I first heard about this issue two days ago while driving home from work and listening to Michael Savage. It seems absolutely unthinkable to me that the US would allow the United Arab Emirates to oversee management and security of six strategic US shipping ports (Baltimore, Miami, New Jersey, New Orleans, New York, and Philadelphia.).
Apparently, the $6.8 Billion agreement was made under the veil of numerous classified discussions, and our Homeland Security Secretary (Michael Chertoff) is actually defending the deal: "Without getting into classified information, what we typically do if there are concerns, is we build in certain conditions or requirements that the company has to agree to make sure we address the national security concerns," said Michael Chertoff. "And here, the Coast Guard and Customs and Border Protection really played a leading role for our department in terms of designing those conditions and making sure that they are obeyed."
Sen. Charles Schumer is one of the few who has denounced the deal, saying the UAE has "a sad history with terrorism." "Outsourcing the operations of our largest ports to a country with long involvement in terrorism is a homeland security accident waiting to happen," he said.
How can US government officials even think about allowing this agreement (the outsourcing of America at its finest) to happen?
Answer: I personally believe it has everything to do with Oil and the US Dollar. (Note: I’m not the sharpest knife in the drawer and this is just pure speculation).
In 1943 President Franklin D. Roosevelt developed a relationship with Saudi Arabia and made it official by shaking hands with King Sa'ud Bin-Abd-al-Aziz Al Sa'ud aboard the U.S.S. Quincy in the Suez Canal. Since that time, the US has been militarily involved in the Middle East, as the defense of the region is key to U.S. interests.
In 1973 a new term was coined (the Petrodollar) to describe the situation that was occurring in OPEC countries. Any country that needed oil first had to convert their currency to Dollars to buy the product. The Dollars accumulated by OPEC through the sale of their oil then allowed them to invest in the economies of the nations which purchased their oil.
Bottom line: worldwide oil sales are now denominated in U.S. dollars and these dollar holdings are rapidly increasing.
Skip to today: The world currently has > 10 Trillion dollars circling the globe (thanks to the Fed’s money machine), the number of petrodollars is also at an all-time high and oil producing countries (with huge bankrolls of cash) now need to a place to spend them.
The US government knows it is in a pickle. Far too many dollars are in the hands of foreign entities and the US dollar, as the world’s reserve, could be at stake if the US doesn’t allow them to spend some of these accumulated holdings. In an agreement to continue the US Petrodollar Ponzi scheme, our elected government officials have probably performed a quid-pro-quo with Dubai.
What are your thoughts on the situation?
5 comments:
Have you seen Syriana yet? It's an excellent drama about oil.
One part in the movie, Bryan Woodman (Matt Damon) tells Prince Nasir Al-Subaai (Alexander Siddig) that if they could control the transportation of oil, their profits would double. It also hints on Peak Oil.
Never heard of it, but just watched the trailer--from your link. Looks good. Will definitely see it now.
Oil is the issue that will finally burst this housing bubble. Ben B. will be forced into raising interest rates. The cost of oil is going to continue to increase. Some kind of event will always be on the horizon.
Next Japan will recover in its economy after 15 years of decline. What will they do? Buy more OIL. Each and every month some event on oil will keep the price up and ever increasing.
LONDON (AP) -- Oil prices rose more than $1.50 a barrel Monday in response to violent militant action against oil pipelines in the Niger Delta that led to a 20 percent cut to Nigeria's oil production.
Nurseliz, thanks for posting up.
You are absolutely correct: outsourcing, job losses and debt will drive our country to its knees.
I woefully feel this is just the beginning and it's going to get much worse. The US is far too dependent on OIL, cheap labor and the recycled savings of foreign entities.
This particular port deal may fall through due to public outrage, but I'm sure there are 10 more foreign deals in wait.
Bottom Line: Far too many US dollars in foreign hands and the US Gvt, in an effort to keep the fiat petrodollar sham going, must appease the holders.
This article has all Crash and Burn well outlined. Long but readable.
A Bubble With a Fuse
By Fred Dattolo Monday, February 20, 2006
Starting this year and picking up speed in 2007, as much as $2.5 trillion of non-conventional mortgage debt is scheduled to be repriced. Millions of Americans will soon face significantly higher mortgage payments. Unfortunately, many can barely afford their current payment.
Why is this happening? What will be the consequences?
In a bid to keep business booming, banks and mortgage lenders in recent years have found “creative” ways to make home loans more affordable—even to people with spotty credit histories or weak credit. By issuing “hybrid” mortgages that typically have low interest rates in the first two years, lenders have been able to entice otherwise unqualified buyers into buying a home. However, the initial low “teaser” rates must eventually be adjusted to the fully indexed level of whatever index is specified in the loan agreement. These adjustments are coming due in a big way, this year and next. That means mortgage payments are set to climb hundreds of dollars a month for a substantial number of Americans!
In the past, when these mortgages were “reset,” it didn’t cause a lot of disruption to the economy. One reason was that the sub-prime market—borrowers with weak credit who could least afford the payment hikes—was proportionately a much smaller share of the overall market. Not so anymore.
According to Barron’s (February 13), the amount of sub-prime loans issued in 2004 and 2005 was $540 billion and $628 billion, respectively. Barron’s estimates that a whopping $600 billion is scheduled to be adjusted higher in the next two years! Fannie Mae figures almost two thirds of all sub-prime loans will be reset in 2006 and 2007. Remember, that’s just the sub-prime market—those who could barely afford a home loan to begin with. Senior economist Michael Fratantoni at Mortgage Bankers Association estimates that in 2007 alone, more than one trillion dollars of all hybrid mortgages in the U.S. are going to be reset higher.
That is going to impact the pocketbooks of millions of Americans to a degree that many are not expecting. A typical hybrid mortgage contract is indexed to some type of money-market benchmark like the six-month London interbank offered rate (libor). In the last two years, the libor rate has risen more than 3 percent and is heading for a 4 percent increase! Even if a mortgage contract has an annual cap limiting interest rate hikes to 2 or 3 percent, many Americans have no idea how much their mortgage interest rate is shortly going to escalate—perhaps 2 or 3 percent this year or next, and more in subsequent years, according to how the index rises.
What may currently be a 5 percent teaser rate (or 7 percent for sub-prime borrowers) will shortly be reset to 7 or 8 percent (9 or 10 percent for sub-prime loans) and most likely higher after that. That means these mortgage payments will go up by hundreds of dollars a month.
All this is coming due at a time when Americans’ discretionary income (after more or less fixed costs of taxes, housing, healthcare, auto, energy, etc.) is declining while debt levels are mounting, interest rates are climbing, sales of existing homes are sinking, inventories of unsold homes are building (especially in areas of the country that led the recent housing boom), federal regulators are pushing for stricter lending standards, and houses are greatly overvalued.
National City is a top originator of prime mortgages. This company incorporates a very sophisticated methodology in its valuation studies. Its latest survey as of the third quarter of 2005 shows “38 percent of the U.S. housing market is at an ‘extreme’ overvaluation level of 30 percent or higher. … [S]uch levels of overvaluation are typically followed by price declines of about 15 percent that take an average of three years to unfold” (Barron’s, February 13; emphasis ours).
As many homeowners face rapidly rising mortgage payments in the next couple of years, all indications are that a lot of them will not be able to refinance to get out of their predicament this time around. Look for foreclosures and bankruptcies to soar.
The end of the housing boom will be very detrimental to the U.S. economy.
In the last few years, the housing boom has accounted for about 40 percent of all new American jobs created in the private sector. According to the Economist, “[T]he global housing boom [led by the U.S.] is the biggest financial bubble in history. The bigger the boom, the bigger the eventual bust” (June 16, 2005).
We are moving ever closer to that day of reckoning. As we do, it becomes evident that the housing bubble appears to have a burning fuse sticking out of it that makes it look more like a bomb than a bubble.
Are you prepared for the explosion?
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