Steve Bull's Blog, page 1185
February 20, 2018
“The Petro Is Born Today” – Maduro Launches Oil-Backed Crypto “For The Welfare Of Venezuela”
More than two months after Venezuelan President Nicolas Maduro announced his intention to launch the world’s first state-sponsored cryptocurrency to try and help Venezuela raise some badly needed foreign capital, the Petro – backed by 5 billion barrels of oil that are still waiting to be pumped out of a local oilfield – is now a reality.
Venezuela first tipped its hand at its intentions over the summer, when it appointed what we believe to be the world’s first “superintendent of cryptocurrency.”
The Venezuelan government has been saying for months that the Petro would be available for sale beginning Feb. 20. According to Bloomberg, it’ll be a few weeks – if not months – before we know anything about the cryptocurrency.
Developed in secret, the project was spearheaded by a 27-year-old blockchain engineer who, according to Bloomberg, earnestly believes in the power of crypto to rescue one of the world’s most repressive regimes from one of the worst economic disasters unfolding anywhere…
However, it turns out that the sale is the culmination of months of work, much of it done quietly by top bureaucrats loyal to Maduro. Working alongside them has been a 27-year-old Venezuelan technology entrepreneur named Gabriel Jimenez, who says he’s spent months helping develop the concept of the Petro and remains certain of its power to fix what ails Venezuela. “This is a lot more ambitious than just a cryptocurrency. It’s a project which I, along with a national and international team, have worked arduously to benefit this country,” says Jimenez. He says he hasn’t been paid for his work and will be compensated only in Petros if the token succeeds.
…click on the above link to read the rest of the article…
History crash
My previous post offered a retrospective take on my ‘Peasant’s Republic of Wessex’ post cycle that I completed a while back. I thought I might now turn to another such retrospective, this time on my recently-completed ‘History of the world’ cycle. So I’d like to offer a few thoughts on the way we think about history, with the help of a couple of books from my recent reading.
JG Ballard’s Crash is one of the weirdest books I’ve ever read – a novel about people who are sexually aroused by cars, and in particular by deaths and injuries in car crashes, deliberately orchestrated or otherwise1. It’s a disturbing, semi-pornographic and some might say depraved book, to which a publisher’s reader of the draft manuscript famously wrote “This author is beyond psychiatric help. Do not publish”. It’s also, in my opinion, completely brilliant. I can’t imagine what the hell was going through Ballard’s mind in writing it, but for me it touches on two themes relevant to this blog.
The first is that we tend to talk about technology nowadays as if it’s something that’s radically separable from what it is to be a person. So with cars, for example, we might draw up some kind of balance sheet where we say that the advent of the automobile has been positive, because it’s allowed us to get to places quicker and more freely, while acknowledging the downsides – road injuries, air pollution etc. I take Ballard to be saying that this way of thinking is flawed. Cars have changed who we are, and bled into the very fabric of what it means to be a person in the 20th or 21st centuries.
…click on the above link to read the rest of the article…
The world in 2018 – Part Three
Mainstream economics seems to have learned little and changed nothing in the last decade, despite the fact that the financial crisis and its aftermath laid bare a number of important issues with its theories and models. Failure to address these issues is making the economics discipline increasingly incapable of informing us about the trajectory and situation of our world.
After a long period of relentless rise, global financial markets seem to have suddenly entered volatile territory. A brutal selloff in global stocks started in early February, which erased all of the prior gains of 2018 and wiped out trillions of dollars of ‘value’ in a matter of days. The selloff was most spectacular in the U.S., with Wall Street experiencing one of its worst weekly tumbles since the 2008 financial crisis – quickly followed, however, by a sharp rebound. Financial pundits the world over are now busy discussing whether this new episode of market volatility is already over or is likely to last, and if it might be announcing a ‘correction’ (a drop of 10% or more from a peak in market indexes), a ‘bear market’ (a drop of 20% or more), or even a full-blown crash. The truth is that no one knows for sure at this stage, and any prediction of how the next few weeks and months are going to play out in global financial markets can only be guesswork at best.
What is more interesting is to observe how quick economists and policy makers around the world have been to serve yet another round of what has become their standard discourse whenever financial markets get suddenly restless: no worries, folks, ‘the fundamentals of the economy are strong’…
…click on the above link to read the rest of the article…
India Will Lead Global Oil Demand By 2035
Oil market participants and analysts have been closely watching the record level of supply coming out of the United States that is threatening to undo OPEC’s production cuts. But in the latter part of 2017 and early in 2018, robust oil demand growth — both in emerging markets and OECD economies — has supported oil prices as much as the cartel’s production restraint and the weakening U.S. dollar.
Traditionally, all eyes have been fixated on China and the pace of its oil demand and imports growth, but lately India has grabbed global attention after its oil imports rose to record highs amid strong economic growth and fuel demand. Projections of India’s long-term energy and oil consumption are also optimistic, and India is already a major oil demand growth driver.
In China, January crude oil imports jumped to a new record of 9.57 million bpd, but forecasts of slower GDP growth are making analysts wary of overly optimistic projections. China’s crude oil demand growth could slow down this year to 4.2 percent from 5.5 percent last year, according to S&P Platts analysts.
In India, high refinery runs and expanding refining capacity amid a strong recovery in demand pushed crude oil imports to a record 4.93 million bpd in January 2018, up by double digits compared to both December 2017 and January 2017, according to data compiled by Thomson Reuters Oil Research & Forecasts.
Although the January imports figure may have a seasonal explanation, with spring refinery maintenance approaching, longer-term projections and Indian refinery expansion plans support the view that oil demand growth will be strong. India plans to boost its crude oil refining capacity by 77 percent by 2030 to meet its growing fuel demand.
…click on the above link to read the rest of the article…
Canada’s Oil Crisis Continues To Worsen
Canadian oil producers can’t get a break. First it was the pipelines — there are not enough of them to carry the crude from Alberta’s oil sands to export markets. This pipeline capacity problem has been forcing producers to pay higher rates for railway transportation, which has naturally hurt their margins in no small way. Now, there is a shortage of rail cars as well.
The situation is going from bad to worse for Canadian producers who can’t seem to catch a break. Canadian railway operators are fighting harsh winter weather and finding it hard to supply enough cars to move both crude oil from Alberta and grain from the Prairies.
The harsh weather is just the latest factor, however. Before that, there was the 45-percent surge in demand for rail cars from the oil industry, Bloomberg reports, citing Canadian National Railway. The surge happened in the third quarter of last year, and Canadian National’s chief executive Ghislain Houle says that it took the company “a little bit by surprise.” This surprise has led to “pinch points” on the railway operator’s network, further aggravating an already bad situation.
As a result, crude oil remains in Alberta and prices fall further because Alberta is where the local crude is priced, Bloomberg’s Jen Skerritt and Robert Tuttle note. In fact, Canadian crude is currently trading at the biggest discount to West Texas Intermediate in four years, at $30.60 per barrel. The blow is particularly severe as it comes amid improving oil prices elsewhere driven by the stock market recovery.
The light at the end of the tunnel is barely a glimmer. Despite federal government support for the Trans Mountain pipeline expansion project, it is still facing obstacles that may result in it never seeing the light of day.
…click on the above link to read the rest of the article…
Dancing to US Tune: NATO Creates Military Schengen and Launches Iraq Mission
Dancing to US Tune: NATO Creates Military Schengen and Launches Iraq Mission
The NATO defense chiefs’ meeting on February 14-15 was mainly devoted to sharing the defense burden and other issues routinely discussed at any event. As usual, there were turgid speeches with opaque meaning to leave one guessing what’s really behind those nice words. In fact, the alliance took two far-going decisions proving a clue to its plans for near future.
The ministers said yes to the creation of military Schengen to ease forces movements across the Old Continent. NATO is to do away with the cumbersome and lingering bureaucratic procedures hindering transportation of troops and hardware through territories of member states. One of the solutions is a standardized form used by European allies and partner states for granting permission for movements. Germany has offered to host the command center to implement the concept of free transit zone in view of its vast experience in providing logistical support.
It’s not red tape only. One thing leads to another. The military Schengen will inevitably result in additional expenditure to adapt the civilian infrastructure to military needs, upgrading roads, tunnels and bridges to enable hardware movements and heavy aircraft landings.
The decision is taken amid burgeoning preparations to boost military infrastructure near Russia’s borders. The fact that by signing the 1997 NATO-Russia Founding Act the bloc pledged not to deploy “substantial” ground forces on permanent basis close to Russia appears to be ignored and forgotten. With the document no longer valid, the bilateral military relationship will be deprived of any legal basis.
To augment the forces in East Europe, the Black Sea, the Baltics and the Scandinavian Peninsula the bloc needs new logistic hubs. Unobstructed large-scale transport movements become top priority for implementation of the war plans, such as concentrating combat-ready stocks for a full US brigade in Poland.
…click on the above link to read the rest of the article…
Munich Conference: “For The First Time In Decades We Are Facing Threat Of Nuclear Conflict”
Over the past fifty years, the Munich Security Conference (MSC) has traditionally reflected the current state of world military affairs. Each February, more than 450 senior decision-makers from around the globe descend into Munich, Germany, to discuss current and future security challenges.
And while there have been times in recent years when the MSC demonstrated signs of hope and optimism, none of that was evident this year. This year’s motto “To the Brink – and Back?”- which seems to be an accurate portrayal of the current geopolitical situations in most regions. After several days of senior decision-makers bickering back and forth, the negativity in the atmosphere only means one thing: A global conflict between nuclear superpowers is lingering.
“I was hoping when I opened this conference on Friday that, in concluding the conference, I would be able to say we can delete the question mark. In other words: ‘We are back from the brink,’” former German diplomat Wolfgang Ischinger said in closing remarks of the MSC. “I’m actually not sure we can say that,” he added.
The dangers of nuclear proliferation and talk of a “dire” global security situation dominated the security conference: from the ongoing war in eastern Ukraine, to U.S. allegations of Russia’s election-meddling, to territorial disputes between ex-Soviet republics, and even discussions about the escalating tensions between Israel and Iran: geopolitical doom and gloom was not short in all conversations during the meeting.
And, in the latest escalation, Bloomberg reports that the most fiery subject of the conference were the tensions surrounding Russia and the U.S over nuclear arms controls.
Addressing a conference hall in Munich packed with dignitaries, UN Secretary-General Antonio Guterres warned of the risks emanating from North Korea’s nuclear activities, which have ratcheted up tensions between Pyongyang and Washington.
…click on the above link to read the rest of the article…
February 19, 2018
The EMP Threat: How It Works and What It Means for the Korean Crisis
Before we begin with this week’s installment of This Week in Geopolitics, I want to draw your attention to the 2018 Strategic Investment Conference. Last year at the SIC, I said the United States would likely launch a pre-emptive attack on North Korea. I failed to anticipate the level of opposition from South Korea, which would bear the brunt of the casualties in such an attack. Without South Korea’s support, the US reconsidered its position. No attack came.
Obviously, I would like it if GPF were right about everything. Our track record is pretty good, but in this case, we were wrong. Still, I view this as the reason the SIC is such a valuable conference. The SIC’s greatest asset is how it brings together thinkers with profoundly different viewpoints to discuss the most important issues in the world today—people who aren’t afraid to tell you what they think, or to admit when they were wrong. I’m honored to be speaking once more at the SIC, where the theme for the year ahead is “Crossroads.”
And indeed, the world is at a crossroads. The post-2008 financial crisis “recovery” has not curbed speculation or reduced inequality. It has not halted the rise of political instability in the world’s most important countries. As Europe celebrates what 10 years ago would have been meager growth rates—and as the US celebrates sky-high stock prices one day only to watch them fall the next—the world stands on a precipice where the choices seem to be imminent chaos or delayed crisis.
…click on the above link to read the rest of the article…
Russia Warns US To “Stop Playing With Fire” In Syria, Immediately Leave Area It Controls
Two weeks after a US B-52 strike killed scores of Russian mercenaries in Syria, which according to Bloomberg and Reuters were are as many as 200, while Russia said no more than 5 Russians were killed in the attack then promptly refused to discuss the embarrassing topic further, Moscow has clearly not forgotten this latest – and most serious – escalation in the 7-year-old proxy war, and on Monday Russian Foreign Minister Sergei Lavrov warned the Trump administration not to “play with fire” as he lashed out at the U.S. over what he described as its “provocative” support for autonomy-seeking Kurds in Syria, while urging US troops in the area of Al-Tanf to “leave immediately.”
Speaking to a Moscow audience at the Valdai Club conference on the Middle East, Lavrov said that US troops must immediately cease operations in the Southern Syria area of Al-Tanf, adding that he once again calls “on our American colleagues not to play with fire and measure their steps proceeding not from immediate needs of today’s political environment, but rather from long-term interests of the Syrian people and of all peoples of this region, including the Kurds, of course,” the Russian top diplomat was quoted as saying by TASS News Agency.
Lavrov was referring to an area on Syria’s border with Jordan and Iraq, which the US declared to be under its protection last year. Among other things, it contains the Rukban refugee camp. The facility is apparently used by radical militants, including members of UN-designated terrorist group best known by its former name Al-Nusra Front, to recover and raid other parts of Syria, Lavrov said at the Valdai Club conference on the Middle East in Moscow, alongside his Iranian counterpart Mohammad Javad Zarif and a top adviser of Syrian President Bashar al-Assad.
…click on the above link to read the rest of the article…
Latvia Bank Crisis: Central Bank In Chaos As ECB Blocks Payments By Third Largest Bank
One day after we reported that the central bank governor and ECB Governing Council member Ilmars Rimsevics was detained by Latvia’s anti-corruption authority on Saturday on suspicion of accepting a bribe of more than €100,000, prompting both Latvia’s Prime Minister and the president to call on Rimsevics to resign, Latvia appears to have a full-blown banking crisis on its hands, after the European Central Bank froze all payments by Latvia’s third largest bank, ABLV, following U.S. accusations the bank laundered billions in illicit funds, including for companies connected to North Korea’s banned ballistic-missile program.
Latvia’s Central Bank governor Ilmars RimsevicsThe troubles started on February 14, when Latvia began investigating ABLV over suspicions of illegal trading related to North Korea’s weapons system. The investigation was launched after the Treasury Department charged the bank with having “institutionalized money laundering as a pillar of the bank’s business practices,” which proposed preventing the bank from opening an account in the U.S.
That decision immediately made ABLV a pariah to other financial institutions, effectively cutting its access to the dollar and funding flows from the world’s most important market, and forcing it to rely exclusively on the ECB as it sole-source of funds.
As the WSJ reported, in proposing the ban on ABLV, Treasury said the bank managed transactions for clients connected to several long-sanctioned North Korean firms.
These include North Korea’s Foreign Trade Bank, the institution that manages Pyongyang’s foreign-currency earnings, revenue that U.S. and United Nations officials say go directly to North Korea’s nuclear and missile programs.
According to the Treasury, ABLV’s alleged illegal activity also included funneling billions of dollars in public corruption proceeds from Azerbaijan, Russia and Ukraine through shell company accounts.
…click on the above link to read the rest of the article…
