day is really chicken feed in terms of world supply so that's why it isn't moving the crude price . . . world consumption is approx 85 million barrels a day.
It would be a disaster for BP though . . .
9. Stevie Dee said...
Precisely, you would think the if the "Russians were coming", and the importance of Baku, the pipeline , you would think this would create or promote a spike. That is why I said yesterday about Russia spoiling the party or joining the pantomime. I believe if Russia were to take over, I believe oil production would in fact increase, gasprom, etc. But there would be more power for the Russians.
10. techieman said...
MG - 200DMA and 62% Fib are around $110 [Basis Light Crude spot]. The fact is the strength of the dollar and the technical position is more of a determinant (if this had happened when oil was going up you would have had a bull spike rather than a shoulder shrug). RSI isnt oversold so if the 200 DMA doesnt hold then we could have a downward spike before we start to make a more serious upmove. Not sure we want to discuss the yellow stuff at the moment!
Re my sale of US @ 2.03 looks like you are right i was a bit premature to get myself stopped (albeit with a 4 cent profit) at 1.99 - but hey thats the name of the game. Break of 1.94 was significant.
11. debtfree said...
"Russia has appalling social problems including high levels of alcoholism, HIV infection and suicide"
“It’s not going to break the Russian economy, but war is bad for investor sentiment.”
So America doesn't have any of these war and drug problems ?
What about New Zealand ? - they have one of the highest drug, theft and pregnancy problems in the world and the UK is also one of the highest in Europe.
There is no mention of Australia either, who has enjoyed the commodities boom, surely they will be going down the pan if this logic was true.
This is complete denial that Russia, Brazil, China and India are emerging economies and will overtake the west.
Russia invaded Georgia because they know the US is too weak to do anything about it. They do not want strategic points into the middle east going pro west and nor do they want defence missile systems on their doorstep.
The Russians have sent a clear message to the Middle East and its one that the US will be hobbling back in defeat.
Didn't the Americans fly Georgian troops home only for the Russians to bomb the runway ?
12. mountain goat said...
TM thanks for analysis. $ strength blasting all sorts of assumptions and supports away at the moment. Decided I am tentatively buying yellow stuff (cold sweat in this plunge) at $800 support but if $ strength persists beyond August this could be a big correction rather than blow-off. Good for the overall long term yellow bull tho because it was over-bought in spring as you correctly judged.
13. montesquieu said...
highly relevant ;)
http://www.thedailymash.co.uk/news/international/russia-evil-after-all--200808111159/
14. beartil2010 said...
Yes I am a bit concerned about the $ strength - it has exceeded what I thought it would manage, and doesn't seem to have any foundation. I can't see this persisting, but if the fed, the us govt and the banks keep on lying enough people might believe that there aren't any problems for some time - right up until their consumer figures really start to plummet!
I am hoping for $ support I bought at $940 for medium term and expect it to go back up... sitting on loss at the mo but it is medium term so not worried - yet
15. sold 2 rent 1 said...
techieman,
"Not sure we want to discuss the yellow stuff at the moment!"
I have a few thoughts.
I am hoping that the temporary support for oil at $110 will also be the support for gold (at whatever level that may be).
This is a truly fantastic time to buy gold stocks.
After some consolidation in this area we should start to see the gold/oil ratio head towards 10.
I think comparing gold stocks now to the Nasdaq in Oct 1998 after the LTCM crash is fair.
The mania in gold stocks (not gold) should peak in spring 2010 (18 months time) - a bit like the Nasdaq peaking in spring 2000 (18 months after LTCM)
The mania in physical gold won't be until 2011 (but that is a different story altogether)
16. Ah-so said...
Debtfree - The BRIC countries are not going to overtake the West. A fashionable acronym and a dislike of capitalism is not enough. China is overtaking is size of its total size (rather than personal wealth), but it will be a long time before any overtake the US or the EU. The other countries are a long way from making a serious challenge to any of the established countries.
As you are interested in comparing Russia and America:
Life expectancy
Russia 73 years
USA: 81 years
Suicide:
Russia 2nd in world - 74 per 100,000
So best off being in the USA rather than Russia.
17. sold 2 rent 1 said...
Also,
Proof that gold stocks can rise during a USD bull (check out May-Nov 2005)
The US$ and the Gold Sector
http://www.safehaven.com/article-10969.htm
18. sold 2 rent 1 said...
This chart was created before yesterday's plunge
19. mountain goat said...
S2R trouble with gold stocks is that they are very exposed to oil prices. However, oil price will crash in the deflation you expecting in 2011. Anyway, I am switching partially to leveraged gold ETF, but that's only for those who can stomach "paper".
20. sold 2 rent 1 said...
mountain goat,
"trouble with gold stocks is that they are very exposed to oil prices"
Oil is going down and down, with the final capitulation being the end of "free energy" suppression (possibly around early 2010)
"Anyway, I am switching partially to leveraged gold ETF, but that's only for those who can stomach "paper"."
Thats OK up until summer 2010, then get the physical stuff under your bed.
21. drewster said...
I hope all those countries in Russia's sphere of influence will finally stop voting for them in the Eurovision Song Contest :)
22. beartil2010 said...
Dave the Dog:
The 1,770km (1,100 miles) Baku-Tbilisi-Ceyhan pipeline, which entered service only last year, pumps up to 1 million barrels of oil per day from Baku in Azerbaijan to Yumurtalik, Turkey, where it is loaded on to supertankers for delivery to Europe and the US. Around 249km of the route passes through Georgia, with parts running only 55km from South Ossetia.
23. jack c said...
BP has today shut 2 of its pipelines in the area whilst another was closed last week due to a fire.
24. beartil2010 said...
Whilst I don't trust the Russians, I thought it peculiar that Georgia would want to take them on.
Unsurprisingly, Georgia are heavily US backed, with hundreds of millions of $ of US weapons, US military training, financial support, US supporting them in joining NATO; why? To get access to the oil in the region without Russia's influence.
Back to the same old story - US warmongering.
The sooner we are all using non-fossil-fuel cars and power the better.
25. Stevie Dee said...
Guys, two points: Look at the Sterling Crisis of the 1980's when Maggie had to go cap in hand to the Sultan of Brunei. I remember this time well, as when visiting the American PX on a daily basis, root beer, Swanson TV dinners, and the Kool Aid, it was fascinating to see how quickly the dollar strengthened. I think this is when they stitched up the Arabs, oil slumped and so did gold from recollection.
Read an interesting article this morning by some guy called Stan Goff: http://www.fromthewilderness.com/free/ww3/102804_todays_imperialism.shtml
My point is this: Kazakhstan has massive gas reserves, and with the problems of Ukraine, I believe the EU think that by using or bypassing the Russians through a "free thinking" or "independent" Georgia - Turkey they can avert a gas shortage or fuel shortage in the event the Russians decide to turn off the taps. This little incident indicates that this is an oversight and secondly the situation is interferring with the Iranian impasse vis-a-vis nuclear electricity generation and thus energy self-sufficiency without the massive tax burden or energy being used as a tool to control the population. Or is it a distraction? Who knows?
At the moment it is fascinating to watch the gold and oil slide (commodities) and seeing both the DJIA rise and the strengthening of the Dollar. But as I view it, the DJIA seems to be being controlled, as in not too "heavy rise" as to create a bubble (artificial). And meanwhile slowly letting commodities reduce in value. Think of the DJIA as a pressure cooker and the Dollar as a let off valve, used ocassional to keep things controlled.
But I personally believe S2R1 about gold, next year or so, gold is worth holding, just as a back-up. And the other thing is Google Shares, one or two if you are poor. lol But also stock up on food.
Something I believe is going to happen, things are going to change, the consequences, well we can only guess.
Just my thoughts and ramblings.. but no conspiracy theories.
26. Stevie Dee said...
Lightbulb moment: If the Israelis or the US do over Iranians as discussed, then surely it will be a race to Tehran because of the probable vacuum created (look at what we are seeing in the media vis-a-vis Shashkebabvili and Russia wanting rid), if the attack were to be great enough surely this would bring about th same sort of demands from both the US and the Israelis. So as said before "have the Russians come to spoil the party or join the pantomime?" or is the answer both?
27. James said...
s2r1 - why didn't your precious Calleman model see this coming? Because it's junk?
As for why the oil price hasn't responded - the pipeline was out of service. Bombing an out of order pipeline makes little difference to the oil price!
28. techieman said...
Hey S2R1 - The HUI is as the chart shows a H&S top - this was pointed out to Mountain Goat the other day by yours truly. As the chart shows i would agree with the strong support (although the best trade from my "short termism" standpoint is a short on the break of the neckline, with short covering near the strong support. However after that a new right shoulder could form (i.e. the "False Top" becomes the left shoulder). The long position therefore should (in my view) only be taken with confirmation that the Bigger H&S pattern fails. Thats my taking out the middle of a move theory rather than bottom fishing. Having said that i did say to MG that if i had no Gold i would be a scale down buyer from 850. so i would probably have been (had i been quick enough) +@ 850 and +@810. I would probably have dipped my toe in @850 and bought prob 1.5X @ 810.
Yes you are right - a move in Gold can be counter to a move in the USD, but I still maintain that at THE MOMENT that is a determinant (and i know it opposes your view - so again we will just disagree),
Incidentially the £/$ also shows a H&S top so that the measuring target shows low 180s before proper support kicks in. I realise you in particular are not interested in backing a Fiat Brava against a Fiat Uno (sorry just trying to raise a smile) but thats my view (and i feel pretty dumb for getting out of those Greenbacks v. GBP).
29. Stevie Dee said...
@27, before we reached $147 on oil... it only took a gust of wind to push up prices..
30. techieman said...
James are you getting your "?" mixed up with your "!" ? or is that !.
Anyway its good to see you posting, i think the armstrong model does have some relevance although i think one shouldnt curve fit the events to it, otherwise its not much use going forward. As for the Mayan stuff, well its in my interesting but not very actionable file. ~As i understand things though the Days and nights get shorter and shorter so we should be able to evaluate it soon and then, you never know, S2r1 may be reinstated as a superhero!
31. little professor said...
http://en.wikipedia.org/wiki/List_of_countries_by_foreign_exchange_reserves
Russia only has around $600bn of foreign reserves.
32. rotten tomato said...
@beartil2010
You are quite right about the US backing for Georgia.
Please find here an interesting site detailing Reuters' fake "Russian war crimes" photos, nicely staged in Georgia, as well as other Western media omissions and outright lies. If you excuse the bad English, the rest of the content is pretty much easily digestible and understandable.
http://war.georgia.su/news.htm
From my point of view, the problem is not only that the West has missed a golden opportunity after the Cold War ended to achieve global growth through the development of much needed joint infrastructural projects linking Europe with the East, choosing instead a modern day from of slavery called globalization. This practice as we can see here in the West now, creates debt in our economies, as we contract loans to buy cheap goods from China and elsewhere, while at the same time, the labour which produces those goods is not rewarded a reasonable price for their efforts, and thus the empoverishment is doubled. The only winners are the middle men, the govenments exacting tariffs from the trade and the institutions issuing loans. The toy is now breaking and we will more clearly see the "rewards" of this short sighted system in the next few short years.
The West is the real spoiled brat in my personal opinion, not the Russians, Chinese or other nations. After the Cold War, it is we who have kept a 1950's mentality vs. the Russians and others. I can't see how we can lecture Russia on their actions in South Ossetia, when it was merely reacting to an attack. Rather we should ask the question of what did Condolleezza Rice (in Georgia 1 week before the Georgians attacked), George Bush, or the British top official promise Saakashvili (the Georgian president)? Was it, then, a coincidence, that Britain's Ambassador to Georgia was in South Ossetia on August 6, where he was told by South Ossetia President Eduard Kokoity, that they had irrefutable evidence that the Saakashvili regime in Georgia planned large-scale military action against South Ossetia?
Besides the confrontational mentality against the Russians and Easterners in general, we must ask ourselves, if it is right that we still have a very much colonial attitude to them, maybe not we as common people, but our leaders certainly seem to!
If we can move beyond these obstacles, then there will be real progress and peace to come, and the price of gas may well come down too (tenuous link to HPC ;-) ). If our leaders insist in meddling in other countries' affairs, and also with their policies of exploitation and locust like destruction of other countries's economies, so that our own parasitical system may survive, then the outcome will not be rosy.
Russia knows that at the moment the West is in full denial mode, and is already three steps ahead of us, having factored this in their calculations and foreign policy.
Finally, those preaching the destruction of the Russian and Chinese economies may receive a big surprise over the coming years, as both countries are doing precisely what is needed to get their systems groiwing internally through high technology investments. Look at the massive investments they are making in the field of nuclear power generation ( and no, Uranium is not about to run out in the world ). While we in the West are struggling to build 2 nuclear power stations in the US, none in Germany, and fortunately Italy is returning to the nuclear fold, but 30 years too late! In fact the West is going bacward to unreliable 19th century technology of windmills for power generation - or the photovoltaic, which does not work at night when electricity is mostly needed, has a pathetic energy power density, and a cost which is too high for the average household! It will be fun watching how people will be able to afford the much touted pv white elephant as our Western economies succumb to the massive leveraged debts we have incurred.
Finally, as far as the high ground of democracy is concerned, I, as a Westerner would not like to jump on that pedestal either. Some examples?:
1. Britain criticized China for squashing democratic government in Hong Kong when it was taken back under Chinese control. Conveniently forgetting that it had itself denied any democratic form of government to its colony for over 100 years (I think) just until before the handover to the Chinese - how convenient.
2. In Italy (my country), our government has not given us any voice over approving the Lisbon Treaty, which effectively removes the authority of individual states and hands it over to a faceless EU bureaucracy!
3. Independence was ok for Kosovo, but not for the Ossetians and the Abkhazians, who are not ethnically Georgians?
33. Panda said...
House price abberations transitioning to war and murder.
Yes; that seems about right.
34. plato said...
Good post damien
This whole incident is the result of the West once again getting too big for their boots. Taking advantage of the countries created through the break-up of the USSR. Planting dreams of power and wealth in their newly formed naive independence.
What on earth did this complete fool Saakashvili attack Russian citizens for? What was he promised? Did he really believe the hype that the West is so powerful and the Russians would not react because of this? I think we all know the answers, just can't prove them once again.
Why is there so little respect toward the Russians? Only fools can justify this attitude. We all know what happens to fools, so it is about time we showed the Russians the respect they are owed and deserve.
We have showed them once again that we are utterly untrustworthy, but they were ready and waiting,easily handling this bravado.
Now let's see what the big,strong West does. It makes me laugh when I see lists of Russian armoury in the media. As if we know what they've got --------- fools! Like we can predict the weather? Get real this is not Holywood. Such Greed can only lead us to doom.
35. Stevie Dee said...
Plato, speaking to ex-forces people, the Russians have the respect that they did not continue further... they have handled themselves honourably. Like all great army's like our own armed services, in the main, well revered and respected. And as for what the Russians have.. what is it? 1,200 nuclear warheads. And everyone was worried about rogue states getting these weapons. No I tend to agree with your sentiments and that of others.. It is like poking a stick at the dog behind a fence and then realising there is a actually a whole big enough for the dog to come through. I was thinking Iran earlier.. because I can't understand why Georgia in there right mind would even consider kicking off against the Ossetians knowing this would inflame the Russians.
36. theboltonfury said...
all i'll say is that it's lucky i don't heat my house with gas. Instead, we use an oil powered aga, so that's alright then...... £2500 a pop every 12 months. £1300 2 years ago
either way, it's all just one big headache
37. layers said...
From middle east times:
"The small oil-rich emirate of Kuwait – situated between Iraq, Iran and an un-enviable geographic hard place on the northern end of the Persian Gulf – has reportedly activated its "Emergency War Plan" as a massive U.S. and European armada is reported heading for the region.
Coming on the heels of Operation Brimstone just a week ago that saw U.S., British and French naval forces participate in war games in the Atlantic Ocean, the object of which was to practice enforcing an eventual blockade on Iran, the joint task force is now headed for the Gulf and what could easily turn into a major confrontation with Iran."
(http://www.metimes.com/International/2008/08/11/special_report_kuwait_readying_for_war_in_gulf/7724/)
This could simply be a smoke screen to keep Russia occupied. If one of these ships gets 'bombed' then, well, all bets are off. Now it's getting scary.
38. layers said...
I should add that as this was posted on rense, then it could be BS too. "More twists and turns than a twisty-turny thing!" ;-)
39. plato said...
Interesting article : http://europebusines.blogspot.com/2008/08/080808-beginning-of-summer-olympics-and.html
40. mark wadsworth said...
Aww. I thought somebody might develop the theme "How cheap money helped Kennedy's Assassin be reincarnated as Elvis Presley. On the Moon". Or something.
41. sold out said...
rotten tomato@5.32
thanks for the link into the russia today news clips,good to see the other sides view and contrast it with our biased media distortion.
Agree 100%,with your views on the west's hypocricy and attitude to Russia and the east in general.I think the spoilt brat is in for a big shock now that the "nice" decade is over.
42. rotten tomato said...
Thank you Sold Out
The choice is entirely ours of course. And that choice is to either continue as has been done for centuries and gloss over financial problems, preferring to start ever more dangerous wars as diversions, so that our financial elites can pick over the remains when the fighting is done. Or we can pressure our governments to choose a different path, that of bi-lateral agreements with sovereign nations on massive infrastructure projects (such as rail and road links) from Berlin to Vladivostok, Beijing and New Dehli. A Bering Strait tunnel is already in advanced planning stages, if only the US would agree to its construction on the other side. Abramovich (yes Chelsea's boss) is already purchasing the biggest tunneling machine in the world to start digging from the Russian side.
These types of projects are what a growing world population needs, not debt-aid, wars and starvation. We have it within us to achieve all this, if only we can pressure our politicians into changing their colonial political mentality into one of co-operation for the mutual benefit of countries. I truly believe that if such co-operation were to be truly enacted, with agreed long term state credit creation say at 1 to 2 % p.a. specifically for these infrastructure projects, the benefits would be enormous. From real engineering job creation (not only service economy), to furthering the world's scientific progress. Of course such steps require that speculative banking be abandoned, or at least drastically reduced, and this can be done by having a 2 tier interest rate system, the above mentioned low rates for long term infrastructure development, and say a 5% interest rate (or as inflation suggests) for ordinary savings accounts/business transactions. And of course forbidding banks which have played with people's savings and pensions on the derivatives casino from ever doing so again. If they go bust, so be it, the government should guarantee the savings of people by putting these institutions into bankruptcy reorganization, nothing more. The speculative paper debts should be written off, nothing else will suffice, this is because the leveraged speculative debt is so huge compared to world gnp, that any attempt to pay it off will ensue with an unbearable and literally genocidal depression of the world's economies (as is being attempted now) - any such bailout attempts will bring down the financial and the real economy in turn.
We should all really pressure our respective governments to build infrastructure, not save the speculators.
Putting these ideas into action will also short-circuit the usual self feeding cycle of job culls which usually follow any downturn, and this will be a good side effect. The housing market will in any case fall to reasonable level prices.
43. layers said...
@42 Rotten Tomato - Oh what a beautiful World we would then have! I totally agree with you, but I believe that our pathocratic leaders are only self interested and therefore, have no desire, nor empathy for 'everyone' to share a peaceful, and full life that benefits society as a whole. Basically there are too many psychopaths at the top of the pyramid ruling the rest of us, and thus, want to maintain their status-quo: which has been extremely profitable for them over the millennia.
The world wont change until we wake up to this fact. Read ‘Political Ponerology’ for a scientific study of the nature of evil used for political gain.
44. malct said...
good to see people addressing the real deep issues and asking searching questions
45. rotten tomato said...
@ layers
I know, I am an idealist at heart! I will look into the book you suggested. Agree 100% on the psychopaths who run us.
46. malct said...
rotten tom - without actually buying the book (which is heavy going) here's a start at the heart, the people who made its publication possible
http://ponerology.blogspot.com/2005/12/political-ponerology-science-on-nature.html
you may also want to take a cautious or even sceptical look into the Canadian film/book "The Corporation"
47. malct said...
Danger to British and Global Economy from possible closure of Strait of Hormuz
Further to comments above ref. rumours of massive fleet movements, here is the most reliable source I've been able to find for now. It is a respected Israeli news outlet - http://www.debka.com/headline.php?hid=5499
Three major US naval strike forces due this week in Persian Gulf
DEBKAfile Special Report
August 12, 2008, 10:04 PM (GMT+02:00)
New America armada around Iran
DEBKAfile’s military sources note that the arrival of the three new American flotillas will raise to five the number of US strike forces in Middle East waters – an unprecedented build-up since the crisis erupted over Iran’s nuclear program.
This vast naval and air strength consists of more than 40 carriers, warships and submarines, some of the last nuclear-armed, opposite the Islamic Republic, a concentration last seen just before the US-led invasion of Iraq in 2003.
Our military sources postulate five objects of this show of American muscle:
1. The US, aided also by France, Britain and Canada, is finalizing preparations for a partial naval blockade to deny Iran imports of benzene and other refined oil products. This action would indicate that the Bush administration had thrown in the towel on stiff United Nations sanctions and decided to take matters in its own hands.
2. Iran, which imports 40 percent of its refined fuel products from Gulf neighbors, will retaliate for the embargo by shutting the Strait of Hormuz oil route chokepoint, in which case the US naval and air force stand ready to reopen the Strait and fight back any Iranian attempt to break through the blockade.
3. Washington is deploying forces as back-up for a possible Israeli military attack on Iran’s nuclear installations.
4. A potential rush of events in which a US-led blockade, Israeli attack and Iranian reprisals pile up in a very short time and precipitate a major military crisis.
5. While a massive deployment of this nature calls for long planning, its occurrence at this time cannot be divorced from the flare-up of the Caucasian war between Russia and Georgia. While Russia has strengthened its stake in Caspian oil resources by its overwhelming military intervention against Georgia, the Americans are investing might in defending the primary Persian Gulf oil sources of the West and the Far East.
DEBKAfile’s military sources name the three US strike forces en route to the Gulf as the USS Theodore Roosevelt , the USS Ronald Reagan and the USS Iwo Jima . Already in place are the USS Abraham Lincoln in the Arabian Sea opposite Iranian shores and the USS Peleliu which is cruising in the Red Sea and Gulf of Aden.
malct comment - for wanna be optimists, the above doesn't mention that this may simply be a shift handover. Has anyone come up with a 'what if' chart or set of charts for what happens to the economy as and when the strait is closed? How do you present 'OH H0£y Ssh!t' in a graph?
48. Stevie Dee said...
Nuts!!!!! But the situation seems to be making more sense now, and with what Bush said regarding aid to Georgia, sort of saying to the Russians "Stay Out or Stand Back", and this Saaskebabvilli character, who resembles a mafioso puppet with the latest pictures seen with shades and a flack-jacket (very hollywood). Amazing to watch the propoganda in 2008. Failed Armada's for reference. Kubliah Khan's attempt on Japan & of course the not so Great Spanish Armada. Famous winning Armada's, the Falklands of course! D-Day Landings!