Look Ahead In The Middle East: 6-12 Months In A Crystal Ball
by ADMINISTRATOR on NOVEMBER 20, 2017
Is it Utopia or Reality?
By Wallace Bruschweiler and
The purpose of this article is to examine the current and rapidly developing trends in the Middle East, and attempt to project likely scenarios in the near to middle-term future. Only time will tell if what we are projecting as possible is a utopia, or will in fact become reality.
In June 2009, then U.S. President Barack Hussein Obama went to Cairo and delivered a speech at Cairo University. It was co-hosted by Al-Azhar University, the preeminent theological seminary in the Islamic world. Observing this speech from the front rows – specifically requested by Obama – were members of the Muslim Brotherhood, the umbrella organization of Islamic terror, from which groups like Al Qaeda, the Abu Sayaff Group, and ISIS are ultimately derived.
This speech, entitled “A New Beginning,” was the thematic basis for the Obama presidency. Ultimately, the administration would back the Muslim Brotherhood (and other, aligned terrorists groups) in the so-called Arab Spring to overthrow the existing governments in Tunisia, Egypt, and Libya (while ignoring a genuine uprising in 2009 in Iran, see here). Syria and Jordan were also targets of these Arab Spring uprisings. Fast-forward to 2015, and the Obama administration had completed what they consider their crowning foreign policy achievement: a “nuclear deal” with Iran, that the administration claimed would prevent Iran from acquiring nuclear weapons and the requisite rocket technology to deliver the warheads. In praxis, however, the deal legitimized Iran internationally, increased their regional prestige, and emboldened their territorial ambitions – see Syria, Iraq, and Yemen.
The net-net result of Obama’s backing of the terrorist Muslim Brotherhood and the terrorist regime in Tehran was a reckoning between several regional powers who had, and have, an interest in containing Iranian influence. In particular, Egypt, Israel, and Saudi Arabia – notably, all historically American allies – are coordinating and acting to check the expansion of Iranian power while simultaneously attempting to contain the spread of terrorism, which routinely reaches the shores of Europe and America. Moreover, the struggle today largely breaks down into a Sunni (led by Egypt and Saudi Arabia) vs. Shiite (led by Iran) confrontation.
Probably the most visible and promising changes to the region are happening in Saudi Arabia, under the rule of its young and reform-minded Prince, Mohammed bin Sultan (aka “MBS”).
When President Donald Trump traveled to Riyadh on his first-ever trip abroad, he famously placed his hands on a glowing purple globe, alongside King Salman and President el-Sisi of Egypt. At the time, the symbolism was not completely understood. Today, however, we can put it simply: with that act of pageantry, he signaled to the world that he would reverse Obama’s failed “diplomacy” and embrace the new alliance that had already formed. In recent weeks, evidence is overwhelming:
Prime Minister Benyamin Netanyahu undoubtedly recognizes the historical import of the moment, as the Arab world, led by Saudi Arabia, seems likely to reach a lasting peace with the Jewish state. The opportunity also presents a unique chance to finally settle the Palestinian problem in Judea and Sumaria (i.e., West Bank).
In addition to the developments above, Israeli policy can be observed through the lens of the following events and trends:
As president of the most populous Arab country, el-Sisi has led the calls for reform of Islam since his coming into power. Not only did he call out the Imams at Al-Azhar for promoting murder of non-Muslims, but he has remained dedicated to eradicating the Muslim Brotherhood’s influence within Egypt. In conjunction with aggressive military operations against neighboring terrorists, this puts el-Sisi in a serious security dilemma.
The Hashemite Kingdom of Jordan has, for decades, worked with Israeli and western security services. King Abdullah Hussein of Jordan, a western-educated Arab ruler who dresses in a suit, faces an extremely delicate internal political situation. The Muslim Brotherhood, and lately Hamas, are powerfully represented in Jordan’s government, and as such the King’s friendly stance with Israel is muted out of concern for domestic unrest.
Yemen, to Saudi Arabia’s south, is in the midst of a civil war/insurrection. The Houthi rebels, located in former North Yemen, are being armed by Iran. Tensions escalated with Riyadh when a second rocket was fired at King Khalid airport from Yemen.
Bashar al-Assad, with the aid of Russia, remains in control of much of Syria including Damascus, Aleppo, and Homs. The war will enter its seventh year this January, and Assad will likely remain in control. Israel and Egypt are not opposed to Assad’s rule, and the Russian footprint means that the territory under government control will not be surrendered.
With Iran-friendly Shiite rule in Baghdad, it is difficult to consider eastern Iraq an independent country. Iraq is effectively divided into three territories today: a Shiite dominated center east, with Kurds in the North, and Sunnis to the west and south.
The Arab Spring, the rise and fall of ISIS, and a long and distinct history make the formation of an independent Kurdistan more likely than ever. The United States should finally step up in this discussion, and back the creation of an independent Kurdistan.
These tiny Gulf States have effectively lined up firmly behind Saudi Prince Mohammed bin Sultan. With the exception of Qatar (see below), they are de facto aligned with Egypt and Israel.
The outlier on the Arabian Peninsula, Qatar, is defiant in the face of sanctions and diplomatic isolation by the Gulf Cooperation Council. Qatar’s network Al Jazeera was instrumental in promoting the Arab Spring, and their insistence on maintaining excellent relations with Iran are unacceptable to their Gulf State neighbors.
Following World War I (1918) and the collapse of the Ottoman Empire (1924), the borders of the Middle East were redrawn, largely arbitrarily, creating several nations with natural flashpoints among and within themselves. The history of last century in the Middle East is the story of these flashpoints, resulting from religious, ethnic, and linguistic divides.
An unintended consequence of Barack Hussein Obama’s support for terrorist groups during the Arab Spring, such as the Muslim Brotherhood, and the terrorist regime in Iran, is an opportunity for stable allies to force a redrawing of the map. While a lasting peace remains elusive, it is not altogether unrealistic to expect that one outcome of this turmoil may be the Arab recognition at large of Israel, and the isolation/trimming down to size of Iran and its wide support of international terrorism.
Soros and his ‘226 EU friends’ thrust into spotlight by Farage – so who are they?
Published time: 17 Nov, 2017 22:28 Edited time: 18 Nov, 2017 19:38
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George Soros © Philippe Desmazes / AFP
Picking up the anti-Soros torch from Hungarian leader Viktor Orban, UK politician Nigel Farage is seeking to investigate fellow EU MEPs who support the controversial vision of the wealthy financier. But are Orban and Farage’s fears valid?UK politician Nigel Farage, the prominent face of Brexit, is now concerned about Europe’s destiny. Addressing the EU Parliament this week, Farage provided some thoughtful ideas as to the source of the claims that Russia had somehow manipulated the Brexit vote, as well as the Trump election.
“Just last week, the electoral commission, in the UK, launched an investigation to find out whether the ‘Leave’ campaign took offshore money or Russian money,” Farage said.
"This came about as a result of questions asked in the House of Commons by one Ben Bradshaw, somebody linked to an organization called Open Society.”
But Farage, who seems to take great delight in agitating his fellow MPs, was just warming up. He went on to provide yet another example of an EU parliamentarian working on behalf of George Soros, this time against Hungarian PM Viktor Orban, who has accused the financier of seeking to create “a Europe of mixed population.”
“We even had last week Mr. [Guy] Verhofstadt lobbying on behalf of Mr. Soros at the Conference of Presidents in a battle that is going on with Viktor Orban, the prime minister of Hungary,” Farage said, pointing directly at Verhofstadt as he spoke.
“I wonder,” Farage continued, “when we are talking about ‘political collusion,’ I wonder if we are looking in the wrong place.”
Nigel Farage calls on EU to investigate George Soros funding, collusionFarage described Soros’s influence in Strasbourg and Brussels as “truly extraordinary.” And that influence looks set to increase dramatically now that Soros has donated the bulk of his wealth - $18 billion - into his Open Society pet project, which campaigns for open borders and supranational structures such as the European Union.
Farage concluded his short, fiery monologue with a weighty statement: “I fear we could be looking at the biggest level of international, political collusion in history.”
On the surface, there seems to be some legitimacy to Farage’s claim. According to public sources, Open Society European Policy Institute (OSEPI), the EU policy arm of Open Society Foundations, met with members of the European Commission on 44 separate occasions in 2016. And now that the organization has just been energized with $18 billion, it would seem apparent that that influence is set to increase.
Moreover, the Soros organizations published a pamphlet providing details on a list of 226 reliable “friends” who serve in the European Parliament. Farage said he would call on the parliament to set up a special committee to investigate the issue.
Who are Soros’ 226 EU ‘friends’?In a 177-page pamphlet published by Open Society, entitled “Reliable Allies in the European Parliament (2014-2019),” 226 EU MEPs are listed and labeled according to their political orientation and views.
According to the pamphlet, “The presence of an MEP in this mapping indicates that they are likely to support Open Society’s work. Considering there are 751 members of the European Parliament, “reliable allies” of George Soros hold at least one-third of seats."
How George Soros’ people enlisted me as a ‘foot-soldier in the fight against Putin’So what sort of qualifications does an MEP need to be included among Open Society’s “reliable allies?” A quick preview of the candidate’s description field provides some good indication as to what Soros expects from his allies, including a political philosophy that includes support of the LGBTI (lesbian, gay, bisexual, transgender, and/or intersex) movement, open borders and an anti-Russia stance.
Among the 226 chosen, there is one Yana Toom, an MEP from Estonia, who comes in for a bit of criticism despite her inclusion. “Refused supporting the European Parliament’s first resolution on the Ukraine-Russia conflict in July 2014, and may be pro-Russia to an unknown extent (and, in that case, not necessarily an Open Society).”
For anyone who questions whether Open Society works directly against Russian interests, that single line should dispel all doubts. Moreover, it provides some background as to why Russia in 2015 banned Open Society from operating on its territory due to the threat it posed to the country’s “constitutional order.”
Another MEP on the list, Monica Macovei of Romania, serves as something like the golden mean for star-studded Soros status.
“Resolutely progressive; unquestionable ally of Open Society values; does not hesitate to go against her group’s instructions; however, can sometimes be described as a loose cannon with her own, uncompromising set of priorities.”
When reading such an assessment, one might get the mistaken impression that the European Parliament is designed to serve the will of George Soros and his highly controversial agenda, as opposed to the will of the European peoples.
What does Soros want?To say that George Soros, who was born and raised in Budapest, Hungary, has an influence on the global scene, would be the understatement of the century. His excessive wealth allows him to finance a veritable army of organizations, many serving at cross purposes.
‘Stop Operation Soros’ movement begins in MacedoniaIndeed, Soros, 87, has been connected to movements and civil disturbances as diverse as distanced as Black Lives Matter movement in the US, to the Maidan uprising in Ukraine.
And nowhere has Soros’s influence been more felt than in the ongoing European debate over migrants.
It looks like the European refugee crisis, which has been blamed on the Syrian civil war, would not occur in its current intensity without the direct assistance of the Open Society Foundation.
Thanks to the advocacy work of the Migration Policy Institute and the Platform for International Cooperation on Undocumented Migrants (PICUM), both Soros-sponsored organizations, the mass resettlement of Muslims from the Middle East and North Africa into Europe became the norm.
In fact, it appeared that the so-called “Merkel Plan” – the deal struck by the EU and Turkey – was the brainchild of the European Stability Initiative, “in addition to the largesse of George Soros’ foundations,” F. William Engdahl wrote in the Near Eastern Outlook.
Considering that the massive influx of Muslim migrants threatens to change the face of “Christian Europe” forever, and without any vote on the matter by the people of Europe, perhaps it is time to see exactly what kind of direct influence George Soros and his Open Society Foundation are having on European parliamentarians. After all, these are not the play toys of any one individual, but the representatives of an entire state.
Robert Bridge, for RT
House Committee Votes to Stop Funding Terrorism
Nov 16, 2017
The House Committee of Foreign Affairs unanimously voted yesterday to proceed with the Taylor Force Act, which will defund the Palestinian Authority (PA) until they cease and denounce their “Pay to Slay” policy, which rewards terrorists and their families for acts against Israel and the United States. The Taylor Force Act will now advance to the Senate and House for a floor-wide vote.
Liberty Counsel and Christians in Defense of Israel have been instrumental in encouraging legislators to pass the Taylor Force Act. This legislation is named in memory of U.S. army veteran and Vanderbilt student, Taylor Force, who served in combat deployments to Afghanistan and Iraq, only to be senselessly killed as a civilian by a Palestinian terrorist in Israel.
The Taylor Force Act will force the PA to face the consequences of its violence or end this abhorrent practice immediately. The PA currently gives over $300 million annually to terrorists and their families. However, since the U.S. provides over $700 million of direct and indirect aid to the Palestinians, American taxpayer dollars are providing the funds to reward terrorists who kill American and Israeli citizens. As soon as attackers are arrested, the PA provides canteen expenses, salary and health benefits. A government job upon release is guaranteed for those sentenced to five or more years. The families of “martyrs” also receive large payments for the loss of their family member.
If the bill is enacted, the PA would have to revoke any law, decree or document authorizing a compensation scheme for prisoners “that uses the sentence or period of incarceration to determine the level of compensation paid.” The secretary of state would also have to certify that the PA “has terminated payments for acts of terrorism against American and Israeli citizens after the attackers being fairly tried and who have been imprisoned for such acts of terrorism, including the family members of the convicted individuals.” The PA would also have to take “credible steps” against incitement to violence against Israelis and Americans.
OUR WORLD: SAUDI PURGES AND DUTY TO ACT
BY CAROLINE B. GLICK
NOVEMBER 6, 2017 21:33
The recent political shakeup in Saudi Arabia has great implications for the country's future, especially on its relationship with funding terrorist organizations.
For 70 years, Saudi Arabia served as the largest and most significant incubator of Sunni jihad. Its Wahhabist Islamic establishment funded radical mosques throughout the world. Saudi princes have supported radical Islamic clerics who have indoctrinated their followers to pursue jihad against the non-Islamic world. Saudi money stands behind most of the radical Islamic groups in the non-Islamic world that have in turn financed terrorist groups like Hamas and al-Qaida and have insulated radical Islam from scrutiny by Western governments and academics. Indeed, Saudi money stands behind the silence of critics of jihadist Islam in universities throughout the Western world.
As Mitchell Bard documented in his 2011 book, The Arab Lobby, any power pro-Israel forces in Washington, DC, have developed pales in comparison to the power of Arab forces, led by the Saudi government. Saudi government spending on lobbyists in Washington far outstrips that of any other nation. According to Justice Department disclosures from earlier this year, since 2015, Saudi Arabia vastly increased its spending on influence peddling. According to a report by The Intercept, “Since 2015, the Kingdom has expanded the number of foreign agents on retainer to 145, up from 25 registered agents during the previous two-year period.”
Saudi lobbyists shielded the kingdom from serious criticism after 15 of the 19 September 11 hijackers were shown to be Saudi nationals. They blocked a reconsideration of the US’s strategic alliance with Saudi Arabia after the attacks and in subsequent years, even as it was revealed that Princess Haifa, wife of Prince Bandar, the Saudi ambassador to Washington at the time the September 11 attacks occurred, had financially supported two of the hijackers in the months that preceded the attacks.
The US position on Saudi Arabia cooled demonstrably during the Obama administration. This cooling was not due to a newfound concern over Saudi financial support for radical Islam in the US. To the contrary, the Obama administration was friendlier to Islamists than any previous administration. Consider the Obama administration’s placement of Muslim Brotherhood supporters in key positions in the federal government. For instance, in 2010, then secretary for Homeland Security Janet Napolitano appointed Mohamed Elibiary to the department’s Homeland Security Advisory Board. Elibiary had a long, open record of support both for the Muslim Brotherhood and for the Iranian regime. In his position he was instrumental in purging discussion of Islam and Jihad from instruction materials used by the US military, law enforcement and intelligence agencies. The Obama administration’s cold relations with the Saudi regime owed to its pronounced desire to ditch the US’s traditional alliance with the Saudis, the Egyptians and the US’s other traditional Sunni allies in favor of an alliance with the Iranian regime.
During the same period, the Muslim Brotherhood’s close ties to the Iranian regime became increasingly obvious. Among other indicators, Egypt’s Muslim Brotherhood-affiliated president Mohamed Morsi hosted Iranian leaders in Cairo and was poised to renew Egypt’s diplomatic ties with Iran before he was overthrown by the military in July 2013. Morsi permitted Iranian warships to traverse the Suez Canal for the first time in decades.
Saudi Arabia joined Egypt and the United Arab Emirates in designating the Muslim Brotherhood a terrorist group in 2014.
It was also during this period that the Saudis began warming their attitude toward Israel. Through Egyptian President Abdel Fattah el-Sisi, and due to Prime Minister Benjamin Netanyahu’s leading role in opposing Iran’s nuclear program and its rising power in the Middle East, the Saudis began changing their positions on Israel.
Netanyahu’s long-time foreign policy adviser, Jerusalem Center for Public Affairs president Dr. Dore Gold, who authored the 2003 bestseller Hatred’s Kingdom: How Saudi Arabia Supports the New Global Terrorism which exposed Saudi Arabia’s role in promoting jihadist Islam, spearheaded a process of developing Israel’s security and diplomatic ties with Riyadh. Those ties, which are based on shared opposition to Iran’s regional empowerment, led to the surprising emergence of a working alliance between Saudi Arabia, Egypt and the UAE with Israel during Israel’s 2014 war with Hamas – the Palestinian branch of the Muslim Brotherhood.
It is in the context of Saudi Arabia’s reassessment of its interests and realignment of strategic posture in recent years that the dramatic events of the past few days in the kingdom must be seen.
Saturday’s sudden announcement that a new anti-corruption panel headed by Crown Prince Mohammed bin Salman, and the near simultaneous announcement of the arrest of more than two dozen royal family members, cabinet ministers and prominent businessmen is predominantly being presented as a power seizure by the crown prince. Amid widespread rumors that King Salman will soon abdicate the throne to his son, it is reasonable for the 32-year-old crown prince to work to neutralize all power centers that could threaten his ascension to the throne.
But there is clearly also something strategically more significant going on. While many of the officials arrested over the weekend threaten Mohammed’s power, they aren’t the only ones that he has purged. In September Mohammed arrested some 30 senior Wahhabist clerics and intellectuals. And Saturday’s arrest of the princes, cabinet ministers and business leaders was followed up by further arrests of senior Wahhabist clerics.
At the same time, Mohammed has been promoting clerics who espouse tolerance for other religions, including Judaism and Christianity. He has removed the Saudi religious police’s power to conduct arrests and he has taken seemingly credible steps to finally lift the kingdom-wide prohibition on women driving.
At the same time, Mohammed has escalated the kingdom’s operations against Iran’s proxies in Yemen.
And of course, on Saturday, he staged the resignation of Lebanese Prime Minister Saad Hariri amid Hariri’s allegations that Hezbollah and Iran were plotting his murder, much as they stood behind the 2005 assassination of his father, prime minister Rafiq Hariri.
There can be little doubt that there was coordination between the Saudi regime and the Trump administration regarding Saturday’s actions. The timing of the administration’s release last week of most of the files US special forces seized during their 2011 raid of al-Qaida leader Osama bin Laden’s compound in Abbottabad, Pakistan was likely not a coincidence.
The files, which the Obama administration refused to release, make clear that Obama’s two chief pretensions – that al-Qaida was a spent force by the time US forces killed bin Laden, and that Iran was interested in moderating its behavior were both untrue. The documents showed that al-Qaida’s operations remained a significant worldwide threat to US interests.
And perhaps more significantly, they showed that Iran was al-Qaida’s chief state sponsor. Much of al-Qaida’s leadership, including bin Laden’s sons, operated from Iran. The notion – touted by Obama and his administration – that Shi’ite Iranians and Sunni terrorists from al-Qaida and other groups were incapable of cooperating was demonstrated to be an utter fiction by the documents.
Their publication now, as Saudi Arabia takes more determined steps to slash its support for radical Islamists, and separate itself from Wahhabist Islam, draws a clear distinction between Saudi Arabia and Iran.
Given Saudi Arabia’s record, and the kingdom’s 70-year alliance with Wahhabist clerics, it is hard to know whether Mohammed’s move signals an irrevocable breach between the House of Saud and the Wahhabists.
But the direction is clear. With Hariri’s removal from Lebanon, the lines between the forces of jihad and terrorism led by Iran, and the forces that oppose them are clearer than ever before. And the necessity of acting against the former and helping the latter has similarly never been more obvious.___________________________________________________________
WATCH: Saudi minister calls Hezbollah ‘Lebanese party of the devil’
November 8, 2017
Thamer al-Sabhan, Saudi Arabia’s Gulf Affairs Minister, referred to Hezbollah as the “Lebanese party of the devil,” whose aggression has led to a state of war between Saudi Arabia and Lebanon.
Aramco, The Purge, and the Chinese Attack on the Dollar
by KEVIN D. FREEMAN on NOVEMBER 6, 2017
There is so much international activity right now that is slipping under the radar of most Americans. While the news has been dominated with stories of whether or not the DNC rigged the primary for Hillary Clintonand also word of the tragic shooting at a Texas church, the geopolitical spectrum is lit up like a Christmas tree.
Over the weekend three very important pieces of the global puzzle were laid on the table. First, we will tell you what those are and then we will do our best to make sense of it all.
First, President Trump put out a tweet asking that the Saudis IPO their Aramco offering on the NYSE (new York Stock Exchange).
Second, the Asian press was discussing how President Trump should arrive with “hat in hand” because we owe China (and much of Asia) so much money.
Trump must tread carefully with his Asian bankersIt’s not like the U.S. is flush – it has a $666 billion deficit. Why, then, budget-busting tax cuts that increase inflation risk, imperil credit ratings and irk his bankers?
ASIA TIMES By William Pesek October 30, 2017 10:16 AM
…As China’s Xi Jinping digs in for another five-year term – with no heir apparent in sight – Washington’s top investor may not be in a giving mood.
Nor might he be very forgiving about tax changes that widen America’s budget deficit and threaten the value of Beijing’s $1.2 trillion of Treasuries. Trump, after all, has on more than one occasion raised the specter of defaulting on debt to gain leverage in negotiations.
Even before Trump, Beijing had a complicated relationship with the fiscal vulnerabilities its dollar holdings pose. In 2009, for example, then-Premier Wen Jiabao raised concerns about Washington’s giant post-crisis stimulus.
“We have made a huge amount of loans to the United States,” Wen said. “Of course, we are concerned about the safety of our assets. To be honest, I’m a little bit worried.”… [Read the entire article at Asia Times.]
Third, we are witnessing a purge in Saudi Arabia led by Crown Prince Mohammed bin Salman, cracking down on “corruption.” We believe that all of this is linked and a part of a serious and deadly global dance.
Royal purge sends shockwaves through Saudi Arabia’s elitesMove consolidates power of Prince Mohammed bin Salman as he attempts to reform kingdom’s economy and societyTHE GUARDIAN, Martin Chulov Last modified on Monday 6 November 2017 08.57 ESTSaudi Arabia’s leadership has pulled off its boldest move yet to consolidate power around its young crown prince, Mohammed bin Salman, arresting 11 senior princes, one of the country’s richest men and scores of former ministers in what it billed as a corruption purge.
The move sidelined at least 20 senior figures, among them outspoken billionaire, Prince Alwaleed bin Talal, sending shockwaves through the ranks of the kingdom’s elites, who had long viewed senior royals as immune.
The scale and targets of Saturday’s purge – ordered by royal decree from King Salman – dwarfed anything seen in Riyadh in recent years, deliberately targeting figures deemed previously to be untouchables…. [Read entire article at THE GUARDIAN]
We believe these three things to be deeply interconnected. Here is our preliminary analysis:
The RootsThere are a multiple factors at play but the roots began with a Saudi-led oil war. Back in early 2014, oil prices had been hovering around $100 per barrel and the Saudi budget required that to cover lavish spending and massive entitlement programs for the population at large. When money is so readily available, corruption is likely. The Saudis chose to begin an oil war and had multiple targets: Russia, Iran, and the United States shale/fracking industry. They were pretty open about what they were doing and why. The Saudis saw Iran gaining hegemony in the Middle East with separate support from Russia and the Obama Administration. In addition, they saw their livelihood threatened as they kept having to lower oil production to maintain the global price. The upstart American frackers were pumping like crazy and America was on a path to energy independence.
So, in 2014 the Saudis started to pump more oil, price be damned, in an all-out oil war. They hoped that this would drive American producers into bankruptcy and de-fund the Russians and weaken Iran. They had done this before and it had worked. This time, however, the Saudi approach seriously backfired. The American shale industry innovated with new technology and lowered their cost of production far below what the Saudis could stomach as a long-term price. Suddenly, America became the swing producer. The Saudis were in a huge budget hole and had to fill the gap by selling down their once vast Treasury bond holdings.
When all was said and done, the Saudis lost the oil war they had started. But it left them in a huge hole financially. Russia became a “strange bedfellow” as Putin had been attacking American fracking already andRussia and Saudi Arabia both desperately needed higher global oil prices. In addition, with the selloff of Saudi holdings of American debt to cover the budget shortfall, all of a sudden the petrodollar concept began to crack, a Putin dream if there ever were one.
With America no longer the largest importer of foreign oil, the Saudis also increasingly must look to China. The Chinese are still very large holders of American debt. But they also have a long-term plan to undermine and displace the U.S. dollar. [While most observers used to argue that the Chinese would never drop the American dollar as primary reserve currency, many now admit that such efforts are underway. They just don’t understand why.] The Chinese use a lot of oil and they have to pay for it in American dollars. The leadership resents that. And the Chinese have secretly supported Iran, a nation that shouts “death to America” and has denounced the U.S. dollar. The Chinese are now pressuring the Saudis to dump the dollar.
The Saudis in the meantime have lost their dollar holdings, lost their oil-price leverage against Iran, and found a new connection with Russia. And they need capital. Lots of it. There is a grand $2 trillion diversification plan and it starts by selling 5% of their state-owned oil company for $100 billion. A little bit of pocket change to tide them over.
Initially the thought was to sell the Aramco stake in an Initial Public Offering (IPO) either on the London or New York Stock Exchange. London doesn’t seem that interested. Then, there was the thought of offering the stake to China directly. Of course, there were complicating Middle East factors involving Qatar and Turkeywhich seemed to be out of the Saudi orbit and aligning with Iran.
It was in this environment that President Trump shocked the world with his election a year ago. Few had even imagined he could win. It changed the domestic landscape. Even more profoundly, although perhaps in a less obvious way, the Trump victory altered the global landscape. And the repercussions are being felt in shockwaves right now.
President Trump pushed the Saudis to clean up their act and end funding of terrorists. President Trump “threw a fit” about the Iran deal orchestrated by President Obama. President Trump threatened a “get tough” policy with China. At the same time, the Saudis joined Egypt in calling out Qatar and Turkey for siding with the Muslim Brotherhood and also with Iran. Complicating issues further has been the U.S. push on China to get North Korea to fall in line. Yep, it’s complicated. And the Trump Adminsitration appears to have competing factors at work inside of itself with many Obama and Deep-State holdovers working against the more revolutionary Trump approach.
All of this leads up to this past week and sets at least some of the context through which we can view is happening now.
Here are our “educated guess” observations at this point:
From our perspective, it is a little early to tell if the purge in Saudi Arabia is a long-term net positive or negative for America (although initial reports claim President Trump’s blessing). Some would argue that the purge removed elements that would stand against an Aramco deal with China, following a Putin and Xi roadmap, and perhaps ultimately paving the way for an assault on the dollar. On the other hand, others view the purge as removing radical elements and favoring the American position. Coupled with the move against Qatar, Turkey and ultimately Iran this is seen as supporting a more moderate Islamic approach that is pro-West and businesslike. Both sides make passionate arguments. Only time will tell which view, if either, is correct.
In regard to the President’s pro-Aramco IPO tweet, we have serious reservations. Is this a signal that the new Saudi Arabia is squarely on our side as some might suggest? Given the recent cozying with Russia and China we have reason to be doubtful. Is this President Trump trying to head off an attack on the dollar? Or, is this President Trump simply wanting to win a deal for America?
If the push for an Aramco IPO in New York is designed to protect the dollar, there are better ways to do that. One would be to explain to the Saudis that dumping the dollar now would have serious negative repercussions for them, far beyond what they may be imagining. If oil were priced in another currency, American energy producers would be freed substantially to take over as the top global producer. This was unthinkable a few years ago when oil exports were outlawed, our domestic supplies viewed as limited, and our cost of production far above that of the Saudis. But things have drastically changed.
The export ban has been lifted. Thanks to technology, our recoverable oil is far greater than we could have imagined. And, we can produce a barrel of oil for far less than the Saudi budget requires for break even. So, if the Saudis dumped the petrodollar, we would no doubt suffer some serious economic consequences. But we would also take advantage of a weakened dollar to gain substantive global oil market share. Oil would seem cheap to buyers with the weaker dollar but our producers would get paid nicely. The Saudis would lose control quickly. China would own Aramco in short order (or control it at the very least). Making Saudi Arabia aware of these facts might give them great pause before attempting any anti-dollar move.
I would make the argument to President Trump that he has already placed us in the much stronger position in regard to Aramco. Our economy has strengthened. Repatriation of corporate earnings would solidify the dollar. Regulatory reform has unleashed energy productivity. Therefore, we should not allow an IPO in New York UNLESS the Saudis genuinely clean up and clear out all material support (or any support) for terrorism. The effort against the Muslim Brotherhood has seemed to be a decent start. The effort against Iran is promising as well. But will they follow through regarding radical Wahhabism? Are they capable of truly rejecting terrorism?
The second demand prior to an Aramco IPO must be full transparency and true minority shareholder rights. We should not even consider allowing any American money into a Saudi-government controlled company where the rights of the investors are not respected. We made this mistake with Alibaba and the Chinese already. Only time will tell how much that will cost us. We have already seen Alibaba use our money to buy up Silicon Valley companies and place them under Chinese ownership. Remember, buyers of the Alibaba IPO did not receive shares in the Chinese company. They received shares in a Cayman Islands company that has a contract with Alibaba. We cannot let the Saudis pull a similar trick.
Finally, the deal must make economic sense for the buyers. Asking $100 billion for a 5% stake seems more than a bit rich at this point, especially when we have a thriving domestic oil industry. The whole of the company is thus valued at $2 trillion. Is it worth that as oil seems much more plentiful, prices are down, and long-term usage at least subject to question with electric cars?
In addition, I would explain to President Trump that even if the Saudis had us over a barrel regarding the IPO and the risks to the dollar, what assurance would we have that they wouldn’t return us to the same position after the IPO ended? They could always offer another 5% to China with the same threat to displace the petrodollar. That’s how blackmail works. You never stop paying. And that brings us to the crux of the matter.
The weekend purge removed Saudi prince Alwaleed bin Talal who headed Kingdom Holdings. He has been viewed as a connector to Western finance as Kingdom Holdings holds sizable stakes in Citigroup and 20th Century Fox. But he also was the one who publicly declared that after an IPO, the Saudis could offer another 5%, possibly to China. Was he removed because of corruption as the official statement declares? Or, was he a proponent of closer ties with China? Or an opponent? We have never been fans of Alwaleed bin Talal for multiple reasons so it is hard to see his inclusion in the purge as something bad.
We have solutions for China as well. We do not have to be in a position of weakness. In fact, if we stop their Intellectual Property theft and forced technology transfer, we can retake some of the economic growth they have been stealing from us. The Chinese should be shown that cooperation with America is in their interests. To make the case, however, requires a very strong domestic economy combined with a robust military capability. And, we must prepare for conflict if required.
We will be watching developments closely and maintain regular contact with source experts in all these areas.
What Should You Take Away From This?Regardless of how things shake out, the reality is that the global economic war is intensifying. Things we have been discussing for years are unfolding before our eyes in the vein of Biblical prophecy. Much more important than the economic aspect, this is truly a spiritual war for the future of Western Civilization.
To gain perspective, check out this latest Ginni Thomas interview with our friend Ken Abramowitz.Ken was in the first-class faculty of the NSIC Institute that we hosted. He also includes our book, Secret Weapon, on his recommended reading list at www.SaveTheWest.com. Ken’s key points are a critical understanding.
[Keep in mind that if this is a spiritual battle (and it is), the only way to win is with a spiritual solution. Thus, we continue to point you to 2 Chronicles 7:14. It’s time to cry out to God on behalf of our nation!]
USA Transnational Report
USA-based, Worldwide Coverage and Analysis
A Unique Opportunity for a Discussion with an
International Counter-terrorism Expert
Terrorism 3.0: Domestic Terror Threats and How to Fight Them
On Monday, December 11, you’re invited to join a discussion with Wallace S. Bruschweiler, Sr., a quadri-lingual expert in counterterrorism, as he addresses the topic Terrorism 3.0: Domestic Terror Threats and How to Fight Them. This is a unique opportunity to question an international counter-terrorism expert on the events that dominate today's headlines - e.g., attacks in Las Vegas, New York, Mogadishu etc.
Mr. Bruschweiler will also share his unique, international perspective on the latest global events and geopolitical trends including terrorism, espionage, foreign relations, and U.S. strategy to confront national security threats. As a guest, you’re encouraged to ask questions and join the discussion.
DATE/TIME: Dec. 11 (Monday), 7:00 - 9:00pm
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LOCATION: 247 W. 30th Street, 2nd Floor (between 7th and 8th Aves).
New York, NY 10001
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Wallace S. Bruschweiler, Sr. is a quadri-linguist and subject matter expert in counter-terrorism and national security issues. He has over 30 years’ experience operating in Europe, Middle East, and North Africa. He is a results-oriented security executive, analyst, strategist and problem-solver with extensive expertise and 30+ years of achievement in complex domestic and international security and intelligence situations in a range of venues. He possesses broad cultural knowledge and awareness, derived from worldwide first-hand experience. Mr. Bruschweiler is a fluent speaker, reader and writer of English, French, German and Italian, and a conversational speaker of Russian.
USA Transnational Report
The USA Transnational Report (www.usatransnationalreport.org) is a citizens-driven news and analysis website that focuses on threats to the United States' security and sovereignty. In close cooperation with retired military and intelligence, we strive for timely and accurate analysis of the day's most important national and international news.
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Photo(s) of the Week
Don't give money to PAC's...
Any PAC =
Pissin Away Cash
Quote of the Week
Once in a while we just have to stand back in awe of government.
The Food Stamp Program, administered by the U.S. Department of Agriculture, is proud to be distributing the greatest amount of free Meals and Food Stamps ever - 46 million people now receive Food Stamps.
Meanwhile, the National Park Service, administered by the U.S. Department of the Interior, asks us "Please Do Not Feed the Animals." Their stated reason for the policy is because "The animals will grow dependent on handouts and will not learn to take care of themselves."
Thus ends today's lesson in irony.
“No war is over until the enemy says it’s over. We may think it over, we may declare it over, but in fact, the enemy gets a vote.” --General James Mattis