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Stratfor On Why Developments In Bahrain Are More Important Than Libya's

Tyler Durden's picture





 

Stratfor explains why the developments in Libya, while important, are materially less relevant from a macro perspective than those in smallish Bahrain:

While the world is focusing on the fighting in Libya, there is a much more profound development taking place in the Persian Gulf, particularly in the country of Bahrain, where the government is negotiating with the opposition. And the outcome of those negotiations will be far more geopolitically relevant and significant than the fighting that is taking place in Libya.

The reason why Bahrain is very important is because in any negotiation you have to have some give-and-take, and it’s likely that the Bahraini monarchy will have to give some concession to the opposition. And once that happens, it will lead to an empowerment of the opposition, 70 percent of which is Shia — 70 percent of the population of the country is Shia — and that has very large-scale implications for the region, particularly for Saudi Arabia and Kuwait. In Kuwait, the royal family and the legislature have been engaged in a tug of war for many years, and if the opposition forces within the Bahraini parliament achieve some sort of a concession from the government, that will embolden the Kuwaiti opposition forces to seek the same. And there is also the sectarian dynamic there in Kuwait, where some 30 percent of all Kuwaiti nationals — roughly about a million people — are of Shia sectarian background. And therefore, this development that is taking place or unfolding in Bahrain will have implications for Kuwait. Mind you, Kuwait is very important for the U.S. military operations in Iraq.

From the point of view of Saudi Arabia, an empowerment of the Shia in Bahrain will likely energize their own Shia population, which is concentrated in the eastern province, which is an oil-rich area not too far from the border with Bahrain. And this is coming at a time for the Saudis when they’re already in the process of impending succession because of the advanced ages of the top four leaders of the country, namely King Abdullah, Crown Prince Sultan, Second Deputy Prime Minister Prince Naif, and the governor of Riyadh, Prince Salman. And so, this couldn’t come at a worse time, and that’s why we see the Saudis engaged in announcing additional social spending packages; the latest one is in the range of $11 billion spending on housing, social benefits, trying to improve employment opportunities. In essence, the Saudis do not want to see anything that can happen in Bahrain spill over into their own country.

And it is for these reasons why this slow simmering situation in Bahrain is far more consequential than the outbreak of fighting between opposition and government forces in Libya.

And confirming that things in Saudi, very much contrary from the lies on CNBC, are getting very hot is an account from a source on the ground who observed a 1,000 person protest in Qatif. The reason: demands for the release of all Shia prisoners. More importantly this was not a social media organized event. If it had been, it would be far bigger...

 


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Thu, 02/24/2011 - 18:08 | Link to Comment DoChenRollingBearing
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Things are happening faster every day...

Prepare!

Thu, 02/24/2011 - 18:12 | Link to Comment Sudden Debt
Sudden Debt's picture

we are watching history in the making without really realizing it.

I got a bad feeling about all of this...

 

Thu, 02/24/2011 - 18:17 | Link to Comment Gully Foyle
Gully Foyle's picture

Sudden Debt

"I got a bad feeling about all of this..."

Rumack: Elaine, you're a member of this crew. Can you face some unpleasant facts?
Elaine Dickinson: No.

Thu, 02/24/2011 - 19:39 | Link to Comment knukles
knukles's picture

Carving through the bad feeling I finally realized that what is transpiring about the globe is all of the same ilk, from the same well of human emotion....
Whether under freely elected, manipulated or dictatorial regimes, the populace are seeing on-line, real time the same frustrations and anger of their peers world wide.  The new Gutenberg press has advanced human societal evolution multifold.
Tired of being the beasts of burden to oligarchs, tired of being squeezed of every last shilling accompanied by actions veiled in platitudes and altruistic promises, lack of jobs and in most cases availability let alone escalating food and materials prices, experiencing dwindling freedoms as the ruling class itself sees no other options than to repress the anger, they identify.  Most in some form of empathy, the root unplaceable and obtuse, but there, present.  Clearly in residence. 
Granted, coming from extremely disparate quarters and conditions, reflective of  disparate opportunities and ideals, it is never the less the same chord being struck, world wide;

"I'm mad as hell and not going to take it anymore."

Strangely, perhaps both Orwell and Marx were right, as in prescient, not else as wrong, correct, or even good.  Simply, prescient.
Subsequent to such epiphany, the bad feeling morphs, becoming understandable and that in and of itself, comforting for the perplexity diminishes as the vision clears.
T'will be a long, arduous and socially wrenching journey, to be felt by generations.

Hope for the best, plan for the worst.

Thu, 02/24/2011 - 19:58 | Link to Comment ZerOhead
ZerOhead's picture

+1000

Had to read it twice to figure out what you were saying... ADHD syndrome thing!

 

"Hope for the best, plan for the worst."

People... do not get caught without a chair when the music finally stops. If nothing else buy a years worth of rice/pasta. Stuff lasts forever and we do not know what a potential global systemic collapse will do to a very complicated and vulnerable food supply chain.

Why risk it when life 'insurance' and 'peace of mind' is still cheap and available.

 

Just ask the Tunisians, Egyptians, Haitians....

Fri, 02/25/2011 - 02:22 | Link to Comment I Got Worms
I Got Worms's picture

Absolutely. I bought a year supply of food from efoodsdirect, to stash in the garage. Hope I never resort to eating it, but feels good knowing it's there. Well, I thought my wife was going to divorce me on the spot when that truck arrived and she figured out I'd spent 2 large on it. All I heard about was all the shit we coulda bought with 2000$, and what a whack job I was for buying two pallets of food. That was a year ago. Hell, it wouldn't surprise me if I find the need to become a freeze dried iron chef sometime this year.

Fri, 02/25/2011 - 08:13 | Link to Comment Cash_is_Trash
Cash_is_Trash's picture

Seems that increasing the American money supply cannot account for all the revolutions and protests in the ME.

I think and increase in Money Supply with millions of unemployed teenagers with raging hormones and shitty living conditions (as Gerald Celente mentions) is the cause of these protests.

Fri, 02/25/2011 - 13:56 | Link to Comment gregd2790
gregd2790's picture

Hang in there, my wife is giving me strange looks too, and I haven't stashed away nearly as much as you.  She (was brought up this way) tends to be a liberal on most issues and pretty much believes all our great leaders will keep us safe, warm and snug, the money comes out of thin air, and nothing bad will ever happen.... I've had to veil my purchases and preparations under the cover of other reasons... like, hey remember when we had that ice storm and power was knocked out for 3 days...?  She gives me a bit of grief and snide remarks when she finds out I stashed something away... her eyes went a bit wide a year ago when I bought a handgun (tho I've owned them in the past and have hunting rifles already)... I think she's kind of hook-line-and-sinker on the sheaple thought that you are some kind of flat-earther, sky is falling, conspiracy freak if you are taking steps to be prepared.... ...her family never locked their doors when she was growing up...like it could never be them that got burglarized.... nuff said...

Fri, 02/25/2011 - 00:28 | Link to Comment Freddie
Freddie's picture

I hope you are correct that it is the masses wanting to be free - I don't think that is the case in the ME.  I think this is what some want you to believe.  A newsletter nailed it over a year ago.  They talked about how the Shia (Iran) were going to reignite their battle with the Sunni (mainly Saudi Arabia) for the biggest prize in the world.  This war has been going on since 632 AD.  The Brits and 1950s/60s CIA did a better job of ME nation building by putting Saddam in place as a buffer.

The West preferred these somewhat secular megalomaniacs like Mubarak/Sadat, Saddam, Khadaffi and The Shah versus the mullahs in Iran.  Saddam's death and the new Iraq was the catalyst for the Shia to make their move.

If Bahrain falls them Saudi Arabia could fall but only about 20% of Saudis are Shia.  The slimy house of Saud will just have to fork out even more money to their welfare like populace.  Even though the Saudis make insane amounts of money - there is not enough money to make all of their subjects middle class to upper middle class.  The birth rate is high, the young population is big and they wan a bigger slice of the pie.

 

 

Fri, 02/25/2011 - 02:07 | Link to Comment StychoKiller
StychoKiller's picture

In addition, the intrawebz allows the have-nots to see just how good the haves are living on their sweat equity!

Fri, 02/25/2011 - 11:30 | Link to Comment gregd2790
gregd2790's picture

I like this post.  When you step back a little, you start to understand that what's going on is that people are fed up with their governments.  Doesn't matter what the principle type of economic system or type of government.... people are tired of being forced to do things they don't want to, all the while having freedoms taken away, or not having them in the first place.  Though capitalsim has given more prosperity and more freedom to more people than any other type of system, look how the govt in the US, from the Feds down to local levels, is being run by people who don't give a hoot what the majority wants...all the while taking more and more of their hard-earned prosperity away from them, "spreading the wealth" to those who haven't earned it and those who game the system, rich or poor, to steal from us who merely work and pay the taxes.  It will take longer for this to boil over in the US, as there are far too many people made content by chasing the latest tech-toy, following the latest Holywood 'news', and mindlessly believing what the mass media throws at them (and doesn't learn what they are omitting)....  Lots of people in the US have become greedy...here in Wisconsin we are watching how the powerful public employee unions are holding us taxpayers hostage, demanding we pay for benefits and "rights" to "bargain" for those pay and benefits when they have more benefits and pay than the people who are paying for them...that's just insane.  Democracies fall when people learn they can vote themselves more stuff.  Politicians eager to stay in power are more than happy to given them the stuff for their votes and campaign donations.  It wil take quite some time for the average taxpayer here to stand up and take control... and I fear it won't happen peacefully, meaning the military will have to adhere to it's top pledge of defending the Constitution (not the govt in power), and stand with the people.  Sadly, this wll all come to pass after I pass, my children and grandchildren bearing the burden.  And most of my children don't even see what's happening, having grown up in a education system promoting socialism and country-hating.... they will be victims of their own dreams...

Thu, 02/24/2011 - 18:17 | Link to Comment cougar_w
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There is no way to prepare for what might happen. Unless you mean to purify one's soul.

Thu, 02/24/2011 - 18:55 | Link to Comment downrodeo
downrodeo's picture

+1

and there's the rub. for almost all of us, the purification will only be possible in the flames of that which lies ahead. Sadly, there are no Buddhas 'round these parts...

Fri, 02/25/2011 - 02:07 | Link to Comment StychoKiller
StychoKiller's picture

If you meet the Buddha on the road, kill him!

In the mean time, alleviate some suffering.

Fri, 02/25/2011 - 13:13 | Link to Comment downrodeo
downrodeo's picture

/bow/

Thu, 02/24/2011 - 19:21 | Link to Comment walküre
walküre's picture

It's fucking winter.

My barn and pantry are almost empty!

Give me until fall please!

Fri, 02/25/2011 - 15:05 | Link to Comment sgt_doom
sgt_doom's picture

It's the 21st century....do you know where your king, billionaire dictator or bankster stooge leader is?????

Funny, it's like the same group are the majority-land owners who were the majority-land owners back in the year 1000.

Forensic economists estimate the Gadhafi family fortune between $80 billion to $130 billion --- as they've been skimming several billions off those oil revenues every year.

Libya should be the richest per-citizen country on the planet, yet it is one of the poorest.

It's the 21st century....do you know where your king, billionaire dictator or bankster stooge leader is?????

Thu, 02/24/2011 - 18:10 | Link to Comment HitTheFan
HitTheFan's picture

Go Shias!

Thu, 02/24/2011 - 18:09 | Link to Comment Sudden Debt
Sudden Debt's picture

Once socialisme is introduced, the economy goes down the drain.

 

Thu, 02/24/2011 - 18:10 | Link to Comment Gully Foyle
Gully Foyle's picture

Meanwhile

http://blog.redfin.com/blog/2011/02/redfin_now_showing_700_more_foreclos...

Redfin Now Showing 700% More Foreclosed Homes

Last night, we flipped the switch on a different data source that gives us a more complete picture of the number of foreclosed homes that are not yet listed for sale. This is a part of what a lot of people refer to as the shadow inventory — homes that have been foreclosed upon by the banks, but not yet processed and put back on the market. These are foreclosed homes that are still waiting in the wings.

The change we made yesterday increased our coverage of these pre-listed foreclosed homes from under 10,000 properties to more than 80,000. This change also provides a more complete picture of each individual home. For instance, we now show the auction price and date for many foreclosed homes — these are the results of failed auctions that have already taken place.

Thu, 02/24/2011 - 18:14 | Link to Comment Sudden Debt
Sudden Debt's picture

Expect BAC to nosedive back to 7$ real soon ;)

Thu, 02/24/2011 - 18:13 | Link to Comment SDRII
SDRII's picture

Two other things to watch:

1. US backed Hariri inquiry indictments while Iran ports - target Hez

2. Nigeria elections

Thu, 02/24/2011 - 18:14 | Link to Comment Joeman34
Joeman34's picture

The author makes a very important point.  The real show in the ME [Saudi Arabia] has not even begun yet...

Thu, 02/24/2011 - 19:08 | Link to Comment Arch Duke Ferdinand
Arch Duke Ferdinand's picture

""The author makes a very important point.  The real show in the ME [Saudi Arabia] has not even begun yet...""

....Within a month we will see it is all about Food and Water for North Africa, and right cross Asia to China.

...Billions and billions of people starving

...Wars between Nations

...Gold/Oil/Silver will be sold for food!

Which makes Canada's four western Provinces who have a plethora of Natural Resources and only 12.5 million citizens...correct, only 12.5 million citizens....Led by gateway city, Vancouver BC...the safest quadrant on our planet folks.....

http://seenoevilspeaknoevilhearnoevil.blogspot.com/2011/02/vancouver-bcworlds-most-liveable-cities.html

Thu, 02/24/2011 - 19:27 | Link to Comment Common_Cents22
Common_Cents22's picture

But I'm already full from eating all this popcorn.

Thu, 02/24/2011 - 19:33 | Link to Comment Confuchius
Confuchius's picture

If we were you, we'd keep rather quiet about our western Canada promotions.

Very quiet.

Thu, 02/24/2011 - 20:08 | Link to Comment Confuchius
Confuchius's picture

If we were you, we'd keep rather quiet about our western Canada promotions.

Very quiet.

Thu, 02/24/2011 - 20:49 | Link to Comment hardcleareye
hardcleareye's picture

Vancouver is a great city if you don't like sunshine.  Gray, rainy (just spits on your head, never really rains), damp and around 40-50 deg...

Thu, 02/24/2011 - 21:34 | Link to Comment SilverRhino
SilverRhino's picture

>> Which makes Canada's four western Provinces who have a plethora of Natural Resources and only 12.5 million citizens

12.5 million citizens and that much territory is begging for a hostile takeover.  

Thu, 02/24/2011 - 23:21 | Link to Comment earnyermoney
earnyermoney's picture

Do you work for the tourism board of Vancouver?

Fri, 02/25/2011 - 05:36 | Link to Comment gravitas
gravitas's picture

No. He works for the BCREA. Realtors know no bounds.

Fri, 02/25/2011 - 02:12 | Link to Comment StychoKiller
StychoKiller's picture

We've still got the open-air limo idling for you down here in Dealey Plaza...

Thu, 02/24/2011 - 18:14 | Link to Comment Scottj88
Scottj88's picture

Unbelievable what is going on... it is just stunning.  However, the alternative view is that the middle east was staged (as supported by Lindsey Williams) to drive oil price up to 150$ then 200$.  From here, the middle east will be in unrest.  This will spread to America... so we must all prepare. 

Buy physical silver...

http://thehardrightedge.com/troubledwater/

Thu, 02/24/2011 - 18:14 | Link to Comment cougar_w
cougar_w's picture

I've been getting the sense for a week that Bahrain is the key to the future in all this. The analysis presented here jives with what I've seen discussed elsewhere. The issue is that the House of al-Saud might not allow Bahraini change because that would constitute a threat to the Saudi families. They could roll in with thier own tanks and take over. What might Obama do in that case? Anything? Nothing? If nothing, then the Shia muslims would take that as a signal to revolt en-mass against their Sunni overlords.

That would be really ugly. Like the Huttu v Tutsi ugly. Genocidal ugly. And we could expect a massive fail in oil production and shipments.

Things are in a very tight balance. This whole thing could go either way, and quickly.

Thu, 02/24/2011 - 19:05 | Link to Comment High Plains Drifter
High Plains Drifter's picture

Oh please, the Saudi army rolls in?  I highly doubt it. Those conscripts would not want to do it and besides they can't fight worth a hoot anyway. Look at the trouble they had with the Houthis in Yemen....

 

At this point, frankly I don't give a hoot what happens over there. It is none of my business anyway. If those people want to get rid of these scumbags, more power to them. We should recall all of our military forces and reduce the size of the stupid thing and mind our own damn business per constitutional mandate.......

Fri, 02/25/2011 - 02:14 | Link to Comment StychoKiller
StychoKiller's picture

Other than jawboning, Obamatron really can do nothing -- the minute the Marines step ashore, the entire Muslim community plunges into FULL Jihad mode  (Kill the Infidels before they reach Mecca!)

Thu, 02/24/2011 - 18:15 | Link to Comment RobotTrader
RobotTrader's picture

Wow, complete, total meltdown in PM stocks today, led by NEM which was smashed 7%.

Amazing how these gold companies are choking on OTC Deriviatives, unable to make much money with gold over $1,400.

Deckers and CRM, however, are held by much stronger hands, both are up over 5% after hours, despite outrageous P/E ratios.

I guess with the crude shellacking today, everyone is going to bail on oil and gold and pile back into tech stocks.

Crazy, but true, the tech stock mania never really died.  It is still here, 10 years later.

Thu, 02/24/2011 - 18:17 | Link to Comment Johnny Lawrence
Johnny Lawrence's picture

As the NASDAQ is lower than both the S&P & Dow year-to-date....

Thu, 02/24/2011 - 18:24 | Link to Comment dryam
dryam's picture

Congratulations, you have been nominated as the ZH douchebag of the year.

Thu, 02/24/2011 - 18:33 | Link to Comment EvlTheCat
EvlTheCat's picture

Sorry man that honor goes to the HarryWanger!  Robo is only runner up.

Thu, 02/24/2011 - 18:30 | Link to Comment EvlTheCat
EvlTheCat's picture

Bubble, bubble, toil and trouble!

Thu, 02/24/2011 - 18:24 | Link to Comment Ancona
Ancona's picture

If Bahrain falls, look to Saudi Arabia next. If that happens......we're fucked, and oil will go to 250

Thu, 02/24/2011 - 18:32 | Link to Comment cougar_w
cougar_w's picture

The price won't be the problem at that point.

The problem will be finding and securing oil at any price. Oil might be diverted into strategic reserves for military uses for a long time to come.

Someone else posted this link in a comment. I found it chilling and motivating, so I am going to repost:

http://www.newcolonist.com/dim_ages.html

Thu, 02/24/2011 - 18:44 | Link to Comment EvlTheCat
EvlTheCat's picture

Lots of empty homes here in Florida.  Jobs not so much.  Come at your own risk.  Citrix Systems is hiring in their Tech Support call center for anyone interested.  If you are stupid need not apply.

Thu, 02/24/2011 - 23:22 | Link to Comment TonyV
TonyV's picture

If oil hits $250/barrel then Citrix will be the stock to buy. Seriously.

Fri, 02/25/2011 - 06:44 | Link to Comment BigDuke6
BigDuke6's picture

We were all drawn to this thread so many of us here are of like mind.

And its probably not thinking 'Is there any cheaper gas we can get from a country still ruled by a ruthless dictator?'

Thu, 02/24/2011 - 19:07 | Link to Comment CR Bill
CR Bill's picture

I don't think many have thought this through . . . .

2 dump trucks with 20 armed men in each roll up to your house/farm, they all get out and one comes to your door and says "You've been denounced as a hoarder, open the door." Your house WILL be empty before they leave, just look at how it was done in Russia.

One can defend against a robber, but when the 'state' is the robber - what?

Bill

Thu, 02/24/2011 - 19:19 | Link to Comment High Plains Drifter
High Plains Drifter's picture

simple. you defend your home vociferously.  then make a call for militia reinforcements  and they cautiously approach under cover and attack said goons from the rear. so now they are in crossfire and it will be over soon. the ones that surrender , you just take them out back and shoot them and throw them in the back 40. animals have to eat too.

Thu, 02/24/2011 - 19:37 | Link to Comment CR Bill
CR Bill's picture

HPD

I'm serious, do read about Russia. No phones, no electricity, all gas for state use only - then what? And as society breaks down, how long 'til your good-buddy neighbor steals your chicken? Can YOU chop enough wood with an axe to heat yourself and your family in Minn.?

There is a reason Greenland does not have a population problem.

Bill

Thu, 02/24/2011 - 19:55 | Link to Comment TeamAmerica
TeamAmerica's picture

You're just soooo wrong.   We have more men with more ammo feeding bigger & better weapons than you or your quaint militia could ever hope to afford.   We win every time.   It's not even a fair fight, and we like it that way.

Every military mind since the dawn of time has realized this fundamental truth: when your adversary is divided to the point where they are defending villages, you have won.  Only when people unite to defend nations do they have any hope.

 

Thu, 02/24/2011 - 21:17 | Link to Comment Optimusprime
Optimusprime's picture

We haven't had a "nation" since 1965 (Immigration disaster/"reform" bill)--or was it 1933 (US a corporation in hock to the Rothschilds, Morgans, etc)?--or was it 1913 (Creature from Jekyll Island is snuck into the law of trhe land)?--or was it 1898 (hey, we can play this navy-based imperial game as well as anyone; take that Spain! And if it takes waterboarding, we WILL pacify those filipino natives who mistakenly thought we might be emancipating them from colonial rule)?--or was it 1861 (if secession is not a natural right, then the Declaration of Independence makes no sense at all)?  Etc., etc.  I am sure those who have studied history could supply their own candidates.

Fri, 02/25/2011 - 11:48 | Link to Comment gregd2790
gregd2790's picture

Then again, 'defending' villages or bits of isolated rock with less-than-the-best weapons seems to work pretty well in Afghanistan...

And remember back to the US revolution...bunch of farmers using sniper techniques to win over the bigger, better, more organized British....  at least at the start until they became better organized....

Thu, 02/24/2011 - 20:41 | Link to Comment hardcleareye
hardcleareye's picture

Thanks for the link.  Anticipted rolling black outs, but had not considered the fuel need for mining and moving coal around...  At that point it is time to dust off the old blue prints and start making steam powered equipment....

 

Thu, 02/24/2011 - 18:23 | Link to Comment Sudden Debt
Sudden Debt's picture

I still could be a trick from the FED to manipulate the US back into a competitive industrial force against China.

 

1. China's production costs : 20% labor/ 80% raw materials

2. US production costs : 80% labor : 20% raw materials

 

To fix this:

A. The costs of raw materials has to go up to make it 50/50 for the US against China.

B. Wages of the US workers need to go down 20% from here on, this can happen through devaluation.

 

From where I look to it, it might work.

Let's see how the dragon will react on it.

Thu, 02/24/2011 - 18:32 | Link to Comment THE DORK OF CORK
THE DORK OF CORK's picture

yeah i am beginning to think similar thoughts -

@robotrader - is there any US centric steel companies you can recommend ?

Fri, 02/25/2011 - 01:16 | Link to Comment Freddie
Freddie's picture

Nucor (NUE) - non-union mini mills. They are HQ in Charlotte, NC.  The are well managed.

Thu, 02/24/2011 - 18:48 | Link to Comment EvlTheCat
EvlTheCat's picture

I can believe this, but only as a short term solution.  China still wins with lax environmental regulations. 

Thu, 02/24/2011 - 19:17 | Link to Comment Vampyroteuthis ...
Vampyroteuthis infernalis's picture

What most people find hard to believe is that the majority of manufacturing allocates only 10 % of production costs to labor. What is killing the US in outsourcing is taxes and excessive regulation. We are shooting ourselves in the foot.

Thu, 02/24/2011 - 20:00 | Link to Comment TeamAmerica
TeamAmerica's picture

Demanding clean air & water is not "excessive regulation" and the Chinese are rapidly realizing that.   One more factor tending to level the playing field.

As for taxes...the truth in the USA has been a downward trend in commercial taxes compensated by an upward trend in personal taxes.   That is likewise a trend towards equality in global competition, and one that many Americans would like to rethink.

Thu, 02/24/2011 - 18:31 | Link to Comment steve from virginia
steve from virginia's picture

Things are going, all right.

 - Oil price rises are self- reinforcing. Credit bids prices higher which in turn require more credit to bid further: the increasing prices commanding more credit in a vicious cycle. High oil prices compete w/ rest of economy for available credit. Prices rise until credit mechanisms are destroyed (not demand).

 - Fighting in Libya is more important b/c it indicates what length protestors will go to obtain political access.

 - Fighting in Libya hangs other autocrats out to dry as even the most severe repression will fail.

 - Revolts in various countries do not add one drop of oil supply but represent massive demand coming out of the closet. Instead of the four new Saudi Arabias pumping more oil there are four new Chinas demanding houses, carz, A/C, televisions ... and credit. The price is going to go much higher, folks.

 - The US strategy is to create failed Petro- states such as Nigeria and Iraq or zero- demand failed states like Somalia or Haiti. This is 'neoliberalism 101'. The issue is whether oil production can be maintained until the time the oil production can be isolated from the failed state itself.

Once credit is exhausted as it was in Summer, 2008, the margin calls will go out and 'Deleveraging 2.0' will begin.

It's not the flight out of the 50th floor window that is so bad, it's the landing.

Thu, 02/24/2011 - 18:55 | Link to Comment THE DORK OF CORK
THE DORK OF CORK's picture

@Steve

I must say you post some of the most intelligent observations on ZH.

 

Thu, 02/24/2011 - 21:21 | Link to Comment Optimusprime
Optimusprime's picture

+1

Thu, 02/24/2011 - 19:19 | Link to Comment Vampyroteuthis ...
Vampyroteuthis infernalis's picture

+++ Big boom that is inflationary followed with a deflationary bust.

Thu, 02/24/2011 - 19:33 | Link to Comment Common_Cents22
Common_Cents22's picture

Revolts in various countries do not add one drop of oil supply but represent massive demand coming out of the closet. Instead of the four new Saudi Arabias pumping more oil there are four new Chinas demanding houses, carz, A/C, televisions ... and credit. The price is going to go much higher, folks.

 

Liberated people will have more demand than one rich dictator for sure.  Except that liberation is ugly and often does not succeed but rather ushers in periods of mass slaughter and destruction, and in the end another dictator seizes power.   Wash, Rinse, repeat.

Thu, 02/24/2011 - 18:32 | Link to Comment Prof Gulliver
Prof Gulliver's picture

But Timmay said higher oil is no problem. And he should know. He's as oily as they get.

Thu, 02/24/2011 - 18:43 | Link to Comment mynhair
mynhair's picture

Need higher oil to protect the House Al Saud - more for them to give out.

Then we can return to ousting dictators, like that one in the WH.

Thu, 02/24/2011 - 19:07 | Link to Comment Incubus
Incubus's picture

gimme a break -- we (the american population) are trained by mass media to digest McInformation.

 

We want tidbits of info, or we want it all at once over the weekend; we'll blog about it, we'll moan about it and cry about how everything is being destroyed, but as soon as the new workweek starts, there's a reset, and we go back to normal.

This leads to one of two things happening:  there will be no revolution--the rest of the world will have revolutions, while we just watch it on the news; or, eventually, the collective 'subconscious' tension is going to build up so much that when things do snap, it's going to make the rest of the world's revolutions pale in comparison.

 

While I'd certainly hope for the latter, I doubt we'll go that path.  We're nice trained little sheep.  We're the model of a perfect slave society, and "we'll always be at war with Eurasia."

 

edit: and no, I didn't junk you.

Thu, 02/24/2011 - 19:07 | Link to Comment Prof Gulliver
Prof Gulliver's picture

No, we're at war with Eastasia. We'll always be at war with Eastasia.

Thu, 02/24/2011 - 19:44 | Link to Comment Amish Hacker
Amish Hacker's picture

And we always have been.

Fri, 02/25/2011 - 12:09 | Link to Comment gregd2790
gregd2790's picture

yep, just give us enough to keep going to work, eating our dinners, watching tv, playing games...with just enough in the bank or possessions to not want to risk it, and not take the time to stand up against the coming crap.... I think what will happen is that there will be a period, who knows when, who knows for how long, where there will be pain people don't even understand right now, then the coin flip will be how these unprepared people living in denial and with a "normalcy bias" will react.  It will be anybody's guess... but most of those people, being unprepared, will likely not be armed, not have tradable wealth, and will starve, die from disease, or do whatever they can to revolt and save themselves.... they might only have baseball bats but that makes a pretty good lump on your head when they are trying to take your stuff so they can survive...

Yes it's a worse case scenario, a reasonable chance it won't happen... but then again, lots of things have happened in history that people didn't expect, denied would happen.  It sure won't hurt to be prepared to survive and defend yourself...I'd rather do that then be caught with my pants around my ankles...

Thu, 02/24/2011 - 18:48 | Link to Comment PicassoInActions
PicassoInActions's picture

There is no need for all doom scenarios.

First we will bomb Iran, than Saudi and take over the oil.

We won't see oil at 200. Our troops dressed like females are already in position and ready to strike at any given moment.

 

Thu, 02/24/2011 - 18:52 | Link to Comment mynhair
mynhair's picture

LOL, Gloria Stein dressed as a female.....just sayin'.

Oh, 'our troops'.

Thu, 02/24/2011 - 21:38 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

 

Another wave of the hand guy.

"take over the oil".

As if military force applied anyhere NEAR oil intrastructure won't set it ablaze, exploding, with a 3-5 year repair time.

Thu, 02/24/2011 - 19:07 | Link to Comment YHC-FTSE
YHC-FTSE's picture

...So, Bahrain is important because of Saudi Arabia. Okay, but I reckon if the scenes in Egypt and Tunisia are anything to go by, analysis of the whole ME by the traditional sectarian divide is pretty useless. The cliches about Arabs not being ready to handle democracy because of tribalism are as outdated and prejudiced as the British attitude towards India in the last century. They clearly are intelligent, sophisticated, and all yearning for the same things we cherish. Freedom and dignity. 

 

Listening to Simon Schama (British Historian), Francis Fukuyama (American Philosopher), and others about the ME people's revolution, it was uplifting to compare these momentuous events with the revolutions in the past. The Middle Easterner demonstrators are better organized, bear far less hatred, secular (Egyptian Christians and Muslims together in Tahrir Sq), and patriotic for a noble cause: Constitutional rights. All the worst elements have come from the autocrats we have supported for decades. Of course democracy and freedom will not put bread on the table, and utopia won't be created out of thin air - there's always a danger a strong man will emerge in the coming months to lead the disenchanted to make things worse - but looking at the organizational skills of the ordinary protesters, their civic pride, and their sophistication, I am a little ashamed of my pre-conceived prejudices about them. I think we are seeing the emergence of a new ME that will teach the world something wonderful about governance. Fingers crossed & good luck to them. 

Thu, 02/24/2011 - 19:13 | Link to Comment CR Bill
CR Bill's picture

I think you have your head up your ass. Have you ever been there? "Democracy" ensures that the lowest common denominator rules.

Somalia is your example.

Bill

Thu, 02/24/2011 - 19:26 | Link to Comment YHC-FTSE
YHC-FTSE's picture

So, I see you don't like 'em. Fair enough. 

Thu, 02/24/2011 - 19:23 | Link to Comment New_Meat
New_Meat's picture

"The cliches about Arabs not being ready to handle democracy..."

are cliches because they match up in a highly correlated way with experience.  I'm awaiting your counter-examples eagerly.

ME revolution?  I've seen a) a military coup in Egypt and b) blood in the streets in the remaining contests.

Dude, Hope is not a strategy.

But it doesn't matter, we have no control and U.S. "Policy" is ambiguous.  Therefore, impending danger.

- Ned

Thu, 02/24/2011 - 19:38 | Link to Comment YHC-FTSE
YHC-FTSE's picture

Does Turkey count? How about Indonesia? They may not be "Arabs", but they are Muslim democracies which are stable and comparable to any other democratic nation, since we are on the subject of tribal sectarianism. I've watched these people I had misjudged previously as backward illiterates demonstrating peacefully against overwhelming odds, in solidarity with their countrymen/women of different religions and ideals. Fighting back only when they had no choice, and never waivering from their goals even when the autocratic regimes we have supported for decades killed their numbers. Would we have seen the same in our streets? I think not. Uncontrolled looting and killing would have been the norm on our streets. I really do think they can do it, and I wish them luck. That's all. 

Thu, 02/24/2011 - 19:47 | Link to Comment New_Meat
New_Meat's picture

YHC:

'They may not be "Arabs",...'

and yes, you catch a portion of my point.

Turkey?  Recently, yes, but I am anticipating a decline for various obvious reasons based upon community organizing events.

Indonesia.  More 'hope' there.

Misjudgement?  Yep, we all have to deal with that and readjust according to facts.  But I'm worried about underlying patterns and the trend ain't good.

Non-violent protests-you betch'a.  Tough/ballsy approach to tough situations.

I really think that the wrong pattern will come in at the end and seize the "democratic" impulse, to everyone's detriment.

But I'm on the short side of almost everything these days (not investing short, mind you).

- Ned

Fri, 02/25/2011 - 06:58 | Link to Comment BigDuke6
BigDuke6's picture

The people of East Timor will love your right-on example of shining light Indonesia.
Their death squads killed tens of thousands and still do in Aceh.
Educate yourself and wake up to smell the roses.

Fri, 02/25/2011 - 12:43 | Link to Comment gregd2790
gregd2790's picture

"Would we have seen the same in our streets?  I think not"

I dunno, ask Reginald Denny (LA riots 1992), Detroit riots after mere sports teams winning... go to this link for a list of riots worldwide, look at all the US listings... sure, maybe small events in comparison... but no doubt the scale was in direct proportion to the number of people affected, how badly they were affected, etc.... now think...no jobs, no food or water.... in a society that now expects Uncle Sam drop off sustainables on their doorstep..

 http://en.wikipedia.org/wiki/List_of_riots

 

 

Thu, 02/24/2011 - 20:07 | Link to Comment Chumbadumba
Chumbadumba's picture

Allahu snackbar!!

I am Chumbadumba

Thu, 02/24/2011 - 21:36 | Link to Comment JR
JR's picture

Barron’s has referred to George Friedman’s private intelligence corporation, Stratfor, as “The Shadow CIA.”

Unfortunately, the CIA has become a strong partnership with the Mossad.

Friedman, IMO, is a neoconservative whose corporation STRATFOR has been cited by media such as CNN, Bloomberg, the Associated Press, Reuters, The New York Times and the BBC as an authority on strategic and tactical intelligence issues.

It is sad to see Zero Hedge join the list.

According to Friedman who “was born in Hungary to Holocaust survivors” and who describes his family’s story as “a very classic story of refugees making a new life in America" : Egypt has been a pro-American country with a peace treaty with Israel that has been quite effective for 30 years.

“Effective” is in the eye of the beholder, of course. The 30-year treaty has been effective for Israel; it has been defective for the Egyptian people. 

With the Israeli/Egyptian agreements expanding the protection of Israel, with Israel-Lebanon and Israel-PLO treaties to keep the Arab world from halting Israel’s growing dominance in the Middle East,  certainly many ME peoples have suffered; 40-50 percent of the Egyptian population is below the poverty line, making $2 or less a day, while Israel, a socialist nation reliant on the U.S. taxpayer, has a per capita GDP that is one of the highest in the world.

A Stratfor article in January 2009 argued that, despite their rhetoric, Arab regimes really support Israel’s punitive invasion of the Gaza strip begun in late 2008 that inflicts continuing civilian casualties and is condemned by a UN report for war crimes and crimes against humanity. The Stratfor article implies that the invasion is not a war crime.  Friedman also is regularly published in Jewish World Review.

Prior to joining the private sector, Friedman spent almost twenty years in academia, teaching political science at Dickinson College. During this time, he also regularly briefed senior commanders in the armed services as well as the Office of Net Assessments, SHAPE Technical Center, the U.S. Army War College, National Defense University and the RAND Corporation. on security and national defense matters.

Fri, 02/25/2011 - 13:08 | Link to Comment gregd2790
gregd2790's picture

Blaming Arab poverty on Israeli prosperity?  How wierd.  I would blame the dictators, despots, Islamic extremists, forms of government and economies and their own acceptance of their situation to be the culprits.  Seems the Israeli's haven't expanded their power in the region... sure, they attack their attackers and often over-compensate...but how would you react to daily missle firings into your neighborhoods?

Thu, 02/24/2011 - 23:29 | Link to Comment americanspirit
americanspirit's picture

Dickinson College? I went to Dickinson, graduated in 1965. A bigger collection of mediocrities cannot be imagined. Why did I go there? Necessity. Am I a mediocrity? Perhaps. But the fact that Friedman taught there for 20 years certainly makes anything he has to say, in my mind, mediocre as it may well be, suspect to say the least.

Fri, 02/25/2011 - 01:17 | Link to Comment kinetik
kinetik's picture

Stratfor: Being wrong since 2003 yet still turning a profit. Yay America!?!?!?!?

Fri, 02/25/2011 - 03:48 | Link to Comment RagnarDanneskjold
RagnarDanneskjold's picture

Now that Pakistan and Iran have nukes, Kissinger has no need to feel pity, both sides can lose.

Fri, 02/25/2011 - 09:44 | Link to Comment wkwillis
wkwillis's picture

Chill on the government taking over.

Our modern high tech military equipment needs lots of spare parts to keep functioning, and one of those parts factories is in your neighborhood. In fact, one of those parts factories is in every neighborhood.

Congress wanted it that way. Now you know why.

Fri, 02/25/2011 - 13:11 | Link to Comment gregd2790
gregd2790's picture

Good point.  I just hope if the shtf the military remembers they pledged to defend the Constitution above the government.

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