Is The Oil Embargo Threat A Desperate Move?

What Is The Planned End Game?

Yesterday we were discussing the effects that the shortage of diesel fuel—brought about by the economic assault on Russia—is having worldwide, including not only in Europe but right here in America. Despite this threat to the economic well being of EU countries—and Germany has been especially open about this—the NATO/EU coalition, under duress from Davos/WEF—is pushing ahead with plans for a total embargo on Russian oil imports. Before we get to Tom Luongo’s explanation for this—I’ve been studying it for a couple days now—I want to present a twitter thread by Kim Dotcom. What Dotcom is doing in this thread is illustrating the unsustainable debt situation the US finds itself in. The relevance of that information to the war on Russia is that the US never would have been able to go so far into debt but for King Dollar’s status as the world’s reserve currency, and that status was attained because the US provides protection for the major Middle East oil producers—King Dollar is King because of the Petrodollar regime. The world runs on oil and the US protects some of the largest producers—just not Russia.

As long as the Petrodollar regime continues in place—and the rest of the world doesn’t put its foot down—the US is able to keep running up its debt, giving its citizens a false sense of the US’s basic prosperity. One problem is that the US has turned its economy into a giant casino by outsourcing much of its basic productive manufacturing and turning instead to rent seeking. Wealth inequality and the resulting corruption of our political class now presents a direct threat to our political order. Another problem is that US debt has become so extreme that the rest of the world has grown restive at financing these shenanigans. Russia and China are suggesting to the world that there could be an alternative to the Petrodollar regime, and many important nations are increasingly interested—even Middle East oil producers. The war on Russia is, to a great extent, a war to keep the current system in place and to bend Russia to it. There are other more ideological reasons (which Luongo addresses) but US/EU financial dominance and its maintenance is certainly an important part.

So, look at what Dotcom is saying. Even if you quibble with his calculations, he’s on the right track. If the Petrodollar system loses its dominance the US debt will lead to dire effects on our way of life. I recommend that you pretty much ignore the issue of what to call our current “system”—is it really “capitalism” as Dotcom calls it? What is “capitalism”? Is our oligarchic system really something else entirely than what we are used to call “capitalism”?

This may be the most important thread that I ever make. Big picture stuff.

I’ll try to help you understand why the future is not what we’re hoping for. A major global collapse is coming. It may be worse than we can imagine.

Our leaders know.
But what are they planning?

The United States did not have a surplus or a balanced budget since 2001 and in the last 50 years it only had 4 years of profit. In fact all profit the US had in the last 50 years wouldn’t be enough to pay for 6 months of the current yearly deficit. So what do they do?

US spending and debt have spiraled out of control and the Govt can only raise the money it needs by printing it.

That causes inflation. It’s like taxing you extra because you pay more for the things you need and all your assets decline in value.

See the money printing frenzy:

The problem is that this has been going on for so long there’s now no way to fix it.

The reality is that the US has been bankrupt for some time and what’s coming is a nightmare: Mass poverty and a new system of control.

Let me explain why this isn’t just doom and gloom talk.

Total US debt is at $90 trillion. US unfunded liabilities are at $169 trillion. Combined that’s $778,000 per US citizen or $2,067,000 per US tax payer.

Remember, the only way the Government can operate now is by printing more money. Which means hyperinflation is inevitable.

The total value of ALL companies listed on the US stock market is $53 trillion.

The real value is much lower because the US has been printing trillions to provide interest free loans to investment banks to pump up the stock market. It’s a scam.

Most of the $53 trillion is air.

The value of all US assets combined, every piece of land, real estate, all savings, all companies, everything that all citizens, businesses, entities and the state own is worth $193 trillion.

That number is also full of air just like the US stock market.

Let’s do the math:

US total debt
$90 trillion

US unfunded liabilities
$169 trillion

Total
$259 trillion

Minus all US assets
$193 trillion

Balance
- $66 trillion

That’s $66 trillion of debt and liabilities after every asset in the US has been sold off.

Do you understand?

So even if the US could sell all its assets at the current value, which is impossible, it would still be broke.

The US is beyond bankrupt.
This patient is already dead.
This patient is now a zombie.

You probably wonder why are things still going? Why didn’t it all collapse yet.

It’s all perception and denial.

The perception is that the US has the largest economy and the strongest military in the world. But in reality the US is broke and can’t afford its army.

The denial is that all nations depend on a strong US or else the global markets will crash.

The only reason why the US zombie keeps going is because the end of the US is the end of western prosperity and an admission that capitalism failed as a model for the world.

But it doesn’t change the reality. The collapse is inevitable and coming.

What’s the plan to fix this?

You may have heard of the great reset or the world government.

Is it a controlled demolition of the global markets, economies and the world as we know it?

A shift into a new dystopian future where the elites are the masters of the slaves without the cosmetics of democracy?

Without a controlled demolition the world will collapse for all, including the elites.

The world has changed so much, nothing seems to make sense anymore, the blatant corruption is out in the open, the obvious propaganda media, the erosion of our rights.

What’s the end game?

Now we turn to Luongo, but note how Dotcom’s concluding thoughts will feed into Luongo’s own thinking.

The Real Reason Behind the EU’s Drive to Embargo Russian Oil

I’ll try to synopsize Luongo’s presentation.

First, we among many have been noting that the sanctions against Russia have turned into something of a joke. Far from collapsing Russia’s economy and turning the ruble to rubble—as Zhou’s handlers had him publicly claim—the ruble is at all time highs against the dollar and Euro and Russia is making money hand over fist under its new energy for rubles regime. Russia’s balance of payments is a dream come true for Russia and a nightmare for anyone attempting financial warfare against Russia. All this is particularly true with regard to natural gas, because the EU countries largely have no plausible alternatives for Russian gas. This, says Luongo, is where oil comes into play.

The difference between oil and gas production is that gas wells can simply burn off excess production, whereas excess oil must be stored somewhere. However, because oil needs are normally extremely stable Russia doesn’t have a huge amount of storage for oil production surpluses that would result from an embargo. Russia would hopefully—from its enemies’ perspective—be faced with the choice of either shutting down oil production or paying for storage—either or both would, if embargo enthusiasts are right, prove to be financially ruinous for Russia I won’t attempt to summarize Luongo’s fascinating discussion of how this all plays out, but here’s the bottom line for this strategy:

The point is that the talking point going around the press today is that Russia does not have the storage capacity to deal with a European embargo and as such will have to cut production. …

This supply shock within the tanker market and the downstream effects of the added costs to the voyages, it is hoped, will create a cascading back-up within the Russian oil industry, forcing the forecasted production hits.

This will, in turn, eat into its positive trade balance which is “fueling Putin’s war machine.” It will also present the opportunity for Russia’s competitors to come in and steal market share from them.

Through this mechanism and efforts in the West to change Europe’s energy usage, the long-term effect is to destroy Russia’s ability to continue the war by starving it of needed capital.

So, the theory is that Russia will be brought to its knees by the oil embargo. Problems in practice? One is that Putin’s government has been watching the US playing sanctions games—including against Russia—for many, many years. They have long know where this was heading and, so, have had a lot of time to plan for this eventuality. What that planning might be I can’t tell you in detail. Part of it is developing alternative markets for Russian energy—China and India are two very large alternatives. Further, Russia’s arsenal doesn’t just include oil, gas, coal and other essential minerals. It includes food—with Russia slated to come in with a record harvest this year.

The other problem is that the embargo could be ruinous for the West. No, I don’t mean that the ruling class will become poor. I mean that ordinary people like you and I could be ruined. One of Luongo’s main points is that this entire scheme isn’t simply a Neocon pipedream—the Davos run EU is, for its own Neo Malthusian reasons, very much on board with the idea. And because this scheme of the ruling class isn’t based on providing for the economic welfare of the subject population, the rulers seem determined to plunge ahead. This scheme is quite mad, says Luongo, but:

… only if you think in conventional terms of doing the right thing for their people. What is clear to any serious observer of EU politics is that they are not interested in what their people have to say or want.

Theirs is an agenda which will brook no opposition, even if it means destroying its own economy to bring a rival to its knees.

And here is that agenda:

Davos’s Great Reset strategy is built on the same mistakes about resource scarcity that Thomas Malthus made back in the early 19th century. Theirs is an economic model which does not believe people respond in real time to incentives, pro and con, which moderate their behavior. Rather, they see humans as a virus unleashed upon the world that needs to be controlled.

…

And the power center of this type of thinking is not in the U.S. and the U.S. Empire. ...

No, this thinking comes squarely out of European critiques of capitalism. To be reductionist it is just Marxism warmed over and given a fresh gloss of rhetorical paint—sustainability, stakeholder capitalism, Environmental, Social and Governance (ESG), shared purpose, etc.

The proof that the EU is just as happy with war in Ukraine as neoconservative forces in the U.S. and UK is evident in their unwillingness to end the war through diplomacy.

But Europeans are the ones who will suffer the most from this strategy.

Moreover, this is all going as planned—planned for a long time:

… the real story of the conflict, … serves a far larger purpose clearly stated by the architects of our misery than the simplistic framework of just blaming the U.S. for everything.

The idea that Europe fears a Russian invasion of Poland or even Germany, which necessitates NATO’s expansion to its border in the Donbas, is ludicrous. Russia’s military is not built along these lines nor is its performance in Ukraine evidence it is capable of such an operation.

What is unfolding now is a script that was written a long time ago. The war by the West against Russia has long been in the planning stages.

The Russians understand this better than many are willing to accept. Their leadership, Putin and Foreign Minister Sergei Lavrov, have articulated this very clearly at every stage of the war to date.

They are under no illusions about where the West and Davos are willing to take this conflict, which is why they have made serious threats about striking out at the real “decision centers” who give the Ukrainian Armed Forces their marching orders.

These are warnings not to our politicians, but to us. This is where things lead.

They have asked for a parting of the ways, peaceably, between East and West, but that is not part of the agenda. Like classic narcissists with the burning need to control everything, Russia and the rest of Asia will not be allowed to walk away from Davos and their Eurocrat quislings, because they are the righteous saviors of humanity.

And we are just, at best, “the help” and at worst an inconvenience.

The bigger Davos plan of destroying the old global order to Build it Back Better, where they own everything and you will own nothing and like it or else, is the script.

They are now committed to this plan. It does not matter now whether it will work or not. This is what we have to realize in all of our analyses. Do the Russians and their friends in Asia and across the Global South have the means and the tools to come out on top? Possibly.

But the bigger question is whether or not this conflict escalates to the point where winning is an irrelevant concept. When you see a bloc as powerful as the European Union willing to commit acts of domestic vandalism this big—and blaming the victim of their unbridled aggression—it tells you we are far past the point of rational settlement.

A final thought. What Americans should be thinking about is what all this means for our domestic political order. Our political elite has backed nearly unanimously this insane and unconstitutional war—presumably because they’ve been bought by the people behind it. If you can think of a better explanation please tell me. Trump’s differences with the scheme were the reasons why Trump had to be removed. All the clear planning for drastically ratcheted up social controls point in the same direction—the transformation of our constitutional order into a dystopian authoritarian state. Can this agenda be held at bay through the only means we have? November 2022 may tell the story.