Theprice of oil is sinking faster than the Titanic. The influence on it is
Saudi Arabia, which has opened up the spigots, forcing down the price
of oil to $50 per barrel compared to $110 last summer. The big winner in
the crude sweepstakes is Saudi Arabia, which is increasing its world
market share. The big losers are U.S. petroleum and shale oil producers
who can no longer turn a profit. And the man with the sword in his hands
is President Barack Obama.
Obama opposed U.S. petroleum drilling
even before he took office. Yet he eagerly bows to the Saudi monarch,
the ailing King Abdullah. Obama has provided enormous military hardware
to the Saudis even as Saudi Arabia continues to fund Sunni terrorists,
including the Islamic State (ISIS). Equally startling is that Obama has
set the stage for a commodity price collapse, which could cause the
worst economic crisis in America since the Great Depression.
Oil
insiders believe that the credit Obama has received for the stunning
rebound in U.S. petroleum production is contemptible. While the
president did promise to open up new areas for exploration, he also
clamped down on the offshore drilling following the BP oil spill in
April 2010. Obama suspended offshore drilling leases and authorized an
investigation of 29 oil rigs in the Gulf. Later, his administration
ordered a six-month offshore drilling moratorium enforced by the U.S.
Department of the Interior. That ended only when a federal judge lifted
the moratorium, finding it too broad, arbitrary and unjustified.
A
Forbes headline in March 2012 declared, “President Obama Has An Oil
Problem.” The writer, Robert Bradly Jr., wrote: “In addition to dragging
its feet on existing oil sources, the Obama administration has taken
blatantly anti-oil actions.”
At the same time, the Obama
administration has provided enormous support to Riyadh. In 2010, the
Obama administration pulled off the largest arms deal ever. It was a
$60.5 billion sale to Saudi Arabia of weapons with offensive
capabilities.
Now with Obama’s blessing, Saudi overproduction of
crude is in full swing. Last year, petroleum prices underwent their
second largest annual decline in history. That has been great news for
American drivers. But the cost of Saudi oil dominance cannot simply be
measured at the gas pump. ConocoPhillips, a major player in the U.S.
shale industry, has announced that it will “defer significant
investment” in U.S. shale oil until returns look more promising. That
isn’t likely until oil prices recover to more than $65 per barrel.
Deflation: The coming collapse of commodity prices
Theglobal impact of crashing crude is what worries me most. Last month,
Goldman Sachs reported nearly $1 trillion in investments in future oil
projects will not happen at today’s prices. That was after looking at
what was to be the development of 400 of the world’s largest planned oil
and gas fields, not including U.S. shale projects. Factor those, and
thousands of good-paying American jobs will disappear.
Obama is
playing a dangerous game conspiring with Saudi Arabia. If crude prices
continue to fall, as I believe they will, to below $40 per barrel, it
will have a crippling impact on the commodity markets. We are almost
certain to see Obama’s trickle “down” economics to do far more than just
cripple the budding U.S. oil shale industry. I predict that in 2015
every resource industry from agriculture to mining is going to begin a
serious decline that may last until the end of this decade.
Last
year, billionaire and Obama confidante Warren Buffet was purchasing up
wind farms. Buffet is shrewd. In five years, wind farms may be the only
farms worth owning. I witnessed it before in the early 1980s when
crashing oil prices crippled not only oil-dependent states like Texas
and Alaska but also farm and mining states like Nebraska, Iowa and
Idaho.
I saw the farming crisis firsthand when I was 22 and
writing for a cattle magazine. I already had a general understanding of
the boon years of the 1970s and the enormous correction that was
occurring then, in the early ’80s, because my uncle owned a 2,000-acre
mixed farm. He was lucky to sell out near the top, but many of our
family’s friends who knew of no other way of life were bankrupted.
During those first years as a young writer, I would sometimes be driving through farm country. I saw the devastation.
According
to Neil E. Harl, an Iowa State economics professor, more than three
percent of the 2.4 million farmers in the U.S. left the farm each year
in the early 1980s. In 1985, the U.S. Department of Agriculture reported
net farm income fell by nearly one-third during the first half of that
decade. As farm commodity values declined, farmland values plunged. And
that broke the backs of tens of thousands of farmers and ranchers.
Saudi Arabia and Barack Obama: A sinister alliance?
Atmy next job as an investment writer, I saw the same havoc in the mining
industry. The Idaho Silver Valley, which had provided so many jobs to
miners in the ’70s, was abandoned in the ’80s. Those families that
stayed on were mostly impoverished as mine upon mine shut down. Today,
the region — including surrounding cities like Spokane, Washington, and
Great Falls, Montana — is a remnant of what it was during the boon in
the ’70s.
It seems Obama is providing too much to Saudi Arabia
where Christianity is illegal and where weekly beheadings draw large
audiences. Even more disturbing is that Saudi Arabia is the world’s
largest financial backer of the worst jihadist groups, including ISIS.
WikiLeaks disclosed a 2009 State Department communication by
then-Secretary of State Hillary Clinton which read, “[D]onors in Saudi
Arabia constitute the most significant source of funding to Sunni
terrorist groups worldwide.”
So even as Obama promises to fight
Islamic extremism, he is backing the very kingdom that is backing the
crazies who want to kill Americans. Others agree, including Larry
Klayman, whose article was published last Saturday by WND:
Indeed,Obama continues to put America more at risk
under the “leadership” of our “Black-Muslim in Chief” — who favors all
things African and Islamic over the rest of us — it is likely that the
nation and the world is about to explode at any moment. Things have
simply been simmering along for too long for this not to occur at some
point.
each passing month. His close relationship with Saudi Arabia should
alone have him impeached but of course he is almost untouchable because
of his heritage and his powerful friends in and out of government. As we
begin 2015, the nation faces an impending deflationary collapse.
Yours in good times and bad,
–John Myers
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