^{Urban Survival’s} Inside Report  # 5 November 18,2001

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  The New World Axis?  It's Not a Conspiracy:  But...  

Assumption of the Week:  It's all about taking apart OPEC and control of energy.  Whoever controls energy here at the end of the Hubbert Curve, owns the future....

For the past many months, hell even the past few years, I have spent nearly countless hours ruminating and cogitating on why the world operates in the manner it does.  I can see why a lot of people think there is some kind of "master plan" being implemented by some "over-class".  You can see references to it all over the web; Bilderbergers, CFR, New World Order, you know, the whole list.  Ever watch the movie "Skulls"?

But after a tremendous amount of reading, I keep coming back to the notion that while yes, there are certain people with a whole lot of money and that means power, it doesn't necessarily means there is any kind of conspiracy in the works.  Although, events play out that way.  I try to keep in mind one of the major points of Thomas Gilovich's book "How We Know What Isn't So":  People are built in such a way that their brains will project patterns where there really are none.  Click here for a snippet page from Amazon.

How many times as a child did you sit and watch the clouds and "see pictures", perhaps an animal there, a donkey over there, a house over there?  Well, in today's world of huge amounts of information, but with a limited language, we are bound to project a lot of things that may not be there. 

With this mindset, therefore, my first inclination was to scream "Ahah!  The New World Order is behind Afghanistan" when I read that Russian President Putin spoke of the New World Order down on the Bush Ranch.  But I quickly laid aside my first reaction, realizing it would probably be wrong.  Still, the comments did spark a few thoughts about what is ahead based on the public pronouncements of the major players and a few glaring facts that were already on the table..

To follow my logic, you need to start by reading the Russian version of Putin's comments (in English, of course) rather than the U.S. press reports.  See: http://english.pravda.ru/main/2001/11/16/21108.html

Ordering Some Data Points

Let's line up our fundamental assumptions: 

• The most important commodity in the world is oil.  Not plutonium, not X-Boxes, not SUV's, and not even water or food.  Why?  Because if you have oil, you can have anything - and I do mean anything - you want.  If you doubt the truth of the assumption, you have only to look at any of the Middle East members of OPEC and ask yourself, "If these guys didn't have any oil, would we give a rip about their deserts?"  I think the answer would be a resounding "No!"  On the other hand, with oil, even a small country with nothing else to offer, can rise in stature to where wars will be fought over it (Kuwait).  What's really weird is that the most powerful country on earth appears to accept that.
• There's nothing particularly sinister or conspiratorial about George W. Bush, son of former president George Bush, being in the White House.  It has happened before that a son has taken up dad's place in the White House:  John Adams was the second President of the country.  His son, John Quincy Adams went on to become the sixth President.  Family connections in politics are nothing new:  Theodore Roosevelt's 5th cousin Frank Delano Roosevelt became President, and it's not like the Kennedy's didn't work well as a political family.  Sure, I'm really not happy with naming the Justice Department after a Kennedy. It's an obvious buyoff to get Kennedy support of expanded police powers in the name of fighting terrorism.  If "naming after" makes sense, why isn't the Civil Rights Office in the "Abraham Lincoln Building", or the F.A.A. in the "Wilbur and Orville Building"?  Obvious and terrorism powers vote-motivated, but I digress....
• More than half of the world's oil supply is owned or controlled by non-U.S. interests, and in many cases, people who simply don't like us.  Although we don't have much to do with the country, my associate "Panama" Bates notes that about the closest thing to a "normal" relationship with have with a serious oil country is how we get on with OPEC member Venezuela.  Venezuela still harbors a lot of Columbian guerilla outposts and if you're ever kidnapped in Columbia, you can look forward to some time in the Venezuela border area.  Still, other than the joint drug operations (no pun intended) it's a low-key relationship.

Still, as I sat down to enumerate the data, about the only thing that makes sense is that the U.S., Europe (and Britain with her oil in particular) and Russia with vast reserves, are forming up as a "counter-OPEC" form.  I think the key phrase in the Pravda article was

"The new world order, based very firmly on the Moscow-London-Washington axis, is cemented on mutual trust, collaboration and friendship, instead of the suspicion, hatred and deceit apparent during the Cold War years."

If Putin's born-again Capitalism, embracing the "New World Order" report is true, and we have no reason to doubt it, it would then explain a myriad of developments in the international arena over the past ten years or more.  For example:

• We know Unocal wanted to build a pipeline through Afghanistan in the mid 1990's.  However, the company withdrew its plan in 1999.  Why?  There would be no reason for Unocal to move forward with its plan if another way to get oil from the Caspian to the West was forthcoming.  According to a Unocal news release:

Unocal reiterates position on withdrawal
from trans-Afghanistan pipeline project

El Segundo, Calif., Feb. 16, 1999 - Unocal Corporation today reiterated that it no longer has any role in developing or funding the proposed CentGas pipeline project across Afghanistan.

The company stated that it is not considering rejoining the CentGas consortium, nor has the company had any discussions with persons or entities anywhere about re-entering the project since Unocal formally withdrew from CentGas in December 1998 (See Unocal statement, Dec. 10, 1998).

Unocal issued this statement after an erroneous press report from Islamabad, Pakistan, quoted Pakistani officials who indicated that Unocal was showing an interest in rejoining the consortium.

• Although Russia has significant oil and gas reserves, it did not join OPEC when it became a "free agent" as the Communist system of government failed in 1988-1989.  There are still only 11-members of OPEC.  Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela.

This is extremely curious when you think about it.  If you were a poor person, and that's the position Russia and the other ex-USSR states were in after the breakup of the USSR, why wouldn't you have joined "The Club" and ruled the world's oil future..and thereby gotten rich?

Just how big is Russia's resource base?  Well, the U.S. Geological Survey sums it up this way:

Russia is large and contains many basins which are significant in terms of global energy production. In terms of energy resources, less information is available; however, U.S. Geological Survey (USGS) scientists expect Russia to represent the largest share of the world's energy resources. Almost 25 percent of the world's energy production from fossil fuels is produced by Russia, with about one-sixth of the total contributed by oil and gas production. Despite a very large resource base, production of oil and gas in Russia has been decreasing during the last several years mainly because of outdated and aging equipment, lack of investments, and political and managerial problems. Many Russian basins are considered frontier areas because of the lack of information from partially-explored areas, and in some instances, the lack of any exploration. The technical infrastructure of the Russian scientific community is rapidly advancing with the use of U.S. techniques and methods.   http://energy.usgs.gov/factsheets/Russia/russia.html#fig1

The answer why Russia didn't join OPEC became clear in 1994 when USGS and Western oil companies began cooperating in exploration projects.  This is undoubtedly what set off the OPEC response via proxies like bin Laden to keep Russia out of Afghanistan. 

I think that when Unocal pulled out of the trans-Afghan pipeline project, things were going to hell quite quickly in the region.  It was looking like the Taliban, with guarantees of lots of heroin to the Russian mafia, had put a deal together that made a lot of economic sense.  I'm not saying that this was engineered by OPEC, but it's clear that when stakes are this high, intermediaries can be used to work out the loose ends.

That OPEC didn't want Russia taking over strategically important Afghanistan, is patently obvious.  That's why OPEC countries like Saudi Arabia (a Wahabiite country) supported and allowed the funding of Osama bin Laden and his Taliban group.

However, once Russia was kicked out after losing the guerilla war between the Taliban and the Russian forces (it was Russia's version of Vietnam), the country was up for grabs.  It then became incredibly important for U.S. and Western interests to insure a compliant government would come to power.  Had the Taliban been allowed to rule Afghanistan, the future trans-Afghan pipeline would never materialize, and OPEC's power would have remained high.

But now, with a "representative" government in the cards for Afghanistan, and oh by the way, a good recession underway in the West to hold down demand, there's plenty of lead time to build a pipeline and secure the resource for the Washington-London-Moscow axis (to use Pravda's description).

What we're really looking as is not a New World Order, but a New World OPEC, call it the New World Axis -except this time, because of the way things have worked out, not only will the new Axis control oil, but they will also control technology.  This is a huge concentration of power, and clears the way for what will amount to world government by a coalition of corporations and governments built around energy and technology.  Third World will therefore continue to be marginalized.  It's about as good a picture as a true capitalist could want.

It also sets up a very interesting "end game" for the existing members of OPEC, who may or may not see the handwriting on the wall:  With a slow economy and time to build a pipeline, the West have wrested pricing power (thus influence) from OPEC in a sufficiently large measure to potentially set up instability within OPEC.  The end for OPEC will come when some existing OPEC members decide to ally themselves with the New World Axis.

But before we get there, we would expect to see some additional attacks on the U.S. and the New World Axis.

Why?  Because in order to drive OPEC to break up, we may need to increase the depth of the recession, and thereby drive down the price of oil to something under $10 a barrel.  Look at it this way:  If oil was free, OPEC countries would realize no revenue.  No revenue means no transfer payments to residents of countries like Saudi Arabia who are used to getting handouts from the Palace.  No handouts means the Palace would change hands.  Wanna bet whether the new occupants would join the New World Axis?

There's more to it than  building pipelines and tearing down OPEC, though.  In addition, we need more time for structuring of existing debt at the new lower interest rates (in U.S. dollar terms) in order to set a foundation for another rise to new all-time highs in both the markets and in government "power" over individual actions.

Power over individuals is important.  To keep the consumers spending chugging along, but at the same time maintaining firm control,  it seems logical that the danger for "terrorists" would need to remain credible both at, and after, the fall of the Afghan Taliban.  That means more terrorism.

So with this simple-minded logic, here are some of the highlights that I expect will occur shortly:

• We're likely not out of the woods yet in terms of terror.  Although we have scaled back our web bot project due to massive snoops and attacks (from Korean, Chinese, and some corporate hacker groups), we continue to see conflict in the models.  From the Sunday morning think tank update:

Strange night last night. Many [hack-GU] attacks. The most persistent were the Koreans and the Chinese. At the last, the Chinese found a French isp with holes in their system and attacked through France.

I will send along log analyzed file later.

I am getting a shaping that indicates capital (ol?) are both at risk from a poisoning in the next few (2) days, imminent in any event.  This also may be read as coming from an attack on the food (meat) industry. More details later. Now much work with the ********** required.

Hacker note: We actually kicked around sending out "gotcha notes" to the folks hacking us, although it would be a waste of time & effort because the critical part of our web bot work is off-line.  So without the secured post-processing, hacking us doesn't net anyone anything...but I can tell you it's all in the logs for this site that we do periodically take apart and run "whois" queries on...

•  OPEC will continue to suffer from low oil prices.  Despite the production cut agreements, there is so much pressure to cheat on quotas, that OPEC will be forced into a position of reduced influence.
• A new Afghan government will be rather quickly installed and will immediately begin setting up shop as the "legitimate" government of the country and as such, will be able to get some of the energy-related projects moving again.  Not that we'll hear about this, because it's likely to be done away from public scrutiny.  It is in fact most unusual that we've had so much candor about the evolving New World Axis except that not everyone reads Pravda and Western press reports.  We're very narcissistic in our worldview.
• More "mixed signals" from China as that country tries to figure out whether it wants to build a "counter-Axis alliance" of Asia, Southwest Asia and Middle East interests, incorporating the Islamic world, or whether they want to "get with the program" and structure a redefined relationship with the New World Axis. 
• Changes in how much technology is actually delivered to OPEC countries is in the cards.  With oil prices low, and demand for payments to citizens very high, the delivery of arms may be cut back as a practical budgetary outcome without much else needing to take place.

Whether the next terror attack comes from bin Laden's followers, or upon his capture, from some force that is invented or employed to push this notion of a New World Axis forward, makes no difference from the functional standpoint as a citizen in the U.S. and trader of markets.  This is not a "conspiracy theory" in conventional terms.  It's just a working interpretive model that can serve us as a modeling tool against which we can test suppositions.

The output from that thinking points to more of the same: 

• Although the odds of bin Laden being captured are high, unless there is a continuing threat, additional legislation that expands powers against terrorists (that could be used in the future again other groups) would not keep up momentum. 
• {Terrorist}actions of a larger magnitude than the WTC event against U.S., British, and Russian interests.
• A very repentant and docile Saudi Arabia and other OPEC members that can be kept in line with the threat of one simple statement from the U.S. "The Saudi government harbors terrorists" or "Iraq harbors terrorists" would on the surface be an attack on a rogue government, but beneath that, it would be a continuation of what may be a larger Western move on OPEC.

Well, nothing new here.  Governments always try to retain power and the things that brought them to power.  Still, the collision is still in process, although by the charts, we could be seeing a break out to the upside, which may mean that at some level, the market is beginning to see things and understand. 

It doesn't mean that things won't reverse right away and go to new lows on news of another attack.  It just means that the potential for a huge win by the West over what had been a strengthening Third World, centering around Islamic fundamentalism -  and its resource base - has apparently been turned back.  For a while.

Lest you think I'm way off base in these suppositions, consider the following link to the Drudge Report....

http://www.drudgereport.com/matt91a.htm

And a reader who writes...

As to the non-conspiracy theory - well, let me state it this way:  The 911 event does so many good things for so many people (i.e.: it removes the likelihood of an immediate anti-Israeli action for their attitude towards Palestinians, it creates an event which can be used to explain/blame a pre-existent galloping recession, it gives us the excuse to re-install a cooperative government in Afghanistan - which government will allow the completion of the pipeline, the Northern Alliance will now be able to re-plant their poppies, the Chinese are now assured of oil which will support their ascendant manufacturing interests, etc.) that it is hard to NOT believe that there is at least a tacit understanding as to how the world should develop.

 

Further, it is very difficult to believe that our intelligence/military authorities can have known nothing about the 911 event.  

 

Having said all that, our government is populated by some of the most errant quacks on the planet.  Bureaucrats prefer their view of the world to reality almost all the time.  For me to accept that it is not a conspiracy, I have to envision that someone like Doodles Weaver is running things and he's not having a good day.  Now, for me, that is not a likely scenario, but I have to admit that the possibility is measurable.  That possibility is not a greatly happier prospect to entertain either.

No, not happy at all.  Still, whether it's a conscious conspiracy, or just a series of events that "walks like a duck, quacks like a duck", but it really something else, matters little.

Next week, we'll get into the nuts and bolts of mapping out what's next, but first we need another week - maybe two - to assess which way the events will take up; Up toward new highs or down in response to another terrorist hit.  How we play it will depend on how many people see how much of the Administration's hand.

If there's a good side to going into Afghanistan, it is to have the privledge  of helping field the finest armed forces in the history of the world.  It makes being an honest "report it all" taxpayer worthwhile.  Despite the efforts of past administrations to dilute our forces, and give away the farm to China, our military is still the best there is, Cinton-era efforts notwithstanding. 

The fact that most soliders are in old quarters, have their kids on welfare, get food stamps in many cases, and suffer horrible pay and status upon retirement is both repugnant and embarrasing.  That we have professional soldiers to operate the human side of Land Warrior Systems is at least one fine reason to go to Church and pray once in a while. 

I am both amazed and thankful that six-figure talent even considers a military career - at pennies on the dollar.  Ever hear the old poem?

"And its' Tommy this, and Tommy that

And it's "Throw him out, the Brute!"

But it's "Savior of our Country!"

When guns begin to shoot!*

*Tommy  by Rudyard Kipling

From the Poop Deck:

Food:  Chicken legs are my bargain of the week (again).  Mix 3/4 cup of soy sauce, 1 or 2 TBS of ground ginger and 1/3 cup of brown sugar, and three or four shots of whatever booze is handy: soak the chicken for 4 to 6 hours, turning once -- if you remember.  Cook in an  electric fry pan for an hour or till done at 325.  It's chicken teriyaki with about 10-minutes total prep time.  $4.00 for meat for three or four people.  Add a bucks worth of rice and whatever is leftovers as a   *** fired rice, and you got dinner for a dollar a person.  Shelter: Housing pricing continue to decline, although with refinancing at record highs thanks to the low rates, nets to sellers are holding up a bit better than might be expected.  If interest rates had been high, the pain would have been much greater.  Communications:  Internet use hitting an all-time high means that although bricks versus clicks was a lost battle in equities, the reality of the competition is coming along.  Online retailers may be a Christmas surprise this year because of how horrible traffic is in many big cities.  Which brings us to:  Energy and Transportation:  Can we really see 80-cent gas?  Yup.  Although you may only see $1.30 at the pump, the rest will be eaten up by Federal and State taxes.  Environment:  Word that the opening of the new Harry Potter movie has caused an increase in demand for owls as pets.  Not only are predatory birds horrible pets, but it's about the last thing I would give a kid who can't defend themselves, still the going price is about $75 if you want to buy an owl. 

Fair winds,

George