Dreamtwister

In the world of oil, the top 5 producers are (in order) Saudi Arabia, Russia, America, Iran and Mexico. Now, America's production peaked some time in the 1970's. Mexico peaked about 2 years ago, to catastrophic effect. That just leaves Saudi Arabia, Russia and Iran.

 

 

"Given the historic record price of oil last week touching near $117 and the admission by Russia that its own oil fields have peaked, the decision by the Saudi's and other Middle East producers to essentially cap production at its current level for future generations should have been important news. As the authors point out, it went largely ignored by the media. Here is what a number of oil industry experts think."

 

Bad news right there, kiddies. Did you notice anything else in that little passage?

 

 

"We now see production peaked last year," Mikhail Kroutikhin, editor in chief of the Russian Petroleum Investor told the BBC.  "I believe the decline will continue for quite a number of years."

 

So we can cross Russia off that list as well. So that just leaves Iran. Funny how everything keeps coming back to Iran, isn't it?

Talk about being in the wrong place at the wrong time.

 

 

Now, before we cast judgement on these "corrupt tin-horn dictator" Mexicans, let's step back for a second and look at the situation. This guy is chief of police in a border town. His options were never all that good, but now is really a bad time to have his job. Here are his choices:

 

1) He could have refused to protect the drug cartels. Considering the life expectancy of your average honest cop in Mexico right now, that's a life-choice.

2) He could cooperate with the cartels, risking being caught, tried and probably executed by the government.

3) He could have quit, putting himself and his family at the tender mercies of the tortilla lines.

4) He could have fled the country.

 

Not a great set of options, if you ask me.

 

But this is just a symptom of the larger problem. The Mexican government can't pay the bills any more. 17,000 soldiers deserted last year, probably taking jobs with the cartels just so they can feed their families. The cartels are actively recruiting active and ex-military and police with promises of food. They actually have the gall to put up flyers and posters around the city, complete with contact numbers for recruiters. The situation is completely out of control.

 

And not a single peep in the mainstream media.

Haiti is only one example. There are food riots in Mexico, Burkina Faso, Cameroon, Ivory Coast, Mauritania, Morocco, Egypt, and Senegal. India is threatening to put food hoarders in jail. The World Food Program is facing a $500 million shortfall this year. Countries all over the world who aren't yet facing famine are curtailing food exports. In Thailand, farmers are forced to sleep in their fields because thieves are stealing rice right out of the patties.

 

And why is this happening?

 

Well the core problem is obviously over-population. But in this case, the proximate cause is the diversion of farmland to producing ethanol. In the United States alone (I use this example because they are so very proud of their "green" program) diverts 25%* of it's farmland to ethanol production. 3.7 billion bushels in 2007! 

I'm actually running out of ways to say "Guess what? I'm right again." Check it out:

 

 

Granted, it's not the Treasury department, but we're talking about a very significant move. This amounts to approximately 1 year's worth of gold trades from one source. It won't be the last such trade, either. A lot of financial institutions will have to mirror this move, or end up as the next Bear Stearns.

 

The crash is almost upon us, friends.