The Big Shut-Down

Chances are, if you were born before 1988 or so, you probably remember the prime time TV drama “Dallas.”  I remember my mom watching “Dallas.”  We watched it together, and she always made me be quiet so that she could hear what was happening.  I still love that show, even today.  Who doesn’t love watching the diabolical J.R. Ewing try to scheme his way out of a sticky situation, usually of his own creation?  There was an episode in, I believe it was season three or four, called “The Big Shut-Down.”  J.R. tries to put Clayton Farlow, an oil refiner, out of business for harboring his ex-wife Sue Ellen and their son, John Ross.  J.R. ends up garnering huge losses for Ewing Oil, and Miss Ellie has to step in and negotiate with Clayton to buy up their oil.  In the end, in spite of his scheming to be top dog, J.R. ends up getting himself removed as president of the company.  More and more, the U.S. is starting to remind me of J.R.

The U.N. just had a vote about whether or not to intervene in Syria.  China and Russia, as was predicted, vetoed any action in Syria.  China suggested the U.N. turn its relief efforts towards Somalia, which has been going through on of the worst famines in recent memory.  This is hardly surprising, given the fact that there is a strong bond between China and Russia, and Russia has long had ties to Syria and other countries in the Middle East.  Russia is Syria’s main arms supplier.  Russia forgave most of Syria’s Soviet-era debt.  Syria allows Russia use of its port of Tartus, where Russia maintains a Mediterranean fleet.  Russia also has at least one major natural gas project going in Syria that is reportedly worth into the billions.  It is not surprising, therefore, that Russia isn’t keen to oust President Bashar Assad.  Things have gone fairly well for Russia in Syria.

If the U.N. (i.e. mostly the U.S. with Europe in the backseat) goes into Syria on one of its “peacekeeping” missions, it seems inevitable that Russia will lose out, probably in a big way.  Its natural gas project could be nationalized.  It could lose the right to keep its navy in Tartus.  Hardly a satisfactory situation.  No country would be happy about another country or group of counties messing with its cash flow.  One might also assume that, given Russia’s veto of the U.N. intervention, if the U.N. decides to go into Syria anyway, Russia will see little benefit from it, in oil or gas trade or otherwise.

The Sino-Russian link is becoming stronger and stronger.  They have been showing solidarity against the West as of late.  China has been working hard to broker the influence of the yuan in the Middle East.  China and the UAE just reached a deal worth about $5.5 billion dollars.  The UAE has agreed to hold renminbi (yuan) in its vault, which will give increasing prestige to the Chinese currency.  Make no mistake about it: Russia and China generally, and China most particularly, are looking to strengthen their ties with the Middle East, and one of the ways that they want to do that is by pushing the renminbi as a viable trading currency.

Something to keep in mind is that China strictly controls its currency flow, as of right this minute.  That is, it only allows for a certain amount of transactions to be done in its currency.  That said, the writing is on the wall, in terms of how China is looking to the future.  There will come a day when China will loosen its currency policy, and it is making inroads to ensure that the renminbi emerges as a currency of favor.  It is estimated that by 2025, China will import three times as much oil from the GCC as the U.S. would need.  Let’s face it: money talks – and walks.

Unfortunately, we are pursuing an increasingly dangerous path in the Middle East.  We are continually intervening for the sake of maintaining the dominance of the petrodollar, which is vital to the continuation of the loose money policy of the Fed.  I could hazard to guess that were it not for the petrodollar and the use of the U.S. dollar as the main reserve currency, the dollar would already be belly up like a goldfish in a dirty bowl.

Frankly, I’m beginning to get extremely worried about the situation that is unfolding in the Middle East.  The U.S government is making it fairly clear at this point that “nothing is off the table,” and if you believe what the news media is saying, war with Iran is practically a foregone conclusion.  I’ve talked at length about why this is probably true.  Follow the money, find the incentive, and you will understand what is happening today.  The same is true about Syria.

The root of this evil lies with the Federal Reserve.  The Federal Reserve has inflated our currency, and now, in order to maintain reasonable purchasing power at home, we are going into foreign countries in an attempt to maintain our ill-gotten standard of living.  It is completely and utterly unsustainable, and people are dying along the way.  It is still incredible to me that the peaceniks I heard who were calling out for Bush’s impeachment are strangely silent now, in spite of the fact that the “war for oil” is nowhere near at its conclusion.

I am afraid of where this constant foreign intervention is leading us.  We are making more and more enemies abroad while further destabilizing an already perilous situation at home.  It is high time that we heed the words of the Founding Fathers and cease our foreign entanglements.  It is time to audit and finally abolish the Fed.  We must return to sound money, for if we don’t, we will only continue down a violent path that will lead to our own inevitable destruction.

While I know that the “gloom and doom” scenario gets tiresome and depressing, there are things that we can do about it.  The first thing that we can do is educate ourselves.  Start reading Mises, Hoppe, Rand, Rothbard, and other Austrian/libertarian philosophers.  Get acquainted with liberty.  It is, for lack of a better word, liberating.  Also, get out there and vote for Ron Paul.  I know that some states have already held their votes, but if you’re on the fence, get off it and go vote for Paul.  Read some of his speeches and articles.  They can be found for free.  Go to the Mises Institute.  There is so much free information available to us, if only we will take the time to go out, find it, and read it.  There is still time to turn this situation around.