OnlineInvestorsNews
Volume M 9-13, November 5, 2004
Fahrenheit
Gold & Oil:
Carving up the Spoils of Iraq
Bill Ridley
www.jameswinston.com
November 8, 2004
Well it's
official. Bush is in for another four years and the neo-conservative
agenda will move forward as planned. For investors, we can look
forward to a continued bullish run with gold, and very likely
a huge spike in oil prices due to another Mid East crisis.
The big prize
for the Bush administration though will be securing the Iraqi
oil fields and putting these prized assets into the hands of
friendly U.S. oil corporations. The big dogs of the corporate
world stand to clean up but so will the common investor who can
read the writing on the wall. Today I will outline how the agenda
will play out in Iraq over the next four years and how you can
protect your assets and make significant profits in the process.
In my last
article, I mentioned that in February of 2003 while Colin Powell
was trying to drum up international support for invading Iraq,
a secret government document was being formed which would outline
plans to privatize Iraq's oil sector and the rest of the country's
economy. At that time BBC investigative journalist Greg Palast
obtained a copy of that report which originated from inside the
State Department.
Carving up
the spoils from the Iraq war were initiated back in the spring
of 2001 when the Cheney Task Force on Energy met with the leaders
of the corporate oil world. Inside the meeting room the executives
passed around a map of Iraq but unlike most maps we have seen,
this one was devoid of cities, towns, or regions. This map detailed
Iraq's oil fields.
From Palast's
article Adventure Capitalism - The Hidden 2001 Plan to Carve-up
Iraq, Palast stated "The Economy Plan goes boldly where
no invasion plan has gone before: the complete rewrite, it says,
of a conquered state's policies, laws and regulations. And when
it comes to oil, the Plan leaves nothing to chance-or to the
Iraqis. Beginning on page 73, the secret drafters emphasized
that Iraq would have to "privatize" (i.e., sell off)
its "oil and supporting industries." The Plan makes
it clear that-even if we didn't go in for the oil-we certainly
won't leave without it."
"If the
Economy Plan reads like a Christmas wish list drafted by U.S.
corporate lobbyists, that's because it was."
"Iraq-born
Falah Aljibury was in on the drafting of administration blueprints
for the post-Saddam Iraq. According to Aljibury, the administration
began coveting its Mideast neighbor's oil within weeks of the
Bush-Cheney inauguration, when the White House convened a closed
committee under the direction of the State Department's Pam Wainwright.
The group included banking and chemical industry men, and the
range of topics over what to do with a post-conquest Iraq was
wide. In short order, said Aljibury, "It became an oil group."
"This
was not surprising as the membership list had a strong smell
of petroleum. Besides Aljibury, an oil industry consultant, the
secret team included executives from Royal-Dutch Shell and ChevronTexaco.
These and other oil industry bigs would, in 2003, direct
the drafting of a 300-page addendum to the Economy Plan solely
about Iraq's oil assets. The oil section of the Plan,
obtained after a year of wrestling with the administration over
the Freedom of Information Act, calls for Iraqis to sell off
to "IOCs" (international oil companies) the nation's
"downstream" assets-that is, the refineries, pipelines
and ports that, unless under armed occupation, a Mid east nation
would be loathe to give up."
Though securing
U.S. oil requirements is an important achievement for the neo
conservatives, it will come with a hefty price. And that's where
you as a private investor will either see your net worth melt
away or you can be the few who will actually come out ahead.
The cost of
securing Iraq oil fields, now estimated at $200 billion, will
undoubtedly run up to at least double that amount over the next
four years.
However there
is a much more troubling scenario brewing on the international
landscape which is threatening the Treasury Department's ability
to finance the ever growing debt. A poll out a few weeks ago
showed a large cross section of foreign nations as having a negative
viewpoint toward the United States. Considering that the majority
of U.S. debt financing comes from foreigners, this animosity
could severely impact the management of the U.S. debt burden
going forward.
Meanwhile as
we have been transfixed by the election, the U.S. budget gap
has now expanded to $412.55 billion, the second-straight record
deficit reported by the Treasury.
Once again
the dollar has slid against global currency markets on Thursday
which has economists wondering if the growing U.S. budget and
trade deficits will send the U.S. currency into a tailspin.
Yesterday the
dollar fell within a fraction of its all time low against the
euro, coming in at $1.2930. Those investors who have been investing
in Canadian based equities have done very well over the last
three years as the "Loonie" hit 83 cents yesterday,
up a full 20 cents from January 2003.
This leads
me to my main point, how to protect yourself going forward.
The strategy
which has worked brilliantly during Bush's first term and makes
perfect sense now going forward is to diversify out of the greenback
and into Canadian based commodity based stocks.
That way you
can get the double whammy benefit of rising commodity prices
and the rising value of the Canadian dollar.
Now there's
one other important story which was buried during the presidential
race and it has to do with Iran's nuclear program. This uncertain
situation could spike oil and gold into the stratosphere.
Fahrenheit Oil and
Gold - The Iran Factor
Another burning
topic which was not discussed during the sanitized presidential
debates has to do with the burgeoning nuclear capabilities of
Iran. While Bush and Kerry discussed their military records and
their opinions on homosexuality, a nuclear show down has been
taking place in the Mid East with shockingly little media attention.
Here's the
situation.
Iran is just weeks away from a critical juncture in their pursuit
of nuclear capability.
Though Iran claims their nuclear program is only for the development
of domestic energy needs, many politicians in Israel and both
parties in the U.S. have voiced their concerns.
If Iran goes nuclear, a strategic shift in power could arise
in the Mid East leaving Israel venerable and the United States
in a precarious position with troops sitting across the border
in Iraq.
Iran has already been cited for supporting terrorist activities
and of particular concern is that the arms and bombs making their
way into Iraq are mostly being supplied from Iran.
In September, Iran blew off requests from the International Atomic
Energy Agency to cease its uranium enrichment activities. More
recently, tensions have increased even further as Iran test-fired
a newly-upgraded missile, capable of reaching Israel and US troops
next door in Iraq.
For a very
short time there exists a very small window of opportunity to
take out Iran's nuclear facilities before they go "hot"
in which case radiation leakage would have horrific effects.
Israel has
stated it wants the world to act and has threatened it would
act alone if necessary to stop what it views as Iran's nuclear
weapons development. It would probably be impossible for Israel
to do this alone due to their lack of specialized weaponry and
technical support.
Iran has as
at least 24 suspected nuclear facilities scattered around the
country, some underground and other strategically placed with
heavily populated areas making conventional air attacks an unlikely
scenario.
However help
seems to be on its way.
A few weeks
ago the Bush administration informed Congress that it was selling
Israel 5,000 precision-guided smart bombs, including 500 satellite-guided,
on-ton JDAM "bunker busters" - capable of penetrating
six feet of concrete.
John Bolton,
the U.S. undersecretary of state for arms control and international
security, stated that he wants the international community to
isolate Iran and further commented that "We cannot let Iran,
a leading sponsor of international terrorism, acquire nuclear
weapons."
This news was
not lost on Iran who issued a warning to Israel that they would
react "most severely" if their nuclear sites were attacked.
According to one report sited from military.com, Israel has built
replicas of Iran's nuclear facilitates in the Negev Desert where
their fighter bombers have been practicing test runs for months.
Given the dead-ended Mid East peace talks, Saudi Arabia's internal
turmoil, continuing terrorist actions, the vulnerability of American
troops in Iraq, and the question of Iran's nukes all contribute
to maintaining tensions at an all-time high.
The writing seems to be on the wall but hopefully cooler heads
will prevail to avoid a dangerous confrontation.
If you haven't
locked up some gold or oil investments yet I wouldn't be waiting
too long.
Bill Ridley
Contact
Website: www.jameswinston.com/
321gold Inc
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