I was perusing through The Economist and came across an article on where all of those dollars you and I are sending the Gulf States are going too and thought that with oil approaching $70 per barrel and gas prices at record highs I'd pass along some of the info in the article.
From the Economist
WITH the price of oil rolling past $60 a barrel, where is the producers' windfall falling? Some of it is going on useful things like roads and schools and paying off debts, some gets recycled, flowing back to energy-thirsty countries in the form of higher demand for their goods. Quite a lot of the cash, though, may be blowing bubbles in Arabia, as in giant stockmarket ones, or getting buried in the sand.
Well its now blown past $65 and heading towards $70 and beyond. So is any good actually being done? Well it appears that some of it is being spent on things for the public good, but just a little. As we're about to see most of it is just going into the markets and enriching some already very wealthy people.
I've often said to friends of mine that in the end, when all is said and done of the oil economy that the west will have marched into the middle east, taken all of their oil and left most of the citizens of the Gulf states no better off than when we first marched in. Is any money being spent for vast new schools, how about creating diverse economies, what about hospitals, roads, telecommunications, water plants?
What about democratic institutions and government, what about legal systems, courts, citizen rights, and all of the things that we hold dear in this country. What about jobs that will sustain the citizens after the oil is gone? What about all of that?
For Gulf oil producers, boom times are back, with a fury unseen since the oil-price shocks of the 1970s. In 2003, the six Arab monarchies that make up the Gulf Co-operation Council sold some $145 billion-worth of oil and gas. At current prices, that total looks set, this year, to double. The value of Saudi oil exports since 2002 has equalled oil revenue for the whole of the 1990s. The Saudi authorities say that investment in the first half of this year was 17 times last year's first-half figure.
Well, it looks like all of those monarchies are benefitting quite a lot from having our man Bush in office eh? With his good friends the Saudis taking home plenty of yours and mine hard earned dollars.
Must be nice for the Saudis to have incompetent friends like GW eh?
With friends like the Saudis and presidents like George Bush, heck the American people don't need enemies that's for sure!
Small wonder that in April a public share offer by a start-up oil firm in mega-rich Abu Dhabi, one of the seven United Arab Emirates (UAE), ended up 800 times over-subscribed. The company, Aabar Petroleum Investments, had sought to raise a modest $135m in capital. In the event it won pledges worth over $100 billion, a sum that is a quarter bigger than the UAE's entire GDP. Lucky banks that jumped to lend to some 87,000 punters in the emirates on the issue earned considerably more in fees and interest than did the issuing company. On an earlier IPO that was 458 times oversubscribed, banks are said to have pocketed $500m. Most UAE banks have still posted half-year profits this year bigger than for all of 2004.
Of course, now would be a great time to remind everyone just who is lending us all of that money to cover the presidents deficits and that in addition to paying them significantly more money for their oil, we get the added benefit of them lending a lot of it back to us to finance tax cuts for the rich.
What a deal eh?
The urge is to get in on the action. UAE stock indices are up by 90% this year, with the price-to-earnings ratio of listed firms now wobbling at an average of 35. Indices across the GCC are up by 70%; the region's total market capitalisation now tops $800 billion, equal to 170% of GDP against barely 50% three years ago. In tiny Qatar, the overall market cap (including the value of untraded government companies) is nearly five times GDP, even after a crash in April that slashed values by 20%.
Gee, I wonder how much of those tax cuts all of those rich folks got has gone into the markets of the Gulf states? We all know that our Stock market has not risen at all and they certainly are not investing it in creating jobs for us.
It must be nice to be rich and have GW as a friend, to participate in all of those "have and have more's" meetings, donating hundreds of thousands of dollars to make sure he gets elected.
The returns on the investment more than pay off eh?
But the biggest bucks are flowing into property. Artificial lagoons and landfills, spiked with villas, hotels and apartment towers, are growing all over the Gulf. The world's would-be tallest building is already under construction in Dubai, whose latest fantasy development, City of Arabia, with no fewer than 35 skyscrapers, promises to house the world's largest shopping mall. Bahrain, Saudi Arabia and Qatar are embarking on lots of similar projects. Even sleepy Oman, a relatively poor cousin, has plans to convert a few miles of Indian Ocean beachfront into Blue City, at a cost of a mere $15 billion.
Ah yes, all of those rich folks will need some new places to vacation and get away from the poor huddled masses of Americana.
Someday when the historians write the recorded history of this era they will write how the United States and the greed of those wanting control of oil were used in a war to gain control of the worlds second largest oil reserves.
How the Saudis attacked us by setting up a fall guy "Osama Bin Laden" and convinced us through years of lies and manipulation of intelligence to attack their old nemesis "Saddam Hussein".
It will be the Saudis and their friends who end up getting control of all of that oil, they are in the region, they know it and control almost every aspect of the middle eastern oil industry.
All that's left now is to keep the insurgents supplied with weapons and money and an endless supply of fighters until America leaves, sooner or later we will and sooner or later the Saudis will be convince us to.
Almost all of the steps have been completed,
- Get Osama to attack America.
- Get America to attack Saddam.
- Significantly raise oil prices to harm Americas economy which will lead to significant reduction of support for the war and the president who launched it.
- Get America to leave Iraq.
- Take control of Iraq's oil industry.
Not far off America will make a significant effort to involve the Gulf/Arab states in helping resolve the crisis in Iraq, they will but a only with a complete drawdown/removal of our troops will they agree. You can see the delima that they will pose to America in return for assisting, they will point to the significant dislike for America in the region as the reason they cannot help.
Of course the Saudis already knew that this would be the case, didn't they?
Seems so simple doesn't it, sure makes it easier to have an incompetent leader of America consumed by the need to avenge his fathers assassination attempt and failed Gulf War and controlled by neo-cons who's greed for the control of the worlds oil is huge!
Is the above tin foil? Probably, but no more so than WMD, the Iraqi's greeting us as liberators and the famous "Mission Accomplished" speach.