STAFF NEWS & ANALYSIS
Shale Oil: Desperation of the Globalists
By Staff News & Analysis - June 20, 2013

Comeback: Why the US Sits at the Brink of a New Boom … It's the best-kept secret in the economics media: The United States is on the brink of a period of solid, long-term growth rivaling that of the 1950s and 1960s. It is not a finance-driven, self-destructive boom, like the 2000s' housing bubble. No, the new economy will be durably grounded in energy and heavy manufacturing, even though it will take several years to come to full fruition. Evidence? Dow Chemical has commenced a $4 billion development in new plastics manufacturing in Texas, for example, that will start coming on stream in 2015 and be fully operational only in 2017, but it will be productive for a very long time. This will be a growth cycle with staying power. – PBS

Dominant Social Theme: Ain't capitalism grand?

Free-Market Analysis: This article tends to confirm our thinking that the top globalists are most worried about the ongoing Great Recession and are willing to do almost anything to strike a balance between chaos and prosperity.

As we've pointed out in other articles, there seems to be a concerted effort to destabilize the dollar, as well, in order to lay the groundwork for a truly international currency. The BRICs, Brazil, Russia, India and China, have all prospered in the past decade while Europe and the US have moved down hard. One could surmise that at a macro level, an "evening out" is taking place between developed and developing countries.

Of course, to make this point is to invite criticism from those who maintain that the world is too complex to be controlled this way. Our answer would be: Not necessarily.

These days there are perhaps 150 central banks in the world, up from five or so at the beginning of the 20th century. The world's economy has never been so controlled by so few people, it seems to us.

Major central banks are controlled by the Bank for International Settlements out of Switzerland. Who controls the BIS? Answer that and you will have an important key to those who control the world's money.

Not entirely, though. There is still the pesky thing called the "market." Those who control the world's money do so via price fixing and price fixing never works.

Inevitably, markets bite back. And that is what's obviously going on now. As the Great Recession unwinds, those involved in setting monetary policy and marshalling grand monetary plans are surely doing what they can to make certain the world's current economic system doesn't entirely dissolve.

Enter shale oil. The ability to extract shale oil from rocks has been around for hundreds of years. But people are simply accepting the idea that the technology only recently became viable.

Not from what we can tell. We analyze dominant social themes and this smells like one to us. We were equally skeptical of Peak Oil, by the way. All these scarcity memes are, in our view, manipulated.

The availability of shale oil does two things. First, it blows up the franchise of the Middle East and also the petrodollar. If you are trying to even out the world's currencies in order to introduce a global one, you need to do that.

Second, according to this article, the global availability of shale oil may counteract the stubborn expansion of the Great Recession, which is even now spreading to the BRICs themselves.

Here's more from the article:

Why haven't you heard about the boom? Official economic forecasters, like the International Monetary Fund and the Congressional Budget Office, simply have not factored America's emerging new economy into their forecasts. Instead, they still see us limping along at an average of 2 to 2.5 percent real (after inflation) growth to the farthest horizon — a hobbled, aging power, borne down by debts and deficits, shorn of its old bounce-back vigor, tottering along just fast enough to stave off out-and-out stagnation.

There is no question that the financial crash has left deep economic scars. But the fundamentals will turn in America's favor and when they do, annual GDP growth should kick back up to at least the 3.3 percent average real growth rate that has prevailed since 1950. That's far from a startling forecast for a recovery, but even at that level, the budget problems that have so paralyzed official Washington will shrink rapidly in the rear-view mirror as tax receipts grow, making debts and deficits shrink.

The seemingly crushing post WWII debt — 120 percent of GDP — quickly dropped from the radar screens with growth in the 3-4 percent range in the 1950s. So what are the positive portents? The most salient is the sudden emergence of the United States as a major energy producer. A recent U.S. Geologic Service study concluded that the Bakken Shale in North Dakota and Montana, already crowned as the U.S.'s largest-ever gas and oil reservoir, has far greater recoverable reserves than previously thought.

At about the same time, a team from the University of Texas completed a well-by-well analysis of the Texas Barnett Shale — the most intensively developed shale field in the world — and confirmed that the fields can support decades of further development. The current official estimate — that by 2020 or so the U.S. will surpass Saudi Arabia in oil output, and Russia in gas — remains on track, and the country will be a major global energy producer far beyond that, which will do wonders for the U.S. trade deficit.

You see what's going on? A half-century of propaganda is being upended. Suddenly there is no more energy scarcity. Not only is there plenty of energy but the US is going to be the number-one producer!

The Great Recession is going to be combated by this sudden emergence of shale oil, and presumably the US dollar may be weakened, as well, allowing for the possibility of a combined currency in the form of the IMF's SDRs or some other similar facility. For certain globalists, it is mission accomplished …

After Thoughts

Are we reading too much into these developments? You decide.

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