Here's to the crazy ones, the misfits, the rebels, the troublemakers, the
round pegs in the square holes... the ones who see things differently -- they're
not fond of rules... You can quote them, disagree with them, glorify or vilify
them, but the only thing you can't do is ignore them because they change
things... they push the human race forward, and while some may see them as the
crazy ones, we see genius, because the ones who are crazy enough to think that
they can change the world, are the ones who do.
Steve Jobs
US computer engineer & industrialist (1955 - 2011)

Thursday, March 26, 2015

The Bush Doctrine and Today

After the 911 attacks on the US, then President Bush declared the right to preemptive military strikes against countries before they actually committed an aggression against the United States. At the time, and until this day, very little attention has been paid to the "Bush Doctrine" announced back in those panicky days. Yet, those simple words have transformed the world. Diplomacy died on the vine of National Interest. International law became passe. So it was then with the US wars against Afghanistan and Iraq, so it is now almost everywhere in the world.

The most recent case, unfolding as I write, is the military blockading, bombing and soon to be invasion of Yemen. Ditto for Canada's newly announced policy of bombing within Syria. It was only a matter of months ago the federal government stated it would not send war planes into Syria without either a UN mandate, or an invitation from the Syrian government. Now, we will, and the rationale is section 51 of the UN Charter, and the declaration that Syria is either unable or unwilling to control the conflict within its own borders. That somehow, by bombing ISIS in Syria is a key to Canadian self-defence. It's true that ISIS inspired lone wolves have committed two acts of terror on Canadian soil resulting in two innocent deaths. It's also true that many hundreds more die or are maimed in car accidents daily in Canada. Somehow the idea that little black pajama men with daggers will swim to Canada enmasse to decapitate citizens is, well, just foolish. Yet, it's all possible under the Bush Doctrine. The doctrine of punch first, ask questions later.

Now a similar, and predictable confrontation is playing out just south of the Suez Canal in Yemen - for the moment. As Iran and Saudi Arabia play out their mutual hatred of each other on a regional basis, the Bush Doctrine unfolds yet again. Saudi claims to perceive an urgent need to restore to power a Sunni president, as the legitimately elected head of Yemen. Saudi is not exactly known for its zeal for democracy. What Saudi is known for is a draconian, barbaric oil state, that is ruled by one family - no elections.. no descent. A ruthless, dark place where no democratic fruit is allowed to grow. The truth is, quite simply put, Saudi refuses to allow the Shia Houthi, who are aligned with Iran, to take over at the expense of their guy. International law be dammed. The son of the Bush Doctrine.

When then president Bush declared the US's right to act unilaterally in world affairs, the US recreated the jungle. It took mankind back to the dark ages, only this time with weapons of mass destruction. It removed the need to be responsible and restrained in the exercise of power. It opened the Pandora's Box of "National Interest". As the saying goes, "two can play that game", and in the context of the world, many can play that game. That is exactly what we see unfolding before our very eyes. In every continent in the world - excepting Australia. In every "hot spot" in the world. Even within countries. We don't have to obey rules. We make the rules. Might is right, and we will prevail. Welcome back to the Stone Age. This is the state of our world today. A place where mutual respect is as barren as the desserts of Saudi Arabia, and where the innocent blood flows as it has throughout our history. We never learn that power exercised without restraint is poison to us all.

Sunday, March 22, 2015

The West's Shame

There is something so bizarre, so inhumane about Western countries boycotting the parade for the 70th anniversary of the Soviet victory over Germany in World War II that I just had to write on it. Recently, the prime minister of the United Kingdom announced he will not be attending the parade. Previous to that, countries like Germany and the United States had announced the same. It's only a parade you say? No it's more than that.

The Soviet Union sacrificed 25 million people to defeat Nazi Germany in World War II. A sacrifice beyond imagination, and far, far greater than all the countries fighting Nazi Germany combined. In comparison, the Holocaust, which is rightly remembered annually, claimed the lives of six million people of the Jewish faith. These are really the two true tragedy's of World War II unleashed on the world by Nazi Germany. The stories of Soviet soldiers advancing without weapons to pickup the rifle of the next dead soldier are well known. The bloodbath of Stalingrad, the siege of Leningrad, the millions of Soviet soldiers killed and captured (only to then die in POW camps) during the early days of the German invasion, and so on, all markers of the brutality of man against his own, stand large in the history of the world. In fact, the German invasion of the Soviet Union stands as the largest military battle in the history of man.

Yet, western leaders have decided to not attend the parade that is meant to honour that sacrifice. When Britain announced it would not attend, well, that's the straw that broke the camel's back frankly. Of all the countries in the world, Britain was saved by the massive waves of young Soviet men and woman that bled the German army white. Hitler would have crushed Britain in short order if he had not diverted millions of German men to the invasion of the Soviet Union. Crucially, the diversion of aircraft, fighters and bombers, to the Soviet front saved Britain from the entire annihilation of a full blown, continuous air campaign, and the subsequent naval invasion that would certainly have occurred. In reality, the western allies left Stalin almost alone in Europe to battle the Nazi's, and take the majority of the casualties in doing so. By the time D-Day finally arrived, the German army and air force was only a shadow of it's former self as it existed in 1941. As bad and hard as it was for the allies to march east through Europe to Berlin, without the Soviet people's sacrifice, it would have never happened.

It's a place of honour in human history. To quarrel with that is to go beyond ignorance. To quarrel with that is the hateful and arrogant bastion of the very seeds that caused World War II in the first place. And now, as if history is repeating itself, Western leaders have entered that bastion of ignorance and arrogance to punish Russia for the Ukrainian civil war. By contrast, Russian president Putin, despite the ongoing conflict in Ukraine, attended the 70th anniversary of the D-Day landings in France last year. He was given the proverbial cold shoulder by western leaders, yet he subjected himself to that, in honour of the sacrifice of the men of Canada, Britain and the United States. He did not ignore the history or the price in blood of that action. He honoured it. He put the sacrifice ahead of his political position, and it could even be said his personal shunning. Now that the time is here to do the same for the Soviet Union's dead, we cannot bring ourselves to do the same.

What that says about us is really quite obvious. It means we haven't learned the lessons of history. That our political leadership has become so petty, so detached from historical reality, that it attempts to rewrite the history of 25 million souls. That is the danger of all of this. Russians don't really need the West to honour their sacrifice. They know it all too well. It's the West that needs to honour that sacrifice so it can clearly see the dangers of war on a scale far more destructive than anything it experienced on the western front, or anywhere else in history. Poland started this train rolling by refusing to invite the Russian president to the Holocaust remembrance at Auschwitz last year. This despite the fact that the Soviet army liberated all of Poland, and specifically Auschwitz from German armies.

The actions of our western politicians say more about us than the Russians could ever say themselves. They have portrayed us as people who refuse to honour the dead, those that gave their lives in another time to defeat a tyrant bent on world domination, and in doing so dishonour those men and women. As the son of a young man, training in England, fighting in North Africa, Italy, Holland, and Germany through those tumultuous years of war and senseless slaughter, I recognize the Soviet sacrifice that probably saved my Dad's life. How could you not? Yet, that is exactly what our politicians are doing today. You don't have to be a lover of this country, or that country to recognize and honour grave human injustice committed on a massive scale. You just have to be humane, and subordinate your own bias in the remembrance of the fallen. Is that really so hard? Isn't that what is expected of us all? Wouldn't we expect that from our children? I've never been so ashamed of the actions of our governments than I am now with the boycott of that parade in Moscow.


Monday, March 16, 2015

The Oil Overdose

Oil is done as a "gold" standard. "Black Gold" is now more like "Black Coal". It's everywhere and plentiful. Many countries in the world, and provinces in Canada (like my home province of Newfoundland and Labrador) have bet the farm on unending oil wealth to fuel their growth. Some, like Norway, have banked all those petro dollars into a trillion dollar savings fund that essentially makes every Norwegian a millionaire. Others have used the big bucks to build massive militaries - like Russia; Saudi Arabia; and Iran to name a few. The old black gold has been a God send for those that have it, but those days have come and gone.

Some economists are predicting a relatively short turn around for oil prices - somewhere between a year or two. Very few economists have ventured into the permanently depressed price projection. So, does the evidence support a short term downturn or a fundamental, long-term decline in the price of crude oil? One of the few interesting trends in oil, that has not been discussed much, is the narrowing of the price for oil between the benchmarks of West Texas Crude (WTI) and Brent Crude. Generally, Brent Crude is a world price for oil, while the WTI is the American price. Not too long ago there was a 20% difference in the two benchmarks - WTI being the cheapest. Today that gap has narrowed to the point of near parity. What does that indicate? In two words - European deflation. The European economy is spiraling downward with massive unemployment in places like Spain and Greece, and negative bond issues in places like Germany and Switzerland. In effect, Europe as an economic entity is tapped out.

Then there is the suppression of oil exports into the world oil trade. Most notably Iran. Iran has been severely restrained from exporting oil due to US led sanctions. It has some of the largest oil reserves in the world, and is strategically located to send that oil to market at a low cost. In effect Iran's oil has already been priced out of the market price. Then there is Libya. It has been torn apart by civil war like conditions, inter-tribal warfare, and now Islamic warfare. Its oil exports have been essentially removed from the market. Nigeria is falling into a similar position. Ditto for Iraq, In other words, the glut of oil in the world is really only a small measure of what that glut would look like if and when these countries come back into the market in a significant way.

There is the major factor of new discoveries and technology to consider. A massive oil and gas field has been discovered off the coasts of Israel and Gaza, and is as yet untapped. There are major oil plays in the Kurdistan region of Iraq and to some extent Turkey that remain well underutilized. The dueling technologies of fracking and offshore sub sea "tentical"lines have revolutionized the ability to recover oil from previously trapped locations.

In other words, there is just too much oil in the world, for the foreseeable future, to warrant a scarcity price. The current prices really reflect almost a Debeers - type strategy. Debeers of course controls the world diamond market and ensures that prices remain high by restricting volume in the market. A similar trend is happening with oil. In reality, oil should be at $15-25 per barrel US. Prices above this reflect artificial interventions in the market place, which cushion the fall for many governments that have built societies based on $100 + oil. My province is no different. In fact, even at the current inflated prices, Newfoundland and Labrador looks to be taking a 15-20% hit on its annual budget. Addressing these issues of revenue loss for governments is guaranteed to add further to deflation as consumer confidence crashes and the internal markets realign to economic reality. The same can be said for countries like Russia, Iran, Iraq, Saudi-Arabia, etc.

Predicting the future is a tough task indeed. But, as the CSI saying goes: "people lie, the evidence doesn't." In order to see that future we need to understand demographic trends, political/trade trends, supply and demand trends, etc and synthesize them into one living organism (our world). It's abundantly clear that artificial barriers, primarily caused by speculators in the trading markets, are becoming more and more redundant. As the world economy deflates, which it is, those artificial barriers to the true market value of oil fall away. Expect to see oil decline as the world economy deflates. They go hand in hand, with one racing before the other. Unfortunately, for people like ours that have been subjected to "good times" spending and zero savings, the end of the oil bounty is the end of the party. The government has suffered an oil overdose, and we let them.