Enough Already! It's Time To Send The Despicable House Of Saud To The Dustbin Of History

Tyler Durden's picture




 

Submitted by David Stockman via Contra Corner,

The recent column by Pat Buchanan could not be more spot on. It slices through the misbegotten assumption that Saudi Arabia is our ally and that the safety and security of the citizens of Lincoln NE, Spokane WA and Springfield MA have anything to do with the religious and political machinations of Riyadh and its conflicts with Iran and the rest of the Shiite world.

Nor is this only a recent development. In fact, for more than four decades Washington’s middle eastern policy has been dead wrong and increasingly counter-productive and destructive. The crisis provoked this past weekend by the 30-year old hot-headed Saudi prince, who is son of the King and heir to the throne, only clarified what has long been true.

That is, Washington’s Mideast policy is predicated on the assumption that the answer to high oil prices and energy security is deployment of the Fifth Fleet to the Persian Gulf. And that an associated alliance with one of the most corrupt, despotic, avaricious and benighted tyrannies in the modern world is the lynch pin to regional stability and US national security.

Nothing could be further from the truth. The House of Saud is a scourge on mankind that would have been eliminated decades ago, save for Imperial Washington’s deplorable coddling and massive transfer of arms and political support.

At the same time, the answer to high oil prices is high oil prices. Could anything not be more obvious than today when crude oil is hovering around $35 per barrel notwithstanding a near state of war in the Persian Gulf?

Here’s the thing. The planet was endowed by the geologic ages with a massive trove of stored energy in the form of buried hydrocarbons; and it is showered daily by even more energy in the form of the solar, tidal and wind systems which shroud the earth.

The only issue is price, the shape and slope of the supply curve and the rate at which technological progress and human ingenuity drives down the real cost of extraction and conversion.

On top of that, the vast resilient forces of the free market have silently, steadily and dramatically improved the energy efficiency of the US economy.

As shown in the long term chart below, energy consumption per dollar of GDP is only about 40% of the level which obtained when Washington’s politicians first started running around like Chicken Little, claiming that the energy sky was falling at the time of the so-called 1973 oil crisis.

U.S. Energy Intensity, Thousand BTU per Dollar of GDP*

Driven by the supply and demand curves of the ordinary processes of economic markets over the last four decades, therefore, the constant dollar price of oil has gone absolutely nowhere. The threat of high oil prices has been a giant myth all along.

The red line in the chart below expresses the world crude oil price in March 2015 dollars of purchasing power. At today’s $35 per barrel it is only marginally higher than it was in 1971 before Nixon slammed shut the gold window and inaugurated four decades of central bank fueled monetary inflation.

Inflation Adjusted Oil Price Chart

The truth is, the long era of the so-called oil crisis never happened. It was only a convenient Washington invention that was used to justify statist regulation and subsidization of energy domestically and interventionist political and military policies abroad.

Back in the late 1970s as a member of the House Energy Committee I argued that the solution to high oil prices was the free market; and that if politicians really wanted to cushion the purely short-term economic blow of a Persian Gulf supply interruption the easy and efficient answer was not aircraft carriers, price controls and alternative energy subsidies, but the Texas and Louisiana salt domes that could be easily filled as a strategic petroleum reserve (called SPRO).

During the Reagan era we unleashed the energy pricing mechanisms from the bipartisan regime of price and allocation controls which had arisen in the 1970s and began a determined campaign to fill the SPRO. Thirty-five years later we have a full SPRO and a domestic and world economy that is chock-a-block with cheap energy because the pricing mechanism has done its job.

In fact, OPEC is dead as a doornail, and the real truth has now come out. Namely, there never was a real oil cartel. It was just the House of Saud playing rope-a-dope with Washington, and its national oil company trying to do exactly what every other global oil major does.

That is, invest and produce at rates which are calculated to maximize the present value of its underground reserves.  And that includes producing upwards of 10 million barrels per day at present, even as the real price of oil has relapsed to 50 year ago levels.

What this also means is that Imperial Washington’s pro-Saudi foreign policy is a vestigial relic of the supreme economic ignorance that Henry Kissinger and his successors at the State Department and in the national security apparatus brought to the table decade after decade.

Had they understood the energy pricing mechanism and  the logic of SPRO, the Fifth Fleet would never have been deployed to the Persian Gulf. There also never would have been any Washington intervention in the petty 1990 squabble between Saddam Hussein and the Emir of Kuwait over directional drilling in the Rumaila oilfield that straddled their historically artificial borders.

Nor would there have been any “crusader” boots trampling the allegedly sacred lands of Arabia or subsequent conversion of Bin-Laden’s fanatical Sunni mujahedeen, which the CIA had trained and armed in Afghanistan, to the al-Qaeda terrorists who perpetrated 9/11.

Needless to say, the massive US “shock and awe” invasion thereafter which destroyed the tenuous Sunni-Shiite-Kurd coexistence under the Baathist secularism of Saddam Hussein would not have happened, either. Nor would the neocon war mongers have ever become such a dominant force in Imperial Washington and led it to the supreme insanity of regime change in Libya, Syria, Yemen and beyond.

In short, the massive blowback and episodic eruptions of jihadist terrorism in Europe and even America that plague the world today would not have occurred save for the foolish policy of Fifth Fleet based energy policy.

Still, there is an even more deleterious consequence of the Kissinger Error. Namely, it has allowed the House of Saud, along with Bibi Netanyahu’s political machine, to egregiously mis-define the sectarian and tribal conflicts which rage in today’s middle-east.

The fact is, there is no such thing as generic Islamic terrorism. The overwhelming share of the world’s 1.3 billion or so Sunni Muslims are not remotely interested in Jihaddism.

Likewise, the 200 million adherents of the Shiite Muslim confession are not terrorists in any religious or ideological sense. There are about 60 million Shiite in India and Pakistan and their quarrel, if any, is rooted in antagonisms with Hindu-India, not the West or the US.

Similarly, the 80 million Shiite domiciled in Iran, southern Iraq, southern Lebanon and the Alawite communities of Syria have been host to sporadic terrorist tactics. But these occurred overwhelmingly in response to efforts by outside powers to occupy Shiite communities and lands.

That is certainly the case with the 20-year Israeli occupation of southern Lebanon, which gave rise to Hezbollah defense forces. It is also true of the Shiite uprisings in Baghdad and southern Iraq, which gave rise to the various militias that opposed the US occupation.

Moreover, post-1979 Iran has never invaded anyone, nor have the Shiite communities of northern Yemen, who are now being bombarded by Saudi pilots driving US supplied war planes and drones.

In short, there has never been a Shiite-based ideological or religious attack on the West. The anti-Americanism of the Iranian theocracy is simply a form of crude patriotism that arose out of Washington’s support for the brutal and larcenous regime of the Shah—–and which was reinforced during Iraq’s US aided invasion of Iran during the 1980s.

By contrast, the real jihadi terrorism in the contemporary world arose almost exclusively from the barbaric fundamentalism of the Sunni-Wahhabi branch of Islam, which is home-based in Saudi Arabia.

Yet this benighted form of medieval religious fanaticism survives only because the Saudi regime enforces it by the sword of its legal system; showers its domestic clergy with the bounty of its oil earnings; and exports hundreds of millions to jihadists in Syria, Iraq, Libya, Turkey, Iran, Egypt  and numerous other hot spots in the greater middle east.

At the end of the day, the House of Saud is also the ultimate inspiration and financial benefactor of the Islamic State, as well. Had it not provided billions in weapons and aid to the Syrian rebels over the last five years, there would be no civil war in Syria today, nor would ISIS have been able to occupy the dusty, impoverished towns and villages of the Upper Euphrates Valley where it has established its blood-thirsty caliphate.

So this weekend’s execution of a Saudi Shiite cleric who never owned a gun or incited anything other than peaceful protest among the downtrodden Shiite communities of eastern Arabia is truly the final straw. It was a deliberate provocation by a reprehensible regime that has so thoroughly corrupted the War Party that it even managed to have Washington shill for its preposterous appointment to head of the UN Commission on Human Rights!

During the last several decades Washington has financed more than $100 billion of arms sales to the House of Saud. Accordingly, there is one simple way to clean the slate in the middle east and put an eventual end to Wahhabi Jihaddism.

That is, cut off arms sales entirely to the Saudi military, which would be grounded within months due to lack of spare parts and support services. Indeed, the mere announcement would send several thousand Saudi princes and their families scurrying for their 747s and escape to Switzerland, London, New York and other fleshpots of the West.

After an abdication by the House of Saud, the Wahhabi clerics would not long survive, and Iran and its Shiite Crescent allies, including Russia, would make short work of the ISIS caliphate.

And whatever government emerged on the Arabian peninsula, one thing is certain. It would need to produce all the oil it can, but at least the proceeds at even today’s $35 per barrel price would have a decent chance of benefiting the nation’s 30 million citizens rather than the unspeakable opulence and decadence of a few thousand princes.

That actually happened in Iran when the mullahs - as religiously rigid and backwards as they might be - overthrew the megalomaniacal tyrant who sat on the Peacock Throne.

It’s time that the House of Saud found its way into the dustbin of history, as well.

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Thu, 01/07/2016 - 17:47 | 7013898 Flying Wombat
Flying Wombat's picture

Funny thing - apparently, they are having a big problem with teenagers stealing cars for joy rides and crashing in the desert.  

Thu, 01/07/2016 - 15:19 | 7012973 gdpetti
gdpetti's picture

Camel milk is extremely nutricious compared to cow's milk... though a tad bit harder to obtain.

Thu, 01/07/2016 - 06:42 | 7009705 falak pema
falak pema's picture

"There never was an OPEC cartel, it was just the House of Saud playing rope a dope with" ... Dear Henry's shuttle diplomacy and astute take over of ME oil patch under the gun of the 6 Days war and the concomitant alliance with the Shah of Iran since Mossadegh's ouster by the CIA coup of 1954...

There... we have the two pillars in the Oil patch working for the Pax Americana hegemonial construct, legacy of FDR 1945 handshake and subsequent Chevron's discovery of Ghawar and creation of Ras Tanura.

We then have the OECD, Dear Henry's express creation to supervise the papered over OPEC cartel run by Saud in ME domination of the OIL age as controlling first world supervisory counterpoint to OPEC's "official" dictats.

Of course, the shit will hit the fan when the Iran revolution occurs..."We've lost Iran"  -- (shades of "we've lost China" trauma of 1949 days under Mao's "Commie Ayatollah" type play)--says an incredule Carter, and ZBi pushes the button on his great chess board to lure  into Afghan the Soviets-- all too pleased to ape the USA in their own Nam type hubris-- and creates the Talibanist Frankenstein with surrogate Paki ISI's collusion.

Pax Americana is the key player in this 60 year distortion of world geopolitics around the energy geyser of Ghawar cum Iran/Iraq/Kumait/Baku/Qatar "greek fire";  land of shattered dreams since Alexander days, turning to Crusader vs Jihadist rage, then into Fitna of Safavid/Ottoman rivalry; until Rule Britannia takes over the Suez Canal.

Now its payback time for those who built Pax Americana's hegemony over the successor to Oriental "greek fire"... in fact the seeping effusions of oil and sulphur known from ancient Assyrian days in that region... !

https://en.wikipedia.org/wiki/Greek_fire

Stockman in his current "revisionist" stance has nailed the truth about PAx Americana hubris and sale of "indulgences"-- in two out of three areas (money line & energy line)-- just like Luther did about the Pope's geo-political plays subsequent to loss of Constantinople and the consequent decay in Catholic control of  European "knowledge meme", and as blowback, the Imperial wars (Ottoman, Habsburg, France)  that followed, for control of Columbus's, Magellan's and Vasco de Gama's legacy to the creation of "one world".

We are there once again. A tipping point in world geo-politics like 1492...

The third thread of this Imperial Pax Americana construct is the "nuclear arms race"; the big stick. And on that front the North Korean caper adds an additional twist to the trauma of nuclear dissemination and its minituarisation (drone dissemination) that could unfurl on our world... Some conundrum ! 

That issue GWB pushed under the rug when he said "Nuclear disarmement" was no longer an issue with Soviets dead and US NWO running the world...Hmmm... Black swans now rising on that front!

 

Thu, 01/07/2016 - 08:30 | 7010199 Fireman
Fireman's picture

USSA  sandwiched as it is between the hairy goat head-chopping camel drivers of the Crypt of Saud and the zionist thug Nutnyahoo and his gangster apartheid state is up to its ass in camel dung. Despite the ongoing slumification of the police state USSA itself on the brink of civil war, it seems the retards in Washing town would like nothing more than a spat in the Spratlys and a war with Mother Russia herself. Anyone who doesn't think that this is going to end very very badly is barely sentient.

Thu, 01/07/2016 - 09:12 | 7010386 nathan1234
nathan1234's picture

Oh what a tangled web the House of R has weaved using the cryptos in the House of Saud!

Thu, 01/07/2016 - 10:10 | 7010771 sam site
sam site's picture

 

That Middle East US Navy 5th Fleet operation represents our part of the Petrodollar Protection Racket so we can trade pretty paper called dollars for imported electronics and many other physical products we no longer make.

This Protection Racket Scam or rather Oil Dollar Skim props up our false wealth and exceptionalism that we've been milking ever since 1973.

The BRICS are undermining this racket with substitutes for our SWIFT, VISA, IMF and other financial and payment systems.  The Petro and Reserve dollar scams are numbered and America's day of reckoning is fast approaching.    

 

Thu, 01/07/2016 - 11:00 | 7011078 earleflorida
earleflorida's picture

Fantastic article Mr. Stockman!

David, you nailed it from 'soups to nuts' in short order for the average lay person to digest.

Just one 'small' mention [?]::  regarding the MIC's of USSA... OBL would never have been[?], if not for the Saudi's elite placing 'WMDs[?]' on the holiest sites in all of the world of 'ISLAM'.

Thu, 01/07/2016 - 15:13 | 7012940 draego
draego's picture

I don't disagree with your conclusions about the Saudi's, or with the toxic effect of our mucking about in the middle east (you sleep with dogs, you're going to get fleas); but your assessments of the future of fossil fuel energy are unicorn crap. Yes, we should pull our head out of the ass of the middle east but don't do it because you think that we are "energy independent", or because you think the global oil market can sustain this freak show for another 200 years.

 

In regards to oil, we are all goin' down - but I'd rather it happen after we salvage some shread of dignity by telling the saudi's to FO.

 

(Re. "goin' down", no - it doesn't have to be this way, but it will be because the stake holders have their claws sunk in too deep to the body of the nation, and they won't voluntarily stop sucking the blood out of this nation. They will destroy the US before they will ever agree to back off - i.e., steal less. So...goin' down.)

 

Thu, 01/07/2016 - 15:20 | 7012986 gdpetti
gdpetti's picture

Hmmm.... to really get rid of the House of Saud, we would need to get rid of the House of Bush, annd all the other houses connected to this global con game trying to establish their 'dark' NWO>

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