Natural gas basins could turn the Mediterranean into a “sea of prosperity”

Natural gas basins could turn the Mediterranean into a “sea of prosperity,” but there is a risk that politics may hamper economic progress, the head of the International Energy Agency (IEA) has warned.

“The biggest problem in the eastern Mediterranean is not the existence of reserves, it is the potential that politics may supersede the economy,” Fatih Birol, the IEA’s chief economist, told daily Hürriyet.

“If this settles down, I believe eastern Mediterranean gas will raise the prosperity of regional countries and could become an important alternative to Russian gas,” he said. Continue reading

Hot money exodus ends currency wars

Turkey’s efforts to pull the lira off record lows on Monday are likely to be emulated across emerging markets as central banks fight to avert an exodus of foreign capital driven by the impending turn in US policy.

It’s all a far cry from a year or so ago, when emerging market exporters were battling rising exchange rates and Brazil was accusing Western policymakers of waging currency wars by flooding the world with cheap money. Continue reading

China’s Military Buildup Worrisome, Japan’s U.S. Ambassador Says

China’s “spectacularly active” naval posture and “massive” military buildup in Asia are part of a pattern of belligerent behavior toward Japan and other neighbors over maritime disputes, according to Japan’s ambassador to the U.S.

Speaking at a Bloomberg Government breakfast in Washington yesterday, Japanese Ambassador to the U.S. Kenichiro Sasae described China’s increasingly frequent forays to lodge territorial claims in the resource-rich East and South China Seas as “harassing” and “provocative.” Continue reading

Entangling the dragon in Middle-Eastern quicksands

The quicksands of the Arabian Desert are notorious for swallowing up anyone trying to control the area. Historically, that’s what happened to Turkey, Britain, France, Russia and the US. Sooner or later, all discovered that instead of dominating the Middle East, they ended up being dominated by the region’s never-ending problems.

And that may also be the fate of China, the latest power to be lured by the idea that it has to engage in Middle-Eastern diplomacy. Unless decision-makers in Beijing are thoroughly prepared for what awaits, they will also find that the region can absorb all their energies, and usually for no practical effect. Continue reading

Iran trumpets new naval warfare capabilities

And just to think, the Iranian navy during wartime will have thousands of speedboats taking off towards US Navy targets. The article also doesn’t take into account the thousands of missiles that could be launched upon naval vessels within the Persian Gulf. The stakes are quite high.

Iran’s speedboats can carry multiple kinds of anti-ship cruise missiles, and fire them while traveling at speeds higher than missile boats in any other navy in the world, an Iranian defense official claimed Monday. Continue reading

Armada of British naval power massing in the Gulf as Israel prepares an Iran strike

An armada of US and British naval power is massing in the Persian Gulf in the belief that Israel is considering a pre-emptive strike against Iran’s covert nuclear weapons programme.

Battleships, aircraft carriers, minesweepers and submarines from 25 nations are converging on the strategically important Strait of Hormuz in an unprecedented show of force as Israel and Iran move towards the brink of war.

Western leaders are convinced that Iran will retaliate to any attack by attempting to mine or blockade the shipping lane through which passes around 18 million barrels of oil every day, approximately 35 per cent of the world’s petroleum traded by sea.

Full article: Armada of British naval power massing in the Gulf as Israel prepares an Iran strike (The Telegraph)

Chinese Patrol Ships Reach Senkaku Islands

The Chinese military deployed its warships to the disputed Senkaku islands, a chain of uninhabited rocks in the East China Sea, amid a weeks-long diplomatic row with Japan over who has sovereignty over them.

Two patrol ships from the China Marine Surveillance, a maritime law-enforcement agency, were deployed and have reached waters near the islands on Tuesday “to assert the country’s sovereignty,” Chinese state-run media said.

The tiny islets are located approximately 125 miles from Taiwan and more than 1,200 miles from Tokyo, and are said to give the rights to reserves of natural gas, oil, and prime fishing spots in the adjoining sea. Japan has governed them since the 1970s when the United States transferred them.

The move comes after Chinese Communist Party head Hu Jintao told Japanese Prime Minister Noda Yoshihiko on Sept. 9 that “Japan must fully consider the seriousness of this situation and not make the wrong decision” while the two were attending the Asia-Pacific Economic Cooperation summit.

A day later, Premier Wen Jiabao said the Chinese regime “will absolutely make no concession on issues concerning its sovereignty and territorial integrity,” according to state media.

Full article: Chinese Patrol Ships Reach Senkaku Islands (Epoch Times)

Coal Industry Under Attack

A map has been generated at FreeMarketAmerica.org which tracks jobs lost on account of the Sierra Club’s war on coal. The data for the map comes from the National Mining Association, which says that over 1.2 million jobs have been lost in the coal industry. If mining stocks haven’t been doing well – whether we are talking coal or even gold – consider the environmental hits taken by the mining industry. Like the timber industry in the Pacific Northwest, coal mining has been specially targeted for reduction.

It’s true, of course. Last June Bloomberg ran a piece, “Displaced coal miners face slim job prospects.” All around the country, coal jobs are being lost. Coal is one of America’s key energy resources. It is an energy resource we don’t have to import. But the Obama Administration appears determined to crush the coal industry in order to save the planet from global warming. The Environmental Protection Agency (EPA) believes global warming is caused by greenhouse gases produced by coal as well as oil. Therefore, a radical effort is underway to curtail the use of coal.

Only a few years ago more than half our electricity was generated from coal. In the first quarter of 2012 the generation of electricity from coal dropped 21 percent from 2011 levels. The immediate culprit is the Cross-State Air Pollution Rule (CSAP). You can read about it at the Web Site of the EPA where it states: “On July 6, 2011, the US Environmental Protection Agency (EPA) finalized a rule that protects the health of millions of Americans by helping states reduce air pollution and attain clean air standards. This rule, known as the Cross-State Air Pollution Rule, requires states to significantly improve air quality by reducing power plant emissions that contribute to ozone and/or fine particle pollution in other states.” (In other words, coal is out.)

In the middle of the worst economic times since the Great Depression, when as many as 86 million are unemployed, how can the federal government purposely push for over 1.2 million in additional job losses? And yes, the job situation may be worse than official figures suggest. Readers should review CNN Money’s May 4 piece titled “The 86 million invisible unemployed” which stated that our work force has the “lowest force participation rate since 1981.”

As CNN Money explained, “Only people looking for work are considered officially unemployed.” So the situation is worse than the government represents. Yet the government would add to the number of those out of work by strangling the coal industry. When the price of oil remains high and a war in the Middle East could drive oil prices higher, wouldn’t it be wise to leave the coal industry alone? But then, we have to save the planet from global warming – or do we?

Full article: Coal Industry Under Attack (JR Nyquist | Financial Sense Online)

Standard Chartered Takes Sides with $250 billion against America?

An excellent and well-sourced article by Kevin D. Freeman. Click the link for the full story.

There is a story out today about how Standard Chartered allegedly hid $250 billion in 60,000 transactions with Iran that could have been used to fund nuclear development or even terror activities. This story, if true, blows away the arguments that no one would work against U.S. interests in the financial realm. The size and volume of the transactions is extraordinary. And, the investigation uncovered an attitude that is clearly against American interests. If all of this is true, we hope that it will wake up regulators to even more serious vulnerabilities in our system. Remember, we documented how a single one billion transaction roiled our Treasury markets a little over a year ago. These transactions total a quarter-trillion dollars!

We have pointed out the extraordinary arrogance contained in the idea that the world’s financial system is U.S. centric. In fact, in our previous post on this subject, Our Paper or Their Oil, we said the following:

A high-stakes drama is playing out now between the United States and Iran. On this blog, in our book Secret Weapon, in speeches and media interviews, we  have been warning about the reality of global economic warfare. For several years, our government has ignored this reality. The good news is that just recently the government has begun to recognize economic weaponry. The bad news is that the government has approached the subject with typical American arrogance. The worse news is that we may all be hurt as a result.

The news from Standard Chartered, a British-based multinational bank operating in 70 countries, provides a decent proxy of world opinion. The primary reason that the world continues to deal with Iran is that they have Oil. We are fighting with paper. Here is a telling quote from the CNBC story:

Regulators, quoting a New York bank branch officer, said the group director replied: “You f—ing Americans. Who are you to tell us, the rest of the world, that we’re not going to deal with Iranians.”

Here are important quotes from the New York Times story:

The bank “left the U.S. financial system vulnerable to terrorists, weapons dealers, drug kingpins and corrupt regimes,” the agency said in an order sent to the bank Monday …

The department accused the bank of undermining the safety of New York’s financial system through a range of violations including “falsifying business records” and “obstructing governmental administration,” according to the order.

Suspecting that Iranian banks were using their financial institutions to finance its nuclear weapons program, the United States Treasury Department banned certain transactions between Iranian banks and United States financial institutions in 2008.

Make no mistake, this is a global economic war. The international financial system is not serving American interests and as we have proven can be used as a weapon in the global economic war (seewww.SecretWeapon.org). Sadly, this is a shock to most Americans.

Full article: Standard Chartered Takes Sides with $250 billion against America? (Kevin D. Freeman)

China launches naval war games

“According to our annual plan for exercises, the Chinese People’s Liberation Army’s navy will in the coming days hold exercise activities in the waters near the Zhoushan islands,” the ministry said in a statement on Monday.

The ministry provided no other details on the war games.

But the China Daily said the live fire naval exercises would start on Tuesday and last for six days.

The exercises come after Japanese Prime Minister Yoshihiko Noda said Saturday that Japan was considering buying a chain of islands at the centre of its bitter territorial dispute with China and Taiwan.

Those islands in the East China Sea are called Senkaku in Japanese and Diaoyu in Chinese, and are further to the east than the area where the imminent naval exercises are being planned.

China claims essentially all of the South China Sea, home to vital shipping lanes and believed to be rich in oil and gas deposits. Taiwan and Brunei and Malaysia also have claims in the waters.

Full article: China launches naval war games (Defence Talk)

Iran And India: A Tangled Web Of Oil And Geopolitics

India and Iran have had a long relationship stretching back to ancient times. Iranian (or Persian) influence has produced a deep imprint upon Indian art, poetry, architecture and literature. With periodic invasions, military adventures and constant cross-migrations between the two empires, the people of Iran and northern India share many cultural and ethnic characteristics.

In the 21st century, the relations between these two great nations must be framed along the lines of geo-politics and oil, rather than art and culture.

Although India was greatly worried by the 1979 revolution in Iran that toppled the Shah and established an Islamic state, New Delhi and Teheran have generally enjoyed good relations. That tie became stronger with India’s insatiable appetite for energy in tandem with western sanctions that have pressured Iran to find customers for its crucial oil exports.

Indeed, India -which criticized the sanctions by the U.S., United Nations and European Union – recently became Iran’s top oil buyer.

Full article: Iran And India: A Tangled Web Of Oil And Geopolitics (International Business Times)

Iran Oil Exports Continue Off Radar

Iran continues to show that there is no bottom for third world economies.

Iran is trying to counter Western sanctions on its oil industry that aim to cripple Iran’s economy and convince it to acquiesce to Western demands regarding its nuclear program.

Reuters cites sources in the oil industry, trading and shipping who say the National Iranian Tanker Company has ordered all its captains to “switch off the black box transponders that are used in the shipping industry to monitor vessel movements.”

Full article: Iran Oil Exports Continue Off Radar (Eurasia Review)

Ahmadinejad: Iran Can Go Years with No Oil Sales

Iran can survive for years without selling oil, Iranian President Mahmoud Ahmadinejad claimed Tuesday, according to Fars news. “Even if we didn’t sell oil for two to three years, the country would manage easily,” he said.

The European Union is planning to ban Iranian oil in an attempt to pressure Ahmadinejad to drop the country’s nuclear program.

Full article: Ahmadinejad: Iran Can Go Years with No Oil Sales (Arutz Sheva)

Obama’s back-channel to Tehran bypasses allies Erdogan and Netanyahu

US President Barack Obama this week gave his two allies, the Turkish Prime Minister Tayyip Erdogan and Israel’s Binyamin Netanyahu, a lesson in the politics of expediency, when Tuesday, March 20, Secretary of State Hillary Clinton announced exemptions for 11 nations from new US financial sanctions against countries that don’t reduce the Iranian oil purchases by June 28.

Above all, Ankara is deeply engrossed in an effort to have the new Iranian and Iraqi pipelines to Europe routed through Turkey, reducing the Strait of Hormuz’s crucial importance as a primary route for the world’s oil supplies. This pipeline would also hurt Saudi Arabia and the other Gulf oil producers, all of whom are dead set against Erdogan’s hegemonic aspirations in the Middle East.

Full article: Obama’s back-channel to Tehran bypasses allies Erdogan and Netanyahu (DEBKAfile)

Obama Holds Saudis Back from Striking Iran – and Syria Too

It should be no secret that the Saudis are both fed up with the Obama administration and seek an end to the Iranian regime. They have even threatened to go nuclear should Iran be allowed to continue its nuclear program.

Hardly a day goes by without the Obama administration pointing out in some US media outlet the futility, wrongheadedness, hazards, superfluity etc. of Israel military action for pre-empting a nuclear Iran. The public has been informed, for instance, that it would only set Iran’s program back by a year, and that the ayatollahs have put their nuclear bomb program on hold. So what’s the hurry?

But about the equally strenuous White House effort to hold Saudi Arabia back from attacking Syria as well as Iran – hardly a word sees the light of day.

The fuss and pother about Israel’s intentions distract attention from the very real fears in Washington about the Saudi royal family’s plans for military action against Iran and its allies, Syria and Hizballah, and Riyadh’s efforts to draw the heads of the Gulf oil emirates into the action.

Riyadh puts no trust in the sanctions and embargo Washington and its Western allies have put in place to curb Iran’s nuclear aspirations. Instead, they see sanctions becoming a boon for Tehran

Tuesday, March 20, oil fell by only 1 percent after the Saudis announced their most detailed steps yet to make good on any shortfalls generated by the embargo on Iranian oil and the cutoff from March 17 of Iran’s banks from transactions through the Belgian-based Society for Worldwide Interbank Financial Telecommunications (SWIFT), which facilitates most of the world’s bank transfers.

Money in Iran’s pocket from sanctions-boosting oil prices

Saudi Arabian Oil Minister Ali al-Naimi announced the kingdom was pumping 9.9 million barrels per day – the highest level in decades – and was willing to turn the taps up to a maximum capacity of 12.5 million bpd to meet its customers’ every request.

Iraq, too, added 30,000 barrels per day to its production of 2.1 million bpd.

But these steps failed to reverse the upward price trend.

And the sanctions’ deleterious impact on Tehran was offset by profits from skyrocketing oil prices: Not only were the extra costs of circuitous trade routes covered, but the declining value of the Iranian rial flattened.

“We are ready and willing to put more oil on the market, but you need a buyer,” Al-Naimi said bitterly, aware that no matter how much more oil Saudi Arabia may pump, Tehran is still ahead of the sanctions game. Only if China, Japan and India can be persuaded to line up behind the Obama administration and make genuine cutbacks in their oil purchases from Iran, would the topped-up Saudi oil production come into play.

DEBKA-Net-Weekly’s sources in the Gulf report that the Saudis suspect the Obama administration of publicly talking up the latest round of sanctions (Barack Obama: “We’ve applied the toughest sanctions ever on Iran”), while assuring Tehran in quiet talks (See the item in this issue about secret US-Iranian talks), that, so long as they keep the dialogue going, sanctions will put Iran in the black.

US stalls British-Saudi arms sales

This week, US acted to stymie Saudi operations in two key arenas:

1. Iran was the first: They suspect the White House of ordering US International Traffic in Arms (ITAR) to stall the sale of British precision-guided Paveway IV bombs developed by Raytheon UK, a weapon that would enable Saudi Arabia to attack key Iranian Persian Gulf sites, such as its naval bases on the Sirri, Abu Musa, Greater Tunb and Lesser Tunb islands around the strategic Strait of Hormuz, and strategic locations on Iran’s Persian Gulf coast.

The Saudis believe the US administration is deliberately keeping those assault weapons out of their hands to frustrate a potential attack on Iran.

They had pinned their hopes on British Prime Minister David Cameron interceding on their behalf with President Barack Obama during his visit to Washington in mid-March and getting the weapons released to Riyadh.

But the bonhomie and shared jokes aside, Cameron made no headway in budging the US president from his opposition to the sale, although British interests are also at stake. The sale to Saudi Arabia of 72 Eurofighter Typhoons delivered by BAE Systems (the combination of British Aerospace and Marconi Electronic Systems), is still up in the air because without the precision-guided bombs, those bomber jets are not much use to the Saudis.

Washington stops Jordan allowing Saudi troops transit to Syria

2. The Obama administration is firing every stratagem in its quiver to hold Saudi Arabia back from military intervention in the Syria crisis.

DEBKA-Net-Weekly’s sources in the Persian Gulf disclose exclusively that, two weeks ago, SaudiKing Abdullah secretly asked Jordan’sKing Abdullah for permission to send Saudi military forces into Syria by way of the Hashemite Kingdom.

Senior Saudi princes, including Saudi Defense Minister Prince Salman bin Abdulaziz, had already been in touch with their Jordanian counterparts to discuss detailed plans which designated the routes Saudi forces would take, the Jordanian bases they would use and the Saudi Air Force’s tactics for covering the advancing Saudi troops and shielding the Kingdom of Jordan against potential Syrian air force action.

The Saudis plan to send troops in to the Syrian Druze Mountains and Horan regions for setting up safe havens to protect the beleaguered civilian population from Syrian military and security forces.

On March 15, Prince Salman attended a military parade on the grounds of the Eighth King Fahd Brigade in Tabuk in northern Saudia near the Jordanian border.

It was attended by a high-powered lineup: Chief of Staff Gen. Hussein Al-Qubail, Gen. Abdul Rahman Al-Binyan, Director General of the Prime Minister’s office, Gen. Prince Khaled bin Bandar, commander of Land Forces, and Maj. Gen. Eid Al-Shalawi, Commander of the Northern Region.

The parade of military prowess and resolve was mean to impress on Jordan that the Saudis were serious about getting a force into Syria through its territory.

The two Abdullahs in deep discord

This Saudi plan was soon nipped in the bud.

Riyadh was informed that US officials had warned the Jordanian monarch against acceding to the Saudi request. Stuck in an impasse, the Hashemite king stopped answering insistent Saudi calls for clarifications.

Seeing their plans for intervention in Syria in ruins, the Saudis decided to get their own back.

In an unprecedented move against a fellow Arab ruler, they arranged for an Arab diplomat, who remained anonymous, to inform the Omani Gulf News agency that Saudi arms were being pumped to the anti-Assad Syrian rebels and the first shipment was on its way to destination through Jordan.

By spilling the beans about Jordan’s clandestine role in this traffic, Riyadh exposed the kingdom to Syrian punitive action.
This maneuver brought the Jordanian king hurrying over to Riyadh for a secret visit.

Our sources report that when he tried explaining to the Saudi king that if Assad was toppled his successors would be worse, he was brusquely brushed aside. Saudi King Abdullah, who is twice the age of the Hashemite royal, reproved him sharply and told him it was time to make up his mind on which side he was in the Middle East.

The two kings Abdullah parted in deep discord.

Saudis are gunning for the US and Turkey

As for Syria, Bashar Assad will have understood by now that Riyadh is rolling up its sleeves for military action against him as soon as a way can be found. Four complications are unfolding:

First: The disclosure that weapon shipments to anti-Assad rebels were passing through Jordan has revived the Saudi pledge of a military and air shield for the Hashemite Kingdom against Syrian aggression. This may lead to military and aerial clashes between Syria and Saudi Arabia on Jordanian soil very near the sensitive junction of Jordanian, Lebanese and Israeli borders.
With this eventuality in mind, Riyadh is reported by DEBKA-Net-Weekly’s military sources to have selected the Druze Mountains and Horan region as potential safe havens for persecuted Syrians.

Second: Saudi-US relations are in sharp decline: Riyadh’s Syrian initiative is an act of protest against Washington’s decision to refrain from military intervention to stop Assad’s brutal suppression of the revolt in Syria – even after at least 8,000 Syrian civilian deaths.

The encounter three weeks ago in Tunis between US Secretary of State Hillary Clinton and Saudi Foreign Minister Saud al-Faisal, ended with Faisal angrily stalking out with words to the effect of: if you don’t take action against Bashar Assad, we will.

The Saudis fully intend now to make good on that threat.

Third: The Saudis are gunning for Turkey. They intend to show up Ankara’s toothlessness in the fight against Assad in contrast to its leaders’ high rhetoric about their prowess as a Middle East Muslim superpower.

Most of all, they can’t abide Prime Minister Tayyip Erdogan’s pretensions as go-between for the back-channel dialogue the Obama administration is conducting with Iran’s Supreme Leader Ayatollah Ali Khamenei. (See a separate item in this issue.)
Fourth: Riyadh finds it essential to counteract Iran’s airlift of arms and equipment into Syria through Iraqi airspace. The Saudis refuse to stand by idly while Iran enhances its position in Syria and Iraq.

Full article: Obama Holds Saudis Back from Striking Iran – and Syria Too  (DEBKAfile)