carving up the spoils of iraq

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    I must admit this Iran issue has the potential to escalate the middle east problem to a point of no return (if it already isn't there). Throwing nukes around stuffs up everyone backyard even though some people on this board seem to think its the ultimate solution

    It also makes you wonder where we would be today if Iraq produce 12% of the worlds cabbages instead of oil!

    Fahrenheit Gold and Oil Carving up the spoils of Iraq

    By Bill Ridley
    November 8, 2004

    Well it's official. Bush is in for another four years and the neo conservative agenda will move forward as planned. For investors, we can look forward to a continued bullish run with gold, and very likely a huge spike in oil prices due to another Mid East crisis.

    The big prize for the Bush administration though will be securing the Iraqi oil fields and putting these prized assets into the hands of friendly U.S. oil corporations. The big dogs of the corporate world stand to clean up but so will the common investor who can read the writing on the wall. Today I will outline how the agenda will play out in Iraq over the next four years and how you can protect your assets and make significant profits in the process.

    In my last article, I mentioned that in February of 2003 while Colin Powell was trying to drum up international support for invading Iraq, a secret government document was being formed which would outline plans to privatize Iraq's oil sector and the rest of the country's economy. At that time BBC investigative journalist Greg Palast obtained a copy of that report which originated from inside the State Department.

    Carving up the spoils from the Iraq war were initiated back in the spring of 2001 when the Cheney Task Force on Energy met with the leaders of the corporate oil world. Inside the meeting room the executives passed around a map of Iraq but unlike most maps we have seen, this one was devoid of cities, towns, or regions. This map detailed Iraq's oil fields.

    From Palast's article Adventure Capitalism - The Hidden 2001 Plan to Carve-up Iraq, Palast stated "The Economy Plan goes boldly where no invasion plan has gone before: the complete rewrite, it says, of a conquered state's policies, laws and regulations. And when it comes to oil, the Plan leaves nothing to chance-or to the Iraqis. Beginning on page 73, the secret drafters emphasized that Iraq would have to "privatize" (i.e., sell off) its "oil and supporting industries." The Plan makes it clear that-even if we didn't go in for the oil-we certainly won't leave without it."

    "If the Economy Plan reads like a Christmas wish list drafted by U.S. corporate lobbyists, that's because it was."

    "Iraq-born Falah Aljibury was in on the drafting of administration blueprints for the post-Saddam Iraq. According to Aljibury, the administration began coveting its Mideast neighbor's oil within weeks of the Bush-Cheney inauguration, when the White House convened a closed committee under the direction of the State Department's Pam Wainwright. The group included banking and chemical industry men, and the range of topics over what to do with a post-conquest Iraq was wide. In short order, said Aljibury, "It became an oil group."

    "This was not surprising as the membership list had a strong smell of petroleum. Besides Aljibury, an oil industry consultant, the secret team included executives from Royal-Dutch Shell and ChevronTexaco. These and other oil industry bigs would, in 2003, direct the drafting of a 300-page addendum to the Economy Plan solely about Iraq's oil assets. The oil section of the Plan, obtained after a year of wrestling with the administration over the Freedom of Information Act, calls for Iraqis to sell off to "IOCs" (international oil companies) the nation's "downstream" assets-that is, the refineries, pipelines and ports that, unless under armed occupation, a Mid east nation would be loathe to give up."

    Though securing U.S. oil requirements is an important achievement for the neo conservatives, it will come with a hefty price. And that's where you as a private investor will either see your net worth melt away or you can be the few who will actually come out ahead.

    The cost of securing Iraq oil fields, now estimated at $200 billion, will undoubtedly run up to at least double that amount over the next four years.

    However there is a much more troubling scenario brewing on the international landscape which is threatening the Treasury Department's ability to finance the ever growing debt. A poll out a few weeks ago showed a large cross section of foreign nations as having a negative viewpoint toward the United States. Considering that the majority of U.S. debt financing comes from foreigners, this animosity could severely impact the management of the U.S. debt burden going forward.

    Meanwhile as we have been transfixed by the election, the U.S. budget gap has now expanded to $412.55 billion, the second-straight record deficit reported by the Treasury.

    Once again the dollar has slid against global currency markets on Thursday which has economists wondering if the growing U.S. budget and trade deficits will send the U.S. currency into a tailspin.

    Yesterday the dollar fell within a fraction of its all time low against the euro, coming in at $1.2930. Those investors who have been investing in Canadian based equities have done very well over the last three years as the "Loonie" hit 83 cents yesterday, up a full 20 cents from January 2003.

    This leads me to my main point, how to protect yourself going forward.

    The strategy which has worked brilliantly during Bush's first term and makes perfect sense now going forward is to diversify out of the greenback and into Canadian based commodity based stocks.

    That way you can get the double whammy benefit of rising commodity prices and the rising value of the Canadian dollar.

    Now there's one other important story which was buried during the presidential race and it has to do with Iran's nuclear program. This uncertain situation could spike oil and gold into the stratosphere.

    Fahrenheit Oil and Gold- The Iran Factor

    Another burning topic which was not discussed during the sanitized presidential debates has to do with the burgeoning nuclear capabilities of Iran. While Bush and Kerry discussed their military records and their opinions on homosexuality, a nuclear show down has been taking place in the Mid East with shockingly little media attention.

    Here's the situation.
    Iran is just weeks away from a critical juncture in their pursuit of nuclear capability.
    Though Iran claims their nuclear program is only for the development of domestic energy needs, many politicians in Israel and both parties in the U.S. have voiced their concerns.
    If Iran goes nuclear, a strategic shift in power could arise in the Mid East leaving Israel venerable and the United States in a precarious position with troops sitting across the border in Iraq.
    Iran has already been cited for supporting terrorist activities and of particular concern is that the arms and bombs making their way into Iraq are mostly being supplied from Iran.
    In September, Iran blew off requests from the International Atomic Energy Agency to cease its uranium enrichment activities. More recently, tensions have increased even further as Iran test-fired a newly-upgraded missile, capable of reaching Israel and US troops next door in Iraq.

    For a very short time there exists a very small window of opportunity to take out Iran's nuclear facilities before they go "hot" in which case radiation leakage would have horrific effects.

    Israel has stated it wants the world to act and has threatened it would act alone if necessary to stop what it views as Iran's nuclear weapons development. It would probably be impossible for Israel to do this alone due to their lack of specialized weaponry and technical support.

    Iran has as at least 24 suspected nuclear facilities scattered around the country, some underground and other strategically placed with heavily populated areas making conventional air attacks an unlikely scenario.

    However help seems to be on its way.

    A few weeks ago the Bush administration informed Congress that it was selling Israel 5,000 precision-guided smart bombs, including 500 satellite-guided, on-ton JDAM "bunker busters" - capable of penetrating six feet of concrete.

    John Bolton, the U.S. undersecretary of state for arms control and international security, stated that he wants the international community to isolate Iran and further commented that "We cannot let Iran, a leading sponsor of international terrorism, acquire nuclear weapons."

    This news was not lost on Iran who issued a warning to Israel that they would react "most severely" if their nuclear sites were attacked.
    According to one report sited from, Israel has built replicas of Iran's nuclear facilitates in the Negev Desert where their fighter bombers have been practicing test runs for months.
    Given the dead-ended Mid East peace talks, Saudi Arabia's internal turmoil, continuing terrorist actions, the vulnerability of American troops in Iraq, and the question of Iran's nukes all contribute to maintaining tensions at an all-time high.
    The writing seems to be on the wall but hopefully cooler heads will prevail to avoid a dangerous confrontation.

    If you haven't locked up some gold or oil investments yet I wouldn't be waiting to long.

    Bill Ridley
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