Today I want to set the records straight and deal with vastly under-reported facts that may have a dangerous impact on our economy in months and years to come. For weeks Congress and Senate discuss the impact the mortgage crash had on the economy. No question, it did have an impact, but it was not the only cause for our severe recession. More important, I am beginning to get the impression that Congress and Senate is absolutely clueless that no matter what recovery package will be implemented our economy is at the mercy of Al Qaeda. Dont for one split second think I am saying this lightly. --- According to the Jerusalem Issue Brief dated December 28, 2004, on December 15, 2004 Bin Laden demanded that the crude price be above $100/barrel, and even more serious that militants engage in attacking the crude logistic in order to hurt the Western economies. The crude logistics that is pipelines etc is virtually indefensible against terrorist attacks. So now lets step back for a moment and look at your favored donut. Just to make sure, you do understand that this donut represents a balanced domestic monetary flow with consumers on one side and suppliers at the other for a moment I will not address the government which in my humble opinion normally is no more than a consumer. You can express this differently and say it represents the domestic economy, a result of the purchase power of its participants, its volume here illustrated by the two arrows. If consumers buy significantly from foreign sources, that purchase power is diminished by the lets call it - capital export.
There is no problem yet if the countries we buy from would buy equal value from us and re-import capital to us. And now it gets scary! Remember the events of last year: the skyrocketing crude prices causing a huge increase in capital export. The result was a significant loss in purchase power affecting the domestic monetary flow, money no longer available to buy domestic goods. Well guess what. Our area 51 illiterates feel rather comfortable because the price of crude fell near $40/barrel. What these guys apparently didnt get is that OPEC held a couple of meetings and decided to cut production. Sure enough the price of gasoline is going up. So now that the mechanics have been established, how long do you think it will take before Al Qaeda and its OPEC brothers will get us into a depression? Lets say Al Qaeda by blowing up pipelines, and OPEC by cutting production even more. Imagine for a moment the effect an orchestrated attack on lets say four or five pipelines would have on the crude price. I understand that big oils contributions to Senators, say Chevrons $5000 to Jeff Session, exactly at a time when the Judge in the Mercedes versus Chevron case recused himself, or to Richard Shelby and others are a valued source to pay for campaigns. I am not sure, though, that these guys understand the consequences of a depression, if you know what I mean. Well, I hope I made clear that we need aggressively and I MEAN aggressively become independent from foreign oil. It is a matter of national survival. So Area 51, wake up!
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