Yes, of course, the title is once again a play on words. What did you expect? For some, at least in the American, and perhaps Canadian, audience a certain 70’s film may come to mind. That movie, The Eiger Sanction, which is partly the namesake and inspiration of this blog post title was a little known 70’s cult classic film starring, and directed by, Clint Eastwood of “come on, make my day” and “do you feel lucky, punk?” fame.
Say what you will, I like Clint. I always have. I’m not a fan because I don’t do fan, but I respect his creative output both as an actor and a director. He’s often criticized as not being much of an actor because he never has many lines and he often plays parts where the characters are taciturn loners of few words. But he does it so well he’s the iconic, quintessential, anti-authoritarian loner working within the system. Eastwood’s nuanced and subtle facial expressions and body language say the thousand words his characters’ lips never do.
For those who haven’t seen the movie, give it a try. It’s not for everyone and it is distinctly 70’s and rough around some edges, but if you’re somewhat of a film buff, like myself, check it out if you haven’t already. Just writing about it right now is enticing me to watch it again since I haven’t seen it for several years. Here’s a link to IMDb and a quoted excellent, concise review.
Great climbing sequences make this hidden gem worth watching!
Author: A_Roode from Halifax, Nova Scotia
30 April 2006
Clint Eastwood stars as a former government assassin turned art teacher who is blackmailed into coming out of his retirement to pull off a difficult last job. A former colleague has been murdered. Eastwood will climb the Eiger face and kill the assassin along the way. The only problem is he isn’t sure which of the three other climbers is his target.
‘The Eiger Sanction’ is very much a product of the 1970’s, and comes from a difficult grey area of Eastwood’s career. He was transitioning between Westerns and Dirty Harry and films like ‘The Eiger Sanction’ got lost in the mix. On the surface the film is a spy thriller, or a gorgeously shot mountain climbing/survival film. I think it doesn’t get enough credit for being very tongue in cheek. It gently pokes fun at both Eastwood and 70’s action movies — Clint giving a female student a playful pat on the rump, the foxy brown flight attendant/girlfriend, and of course “damn that Brando” when Clint’s Native American trainer pushes him too hard. Throw in the promiscuity and the way homosexuality is dealt with (rival gay hit-man with the little dog) and the film runs pretty nicely as a satire.
‘The Eiger Sanction’ is really about the third act though where the climbing takes place. Brilliantly photographed, I didn’t find much not to enjoy about this film. Quite possibly the best climbing film that I’ve ever seen and it is certainly superior to things like ‘Cliff Hanger’ or ‘Vertical Limit’ — which owe a great deal to ‘The Eiger Sanction.’ Clint Eastwood has acted in better movies and he’s directed better movies. That said, this one is an unpolished gem and worth taking a look at if the opportunity arises.
What does some obscure Clint Eastwood film most people have never heard of let alone seen have to do with anything you might ask? Well, it has everything and nothing to do with anything I suppose. The word sanction, or the plural of it, has been in the news a lot lately as you well know, and for those who are following along very closely, maybe even too closely, so too has the name Igor, as in Igor Girkin (aka Strelkov and/or The Pickle) and Igor Sechen (Rosneft CEO – Check out the link for further proof of the Russian-Italian connection I’ve highlighted before at this blog), been in the news and limelight depending on your perspective of limelight. By the way, as an aside, what a horrible name. Who names their child Igor? A freak, that’s who. It’s worse than Vladimir. Why can’t they just stick with Borris and make it simple?
Per review of the movie The Eiger Sanction, you can see its main character, played by Clint Eastwood, is an assassin for a bizarre private intelligence organization run by an albino allergic to sunlight. In this cult classic 70’s film, this assassin in retirement, Dr. Jonathan Hemlock, is required to come out of retirement for one last assassination to avenge the death of his former colleague. That final assassination is referred to as a sanction, and it will take place climbing the Eiger — a treacherously steep-sloped mountain in the Swiss Alps. This blog post will propose a (one — singular) sanction, unlike the feckless for-show sanctions leveled by both sides (The West & Russia) in this fabricated Ukraine crisis where innocent people are caught in the crossfire of a battle in which they want no part, that will assassinate this fabricated-by-outside-forces Ukrainian crisis and put an end to Putin’s and Russia’s aggressive expansionist and Soviet revanchist proclivities.
Before I present The Igor Sanction to end all sanctions, let’s have a little sidebar about sanctions since they’re so popular these days. Much to do has been made by the Western mainstream media establishment about the sanctions leveled by The West against Russia. It all sounds very ominous and dire, but when you peel back the onion of the sanctions, it will leave you scratching your head. Most don’t peel back that onion, though, and instead react to the news of the sanctions with a defensive pro-Russian posture or they’ll placidly accept that the sanctions are designed and intended to bring each party to bear in this fabricated conflict/stand-off.
Let’s take the most recent sanctions against Rosneft as an example. Forbes ran an article on this not too long ago concerning the sanctions leveled against Rosneft and its oligarch CEO, Igor Sechen. If you take the sanctions at their official face value, you quickly run into contradictions that leave you flummoxed and scratching your head. What’s ironic about the Forbes article I will link to and quote below is that it flies directly in the face of those, and they’re not a few in the anti-American pro-Russian crowd, who claim this fabricated conflict is about the demise of the petrodollar or the loss of the dollar as the world’s reserve currency. This contradiction is staring these gold bugs (whether they mean to be or not) right in the face and yet they either don’t see it or choose to ignore it. Here’s the link to the Forbes article:
The US has announced another series of sanctions on Putin connected companies over the troubles in the Ukraine. They’re ever so slightly odd sanctions as well: they don’t stop people dealing with companies like Rosneft but they do stop that company from being able to make any significant new long term borrowings in US dollars. This is a rather subtle use of the United States’ power over the currency but it’s possible that this might, in the longer term, lead to a development of a market for oil in other currencies.
Somebody give this author a 300 volt shock to his naughty bits for using “the Ukraine” instead of “Ukraine.” In the least, Forbes should put Worstall on probation — after the jolt to his private parts.
How about the part in bold. Come again? What? This so adamantly contradicts those who claim a petrodollar protection angle to this manufactured Ukraine/East vs West conflict because this sanction is daring Rosneft, nay it’s encouraging Rosneft, to forge a new currency trading market for oil. One of two possibilities can explain this seeming contradiction. One, The West, and specifically America here, is so confident and so full of hubris it’s taunting with this sanction that the petrodollar is king and there’s nothing anyone or anything can do about it, or two, America has treasonous and traitorous bastards Inside the Beltway who are using the system of American governance to collapse the American economy under the guise of leveled sanctions anent (the good ‘ol days at CFN) the fabricated Ukraine/East vs West conflict to justify said sanctions. If it’s the latter, shouldn’t impeachment proceedings begin immediately? And this time, the proceedings would finally be for the right reasons. I know I’ve satirically joked previously at this blog about Obama being a Russian plant, but considering this sanction and no doubt the others when you peel back their onion skins I’m left wondering if the satire is closer to home than I originally thought.
Either way, and despite all that and regardless of the bizarre and feckless sanction considering its “officially” stated intention and purpose, behind the scenes, once again and as always, it’s Business As Usual. Per this article from The Christian Science Monitor, we see that ExxonMobil, an American oil company for the brain-dead in the audience, is a drilling partner with Rosneft related to a significant project in the Arctic Kara Sea. Russia just loves it some Global Warming in the morning. As Warmists attempt to cajole American companies to dial back their energy exploration and production due to the impending doom of Global Warming, Russia is full steam ahead with nary a peep from this climate-concerned crowd. And if you ask me, that’s very curious.
Russian president calls ExxonMobil a ‘model of cooperation’ for its partnership with Rosneft in the face of Western sanctions against the Russian oil company. The energy giants are drilling Russia’s first well in the arctic Kara Sea, an area with huge reserves of oil and gas.
U.S. oil giant ExxonMobil began drilling in Russia’s Arctic on Saturday, despite Western sanctions imposed on its Russian partner Rosneft, and was hailed by Russia’s president as an model of “cooperation”.
Although U.S. sanctions over the crisis in Ukraine are not designed to halt joint projects by Russian and U.S. companies, they nevertheless aim to starve Rosneft of dollar financing and ban access to modern technology.
“Today, commercial success is driven by efficient international cooperation,” Vladimir Putin told Rosneft CEO Igor Sechin and Glenn Waller, ExxonMobil’s lead manager in Russia, on a videoconference call from his Black Sea residence in Sochi.
“Businesses, including Russian and foreign companies, perfectly realize that and despite certain current political difficulties, pragmatism and common sense prevail, and we are pleased to hear that,” he said.
See that? Despite the “harsh and harsher” sanctions, everyone’s Happy Happy! It’s Business As Usual. Then, of course, there are the recent sanctions leveled by Russia against The West where Putin’s banning imported goods, mainly agricultural, from various NATO countries including Poland and Moldova. Perhaps you’ve heard, like the Seinfeld Soup Nazi Putin’s told the Small People of Russia, “no more Polish apples for you!” When I first heard Putin’s sanctions announced, my immediate common sense impression was that this will just hurt the Small People of Russia, not the major players in The West or the Western economies. However, my immediate reaction and perspective is in the severe minority ( a minority of one) at the anti-American pro-Russian blogs I have referenced too many times to count now at this space. Here’s what I said at Ian Stirling Ireland Lang Simeone Celsius Welch‘s blog when the propagandists at that space went to town adulating Putin’s alleged game-changing round of retaliatory sanctions.
Welch: I note, finally, that if you are going to go to war with someone, you should cut off your food dependency before you do.
Cold: This necessarily means Putin plans on invading Poland and Moldova since he’s cut off Russia’s food dependency from those two countries, as well as many others. I don’t see Poland and Moldova as threats to Russia but per your reasoning Russia plans on going to war with those two countries by virtue of eliminating its food dependency with both, respectively.
I thought Putin was a crackerjack chess player? This is a terrible move. It hurts Russia mostly. It only hurts the Small People — of both Russia and the countries that export the banned products. The sanctions levied by The West heretofore are meant to put a pinch on Putin’s rich Russian friends — not the Small People. Putin obviously doesn’t care about the Small People.
Maybe Russia can now get its baby food and apple juice from China.
There wasn’t one person at any of these anti-American pro-Russian blogs who critically evaluated Putin’s actions so poisoned they are with propaganda. So, I worked backwards to see if I was not alone in this first impression about Putin’s sanctions and my search turned up this article from The New York Times. You can always count on The New York Times, can’t you?
The sad truth of the tit-for-tat sanctions that Russia has imposed against the West is that they will hurt Russians far more than they will hurt Westerners.
Acting on President Vladimir Putin’s orders, Prime Minister Dmitri Medvedev on Thursday ordered a ban on a wide range of food and agricultural products from the European Union, the United States, Canada, Australia and Norway. No doubt many producers in these countries will feel the loss of $30 billion in food exports to Russia, but the overall effect on their large and diversified economies will be marginal. Russia, by contrast, imports about 40 percent of its food needs in terms of value, and the Russian agriculture minister has acknowledged that the sanctions would cause a spike in inflation.
In effect, Russians will be getting another hefty bill for their president’s arrogant efforts to batter Ukraine, and they will become more estranged from the global economy they need to develop their vast country.
Mr. Putin’s readiness to impose hardships on his own people rather than back down in Ukraine is, unfortunately, not surprising. His entire adventure in Ukraine, from the annexation of Crimea to the active military support for secessionists in eastern Ukraine, reflects his view of a zero-sum contest between Russia and the West in which Ukraine is the central battlefield. Even as Russia ordered the retaliatory sanctions, NATO reported that Russian troops were again massing on the Ukrainian border, once again raising the dangerous possibility of a direct intervention in support of the rebels, who are under attack by Ukrainian troops.
Further, in addition to the ban on food imports, Mr. Medvedev indicated that Russia was also considering a ban on flights over Siberia, a measure that would add to the cost of Europe-Asia travel, but would also cost Russia millions in transit fees.
Polls show that Mr. Putin is hugely popular with Russians, and no doubt his latest show of defiance against the West will find applause. But that could begin to change once prices for basic needs begin to rise and jobs begin to vanish in a contracting economy. The new economic elite, already funneling their money abroad at high rates, will not welcome the loss of the fine European foods that fill Moscow supermarkets. Many in the middle class are already wondering what it is they’re paying so huge a price for, and that question is bound to spread as Russians lower on the economic scale begin to feel the pain.
It is critical at this juncture for the Western allies to remain united, even if the cost of the sanctions — their own and Russia’s — are not equally borne. The European Union has a fund to compensate farmers for lost production in times of crisis, and this is just such a time. Sanctions are a painful weapon, and Russia has been a lucrative market for Europe. But the alternatives to sanctions — military action on one side, or doing nothing in the face of Mr. Putin’s brazen challenge to the post-Soviet order — are not really options.
We see a pattern develop with these sanctions, at least the two sets of them I mentioned. Both have significantly potential adverse effects, not on the sanctioned party but on the one doing the sanctioning. Bizarre. As far as the Russian people are concerned, well, they’re nuts if the polls are to be believed and I’m not sure they can be believed. They’re being robbed blind by Putin and his Oligarch gangster friends and they’re being made to pay for Putin’s expansionist proclivities as is witnessed by this article from The Guardian.
Residents of the southern Russian republic tell Caucasian Knot that money has been deducted from their salaries to help fund humanitarian aid to the conflict zone
Chechen residents believe their salaries are being docked to raise funds for humanitarian assistance in eastern Ukraine, Caucasian Knot has learned.
Residents of the southern Russian republic of Chechnya have reported seeing deductions taken from from their salaries, and have received demands to allocate money for humanitarian assistance to the Donetsk and Lugansk Regions of Ukraine, where Moscow-backed separatists are battling the Ukrainian army.
It is not uncommon for employees of civil service organisations to find their salaries are in arrears, but in July they found much more than usual was missing, according to Yusup, a staff member of the Chechen law enforcement agencies, who did not want to give his full name.
All that immense oil sales profit, and the cheap-ass, slimy, cowardly Putin has to steal from Chechens — yet again, rather than funding his Ukrainian proxy war out of his and his friends’ deep and full-to-overflowing pockets.
Exploitation is bad enough, but to doubly and triply exploit a mark is sadistic. There should be no mercy for this tyrant. If ever a death penalty is warranted, it is warranted for soulless shits like Putin and his fellow oligarch gangsters.
It’s nothing new, though. Welcome to the Russian Federation. An IMF wet dream. This is how Putin runs his budding empire — like a gangster seeking out and exploiting front companies he can load up with debt and demand tribute from in the form of tax revenue payments for nothing in return. Except in this case the front companies are the various Russian provinces/regions ( a total of 83 and counting if Putin gets his way) referred to as oblasts, republics, krais, federal cities and autonomous okrugs.
Russian propagandists have done an excellent job of presenting Putin’s Russia as a fiscally responsible entity with little to no debt and actually a budget surplus with almost half a trillion in reserves in the bank. But that’s only a tenth of the truth. That statistic only applies to The Russian Federal government, or The Kremlin so to speak, but not to the Russian Federation proper if its entire balance sheet, income statement and statement of cash flows is taken into account. Putin’s Russia and his propagandists hide the other nine tenths of the truth about the Russian Federation’s financial status in the regions/provinces out of sight but never out of mind because those various oblasts, republics, krais, federal cities and autonomous okrugs are Putin’s rocks from which blood is drawn daily as is witnessed by the Chechnya example above.
This Across the Curve blog article does an excellent job of describing how the Russian Federation operates financially and reveals how Putin plays smoke and mirrors when presenting the Russian government as fiscally responsible.
The Russian ruble is one of the emerging market currencies spinning out of control. Stratfor has a very long analysis of debt in Russia . The central government has very little debt given its size but an immense amount of debt is located in the regions away from the central government. Stratfor thinks that debt is approaching the point at which is it not easy to manage. Warning this is a pretty long one.
Since the 2009 financial crisis, the Kremlin has allowed Russia’s regions to take the brunt of the country’s economic decline in order to keep the federal government seemingly healthy, with a nominally small budget deficit and large currency reserves. But now most of Russia’s regional governments’ debt is so high, it is becoming dangerous for the federal government and big banks and could soon become unmanageable.
Russia is so large that the Kremlin lacks the resources to run each region of the country directly. Currently Russia is split into 83 regions of all shapes and sizes, which fall into categories of oblasts, republics, krais, federal cities and autonomous okrugs. Historically, the Kremlin has given regional leaders (mayors, governors, heads or republic presidents) the power to run their own regions and ensure loyalty to the Kremlin and stability for the country.
However, the Kremlin is constantly concerned with its control over the regions. The federal government’s ability to maintain the loyalty of each region has been tested often throughout history. For instance, dozens of regions attempted to break away after the fall of the Soviet Union, occasionally leading to wars such as those in Chechnya.
The central government’s control over the regions was demolished during the devastating financial crisis in 1998. Many of the regional heads defied the federal government in order to look out for their own regions’ survival. It was the second-worst regional breakdown in Russia following the collapse of the Soviet Union, and it was related directly to the chaos caused by that collapse. This is why the currently growing economic strains in the regions will be of great concern for the Kremlin.
The Regions’ Mounting Debts
Most of Russia’s regional governments have always had some level of debt, but resource-based export revenues have kept it mostly manageable since the 1998 crisis. However, since the 2008-2009 financial crisis, most of the regions’ debt has risen by more than 100 percent — from $35 billion in 2010 to an estimated $78 billion in 2014, and Standard & Poor’s has estimated that this will rise to $103 billion in 2015. Russia’s overall government debt — the federal and regional governments combined — is around $300 billion, or 14 percent of gross domestic product. This is small for a country as large as Russia, but the problem is that so much of the debt is concentrated in the regions, which do not have as many debt reduction tools as the federal government does.
Of the 83 regional subjects in Russia, only 20 will be able to keep a budget surplus or a moderate level of debt by 2015, according to Standard & Poor’s calculations. This leaves the other 63 regions at risk of needing a federal bailout or defaulting on their debt.
Currently, the Russian regions are financing their debt via bank loans, bonds and budget credits (federal loans, for example). Each region has to get federal approval to issue bonds, because regional bonds create more market competition for the federal and business bonds. Most of the banking loans to the regions carry high interest rates and are short term (mostly between two and five years). The federal loans come with much lower rates and longer repayment schedules (mostly between five and 20 years), so naturally federal credits and loans are more attractive for the local governments, though unprofitable for the federal government. The issuance of federal credits or loans to the regions in 2013 was limited; initially, Moscow said it would issue $4.8 billion in new credits to the regions in 2013, but only issued $2.4 billion due to its own budgetary restrictions. This is one contributing factor to the dramatic local-government debt increases.
The next contributing factor to the rise in regional debt is the overall economic stagnation that has plagued Russia since the 2009 financial crisis and subsequent stimulus aimed at pulling Russia out of the crisis. Despitehigh energy prices all year, Russia’s gross domestic product growth slowed dramatically in 2013 to 1.5 percent growth after an initial 3-4 percent growth target by the Kremlin at the start of that year. This is low compared to the 7-8 percent growth seen yearly in Russia in the mid-2000s. Most analysts believe the only way Russia’s growth remained positive was through its large energy revenues, which make up half of the federal government’s budget and 20-25 percent of the country’s gross domestic product.
There are a handful of reasons for Russia’s economic stagnation. First, investment in Russia was lower than expected in 2013. Fixed investment was down 1.8 percent year-on-year in the first 10 months of 2013, compared with a 9.1 percent year-on-year growth in the same period in 2012. Private sector outflows of capital were high in 2013, with a net outflow of $48 billion leaving Russia in the first nine months of 2013, compared with $46 billion for the same period in 2012. Moreover, the investment sentiment in Russia is poor at the moment, as the Central Bank of Russia has begun closing some 800 smaller banks in a consolidation. Many of those banks were regionally based, and their closure is making investment in the regions less attractive.
Lower investment, coupled with less corporate borrowing and a decline in demand in many sectors, such as metals, led to lower industrial production. In the first 10 months of 2013, industrial production was flat compared with 2.8 percent growth in the same period in 2012. Industrial production is region-specific in Russia; industry provides nearly the entire economy in some regions. Thirty-one Russian regions, including Komi and Barents, had negative industrial production indexes for 2013. This could get worse in 2014, as many of the metals giants are planning to continue shutting down plants due to a lack of demand and low prices. For example, the world’s largest aluminum producer, Rusal, is shutting down five aluminum plants in the Volgograd, Karelia, Leningrad and Urals regions and laying off tens of thousands of workers.
Another factor contributing to the regions’ rising debts is increasingly burdensome obligations to the federal government. Of the income generated in a particular region, only 37 percent of the income stays in that region and the rest goes to the federal budget. The federal government does return some of the funds to the region in the form of subsidies and intergovernmental transfers, but not more than 20 percent. The amount of income that the Kremlin has taken from the regions has increased 12 percent in the past three years (via increases in taxes and decreases in subsidizations), leaving less and less for the regions to work with.
There has also been a large outcry from the regional governments in response to a series of presidential edicts that Vladimir Putin declared when he was re-elected to his third term in late 2011. Putin ordered the regional governments to do a series of tasks, such as replace all dilapidated housing by 2014, and to raise regional and municipal salaries by 7-10 percent in 2014 and another 10 percent in 2015. The regions are calling these “unfunded mandates,” as the federal government is not helping the regions pay for these projects. Already, the Kremlin has had to postpone the housing replacement edict to 2016 due to lack of funding in the regions, but the salary edict remains in place and is estimated to cost the regions $56.6 billion over the next two years.
I’m going to blow-up a couple of the graphs from that article so you “get the picture.” Because the picture is what Putin has in store for Ukraine, and perhaps all of the former Soviet bloc states as well as the rest of Europe. All under the auspices of Federalism no doubt since his propagandists like to tout that as such a positive thing. Tell me, how’s what Putin has planned for Ukraine any different than the goals and aspirations of the IMF for Ukraine? It’s not very different, and perhaps this is why Putin is so fond of the IMF.
The BRICS leaders believe the global economy is excessively dependent on the monetary and financial policy of the U.S. government and the IMF reform is unreasonably drawn-out and intend to change this, Russian President Vladimir Putin said.
“We should take a more active part in the IMF and the World Bank’s decision-making system. The international monetary system itself depends a lot on the US dollar, or, to be precise, on the monetary and financial policy of the US authorities. The BRICS countries want to change this,” Putin said in an interview with a Russian state news agency.
In his opinion, the international monetary and financial system “in the present form it is unjust to the BRICS countries and to new economies in general.”
The BRICS leaders will discuss the IMF reform at the summit in Brazil, Putin said. “The BRICS countries are concerned about the unreasonable delay in holding a debate of this subject. This jeopardizes all the efforts of G20 in this direction. In the meantime, it is the case of fulfilling the rightful demands of “new economies” to balance the IMF according to the 21st century reality,” the chief of state pointed out.
Essentially Putin’s saying the only thing wrong with the IMF is that America has too much say and influence, otherwise he likes the cut of its jib. What say all the IMF/World Bank critics about that? Your boy likes the way the IMF operates with one exceptional tweak. And well he should since he operates very much the same way. Putin’s not the answer to the IMF, he is the IMF in bear’s clothing.
Oh yeah, I almost forgot — the graphs enlarged for effect.
In the least, the sanctions are a joke, and at their worst they’re downright sinister in their duplicity. Combined, they’re a cruel joke on the loser — always the loser — the Small People.
But let’s assume the sanctions, The Western ones at least, aren’t a joke, cruel or otherwise, and are instead on the up and up good faith attempts at bringing the expansionist tyrant Putin to heel without directly engaging him militarily. Assuming that, and it’s one hell of a broad leap assumption, then I have the perfect sanction that will accomplish this goal and some. And my sanction, and it is just one singular sanction to end all sanctions, will also be a win for the Small People so it’s a Win-Win. What’s not to like?
What is this one sanction, you ask? This one sanction, The Igor Sanction, is taking control of the mechanism that prices oil on the so-called open market. The price of oil, as I’ve mentioned many times on this blog and have verified with solid evidence, is essentially fixed by a very few market-dominating players and no longer has any relationship to supply and demand. For those unfamiliar with this who still believe in The Oil Fairy (The Tooth Fairy‘s younger brother), there’s this quote from my very first post, Blogging And The Fate Of Treachery, at this blog here.
Fair enough, Jimmie, I’ll give you a maybe or how about a more than likely on that, but when it comes to oil, according to Unca Jimma it’s pure and natural free-market supply and demand dictating the price and since supply is allegedly declining per Kunstler and his fellow Doomers, the price is soaring on a resource that’s becoming more precious. He applies a principle or rule to all other commodities but makes an exception when it comes to oil and vice versa. Why? Because he has to make it fit the crazy thesis, so he lies about oil, both the supply of it and the price of it. Kunstler’s been provided ample evidence by a number of people, including me, that the price of oil is being manipulated, and set really, by insiders who have the power and ability to do it and are doing it. It’s not just speculation on oil which is bad enough, it’s purposeful setting of the price. The price has nothing to do with demand, supply or costs to extract, or at least not costs to extract directly. But Kunstler puts his hands over his ears or blackens out any written disconfirming information like the government blackens out practically entire documents when it releases sensitive declassified material from its archives under the FOI Act. Per that link about setting the price of oil, this is worth noting and underscoring for posterity:
They were a band of outsiders unable to get jobs with New York’s gilded financial establishment. They would go on to corner the world’s multitrillion-dollar oil market, reaping unimaginable riches while bringing the economy to its knees.
Meet the self-anointed kings of the New York Mercantile Exchange. In some ways, they are everything you would expect them to be: a secretive, members-only club of men and women who live lavish lifestyles; cavort with politicians, strippers, and celebrities; and blissfully jacked up oil prices to nearly $150 a barrel while profiting off the misery of the working class. In other ways, they are nothing you can imagine: many come from working-class families themselves. The progeny of Jewish, Irish, and Italian immigrants who escaped war-torn Europe, they take pride in flagrantly spurning Wall Street.
Under the thumb of an all-powerful international oil cartel, the energy market had long eluded the grasp of America’s hungry capitalists. Neither the oil royalty of Houston nor the titans of Wall Street had ever succeeded in fully wresting away control. But facing extinction, the rough-and-tumble traders of Nymex—led by the reluctant son of a producemerchant—went after this Goliath and won, creating the world’s first free oil market and minting billions in the process. Their stunning journey from poverty to prosperity belies the brutal and violent history that is their legacy.
For the first time, The Asylum unmasks the oil market’s self-described “inmates” in all their unscripted and dysfunctional glory: the happily married father from Long Island whose lust for money and power was exceeded only by his taste for cruel pranks; the Italian kung fu–fighting gasoline trader whose ferocity in the trading pits earned him countless millions; the cheerful Nazi hunter who traded quietly by day and ambushed Nazi sympathizers by night; and the Irish-born femme fatale who outsmarted all but one of the exchange’s chairmen—the Hungarian emigre who, try as he might, could do nothing to rein in the oil market’s unruly inhabitants.
From the treacherous boardroom schemes to the hookers and blow of the trading pits; from the repeat terrorist attacks and FBI stings to the grand alliances and outrageous fortunes that brought the global economy to the brink, The Asylum ventures deep into the belly of the beast, revealing how raw ambition and the endless quest for wealth can change the very nature of both man and market.
Showcasing seven years of research and hundreds of hours of interviews, Leah McGrath Goodman reveals what really happened behind the scenes as oil prices topped out and what choice the traders ultimately made when forced to choose between their longtime brotherhood and their precious oil monopoly.
For a thorough review of the basis arguments for The Igor Sanction, please review my earlier blog posts Call The Bluff and White Trash as well as the comments to those blog posts. I’ll quote from White Trash for a taste, but if you’re interested enough, you’ll review the posts as I’ve suggested and their attendant comments because I don’t want to reinvent my wheel and make this post any longer than it already is.
What came first, the chicken or the egg? Did the escalation of the price of oil precede the escalation of conflict in the ME and elsewhere after a couple decades of relative peace and calm, or was it the other way around? Was there any mitigating legislation that affected the trajectory of both, regardless of which came first? The answer to both questions is an emphatic yes. The legislation that affected the escalation of both the price of oil and the magnitude and intensity of conflict is The Gramm–Leach–Bliley Act enacted November 12, 1999. Considering the financial windfall that came in its wake, one has to wonder whether Prince wrote 1999 for the vested interests that pushed that legislation through in the dead of night.
Let’s take a look at a historical oil price chart for purposes of illustration in the chicken or egg debate.
Nice chart, isn’t it? I like the inclusion of gold for a useful juxtaposition. Notice how the chart author indicates the manipulation of the gold price, but there’s no such indication for the manipulation of the oil price. Funny that. I mentioned this in my very first blog post. Kunstler does the same thing. Even though he’s allergic to conspiracy theories, he consistently implies commodities other than oil are manipulated. But never oil. No, for some miraculous reason, those who would endeavor to fix and/or manipulate the price of all other commodities, would never dare mess with oil. Sure. Yeah, right. Whatever. Get a clue. You manipulate everything you can manipulate, and since these crumb bum lush creeps can manipulate everything with the passage of The Gramm–Leach–Bliley Act, they do. So let’s not pretend oil’s sacred. It’s not. In fact, since it’s the most widely used commodity on the face of the earth besides air, water and sunlight (all of which will eventually be owned and controlled by commodity regimes by the end of this century), the leverage it provides for immense profit, via price hikes just for the hell of it, is tremendous. And don’t forget how the price of oil is set. Per this link, that I’ve linked to before at this blog, we know it’s rigged. Yet intelligent people will read that link and still believe, even though they’ll accept other commodity prices are manipulated, that the price of oil is predicated upon supply and demand. Sometimes, you just want to give up. Not me. Not anymore. I may not care, but I’ll never give up — it’s too much fun pointing out the contradictions.
The Igor Sanction, therefore, is an international cooperative effort and agreement whereby the price of oil is based on an agreeable cost to extract plus a reasonable and agreeable profit percentage. The price is only variable in the sense cost to extract is variable — the agreeable profit percentage will always remain constant once agreed upon. The cost to extract must not include the cost of “sand” and “shale” projects because these technologies are currently cost prohibitive compared to traditional oil production and until the cost of traditional production increases to equal the cost to extract for “shale” and “sand,” the latter is not a sound investment since the ROI under The Igor Sanction proposed pricing formula would be negative — for now.
By virtue of implementing this agreed-upon formula, the price of oil would drop precipitously since it is now set so artificially high. I estimate, just on the face of it, oil could, on average, drop to between $30 to $50 per barrel, or about a third or less of what it’s selling for now. It would put the kibosh on both Igors rather quickly, Girkin and Sechen and it would put an end to Putin’s military build-up and expansionist proclivities because he would be forced to make his developing country creative rather than resting on the laurels of artificially high oil rents. As the Across the Curve blog indicated, related to Russia’s economy and GDP, “most analysts believe the only way Russia’s growth remained positive was through its large energy revenues, which make up half of the federal government’s budget and 20-25 percent of the country’s gross domestic product.”
Cut the price of oil to a third or less of its currently set artificially high price, and you pretty much deflate Putin’s Russia and Putin’s ego overnight. Not to mention, but I will, you alleviate a criminal and undemocratic oligarchic oil tax that is sucking the blood out of the Small People everywhere. Sure, all those who are invested in oil, mainly the oligarchs, will take it in the shorts, but hey, they already have so much this won’t be missed, although their enormous egos would take a big hit, and that’s one of the reasons The Igor Sanction is not mentioned let alone considered. We all know it’s a Win-Win sanction on the face of it if we take the official reasoning for sanctions at face value. The fact that this one and only effective sanction isn’t mentioned let alone considered and implemented betrays this Ukraine/East vs West conflict for what it really is; A carefully-crafted ruse to continue robbing the Small People blind and keep the Small People gouging each others’ eyes out so they can’t see the obvious charade.
That’s it for now, friends — or whatever the hell you are. Lie well for all the right reasons and live long.
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Cold N. Holefield