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Natural gas

Natural gas

In the eastern Mediterranean it smells of powder. Fighter jets from various countries fly over the Levantine Basin and frigates are on a collision course. These are not exercises. It is a crisis reminiscent of the conflict between Ankara and Athens in the 1970s or even the beginning of the First World War. This time it is not just about the ambitions of Greece or Turkey, small islands or a dead prince, but about the struggle for energy. In the Levantine Basin, ever larger deposits of natural gas are being discovered and there are many who would like a piece of the cake.

Back in 2010, the American company Noble Energy and its Israeli exploration partner Derrick Drilling discovered the largest gas field only 130 km from Haifa. A year later, French Total confirmed another deposit with a volume of 127 billion m3. The researchers suspect a total of 3.5 trillion cubic metres of natural gas and 1.7 billion barrels of crude oil deep in the rock beneath the seabed. How much is that actually? Certainly enough to fill the coffers of the states bordering the Mediterranean and make a solid contribution to Western Europe’s energy supply. By way of comparison, the total natural gas consumption in the European Union in 2019 was around 470 billion cubic metres. No wonder, then, that the areas between Cyprus, Turkey, the Greek islands, Syria, Lebanon, Israel, Egypt and Libya became the scene of a conflict that could well turn into a war. It would not be a local war because the conflict and possible gains also involve other actors whose interests could be disrupted by the gas from the eastern Mediterranean, even though their geopolitical interests appear to lie elsewhere.


The natural gas alliances in the Eastern Mediterranean or who with whom against whom?

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NordStream 2 splits the Western World

NordStream 2 splits the Western World

If we were to paint the current situation with a broad brush, we would receive the following simplified picture. The European Union is split into two camps: the old and new member states. The West is split across the Atlantic: it is – roughly – Washington against Paris and Berlin. The world is split into three rivalling superpowers: the United States (strong military and strong economy), Russia (strong military, weak economy) and China (weak military, strong economy). Western Europe gravitates more to Russia than Eastern Europe does; Eastern Europe in turn gravitates more to the United States than Western Europe does.

The state of affairs on the Old Continent is as follows.

[1] Germany wants a stable energy supply in the form of natural gas and from among a number of providers it has decided on Russia because

[2] Russia has large natural gas deposits and being in need of hard currency is willing to sell its energy resources to any bidder.

[3] Germany and Russia countries entered a commercial agreement which resulted in the construction and completion of one pipeline laid on the bottom of the Baltic: NordStream 1.

[4] Since the capacity of one pipeline was not sufficient to satisfy the needs of Germany and other West European states, another agreement was concluded to build a second pipe along the bottom of the Baltic – NordStream 2 – which is now near completion.

[5] Both pipelines sidetrack eastern European countries – Ukraine, Poland, Czechia and Slovakia – which makes them alarmed because soon Russia will be able to cut off its gas supplies to and through those countries – the Yamal (Poland, Belarus) and Brotherhood (Czechia, Slovakia, Ukraine) pipelines – while continuing the provision of gas to Western Europe, thus breaking the economic solidarity of the European Union.

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You had better memorize the term: de-dol-la-ri-za-tion

You had better memorize the term: de-dol-la-ri-za-tion 

Some say it was Colonel Muammar Qaddafi, who wanted to dethrone the dollar, and so he paid for it with his own life. Others say it was Iraq’s President Saddam Hussein, who wanted to make settlements in a currency other than the US dollar, and he was hanged. Now it is Russia and China, which want to do the same. Just days ago an agreement was signed to this effect. 

(i) Russia and China have decided to begin to make mutual settlements increasingly in their respective national currencies, and 

(ii) they have decided to bypass the SWIFT system, introducing their own instead.1)

Moscow has also revealed lately that Russia has stopped using the US dollar and the SWIFT system for settlements in arms trade.2)

The exchange of goods between Russia and China is significant; Russian weaponry has a lot of clients around the globe. On the other hand both countries, and especially China, have large dollar reserves. And both states are under attack from the West, be it economic sanctions against Moscow, be it American trade war against Beijing. 

To administer punishment for such a daring act was a child’s play in the case of Libya and Iraq: the two countries were swiftly dealt with. What can one do with a nuclear superpower on the other hand and Asia’s largest economic tiger on the other?

If Washington has wanted to weaponize Moscow against Beijing or the other way round as it seems it has, then the strategists on the Potomac must swallow a bitter pillow. The hybrid war waged against Russia in Georgia, Ukraine, Moscow, the Baltic States, Poland as well as in Venezuela and Syria rather than weakening the target state have cemented its embrace with the Middle Kingdom.

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The road to modern wars

The road to modern wars 

President Trump pursues a policy combining military threat with economic warfare and his aim is to restore American hegemony especially in view of the rising contender: China. Beijing has been acquiring technological knowledge and started expanding beyond the borders, having easier access to Central Asia and the Pacific than Americans.

In 2015, when Trump stood for election, we wrote: “Trump’s war rhetoric is very popular with his audiences and is a step beyond Obama’s statement about American exceptionalism. In New Hampshire, Trump nearly declared war on China as he stated: ‘Take a look at China what they have done, they have taken our money, our jobs, our base, our manufacturing, and we owe them 1.5 trillion dollars that’s like a magic act, they have taken everything, and we owe them money.’ Mr Trump did not tell his audience that bringing back jobs comes at a cost. China’s GDP per capita is around 7,500 dollars, while the GDP per capita of the US is about 55,000 dollars. The China rhetoric is unambiguous; China stole what belongs to the US, and there is no need to repay US debt owed to China. The world should brace for Mr Trump as the 45th president of the USA.

President Trump wants to dictate to the whole world, but, taking into account the fact that the United States is now in conflict with Cuba, Venezuela, Iran, Syria, Russia, China and North Korea, a big war is not to be expected any time soon, so much so that the military interventions in Afghanistan, Iraq, Pakistan, Yemen and Libya appear to be inconclusive. Washington has an arsenal of other measures and these include:

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The New Tanker War – Trump Pampers the US Shale Oil Industry

The New Tanker War – Trump Pampers the US Shale Oil Industry 

The situation in the Gulf of Oman is getting worse. After the attacks on two tankers, Khamenei said that he would never sit at the negotiating table with the US again.1)So Iran will continue its nuclear program till the Israeli strategists interpret its advancement as unacceptable and will have Iranian targets attacked. Up to this time a new tanker war is more likely than 30 years ago, of which Gefira warned already in autumn 2018. 2)Our forecasts proved correct. 

The attacks could indeed have been carried out by Iranians, and it is quite possible that they were a provocation of the Americans. Such a hypothesis is justified by the analysis of the history of the conflict between the Great Satan and Iran. In August 1953, MI6 and CIA overthrew democratically elected Prime Minister Mohammed Mossadeq for wanting to nationalize the British Anglo-Iranian Oil Company (now BP). The company earned huge sums, of which Iran received hardly anything. The CIA’s Shah Reza Pahlavi, installed in place of Mossadeq, guaranteed the US that Iran would not cross over to the Soviet Union. With the help of the Americans3)he founded the secret service SAVAK, which suppressed the population, tortured and committed numerous murders.4)The Americans were not bothered by this for decades, but today they are outraged by the violation of human rights in Iran: indeed by the violation of their interests in the region.

The nationalization of oil production did not take place under Pahlavi. Almost half of the proceeds continued to go to American and British companies. As in Afghanistan and other countries of the world, Americans have invented their future enemies themselves.

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Yellow Vests Protests Rock Paris For 21st Consecutive Week 

Yellow Vests Protests Rock Paris For 21st Consecutive Week 

Does the establishment understand: there is just no solution for France

Does the establishment understand: there is just no solution for France 

Children are the political tool of choice in the hands of shameless propagandists

Children are the political tool of choice in the hands of shameless propagandists 

Source: wikipedia.com

Policy-making has been with us since the dawn of humanity and generally its rules are timeless. Governments, heads of states, diplomats, religious leaders – whether they are part of the establishment or in opposition – have employed various instruments in a bid to tip the balance of the power play to their advantage. These included propaganda, finances, religions or ideologies and – the most powerful of all – emotions. It is, however, the twentieth century that made extensive use of… children. Not that the instrument was not known earlier: the reader will have remembered the Children’s Crusade of the Middle Ages, for instance.

With the advent of the visual mass media – photography, film footage, television, the internet – this present-day biblia pauperum, the lay and religious leaders alike have learnt to how make a highly emotional appeal to the public through children. The effectiveness of this instrument cannot be overrated. Why, we are – men and women – biologically hardwired to positively respond to a child’s facial expressions. If you want to gain support for aid directed toward a far-away country, you post pictures of children’s lovely faces, now sad, now smiling – whichever better suits the purpose at a given time and place – and the hearts and minds of the receivers of the message are sure to be won over. That’s the power of an innocent child’s face, as we are accustomed to saying.

Nowadays presidents, prime ministers, monarchs – some of them intentionally childless! – and popes like to be filmed with or photographed in the company of children. The message is clear: someone who likes children is good, intends no harm. The little ones are not only used to elevate a politician’s image but also to advance and advocate a policy.

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The revolution of the petty bourgeoisie

The revolution of the petty bourgeoisie 

Source: shutterstock.com

The 2008 financial disaster marked the beginning of a deep identity crisis in the West. After the collapse of American Lehman Brothers, governments around the globe began to support their financial institutions with unlimited amounts of tax money. Small and middle size companies would bankrupt and people in the United States continued to be evicted from their houses while the financial elite would receive a handsome amount of public support. In other words: socialism for Wall Street, capitalism for Main Street. It became painfully clear that the free market and capitalism did not work for the banks and financial institutions.

Then followed the euro crisis, with Greece’s debt at its centre. Particular European economies are suffering from the imbalance between income and a rising public debt. In 2015 it was apparent that the European leadership had no solution for Greece let alone for similar problems that will soon inevitably emerge in Spain, France and Italy.

During the 2008-2015 time frame there was a widespread opposition among the common against the financial establishment, European governments and the monetary system. The resentment was stoked by the perception that the whole system was unfair against the normal working man. In 2015 radical left-wing politician Alexis Tsipras took office in Greece and socialists like Yanis Varoufakis, Jeremy Corbyn and Bernie Sanders became the protectors of the middle and working classes. The political climate seems perfect for the socialists and yet socialist parties are declining.

It is not merely inequality that matters. Most Western countries are implementing a redistribution of wealth from the middle to the lower classes. For example, in the Netherlands a family with one working adult and a yearly income of 20 thousand gets 7 thousand euros in subsidies, thus pocketing 27 thousand, whereas a person having a 31 thousand income must pay 3 thousand euros in tax, and since he receives no subsidies, he lands up with 28 thousand euros.

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Macron – No taxation without representation

Macron – No taxation without representation

The mass protests on the streets of French cities recall the first years of the American War of Independence. In the years before and during the American Independence Movement, the resentment that independence advocates harboured was that the Thirteen Colonies were obliged to pay taxes to the British Crown without being represented in the British Parliament by their own elected deputies. The slogan of the founding fathers of American democracy at the time was “No taxation without representation”. Nowadays it could be inscribed on the flags of the Yellow Vests, the movement that opposes additional taxation by Macron’s government. The government represents the interests of the Brussels technocrats, i.e. bankers and large corporations, and not those of the French people. Brussels does not allow holes in the state budget, does not tolerate anyone who does not abide by its fiscal guidelines. The French were persuaded that they retained sovereignty, although for years the princes from Brussels (commissioners of the revolution against sovereignty of states – Timmermans, Juncker and others) have been setting the course for France. Although the French deputies allegedly represent their people in the European Parliament, they are not proposed directly by the people, but by the parties. Most voters have swallowed the bait for years that the parties act in their interests, but even the dimmest dummy gets wise over the years. Voters in the 21st century must not be treated as they were in the 19th: the first cracks in the beautiful image of the handsome president, whom the German media describe as “visionary”, appeared when he reduced property tax on real estate. French citizens could not swallow it. Though the move was supposed to keep money in the country, Macron was denounced by low earners as the “president of the rich”.

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Saudi Arabia and China are preparing for war

Saudi Arabia and China are preparing for war

The fact that Saudis want to control Yemen and the Chinese are increasing their presence in Myanmar is a preparation for the conflicts that may soon flare up. It is about securing the flanks.

The war in Yemen is being waged more and more brutally by the Saudis. The weapons of the Saudi army supplied by the USA hit the civilian population more and more often. The central bank moved from Sanaa to Aden by order of the Saudis prints money in heaps, so that the population cannot afford food due to galloping inflation. Why genocide? It is not about ideology, or religious differences between Huthis (Shiites) and the rest of the people of Yemen (Sunnis). One of the reasons can be oil. The reserves of black gold discovered in the northern province of Yemen, Al-Jawf, are said to be larger than the Saudi reserves.1)A bargain for Saudis. But the most important thing for them at the moment is to prepare for the direct conflict with Iran. If war were to break out, Iran would block the oil transit bottleneck in the Strait of Ormuz. Saudi Arabia therefore needs to secure access to the 27 miles wide strait between the Red Sea and the Gulf of Aden and thus its oil exports. The road is called Bab al-mandeb (Gate of Tears) in Arabic. If it is also blocked by enemies of the Saudis, there will certainly be many reasons for Riyadh to cry.

For China, however, it is the Strait of Malacca that is of strategic importance. Since the Chinese are increasingly aggressive on the South China Sea, have artificial islands built and are on a collision course with countries such as Vietnam, the Philippines and the USA, they must be on their guard when it comes to their most important trade and transport routes.

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The US will become a neo-feudal nation

The US will become a neo-feudal nation

The Western world is heading for the next big social and economic crisis. America’s hegemony is waning and its establishment is fighting among themselves. To uphold American supremacy, President Trump and his administration are trying to reshape the nation into a neo-feudal society with a new relationship between the President (sovereign), the financial elite (fief holders, the privileged vassals) and the people (subjects performing socage). If the country is doing well, the population lives in relative stability and the leader is loved. The US is facing a demographic decline and a rapid replacement with migrants from Central America and Africa. This internal development will have profound effects on social stability and economic prosperity. The US can only be a superpower if the country is stable and the nation supports the establishment.

Jerome Powell, the head of the FED, is derailing Trump’s stimulus programme by increasing the interest rate and reducing the federal reserve balance sheet. The actions of the FED result in a drop in stock prices and the increase in the cost of debt servicing for the highly indebted US corporations. The US is now the world’s largest oil consumer and producer thanks to its shale oil industry. However even with the oil price around $70 the industry has lost more than it earned. A high interest rate and a low oil price make the industry vulnerable.

The president has said clearly that he does not like what the FED is doing. The FED has to revise its decisions, otherwise Jerome Powell will be dismissed as envisioned by Section 10 of the Federal Act. The FED will have to reconsider its policies so as to enable the stock market to make another push up next year. However, investors should be careful.

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The European Project Comes to an End

The European Project Comes to an End

The end of the EU and the Balkans as China’s foothold in Europe

Though the end of the European Union is inevitable, the proponents of a further integrated or federal superstate are busy making a last effort to achieve their goal. The opposition against the project is mounting with every day. Europe is suffering from economic stagnation, and is facing a demographic calamity.

The pro-European establishment’s last hope was the newly-elected French President Emanuel Macron who was to revive the economy and integrate the European Union under French leadership. Gefira was of the opinion that all these expectations were misplaced. The once great nation is broken beyond repair. France’s problems are much worse than those of Italy. Though Italy has a higher debt-to-GDP ratio than France, France has a larger budget deficit, and the difference is that while Italy has a trade surplus France has a trade deficit, so the country cannot pay for its imports.

Gefira Financial Bullletin #29 is available now

  • European Project Comes to an End.
  • The Balkans
  • Intelligent or automated security is the future

While the Italian “populist” Mateo Salvini is earning the nation’s respect, Emmanuel Macron’s popularity is at a historic low. All of France is engulfed by riots, civil unrest and looting. In city after city, village after village, protesters have been clashing with the police for weeks now while President Macron has nothing to offer to appease them, unless he violates the budget deficit boundary of 3%.

Like the Soviet Union once was, France is a sizeable social-multicultural experiment, and like the empty shops in communist countries, the demographic changes in France are visible in every section of the society, but nobody dares to name them. 

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Sino-Russian interdependence will be based on oil

Sino-Russian interdependence will be based on oil

Although Beijing is Moscow’s largest trading partner, while Russia only ranks in the second ten among China’s importers, the Kremlin is strategically the most important contractor because it supplies the most desirable product – oil – and Chinese demand for this raw material is growing. It appears that an increase in Russian oil exports to China will be at the expense of European consumers.

Chinese oil production has been falling since 2015, and yet enormous infrastructure investments and huge strategic petroleum reserves (SPR) boost the demand for it. No wonder then that in 2017, Beijing became the largest importer of crude oil, overtaking the United States. Currently, China’s consumption of product is approaching 13 million barrels per day. In the March Gefira we predicted that the PRC will have become the largest consumer of this raw material by 2025, accounting for 18-20% of the global consumption.1)And Russia has an important role to play because already in 2016 it became China’s most important oil supplier, replacing Saudi Arabia.

China has been buying more and more Russian oil in the last decade, even though the Kremlin does not increase its export volume, which is around 5 million barrels per day. In 2009, countries such as Poland and the Netherlands imported more Russian crude oil than Beijing, but in 2015 they were overtaken by China, which in 2017 had an over 20% share in the Russian exports of this raw material.

In recent years, an increase in the Sino-Russian trade balance has been noticeable. While a decade ago, the total turnover was less than 45 billion USD, in the last year this result was almost twice as high: 84 billion USD. During the November meeting of the prime ministers of both countries, it was announced that the target would be to reach the level of 200 billion USD, with the energy industry, mainly oil and gas, being the main factor in the balance sheet growth.2)

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ACTA 2.0 – the end of freedom on the Internet

ACTA 2.0 – the end of freedom on the Internet

Freedom of expression is a thorn in the side of EU technocrats. The new intellectual property law adopted by the European Parliament in September threatens our fundamental rights.1)

Internet means freedom. Still. We can (still) freely retrieve content with our search engines. We can (still) freely and without further ado access the sources in a text. This will soon change. Article 13 of the controversial law says that website operators and Internet providers will be held accountable for the content of their customers and readers. The new law thus obliges them to use the so-called upload filters. The filter obligation leaves it to the software to decide what users are allowed to upload and what not. In plain language it says the provider will control and censor our activities on the net: every uploaded photo, video, every text will be checked. The question arises: what criteria will apply to this censorship and how and by whom will this filter software be programmed? The EU Commission will certainly soon be proposing detailed guidelines to combat fake news, the spread of terrorism on the Internet, and to combat those who infringe copyrights. All right, but it will also be a tool to suppress the critics of the EU, independent bloggers who want to throw light on the incompetence and insolence of the Brussels technocrats, dissidents (not left-wing liberals). And I bet: the directives will be introduced very quickly and eagerly in all EU countries.

Source: shutterstock.com
Article 11 deals with the introduction of a kind of tax on links. From now on, when we publish a link on our website, we have to pay the owner (the author or publisher) for it. Technocrats believe that if we refer to a specific source and link it in our text, the source is entitled to a remuneration.

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Olduvai IV: Courage
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Olduvai II: Exodus
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