For those that are familiar with Lindsay Williams ...

[gonegolfin]

I am currently attempting to apply some critical analysis to his work on the non-energy crisis. I am particularly interested in clarification around his exact position as to why the government does not want all of this oil from the north slope coming to market.

1) In the original version of his book, the reasoning provided was based on the desire of the US Government to nationalize the oil industry by attempting to bankrupt an industry that was struggling at the time. The US oil industry as a whole escaped insolvency and is quite healthy today. So, this is no longer realistic.

2) In his recent interviews, Williams claims that the US government wants to continue the arrangement with the middle eastern countries that are accepting only US Dollars for oil. He claims that to do this requires honoring our purchase commitments (staying dependent on middle east oil). Failure to do so might provoke these countries to abandon the petro-dollar, resulting in a US Dollar crisis.

The problem I have with #2 is this ... If there is as much oil under the north slope as Williams claims, the effect on the US Dollar is probably not as dramatic as he claims since the US is the dominant consumer of oil. As a percentage of world oil supply in US Dollars, the transactions would be denominated in less Dollars. But it would be somewhat offset by the sales of the new Alaskan oil supply in US Dollars.

None of this is attempting to validate or refute any evidence that vast oil pools exist under the north slope. I am approaching it from the standpoint of whether legitimate reasons have been provided as to the reason why the government would take such a position.

Comments?

Thanks,
Brian

[Zippyjuan]

At the end of his "Energy Non Crisis" video, he says that the US is not allowed (by the IMF and World Bank- his "they" who rule the world) the pumping of the two (yes, he says there are two- he said he saw Gull Island coming in and later talked to somebody after he left and said they had found another field at least as big) Alaskan oil fields "as big as all the oil in Saudi Arabia" is because then the OPEC countries would not have the revenue to be able to continue to buy our debt (which they are required to do so with a portion of their profits according to Williams). He says it would collapse our economy if they allowed it. (see the last ten minutes http://tobefree.wordpress.com/2008/0...gest-on-earth/ )

In his latest version, rather than preventing the collapse of the US dollar and economy, that is supposed to be the goal now. Flood the market with oil to drive the price of oil down to $50, bankrupt the OPEC countries forcing them to dump their dollars and collapse the US economy. The source of this oil is not the alleged giant reserves in Alaska but mysterious giant fields in Indonesia (which is a net oil importer these days) and "north of Russia". In another interview he says this will happen because "they" are concerned that Iran is becoming "one of the richest nations on earth" (Alex Jones interview).

Where does the IMF and World Bank hope to get more money if the oil countries and the US economies collapse?

Our biggest sources of oil are not OPEC but Canada and Mexico. Oil producing countries hold about six percent of our foreign held debt or only about one and a half percent of our total debt. http://www.ustreas.gov/tic/mfh.txt

And what happened with John McCain being "their man" who they would do "anything possible" to make certain he became president? As the election came closer and the likelyhood of this happening, Williams backed off that one too.

[dannno]

Answer:


Part of the agreement was for Saudi Arabia to buy up our debt. They now own ~13% of our economy, or debt. Once they call in their debt, then that money will be dumped onto the US economy. That will trigger a huge devaluation of the dollar, if not a collapse, which will lead other countries to do the same in a rush to get out of the dollar, causing hyperinflation.

[muh_roads]

Answer:


Part of the agreement was for Saudi Arabia to buy up our debt. They now own ~13% of our economy, or debt. Once they call in their debt, then that money will be dumped onto the US economy. That will trigger a huge devaluation of the dollar, if not a collapse, which will lead other countries to do the same in a rush to get out of the dollar, causing hyperinflation.

This is what Williams says in the video, but as the original poster pointed out...there is a huge discrepancy here in what he wrote many years ago with his book if that is true.

I haven't read the book yet, so thanks for posting OP.

[gonegolfin]

Answer:


Part of the agreement was for Saudi Arabia to buy up our debt. They now own ~13% of our economy, or debt. Once they call in their debt, then that money will be dumped onto the US economy. That will trigger a huge devaluation of the dollar, if not a collapse, which will lead other countries to do the same in a rush to get out of the dollar, causing hyperinflation.

I guess I am not convinced that the Saudis would simply dump their existing US Dollar reserves. There would also be some implicit strength in the Dollar in that you would still have a significant amount of oil priced in Dollars.

Brian

[gonegolfin]

In his latest version, rather than preventing the collapse of the US dollar and economy, that is supposed to be the goal now. Flood the market with oil to drive the price of oil down to $50, bankrupt the OPEC countries forcing them to dump their dollars and collapse the US economy. The source of this oil is not the alleged giant reserves in Alaska but mysterious giant fields in Indonesia (which is a net oil importer these days) and "north of Russia". In another interview he says this will happen because "they" are concerned that Iran is becoming "one of the richest nations on earth" (Alex Jones interview).

I guess I am one "end goal" revision behind. :-)

Of course, I have not seen any evidence that additional supply has come to market. The large runnup from last August ('07) of $70 to nearly $150 was net caused by big financials covering their oil shorts, not the supposed long only index funds and hedge funds that were being scapegoated (and not excessive demand). We then had a large void in the futures market and the price came tumbling down. I think the futures market has played the dominant role here for a while.

Does he still believe that the giant reserves in Alaska exist?

Thanks,
Brian

[Paul.Bearer.of.Injustice]

If oil is indeed a limited resource, I think we would sit on a massive reserve until we absolutely need it.
Why use your own precious commodities before you take everyone else's first?
20 years from now we may be like, "Hey, look what we've just found!"

Like about bank reserves, lie about oil reserves... mercantilism never went away.

[Zippyjuan]

Answer:


Part of the agreement was for Saudi Arabia to buy up our debt. They now own ~13% of our economy, or debt. Once they call in their debt, then that money will be dumped onto the US economy. That will trigger a huge devaluation of the dollar, if not a collapse, which will lead other countries to do the same in a rush to get out of the dollar, causing hyperinflation.

You are off by a decimal point. They own about 1.8% of our total debt outstanding- not 13%. According to the Treasury as of August of this year, the "oil producing countries" as a whole held $180 billion of our debt. All foreign countries held $27.4 billion so that is 6.6% of that. Total debt is now over $10 trillion. http://www.ustreas.gov/tic/mfh.txt

Yes- he has been pretty quiet about the alleged Alaskan reserves lately. Other than to say that he has been threatened with death ("to end up like JFK") if he still talks about some things he used to. I too have seen no evidence of an increase in oil supply- only a decrease in demand due to the global slowdown. He said it would come from Indonesia which is a net oil importer and "North of Russia" where they have no wells. They are still constructing the rig to drill their first test well in the area. There may indeed be oil up there but none of it has been actually found and certainly will not be extracted and available to flood the market in the next twelve months. Weather conditions make it very difficult to work in the area and costly to get at any oil which may be there. The rest of Russian production started to decline in the last year or so.