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tv   [untitled]    August 5, 2011 8:30pm-9:00pm EDT

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yes may have something to do about it and we are looking into it because of some of the stories on tap next week you will not want to miss them but that is going to do it for now from one of the stories we covered go to our t.v. dot com made interviews you just saw here are there and it's entirety also our you tube channel have a great night. thanks i'm here broadcasting live from washington d.c.
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coming up today on the big picture. can. blow we welcome the process you know a little the price of oil the curse of oil with the ongoing unrest in the arab world petroleum markets are more than reacting is the global economy on the edge of another deep recession and are all high oil prices here to stay is the price of oil time to arab revolutions and aspirations. can.
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you discuss the impact of all this on oil prices i'm joined by michael klare and in springfield he is director of five colleges program in peace and world security studies and author of rising powers shrinking planet the new geopolitics of energy in new york we go to andrew sheaf he's director of communications and marketing at euro pacific capital and in frankfurt we crossed william engdahl he is an economic researcher and the author of a century of war anglo-american oil politics and the new world order and another member of our cross-talk team in the hunger all right gentlemen this is cross talk and you have different opinions i want my viewers to see them william let's go to you first let's talk about the possibility of what's people are calling the return to the great recession so you do have a magic number. what the price of oil will be for the entire economy to take another major dip name your price well i think we have to differentiate here the.
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price of oil diesel be the us economy i think will have relatively little effect on recovery because there is no recovery in the us and how it's going into a deep depression and it's deepening by the hour by the month of the year in europe it can have an impact in so far as it has an impact on growth in china because the locomotive of the marvelous german recovery over the last eighteen months has been exports of machine goods and industrial products to china primarily so that could have an effect i don't think it would have an effect unless there's a sustained prize at least above one hundred fifty or thereabouts and we're not we're not there yet but by a long shot i think the hedge funds and the big players like goldman sachs and morgan stanley morgan chase are having a field day with what they see is a perfect storm a beautiful excuse to manipulate the i.c.
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futures in london in fact this thing up for all its worth as long as it lasts ok so the typical people are going to the bank michael if i can go to you do you have a magic number that where you think where are we really do real the global economy you know i think that we have to see the multiple recall effects of what's going on it's not just the price of oil it's also the price of food food is now higher than it's been ever according to their food and agriculture organization as the price of oil rises it pushes up the price of food and this i believe is going to generate more protests and up evils around the world this will create more chaos and more disturbances and this could have further effects on the price of oil so the crisis that we see today in the middle east as far as i'm concerned is nowhere. near the conclusion i think we'll see more ripple effects and the economic consequences of
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that are yet to be seen and if we're going to if i go to you right now what about you i mean that's a very good point because we see we see a lot of these riots that brought about these revolts in maybe revolutions we have to see how it's played out because of food prices and we have the added in element here that some of these countries like libya are major oil producers right well it's ironic that you know the trigger of these really revolutions were were food prices were the cause the rising inflation these markets no i'm not saying that was the only cause of these rises or long simmering. regimes that have never been popular with that with with their people so the rise in inflation was really the spark not the cause but those prices were rising in the first place because of federal reserve policy i mean it's the united states that's primarily flooding the world with cheap money. that in order to bail us out of our own recession i agree with the first guess that we're not really seeing a real recovery in the united states but we are seeing a recovery based on the metrics that the federal reserve uses they see low
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inflation because they don't really count food and energy and they see a lot of spending which they consider economic growth now these higher oil prices and i do a greenie that oil prices i say sustainable now north of one hundred twenty dollars a barrel that will take a sizeable chunk out of u.s. g.d.p. growth that will slow the economy down but it's not going to raise inflation as the fed sees it as they don't count energy as inflation so that will cause them to reliquefy the markets even more to try to keep us out of recession and that will again ignite food inflation around the world and add more fuel to the fire william i didn't think you and andrew are going to agree so much do you want to elaborate because you've talked a lot about this in the past on crosstalk. well first of all the link that michael mentioned between food and energy since two thousand and seven we've had a an insidious link through the subsidization by the bush administration and now
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the obama administration the european union of this madness called biofuels because that takes the grain acreage out of production for corn forty percent of the american corn crop is now burned as a fuel alternative more c o two and more toxic if you want to measure c o two then even normal gasoline but the it has a beautiful effect in terms of the grain cartel companies buying the a.t.m. and cargo and so forth to boost the grain prices wall street is having a ball with this so and that the twin effects of these two the synergies between the two are really a devil's circle that is highly dangerous i think that's something we have to address if if countries in the o.e.c.d. really want to do something about this they should end the biofuels subsidy madness they should reduce taxes on gasoline it's sixty seven percent of the tank of gasoline in germany is is state federal taxes so. you know there is much leeway
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here to move around but. ok and you want to. head the yet a bio fuel subsidy is very destructive it's a boon not just for the big big conglomerates but also the. regular corn farmers the united states we have got a huge lobby they benefit from it but i think the more important subsidy is not so much the biofuels but the subsidy the u.s. dollar i mean again the fact that there's so many countries around the world that have to maintain their dollar peg in order to maintain their role in the global monetary system that allows this place and that we're creating here the united states to take root around the world and by by ending that dollar subsidy by allowing american america to create its own inflation have that inflation be to remain at home that will lessen the burden that we're seeing in a lot of these places and that what i mean is taking this hour of the past as
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a reserve currency if i understand you correctly you're saying that we're all or no longer be made to reserve currency that ends the american hegemony in the world and of ok i think i'd like to go down that path a little bit later here michael fine go to you you know i started the program with geopolitics in our other two guys have gone to finance very quickly and in there that's an element of it but let's continue with the geopolitics of it all i mean when we see the spread of protests in the arab middle east we have to think of other cut the other producers that have been relatively quiet and very autocratic when we look at some of the places like saudi arabia now we see instability there and we have i'll just as i was sitting down to do this program i mean iraq is on fire now with protest as well i mean not that it's a major exporter right now but i mean what we're looking at the entire exporting region now that then we get into a really different ballpark here because different types of regimes could come into power not necessarily friendly to the united states could even be hostile to the
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united states now we're changing the oil. dynamic in the world in a very big way. you're right to raise this question that's why the developments in teeny bahrain are so important they've been shoved off the news the past few days because of developments in libya but what's happening in bahrain is very significant even though the population there is less than one million people it is significant because it is a clash between a shiite majority and a sunni meant minority and a monarchy as well and you know if the if if that conflict plays out and spreads to saudi arabia then we're in a very different ballpark now in saudi arabia of course you have a sunni majority and the shiites are only a minority but they are a majority in the oil producing region in the eastern province adjacent to bahrain
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so if they rise up as they have in the playoffs they could cripple oil production in saudi arabia and that would have a catastrophic effect on oil production around the world that would send oil prices way above one hundred fifty dollars a barrel you know i'm not sure that it's going to happen but certainly the saudi leadership is concerned about it offering ten billion dollars in new payments to young saudis this is a sign in my mind that they are very worried and william if i can go to you i mean the reason why i bring this up is that less than two months ago nobody expected any of these things happening in the greater middle east except for really insightful people like robert fisk and other writers on the middle east if c.n.n. and fox and everybody all thought everything was hunky dory you know and all our great dictator friends who are still in power for stability reasons but i mean i bring up the saudi card because the unexpected is happened and who knows what the future consequences of what we're seeing happening right now will be. well let's go
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back ten years to one condi rice and the bush administration introduce the greater middle east in the g eight in two thousand and four and seven years and. this is part of a long planned scenario the pentagon is involved in at the state department is involved in it i think the reason that we're seeing these these riots the i.m.f. cause the food crisis in tunisia just at the time that the hedge funds and wall street were pushing prices up using the biodiesel in the harvest failures in russia and such things but the there's a geo political trigger to this that is coming out of washington they're trying is there one person in washington turn to creative destruction in the middle east who upset the chess board and make sure that in fact what has been happening since two thousand and one is many of these arab countries are fed up with washington's militarization of the middle east they are fed up with the mess in iraq they're fed up with the heavy handedness that's coming out of washington and they're looking to
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china they're looking to russia they're looking to the european union for an alternative to the dollar and that i think is why we're seeing all this right now and yes if saudi arabia blows the lid it's going to be ok we're going to jump in on this i want to go to the racetrack or a short break we'll continue our discussion on oil and global economic state with our. my. reading you the latest in something sensitive. from. the future. if. it is easy to.
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see.
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above. and. welcome back iran stuff i'm here live up to my job we're discussing the prospects for sustained global economic recovery. but first let's see what russians think about their country's economy. on waves on middest broadcasts where the ongoing outrage happening in the oil rich middle east region prices probably like gold have risen dramatically when it ousts a the andras has directed correct on oil prices and global economic recovery the russian public opinion research center asked citizens about their prospects for
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russia's economic simply forty four percent believe it will experience positive trends during the next twelve months however another twenty eight percent do not see this in such a positive light how will these attitudes change in life for the oil prices hikes as protests grip the north africa and the middle east and will it eventually do real the global economic recovery peter ok michael before we went to the break we were talking about the strategic impact of all of these changes in the arab middle east in specially the oil producers and you want to jump in and it may be extrapolated to continue with something that william was saying if it's a for example of saudi arabia were to go off the rails. yes well i i wanted to could test the notion that the united states was somehow behind what we see or seeks to benefit from this my sense is
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that rushing tends to default position is to favor authoritarian governments in the middle east whether the qaddafi version or the mubarak version or the king abdullah version this is the been american policy for generations and i don't think that's michael that's the only reason he's had a reality this is something different to me with an alternative all right william this is cross talk go ahead jump this problem so let me build the reality since under different if you larry clinton brought me into the leaders of the addiction cafaro movement to washington to be trained i have a picture on my web site of hillary shaking hands with many of these people well before this kicked off two thousand and eight the pentagon sent the rand corporation to train comes. to be successful after they made some mistakes in an earlier time the national endowment for democracy is up to their ears in all of this in every single country there is no neutrality of washington ok please let me
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tell you a barak start ok if you look at washington try to control events on the ground in the middle east and that's patently absurd but there's no way we could i mean it's so chaotic it's so who would believe these are the way we go on central i mean there was a man that the cia is calling the shots here really defies description i mean i don't think america is necessarily doing if you're already on this i'm going to leave as we might you're not up to speed on the latest techniques all you will do is to get a look at all the revolution when. your daughter was doing was he or or tripoli and you can realize this is not being dictated by watching it but i mean certainly did have a i think i'd interest in the status quo we weren't happy with these dictators i was unhappy with these dictators but you know the dead. well you know it was generally better than what you don't know and we certainly don't know what's going to happen here i am not so concerned about what's going to happen in egypt and in libya i think those populations are are relatively modern and have some pro western
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tendencies the big question as i said earlier is saudi arabia i mean we don't know what's going to happen now right now saudi arabia looks quiet but two months is an eternity you don't know what's going to happen there and if things the stable lies in saudi arabia i see a much greater islamised undercurrent in that country which could veer saudi arabia off in a very dangerous direction and that would have a severe geo political consequence an economic consummate argument there michael if i can go to you you know we all worry about the outcomes of these situations here but nonetheless i think logic would kind of dictate if you have a natural resource that other people want new governments hopefully democratic governments or governments supported by the people they're going to want to sell this oil and reap the profits from that resource that they haven't been able to do for decades it's been stolen by dictators backed up by washington and and their european allies now we could have a situation where we have different governments with legitimacy that would obviously want to export their oil to benefit themselves so i mean it's not
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a catastrophic situation it's just how we get there. well you have to distinguish between i mean literally because like michael you're listening to michael michael michael first michael let me just finish my point yes this is a difference between pumping oil and pumping enough oil to satisfy the ever growing thirst of the world world market and my sense is that just because these new governments will pump oil i'm sure they will but will they pump enough to keep adding to world supply that i'm not sure of venezuela where you have a radical populist government they have not been able to increase production this is what i think is likely i think no matter what the outcome is this is my prediction no matter what the outcome of all of this is we will not see the ever rising production levels that the department of energy and the international energy
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agency predict for the years ahead we should expect from now one diminishing levels of oil coming from these countries for technical and political and other reasons that's what i think it only has no legitimate reason why do you think say ok will you guys do that only as a political factor the idea that we're peaking on oil worldwide this absolute peak is is scientifically invalid and it can be demonstrated that's a longer discussion but the resources are there is just a political question of getting up and we saw that in the caribbean cuba the b.p. disaster is probably because they hit one of the deepest the migration channels going going in. and into the deep sea there and find oil the some some scientists think it's another saudi arabia. offshore brazil it's in the oil is there it's a political question of whether the anglo american oil giants and the governments
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behind them the military are going to let the let these countries develop that for their own use. political was it a good decision this is it it's a chia logical question those fields you describe are at the very edge of the technological capacity and they made to five even the most strong this political will to do so or even on the middle of these what you want all that is the peak oil thing is a myth that was created by a more important author and selling oil and the oil giants are going to have maximum prices and you've been very very melody and you've been very patient go right ahead of the head. thank you a lot of the projections about all demand kind of discount how much demand will be coming from china over the next twenty or thirty years and i think they're assuming a wealth growth in time because course china wants a lot more energy they're going to import a lot more oil and if they do if they read if the chinese come to their senses and allow their greater appreciation of the r. and b.
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not only that will unleash their domestic demand because we'll have greater purchasing power and will be able to buy more oil around the world as oil becomes cheaper price than their own currency and they're going to experience a significant significant address was asian which could put severe strains on global global production and that would especially in dollar terms of the dollar remains a currency that we're using in europe and a lot of must much of the world use a reserve you'll see the dollar price of oil go crazy. whether or not if they start tapping offshore offshore brazilian oil fields ok i'm well you know you think about that i mean we again i mean i guess we're going in different directions here i still think we will have these exporting countries and list they with the middle east because that's in the news right now they're still going to want to get their oil to market aren't going to want to have even the same customers they don't really care they want the money and russia is an energy exporter it just wants the money doesn't play politics with it. i was told by someone in washington about twelve years ago who was highly informed i won't give details that there's enough
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you have enough untapped oil u.s. intelligence satellite reconnaissance and other physical presence in the disputed territory between yemen and saudi arabia to feed the entire world economy for the next fifty years that's only one example somalia is another one the world is swimming in oil we're running into oil not running out of it so again i say this is a political and geo political question american power since one thousand nine hundred five has rested on control of oil control of oil everywhere and. how the middle east situation develops it's going to have a massive impact on that but that's a political question not a resource question michael if i hear your answer your question peter is yes they want to sell oil all right dr michael thanking you in respect to be respected be anybody irrespective of you aggrieved in the peak oil theory or not it let's put that aside right now it's still going to be an issue of pricing you input political
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turbulence will always for exporters drive up the price i mean again the kind of in the program where we began i mean how we lasted is that when we going through a recovery i mean where do we get a tripping point where then it doesn't really matter how how much oil is because it will be too expensive because it will break economies. well i think that's the right question and i do worry very much about the american economy because this is an economy and life style that is heavily dependent on petroleum and there's already signs i mean i drive up to the gas tank every day and the price is really rising very rapidly in front of our eyes and that's going to have a dramatic effect on people spending habits. ok andrew what do you think i mean i think i've been clear i know you know everything's fine fine and refined i mean i think i think we're going to see right now we're seeing in the united states gas
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prices closing in closing on four dollars a gallon. at best four leaders by the way it is getting close if you get up to five or six i mean people are very strong out to begin with and really trying to make ends meet if that oil price and we're very into energy intensive united states that could really send our economy into into a double dip recession and when that happens i say as i said earlier the federal reserve is going to are going to pull out more monetary open up the floodgates even more to flood the world again with more liquidity which is going to create even more problems around the world so it's this oil this situation the list does not help unfortunately was kind of inevitable given given what's been going on for thirty or forty years this inevitability here we're going to give you last word ten seconds go ahead ok i think the oil price at this level of one hundred hundred twelve the is not a disaster if it's short term the u.s. economy is already a basket case and this is not going to tip it over it's already in
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a depression not a double dip recession. really so thank you very much you know many thanks my guest today in springfield frankfurt and in new york and thanks to our viewers for watching us here r.t. see you next time and remember of cross talk rules.
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i tell marvin here broadcasting live from washington d.c. coming up today on the big picture. mission free cretaceous free zones for charges free arrangement free. free spirits like free. download free blogs just plug in video for your media projects
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a free media and on to our teeth dot com. today violence is once again flared up. and these are the images the world has been seeing from the streets of canada. for asians around the day.

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