An old plan !

JPMorgan

A beautiful building which should make the US taxpayer very proud.

Nothing is better that a good conversation between trusted friends to get quickly to the point.
1974 was an important year, it was then crucial to deal with the effects of the first oil chock.
So I strongly suggest readers to go to the whole conversation the head of the secretary of state is discussing those important matters with high level German counter-parts, the central question is about potential systemic failure of the financial system.
Ingenuity would lead to understand that the birth of the so called petro-dollar was just nothing more than an unforeseen consequence of a geopolitical quagmire. It should be noted that not only that was a possibility clearly present to the mind of those involved at high level but, even more interesting that the endgame was also very clear from the very beginning.

Von Staden: What about the Shah?
Secretary: I don’t understand his position at all. He is the only world statesman in the area. These prices will in the end ruin the producers
as well. Constant devaluations are no solution. If Yamani gets his way and production is cut further, there will be an even more serious crisis.
Rush: If the Arabs industrialize subversion will grow.
Secretary: That’s what they are doing in Saudi Arabia, building for a revolution.
Von Hoffman: They have all these billions of dollars and yet there is no commercial teletype in Saudi Arabia.
Bahr: Why can’t they invest their money in the US?
Secretary: I don’t think they will to any great extent, but if they would we could let them invest here and then expropriate their assets.That’s really our secret plan. I hope you will go back and convince your colleagues of the absolute necessity of achieving results at this conference.

Source:

FOREIGN RELATIONS OF THE UNITED STATES; 1969–1976 VOLUME XXXVI,ENERGY CRISIS,1969–1974

file:///D:/Downloads/frus1969-76v36.pdf

At the light of such a document one should ponder the alleged active involvement of Saudi Arabia in the recent price move. As they surely figured out for themselves the “secret plan” we can presume that they know that their giant partner should not be mismanaged. It let us to contemplate three fascinating alternatives.

  1. Market is at work, such a proposition seems preposterous in our world but who knows, I would prefer that adventurous conclusion.
  2. If US is not happy with what is happening perhaps enormous events are on their ways on the financial front.
  3. If US is OK with what is going on, then the pressure on Russia is surely not the only reason, the oil majors will be happy to grab the busted juniors companies who prospered in the inter-land for almost nothing. Such a possibility will let the US taxpayer with another boom-bust price to pay but it will give the USA a powerful industrial base home based in that still strategic area.

We are living interesting times indeed.

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Small things are the start of big things ..

President elect Carter took immediate contact with representative of the PRC. The conversations where friendly and convolute. Carter was clearly pressed by his new ally to commit more energy to fight their common enemy, the USSR, forever on the march. But, a few days later this nice memorandum appeared, in this world nothing is free, especially between great powers. History have her own sense of irony, Brzezinski, our kind of guy, signed this faithful document.

15. Memorandum From the President’s Assistant for National
Security Affairs (Brzezinski) to Secretary of the Treasury
Blumenthal and Secretary of Commerce Kreps
1
Washington, March 7, 1977
SUBJECT
U.S.–PRC Trade Relations
The President has noted the sharp downturn in U.S. exports to
China which began early last year. As you know, this downturn has led
to the first U.S. trade deficit with China since U.S. import controls were
lifted in 1971.
The President would like to know what we can/should do about
this. Please let me know by Thursday, March 10.
Zbigniew Brzezinski

Archives are wondeful, this is a must read !

This is coming from the web archives of the departement of state …enjoy !

The date and the content of the document are very funny, i wonder what sort of letters Barrack send to his new head of the Pentagone.

149. Letter From President Nixon to Director of Central
Intelligence Helms1
Washington, December 29, 1972.
Dear Dick:
I tried to reach you by phone the day after Christmas but then recalled that you were taking a well earned rest in Mexico. The purpose of my call was to ask you to have a chat with John Connally when you return to get his observations with regard to his visit to Saudi Arabia and also to Algeria.2 In your position as Ambassador to Iran3 I would like for you to take as an extra assignment an analysis of the entire Mideast oil situation analyzing, of course, the relations of American
and European companies with the various governments and also the stability of the governments.
As I consider the energy crisis we are going to be facing in the next 10 years a continuing supply of oil and gas from the Mideast is absolutely indispensable, not only to Western Europe and Japan but also even to us. The greatest threat to this source of supply, of course, is the instability of the governments in that area. We all remember what happened
when Mossadegh was in power in Iran. The same thing, of course, could happen in Saudi Arabia and even in Iran today if something should happen to the Shah and, of course, in the new and highly unstable gulf states. I would like for you to make a thorough study of this situation before you leave for Iran and then after you arrive there I want you to visit some of the other countries in the area and give us an evaluation of the stability of their governments and what we can do to shore them up. Before you leave perhaps we can have a further talk on this subject.
With every good wish for the New Year,
Sincerely,
Richard Nixon

Oil Quizz !

A very nice quote coming from a very nice public document, could you guess the year ?

“8. Proceed with leasing of shale lands. There are very substantial oil
reserves—estimates run as high as a trillion barrels—in the oil shales
of the West. The cost of production is high, the water requirements are
enormous, and the problems of disposing of the waste material have
not been solved. The Department of the Interior has a program to lease
six 5,120 acre tracts, two each in Colorado, Utah and Wyoming. (This
is less than 0.3% of the shale lands in these three States). It is expected
that these leases will result in the development of technology so that
shale can be an important long term source of energy for the US. Environmentalists
have opposed this program.”