Monday, November 10, 2014

More Lies from “Our” Government: The Latest Jobs Report

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Just as the German media has destroyed its credibility with lies, the US government is consistently destroying Washington’s credibility both with its own citizens and the rest of the world.

Russia and China, the other two significant nuclear powers, no longer believe anything Washington says or any agreement that the US government signs. The Russian and Chinese governments have observed that Washington does not obey its own statutory law, much less international law and treaties that Washington has signed. Russian President Vladimir Putin has criticized Washington for acting as if its will was the only law.

Europeans know that they and their governments are Washington’s vassals and that Europeans are impotent to do anything about it.

Some percentage of the 99 percent understand that Washington is aligned with the one percent against them and that their incomes and economic prospects will continue to decline.

Economists, or rather the few who haven’t sold their souls, know that the government’s economic data are pulled out of a magician’s hat and massaged to produce numbers contradicted by reality. Unemployment is measured according to methodologies designed to prevent its discovery. Inflation is measured according to methodologies designed to deny its existence. Jobs are reported that don’t exist, and GDP growth rates are announced that declines in real median family incomes and consumer credit make impossible.The poverty level income is set artificially low in order to minimize welfare spending.

The lies that Washington and the powerful private interest groups that control the US government tell us go unchallenged by the print and TV media and by NPR. The propaganda that Americans are fed is more extreme than the propaganda of Big Brother in George Orwell’s 1984.

In last Friday’s report the Bureau of Labor Statistics (BLS) tells us that the unemployment rate has declined to 5.8% and that 214,000 new jobs were created in October. Once again let me explain these lies to you. The unemployment rate is low because the one that the government and financial media emphasize does not count those millions of Americans who have become so discouraged from looking for jobs that do not exist, that they have quit looking. If you give up and stop searching for a job, the US government does not count you as a member of the work force. You are unemployed but not counted as unemployed.

The uncounted unemployed can be measured in the sharp 21st century decline in the labor force participation rate. The labor force participation rate has declined because there are no jobs to participate in. But Washington, the financial media, and the bought and paid for economists lie. They say the participation rate is down because the baby boomers are retiring. However, as John Titus, Dave Kranzler, and I documented with the government’s own data in a recent column, the participation rate of baby boomers is the highest of all and the only one that is rising. http://www.paulcraigroberts.org/2014/09/04/lie-serves-rich-roberts-titus-kranzler/ [1]
The reason is that with the Federal Reserves sole concern with the welfare of a small handful of mega-banks–the ones that sit on the board of the New York Federal Reserve Bank–real interest rates are negative. Therefore, retirees have no income from their retirement savings. (Generally speaking, retirees avoid stock investments, because they can lose a great deal from a major correction, and it can take more years than they have left for stocks to recover.) To supplement their Social Security pensions (a rigged CPI prevents or minimizes cost-of-living increases), retirees take the temporary, lowly paid jobs that are all that the US economy can produce. These jobs do not provide sufficient income with which to form a household.

As I have pointed out for a decade, or longer, the US economy no longer creates First World jobs. The US economy creates jobs for waitresses and bartenders, hospital orderlies, and retail clerks. The fact that the complexion of the US work force is becoming Third World is not considered a notable problem by the media or financial press, and economists seem immune to the facts.

Let’s look, once again, at the BLS payroll jobs report for October 2014: http://www.bls.gov/news.release/empsit.t17.htm [2]

There are 209 thousand private jobs created and 5 thousand government jobs created.

Where are the private jobs?

Almost all of them–181,000–are in lowly paid private services.

Retail trade with 27,100 jobs, wholesale trade with 8,500 jobs, and transportation and warehousing with 13,300 jobs and 48,900 jobs. With middle class retail stores closing and even dollar stores failing and with consumer income (except for the rich) and credit (except for student loans) shrinking, do you really believe that consumer spending supported almost 50,000 new jobs in October?

Where is the money coming from?

The vast amount of money that the Fed has created has gone into the handful of mega-banks to support the banks. The banks are not buying consumer goods.

The BLS reports that 37,000 new jobs were created in October in professional and business services. Employment services, such as temporary help services, account for 24,000 or 65% of these jobs.
Another old standby is education and health care services, which provided 41,000 new jobs. Health care and social assistance provided 27,200 of these jobs and home health care services provided 7,400 of these jobs. Together lowly paid services provided 84% of the jobs in health care services.
Now we come to the major jobs sector in America: waitresses and bartenders. Waitresses and bartenders are classified under “leisure and hospitality,” which claims 52,000 new jobs in October of which 41,800 or 80 percent are waitresses and bartenders.

If you look at the jobs that the BLS reports the US is creating, they are third world jobs. How is the US “the world’s only superpower” when it cannot create a middle class job.

Amidst the media hype of 214,000 new October jobs, here are some very disturbing facts: In October job cuts rose 68% from the previous month and 12 percent from the previous year. So far there have been 414,591 job eliminations in 2014 with 51,183 of these coming in October.

Where are the job cuts? Retail store closings have produced 38,948 retail job reductions in 2014 with 6,874 of those coming in October. Yet, the BLS reports consistent job growth in retail jobs.

Hewlett Packard cut 5,000 jobs in October, bringing its year’s total to 21,000 lost jobs.

Microsoft eliminated 6,509 jobs in October for a year to date layoff of 55,511, a rise of 92 % from 2013.

In October the electronics industry cut 1,648 jobs, bringing the year to date loss to 18,153.

The telecommunications industry cut 5,217 jobs, bringing the year to date loss to 20,038, an increase of 81% from 2013.

According to Wolf Richter, US job losses in the tech sector have risen 97 % from the previous year. http://wolfstreet.com/2014/11/07/layoffs-explode-in-big-old-american-tech/ [3]

My point is: how does consumer demand grow in order to propel the economy when good jobs are replaced by low-paying jobs?

Perhaps one day economists will notice the problem.
URLs in this post:
[1] http://www.paulcraigroberts.org/2014/09/04/lie-serves-rich-roberts-titus-kranzler/: http://www.paulcraigroberts.org/2014/09/04/lie-serves-rich-roberts-titus-kranzler/
[2] http://www.bls.gov/news.release/empsit.t17.htm : http://www.bls.gov/news.release/empsit.t17.htm
[3] http://wolfstreet.com/2014/11/07/layoffs-explode-in-big-old-american-tech/ : http://wolfstreet.com/2014/11/07/layoffs-explode-in-big-old-american-tech/

UBS Settles Over Gold Rigging, Many More Banks To Follow

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Remember when everyone decried wholesale Libor manipulation as a crazy conspiracy theory (Zero Hedge: January 2009: "This Makes No Sense: LIBOR By Bank") because after all, it was impossible for so many people to keep their mouth shut or whatever the generic justification is for disproving such "conspiracy theories"? Why, none other than ICAP chief Michael Spencer says they all though Libor was "unmanipulable." As it turns out, not only is Libor manipulable(sic), and a vast rate-rigging "conspiracy theory" is quite possible when everyone's interests are aligned, but it also was massively profitable.
Then it was the turn of the even more massive, multi-trillion FX market, when first UBS squealed like a pig and soon ratted out every other bank in the criminal "Cartel" (or was it "Bandits"?) syndicate (see: "Meet The (First) Seven Banks Who Rigged The FX Market"). End result: banks such as JPM, Citi and BofA forced to review their criminal ways and adjusting their third quarter results a month into Q4. Many more legal fees, charges and settlement coming however for those who lost money on the other side of such long-running manipulation, please accept our condolences: you won't see a penny.
And finally, there was the precious metals market: a market which all the Keynesian fanatic paper bugs said was immune from manipulation, be it of the central or commercial bank kind, even with every other market clearly exposed for perpetual rigging either by hedge funds, by prop desks, by HFTs, or central banks themselves.
Sadly this too conspiracy theory just was crushed into the reality of conspiracy fact, when moments ago the FT reported that alongside admissions of rigging every other market, UBS - always the proverbial first rat in the coalmine, to mix and match metaphors- is about to "settle" allegations of gold and silver rigging. In other words: it admits it had rigged the gold and silver markets, without of course "admitting or denying" it did so.
UBS is to settle allegations of misconduct at its precious metals trading businessalongside a planned agreement between UK and US authorities and seven banks over accusations of foreign exchange market rigging.

* * *
UBS is expected to strike a settlement over alleged trader misbehaviour at its precious metals desks with at least one authority as part of a group deal over forex with multiple regulators this week, two people close to the situation said. They cautioned that the timing of a precious metals deal could still slip to a date after the forex agreement.

Regulators around the world have alleged that traders at a number of banks have colluded and shared information about client orders to manipulate prices in the $5.3tn-a-day forex market. UBS has previously disclosed that it launched an internal probe of its precious metals business in addition to its forex investigation. It declined to comment for this article.

Unlike at other banks, UBS’s precious metals and forex businesses are closely integrated. The business units have joint management and the bank’s precious metals staff – who mainly trade gold and silver – sit on the same floor as the forex traders.

One person familiar with UBS’s internal probe said the bank found a small number ofpotentially problematic incidents at its precious metals desk.
"Potentially provlematic incidents"? One must give props to the FT for always finding just the right amount of politically correct lipstick to cover up what was market manipulation, pure and simple, which continued for years and years, even as the same FT routinely mocked everyone who alleged otherwise.
The good news is that the FT will finally reinstate the Gold manipulation article which is penned in February then promptly removed following complaints from up high.
Some more from the BOE's favorite media outlet:
The head of UBS’s gold desk in Zurich, AndrĂ© Flotron, has been on leave since January for reasons unspecified by the lender.
Surely it is because he made too much money rigging FX and gold?
Those who wish to send Andre their regards, may do so courtesy of his LinkedIn profile...
... Because he is one of many people responsible for such perfectly new normal trades as "Vicious Gold Slamdown Breaks Gold Market For 20 Seconds." Recall what "a humble block of 2000 gold futs (GC) taking out the bid stack, and slamming the price of gold, managed to halt the gold market: one of the largest "asset" markets in the world in terms of total notional, for 20 seconds" looks like:
Thank you Monsieur Flotron for teaching us how market manipulators "trade" gold:
Mr Flotron has not been accused of wrongdoing and has never responded to any requests for comment. He has labelled his professional status on his LinkedIn profile as being “on leave, keen to return in due time”. 

The gold market has this year become the latest trading area to be subjected to heavy regulatory scrutiny and allegations of price-rigging. The FCA fined Barclays £26m in May after an options trader was found to have manipulated the London gold fix.

Germany’s financial regulator BaFin has launched a formal investigation into the gold market and is probing Deutsche Bank, one of the former members of a tarnished gold fix panel that will soon be replaced by an electronic fixing.
As for what happens next, the game is clear, because the only thing that can surpass the "developed world's" rigged markets is said world's "judicial" system: rigged far more than a $10 billion gold market sell order at 1 am in the morning. The TBTF, aka Too Big To Prosecute Banks will settle, paying out pennies on the dollar of the profits they made from rigging gold, silver, FX, libor, Interest rates, equities, and so on, and will lay low for a while until the rigging resumes.
But fear not: even as the criminal banks stay out of the rigged market for a month or so - after all they have to at least give the appearance of complying with the rigged law - the central banks, courtesy of the "People Bringing You Currency Manipulation On A Daily Basis" located conveniently at the nexus of central banking in the Bank of International Settlements in Basel, will keep on rigging. Or else none other thanBenoit Gilson, Head of Foreign Exchange & Gold at the BIS will be forced to report that he too is "on leave, keen to return in due time"...
Alas, we are far too deep inside the rabbit hole at this point to even pretend normalcy can ever again exist without the biggest systemic reset in history.

Whistleblowers: IRS officials behind ‘fraudulent’ multi-billion dollar corporate tax giveaways

10-year veteran Internal Revenue Service (IRS) attorney has demanded a Congressional audit of the IRS to investigate the agency’s alleged role in allowing American corporations to illegally avoid paying billions of dollars in taxes at the same time the agency is cracking down on individuals and small businesses.
In a letter to Treasury Secretary Jacob Lew, IRS commissioner John A. Koskinen, and IRS chief counsel William Wilkins, Jane J. Kim, an attorney in the IRS Office of the Chief Counsel in New York, accused IRS executives of “deliberately” facilitating multi-billion dollar tax giveaways. The letter, dated October 19, will add further pressure on the agency, which is under fire for allegedly targeting conservative and Tea Party groups.
Kim, who has previously blown the whistle on “gross waste of government resources” in the IRS New York field offices, wrote in her new letter that senior IRS officials have “intentionally undermined the authority of the IRS Whistleblower Office” to avoid taking action “in cases involving billions in corporate taxes due.” The IRS also refuses to enforce laws for “large corporate taxpayers,” resulting in giveaways of further billions, despite applying the same laws with “draconian strictness to small business, the self-employed, and wage-earning individuals.”
The IRS attorney’s letter was copied to Jason Foster, chief investigative counsel for the Senate Committee on the Judiciary, as well as several other senators and Congressional representatives, including Elizabeth Warren, Maxine Waters, Alan Grayson, Bernie Sanders, Charles Grassley, Mike Lee, Rand Paul, and Ted Cruz. They could not be reached for comment. 
Whistleblowers shut down
Following coverage of her earlier allegations by Pulitzer Prize winning tax journalist David Cay Johnston, Kim was approached by a private sector lawyer representing corporate whistleblowers to the IRS, who told her that numerous legitimate investigations into corporate tax fraud were being shut down. Her letter sent on Sunday to the US Treasury and IRS described three such cases.
In one case, the IRS was auditing a US company that fraudulently under-reported its profits by nearly $3 billion annually. On behalf of the IRS, the whistleblower had drafted a detailed report proving the fraud, but the agency “closed its audit without ever asking a question or reviewing the documents submitted.” As much as $4 billion in taxes were lost.
In another instance, “a solid case” allegedly involving $6 billion of taxes due was “inexplicably shut down” according to IRS criminal investigation agents. Instead, detailed evidence of fraud and malfeasance “in hundreds to thousands of specific accounts” was ignored. The agent blamed links between senior IRS executives and outside corporations associated with the case.
In the third case, $3 billion of taxes were allegedly uncollected and now accumulate year after year. The American company claimed to the IRS that it earns all profits outside the US, which are then invested overseas, while informing foreign jurisdictions that it earns nothing outside the US. Although US laws tax Americans “on worldwide income,” the IRS simply closed the investigation despite clear evidence of a taxable income.
The private sector lawyer, a former IRS attorney in the Office of the Chief Counsel for over 15 years, said on condition of anonymity that Kim’s allegations are not isolated, but represent a deep-rooted trend: “The problem is the IRS upper management don’t want a big case going forward. They are purposely not working big cases. Employees are quietly encouraged not to expedite them, and to settle or dismiss them. I’ve seen the IRS sit on straightforward billion-dollar cases for years, and then decide not to pursue.”
The IRS Whistleblower Office (WO) was created by Congress in 2006 to encourage leaks of evidence concerning large-scale corporate tax fraud. Once a whistleblower case is proved, resulting in an individual or corporation getting taxed, whistleblowers are to be rewarded with 15 to 30 percent of the total tax paid to the IRS. In 2012, the most recent year with available data, the IRS paid $125 million in whistleblower awards.
“Since, 2006, the office has received anywhere from 1,500 to 1,900 tips per year, the vast bulk of which are not investigated,” said Kim.
According to the private sector lawyer, the Whistleblower Office is being hampered by the agency’s attorneys, who are making decisions not to work the bigger cases. 
Energy tax scams
Kim’s letter also highlighted cases exposed by her colleague, IRS attorney Bill Henck, who since 2003 has blown the whistle on IRS concessions to two major corporate energy tax scams for ‘clean’ coal (coal sprayed with the equivalent of “watered down Elmer’s glue”) and ‘black liquor’ biofuel (a byproduct of paper manufacturing with added diesel), resulting in more than $50 billion of unclaimed taxes (not to mention increased fossil fuel emissions).
According to the IRS itself, the US loses $450 billion a year to tax evasion. But the actual sum is probably much higher. “If we factor in the quantity of the cases that are piling up in the WO that no one is looking at, if we consider that the cases I’ve been made aware of are roughly representative of the scale of losses for each case, it could be much higher,” said Jane Kim. A 2008 Senate report on tax havens found that the wealthiest US companies and individuals could be hiding as much as $5 trillion in offshore accounts.
Kim’s letter blamed “a lack of oversight” mechanisms by which Congress can hold the IRS to account. “If the intent of the IRS executive offices was to emasculate the WO, they seem largely to have succeeded,” she wrote. The IRS Office of the Chief Counsel unjustifiably adopted “wide latitude” in “interpreting the laws and regulations… [to] thwart the Office’s effectiveness and mandate.”
Bill Henck, who has worked for over 26 years in the IRS Office of the Chief Counsel, agreed. “The senior executives drive the train on all this and pal around with lobbyists,” he said. “Treasury was involved with both the Elmer’s Glue scam and the black liquor taxability issue. IRS executives look out for themselves, which usually means protecting corporate interests, since they hire lobbyists and are close to politicians.”
According to Henck, this perspective of collusion between the Treasury, IRS, and corporate lobbies, is widely held by IRS employees: “I’ve talked to numerous revenue agents and attorneys within the IRS who believe, like I do, that the agency has hit the skids and that senior executives are dishonest.”
In a detailed account published in February, Henck described how he had “personally witnessed improper giveaways of billions of dollars to taxpayers with inside access at the agency” and “bullying of elderly taxpayers” despite the legal case against them weak. The IRS’ “decision to allow well connected taxpayers improperly to avoid reporting billions in taxable income,” he alleged “was covered up by high level officials.” Ultimately, according to Forbes, the IRS’ mishandling of the black liquor case exposed by Henck “cost the United States $25 billion.” 
A revolving door
In 2010, former IRS chief counsel Donald Korb, a George W. Bush appointee, criticized the creation of the Whistleblower Office under his tenure as a “real disaster for the tax system.” Describing it as “unseemly” to encourage Americans to “turn in their neighbors and employers to the IRS,” he complained: “The IRS didn’t ask for these rules; they were forced on it by Congress.”
In Henck’s view, this sort of attitude is symptomatic of a wider culture “including a complete lack of accountability on the part of IRS executives, fear of retaliation on the part of IRS employees, a general lack of integrity, and the influence of lobbyists.”
Backing up Henck’s concerns, the private sector lawyer and ex-IRS attorney explained that since 1998, IRS restructuring has focused on bringing in “outside people.” This led to the employment of an extra layer of executives who were previously “partners from big accounting firms.” Citing active IRS criminal agents, the ex-IRS attorney said: “Almost every large firm or corporation has a person inside the IRS. It’s a revolving door, with the top two or three management layers all from big accounting and law firms, and this is why they won’t work big billion-dollar cases criminally. Private bar attorneys are, in effect, controlling the IRS. It’s a type of corruption – that’s the word used by one IRS agent I’m in touch with whose case was shut down by higher ups without cause.”
The incumbent IRS chief counsel, William Wilkins, was previously a lobbyist at the WilmerHale firm where for 21 years he represented and lobbied on behalf of private sector clientsincluding the Swiss Bankers Association. Swiss banks UBS and Credit Suisse have faced penalties, hearings and convictions for helping wealthy Americans illegally conceal billions of dollars of taxable income.
Attorney James Henry, former chief economist at financial consultancy McKinsey, said that Wilkins’ firm “continued to represent the Swiss Banking Association throughout the 1990s and into the 2000s. Now Wilkins gets appointed chief counsel of the IRS in 2009, and he’s presiding over these whistleblower cases.”
In early 2008, Treasury secretary Jacob Lew was chief operating officer at Citigroup’s alternative investment services unit, where he oversaw the bank’s expanding investments inCayman Islands tax havens – and even invested in one himself.
Treasury officials refused comment on Kim’s letter, but an IRS spokesperson said: “The IRS cannot comment on specific cases or investigations. However, the IRS strongly supports statutory policies providing for whistleblower rewards where information leads to the collection of additional tax proceeds. The IRS is also committed to pursuing and addressing tax evasion and fraud through all available tools, including information provided by whistleblowers.”
Henck, who still works with the IRS, expressed his bitter disillusionment with the lack of meaningful action. “I’m done with the whistleblowing because no one in authority seems to care,” he said. “The vast majority of IRS employees are honest and conscientious. We used to be the good guys and it is a damn shame that we probably can no longer claim that.”

Has Washington Just Shot Itself in the Oily Foot?

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By now even the New York Times is openly talking about the secret Obama Administration strategy of trying to bankrupt Russia by using its oil-bloated Bedouin bosom buddy, Saudi Arabia, to collapse the world price of oil. However, it’s beginning to look like the neo-conservative Russia-haters and Cold war wanna-be hawks around Barack Obama may have just shot themselves in their oily foot. As I referred to it in an earlier article, their oil price strategy is basically stupid. Stupid, as all consequences have not been taken into account. Take now the impact on US oil production as prices plummet.

The collapse in US oil prices since September may very soon collapse the US shale oil bubble and tear away the illusion that the United States will surpass Saudi Arabia and Russia as the world’s largest oil producer. That illusion, fostered by faked resource estimates issued by the US Department of Energy, has been a lynchpin of Obama geopolitical strategy.

Now the financial Ponzi scheme behind the increase of US domestic oil output the past several years is about to evaporate in a cloud of fictitious smoke. The basic economics of shale oil production are being ravaged by the 23% oil price drop since John Kerry and Saudi King Abdullah had their secret meeting near the Red Sea in early September to agree on the Saudi oil price war against Russia.

Wall Street bank analysts at Goldman Sachs just issued a 2015 forecast that US oil prices, measured by a benchmark called WTI (West Texas Intermediate) will fall to $70 a barrel. In September 2013, WTI was more than $106 a barrel. That translates into a sharp 34% price collapse in just a few months. Why is that critical to the US shale production? Because, unlike conventional crude oil deposits, shale oil or tight oil as industry calls it, depleted dramatically faster.

A comprehensive new analysis just issued by David Hughes, a Canadian oil geo-scientist with thirty years’ experience with the Geological Survey of Canada, using data from existing US shale oil production that has now become public for the first time (the shale oil story is very recent), shows dramatic rates of oil volume decline from US shale oil wells:

The three year average well decline rates for the seven shale oil basins measured for the report range from an astounding 60-percent to 91-percent. That means over those three years, the amount of oil coming out of the wells decreases by that percentage. This translates to 43-percent to 64-percent of their estimated ultimate recovery dug out during the first three years of the well’s existence. Four of the seven shale gas basins are already in terminal decline in terms of their well productivity: the Haynesville Shale, Fayetteville Shale, Woodford Shale and Barnett Shale.

A decrease in oil daily of between 60% and 91% for these best possible shale oil regions means the oil companies must drill deeper to even stay still with oil production, let alone increase total oil volume. That means the drillers must spend more money to drill deeper, a lot more. According to Hughes, the Obama administration Department of Energy has uncritically taken rosy forecast numbers given them by the companies that boost the US shale oil myth. His calculations show future US shale oil output only 10% that estimated for 2040 by the Energy Department.

Hughes describes the current deadly dilemma of the shale oil companies as a “drilling treadmill.” They must drill more and more wells just to keep production levels flat. The oil companies have already gone after the most promising shale oil areas, so-called “sweet spots,” to maximize their production. Now as production begins to decline terminally, they must start drilling in spaces with less rich oil and gas returns. He adds, “if the future of U.S. oil and natural gas production depends on resources in the country’s deep shale deposits…we are in for a big disappointment.”

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What Hughes describes was the state of shale oil before the start of the Kerry-Abdullah Saudi oil price war. Now US WTI oil prices have dropped a catastrophic 25% in six weeks, and still falling. Other large oil producers like Russia and Iran are in turn flooding the world market with their oil to increase revenue for their state budgets, adding to a global oil supply glut. That in turn pressures prices more.

The shale oil and gas bonanza of the past five years in the USA has been built on a foundation of zero Federal Reserve interest rates and huge speculative investment by hungry Wall Street firms and funds. Because of the ultra-rapid oil well depletion, when market oil prices collapse, the entire economics of lending to the shale oil drillers collapses as well. Money suddenly vanishes and debt-strapped oil companies begin real problems.

According to Philip Verleger, former head of President Carter’s Office of Energy Policy and now an energy consultant, in North Dakota’s Bakken shale, one of the most important new shale oil regions, oil at $70 a barrel could cut production 28 percent to 800,000 barrels a day by February from 1.1 million barrels a day in July. “The cash flow will go down as the prices go down, the amount of money advanced to these people to continue the drilling will dry up entirely, so you’ll see a marked slowdown in drilling,” said Verleger.

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The end of the shale oil bubble would deal a devastating blow to the US oil geopolitics. Today an estimated 55% of US oil production and all the production increase of the past several years comes from fracking for shale oil. With financing cut off because of economic risk amid falling oil prices, shale oil drillers will be forced to halt new drilling that is needed merely to maintain a steady oil output.

The aggressive US foreign policy in the Middle East—its war against Syria’s al-Assad regime, its hardball oil sanctions against Iran, its sanctions against Russian oil projects, its cynical toleration of ISIS in Iraqi oil regions, its refusal to intervene to stabilize the Libyan oil economy but instead to tolerate dis-order are all premised on a cocky view in Washington that the USA is once again the King of Oil in the world and can afford to play high-risk oil geopolitics. The official government agency responsible for advising the CIA, Department of Defense, State Department and White House on energy, the US Department of Energy, has issued projections of US shale oil growth based on myths and lies. That has led the Obama White House to launch oil wars based on those same myths and lies about the rosy prospects of shale oil.

This oily arrogance was epitomized in a speech by then Obama National Security Adviser Tom Donilon. In an April 2013 speech at Columbia University, Donilon, then Obama’s national security adviser, publicly expressed this: “America’s new energy posture allows us to engage from a position of greater strength. Increasing US energy supplies acts as a cushion that helps reduce our vulnerability to global supply disruptions and price shocks. It also affords us a stronger hand in pursuing and implementing our international security goals.”

The next three or so months in the US shale oil domain will be strategic.
First appeared:http://journal-neo.org/2014/11/06/has-washington-just-shot-itself-in-the-oily-foot/