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Japanese Oil Tanker Attacked in the Strait of Hormuz

One of the things we keep an eye out for around here is the possibility of an event that could tip the scales. Anything that might disrupt oil traffic in the Strait of Hormuz is right at the very top of our list of events to pay especially close attention to.

Here I take a closer look at the recent attack on the Japanese supertanker in the Strait of Hormuz.

Last week there was a mysterious incident in the Strait of Hormuz involving the Japanese supertanker “M Star,” a 314,000 metric ton oil tanker measuring a bit over 1,000 feet in length.

Growth and the Upcoming Iranian War

by Chris Martenson

Growth and the Upcoming Iranian War

Monday, July 12, 2010

Executive Summary

A war with Iran seems likely before the US elections in November.

The US has committed an act of war in deciding to embargo Iranian fuel shipments and international financial activities.

The “urgency for dealing with Iran” is driven more by oil competition than military crisis.

The US militarily occupies or diplomatically controls every strategically-located oil producer in the Middle East except for Iran.

The most probable explanation for the sudden concern about Iran is likely centered over energy and the ‘requirement’ of growth that our economic and financial systems demand.

Seeking militarily-secured access to oil halfway around the world is a weak strategy.

An Iranian war has the potential to severely disrupt developed economies due to another wild oil-price spike.

I am troubled by the renewed beating of the Iranian war drums by the West and Israel. Troubled, in part, because the world economy needs a war with Iran right now like it needs a hole in the head. Or perhaps I should say a hole in the barrel, because the most likely immediate outcome of an Iranian war would be a diminution of oil traversing out of the Persian Gulf and a gigantic leap in the price of oil.

Both would add terrible stresses to the global financial system at this particular moment.

The last time I wrote about the urgent beating of the Iranian war drums was in December of 2009. Then, too, we saw a near-perfect coordination of the media in breathlessly “reporting” whatever the US and Israeli military elements wanted communicated. Basically it boiled down to something like this: “THE US MUST IMMEDIATELY DEAL WITH THIS URGENT THREAT RIGHT NOW – NO WAITING – IT IS THAT SERIOUS!!!” Sorry for shouting there, but that’s how it came across to me before it all, oddly and quietly, slipped off of the headlines and out of our collective consciousness, until just recently.

Deep Impact: Why The Deepwater Disaster Spells Serious Trouble

by Chris Martenson

A new Martenson Report is ready for enrolled members.

Link – Deep Impact: Why The Deepwater Disaster Spells Serious Trouble

Executive Summary

We can say with absolute certainty that future oil exploration and development costs are going to rise.
Our date with an oil supply shock now seems probable for the 2011 to 2012 timeframe.
A new paradigm is emerging, in which downsizing trumps growth.
A permanent energy crunch will lead to higher prices for all things connected to energy.
It would not be too strong to suggest that our federal commitment to energy efficiency is a farce.
In terms of personal planning, do not take anything for granted.
While I am not sure how this will play out yet, I am quite comfortable stating that the age of abundance is drawing to a close.

Resource Wars

by Chris Martenson

This is a must-read article. It shows that the big money, and what I consider to be the long-term smart money, is moving aggressively towards locking up the last remaining critical resources on the planet. This article centers on crop land, but it could just as easily center on critical mineral resources. Or oil.

Wish you weren’t here: The devastating effects of the new colonialists

International instability

by Chris Martenson

As bad as the US is, there are worse problems elsewhere. This is why I think this credit crisis will not play out like any previously and why I think there’s a better than even chance of a systemic banking crisis.

In times past when a country experienced a bubble or a banking crisis, there was always a country next door that hadn’t where the savvy could hide out. Where does one hide out today?

Europe on the brink of currency crisis meltdown

The financial crisis spreading like wildfire across the former Soviet bloc threatens to set off a second and more dangerous banking crisis in Western Europe, tipping the whole Continent into a fully-fledged economic slump.

Currency pegs are being tested to destruction on the fringes of Europe’s monetary union in a traumatic upheaval that recalls the collapse of the Exchange Rate Mechanism in 1992.

“This is the biggest currency crisis the world has ever seen,” said Neil Mellor, a strategist at Bank of New York Mellon.

Stephen Jen, currency chief at Morgan Stanley, says the emerging market crash is a vastly underestimated risk. It threatens to become “the second epicentre of the global financial crisis,” this time unfolding in Europe rather than America.

Austria’s bank exposure to emerging markets is equal to 85pc of GDP – with a heavy concentration in Hungary, Ukraine, and Serbia – all now queuing up (with Belarus) for rescue packages from the International Monetary Fund.

Exposure is 50pc of GDP for Switzerland, 25pc for Sweden, 24pc for the UK, and 23pc for Spain. The US figure is just 4pc. America is the staid old lady in this drama.

Those figures in the bottom two paragraphs are quite the eye-openers. Somehow Austria’s bank system loaned out 85% of Austria’s GDP to emerging markets that are even now resorting to emergency measures to stem the erosion of the their currencies against the dollar. The problem, apparently, is that these countries were loaned vast amounts of money denominated in dollars. The faster their currencies fall, the more it costs them to pay back their loans.
Some of these currencies have fallen by 40% in a matter of weeks.

Chaos in Washington!

by Chris Martenson

This is the most explosive story of the day, because of what it implies – a rupture in the formerly seamless power structure down in DC.

The chaos in Washington represents the most serious split of political power in, well, far too long. Depending on your point of view, this is either a godsend or a complete disaster.

If you are the Bush administration, trying to find a crevice of political advantage for John McCain, it is a disaster.

You don’t even have to read between the lines on this one.

[quote]WASHINGTON – Even for a party whose president suffers dismal approval ratings, whose legislative wing lost control of Congress and whose presidential nominee trails in the polls, it was a remarkably bad day for Republicans.

A White House summit meeting on Thursday meant to shore up John McCain’s shaky campaign "devolved into a contentious shouting match." And that’s how McCain’s own campaign described it.

The meeting revealed that President Bush’s $700 billion bid to combat the worst financial crisis in decades had been suddenly sidetracked by fellow Republicans in the House, who refused to embrace a plan that appeared close to acceptance by the Senate and most House Democrats.[/quote]

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