Archive for the ‘cirisis’ Category

The next big war could be over commodities; The current financial meltdown could be the start

October 12, 2008

The struggle for the future leadership of the world may have already started.

By John E. Carey
Peace and Freedom

Earlier this year, President Bush went to Saudi Arabia to ask his friends there to increase oil production. The White House believed that by increasing supply, the price of gasoline per gallon at your friendly service station would drop. The president was rebuffed.

Then the United States urged upon the other large users of oil in the world community to join the “produce more” bandwagon.

China, Japan, India and South Korea went along with the U.S. plan.

Cabinet ministers from the five countries, which account for more than half the world’s consumption of energy, agreed that the sharp surge in oil prices was a menace to the world economy, and that more petroleum should be produced to meet rising demand.

The five consumer countries, meeting in Japan before an energy conference of the Group of Eight industrialized nations (G-7 plus Russia) on June 8, 2008, argued that the unprecedented prices were against the interests of both producers and consumers, and imposed a “heavy burden” on developing countries.

The Organization of Petroleum Exporting Countries (OPEC) current president, Chakib Khelil, said that the cartel will make no new decision on production levels until OPEC’s September 9, 2008 meeting in Vienna.

So in just a few weeks time, we witnessed the President of the United States pleading for more production and the senior energy ministers from the U.S., China, India, Japan and South Korea joining in a chorus.

We at Peace and Freedom believe that when the engine of the free market jumps the tracks and supply and demand are ignored; one had better get ready for bad blood.

Then we have food. In the Philippines the people took to the streets demanding more rice. In Egypt, the people took to the streets demanding more bread. And some bad blood developed between Thailand, the world’s leading rice exporter, and Vietnam, perhaps the second most important rice exporter.

It seems the Vietnamese had underbid the Thais on contracts to export rice. The Vietnamese saw this as good business. The Thais viewed it as theft. Never mind that Thai rice is of higher quality and thus cists more.

China recently announced that it had “overbuilt” its industry and removed too much farmland from production. China now is instituting new regulations to preserve farmland and it is mapping a strategy to import more food.

Ethanol and other bio fuels seemed like a great idea to help add to U.S. oil stocks. But when all that corn disappeared into your fuel tank, the price of all corn went up. And corn not only feeds people but it is a huge source of livestock feed. So the price of pork and beef and all that other livestock that makes its way to the dinner table went up.

And food and fuels have never been in such demand. Never mind the huge increases in global population; with the combined populations of India and China eight times that of the U.S.

The world, believe it or not, is becoming more “middle class.” That means more people want gas burning cars which suck up a lot of fuel and add to global pollution. These new “middle class” folks also want a higher protein diet.

If one eats rice or corn or other grains the costs are somewhat manageable. But it takes four times more grain (and sometimes as much as six times) to put meat on pork or cattle before human beings eat that meat. So the high protein diet has a huge cost. It sucks up a lot more grain that human grain eaters ever would and it means the eaters need more dollars, rupees euros, yen or other denominations to buy every meal.

Bacon and eggs are more expensive, say, than the traditional rice bowl.

Finally, all these goodies, usually called commodities, are moving around the globe.

The Associated Press had an excellent article by Gavin Rabinowitz out on June 7 called “India, China jostle for influence in Indian Ocean.”

A rather ominous title.

Mr. Rabinowitz pointed out that looking south from Sri Lanka “just over the horizon runs one of the world’s great trade arteries, the shipping lanes where thousands of vessels carry oil from the Middle East and raw materials to Asia, returning with television sets, toys and sneakers for European consumers.”

That shipping lane is a possible flashpoint between India and China. Add in Japan, which gets just about all of its oil by that sea lane. And don’t forget the U.S. and the U.S. Navy. Those boys don’t want to see that sea lane interrupted by war, terrorism, piracy or any other form of bad blood.

So the bottom line, from our small window of the world is this: The next big war could well be over “commodities.”

We’ve used food and oil here as the most obvious examples of commodities worth fighting for. But it could be over uranium, tin, gold or who knows what. Even fresh water.

California is already starting to limit development due to water shortages. Australia is in the midst of a multi-year drought which has crippled Aussie grain production. And over use of fertilizers and pesticides in China and Vietnam have poisoned much of the ground water.

The next big war could well be over commodities.

But now add to all this the financial “crisis” or “meltdown.”

Already some very sharp international financial analysts are saying that the leadership of the world is already changing.

“In a very bizarre way, roles have been reversed in the global economy. The typical troublemakers of the global economy, the emerging markets, are actually now the world’s creditor,” said Alex Patelis, head of international economics at Merrill Lynch.

There could be a new world order brewing.  And commodities, trade and the global economic situation are at the core.