North Korea War Signala Rattles West

 

 

Will South Korea Have to Bomb the North, Eventually?

​ 

 

2016 Cuban Missile Crisis?

 This situation has not garnered the attention it deserves in the press nor by the markets. Should tensions escalate to the point of causing a nuclear event then such an engagement could lead to wider actions  bringing  the involvement of respective allies and the bigger powers. 

Even the limited use of nuclear weapons places the world in greater peril than most appreciate or know at first glance. Why? Russia operates a mechanized nuclear defence program that is often termed and referred to as  " the dead-hand system" because the missile-launch- order can  be triggered when its sensors determine that the radioactivity in the atmosphere is beyond preset acceptable levels. Breaching of these tests causes the system to conclude and assume that a nuclear attack is being carried out against their nation and it will then automatically order the launch of Russian missiles aimed at predetermined targets. 

There is no human involvement.  

http://www.nytimes.com/2011/03/06/books/review/Rhodes-t.html

 Originally the system was designed to provide for an immediate  retaliatory strike in the event that  the leadership in the Kremlin was destroyed 

by a first strike by an aggressor,

 

and thus decapitating the decision-making powers ability to respond.  The premise of the system embraces the cold war  assumption  that the threat of mutual annihilation would deter  the superpowers, at the time, from ever entering into any confrontations using nuclear weapons.

However, today  this old and perhaps antiquated system could inadvertently  launch  missiles because the sensors detect the radiation from a much smaller nuclear conflict. Right now, as long as tensions remain high in North Korea there is a great danger that aggressions could expand rapidly into the global theatre. Such a possibility, to our knowledge has not been experienced since the Cuban Missile Crisis, in 1962, when the world was was gripped by fear and  just seconds away from a global nuclear war that could have wiped out all of humanity in mere days.

 In light of the concerns mentioned, and their potential consequences and devastation  - this situation is to be given the highest priority and attention in the days and weeks ahead. It is also noted that certain  US Presidential candidates indicated, in February, that they would approve a preemptive strike against North Korea - that does not sound like such a  good idea should it also lead to those same sensors detecting and acting upon excessive radioactivity in the atmosphere. Moreover, leadership in North Korea is far from stable or sensible - you have a child holding a loaded gun.      

In the last analysis, the world again is walking on eggshells; one misstep having frightening ramifications 

http://pwa2100.blogspot.ca/2016/03/world-on-edge-as-north-korea-prepares.html

Panic Grows as Moody's Cuts China's Rating Outlook

China  Another  Enron?

Really, when you think about it , what is  the  difference between the two, when they both  are great benefactors of ghosts and zombies and then go on to apply the most opaque and misleading accounting practises, at all levels of organization with utter impunity? No wonder investors and creditors are heading for the hills. To answer the question: there is no difference - and the results are sure to be  the same.

Now  that brings up the next question  regarding Bernie Madoff...

http://pwa2000.blogspot.ca/2016/03/panic-grows-as-moodys-cuts-chinas.html

Methane Time Bomb Closer Than Feared?

The Big Question

​  

Any day now? Any moment? But at how many parts per billion do we actually  have the same atmospheric conditions as the Permian extinction? Once we know that  - then with a little math we could probably  determine the next poorly planned and unfortunate   event in  the planet's history.  

Remember too, that a failure to plan - is a plan to fail!

http://drkinesa.blogspot.ca/2016/03/methane-time-bomb-closer-than-feared.html

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Peak Oil Today

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 - 29 Feb 2016

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The End Of Fossil Energy 

The very best weekly analysis and evaluation of the global peak oil situation with additional briefings, charts and videos, added by the curator from accredited professional sources, to enhance the informed investor's knowledge and understanding of its deep complexities and evolving outlooks. 

Everyone should "Bookmark ' this very important weekly post to stay abreast of this most critical aspect of global economics and life on this planet.

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Peak Oil Review – 29 Feb 2016 

By Tom Whipple

Quote of the Week

“The problem is going to be the money. Where is the money going to come from? A lot of people who have burned their fingers on (U.S. shale) are going to be reluctant to reinvest.”

Arnaud Breuillac, president of exploration and production at French oil giant Total.

Contents

1.  Oil and the Global Economy

2.  The Middle East & North Africa

3.  China

4.  The Briefs

1.  Oil and the Global Economy

Oil had a good week for a change with New York futures rising 3.2 percent to close at $32.78 and London climbing 6.3 percent to close at $35.10.  This time, there was more than just wishful thinking behind the price increase as pipeline outages shut in 600,000 b/d in Kurdistan and 250,000 b/d in Nigeria to cut global exports by 850,000 b/d. In both cases, it is unclear as to just when the pipelines will reopen. In Nigeria, the outage was due to an underwater leak while the situation in Kurdistan likely is related to one of many wars taking place in the region.

 

READ MORE

http://peak-oil.org/peak-oil-review-29-feb-2016/

 

 

 www.firstfinancialinsights.blogspot.com 

Peak Oil Today - 29 Feb 2016

The very best weekly analysis and evaluation of the global peak oil situation with additional briefings, charts and videos, added by the curator from accredited professional sources, to enhance the informed reader's knowledge and understanding of its deep complexities and evolving outlooks. 

Everyone should "Bookmark ' this very important weekly post to stay abreast of this most critical aspect of global economics and life on this planet.

 

Peak Oil Review – 29 Feb 2016 

By Tom Whipple

Quote of the Week

“The problem is going to be the money. Where is the money going to come from? A lot of people who have burned their fingers on (U.S. shale) are going to be reluctant to reinvest.”

Arnaud Breuillac, president of exploration and production at French oil giant Total.

Contents

1.  Oil and the Global Economy

2.  The Middle East & North Africa

3.  China

4.  The Briefs

1.  Oil and the Global Economy

Oil had a good week for a change with New York futures rising 3.2 percent to close at $32.78 and London climbing 6.3 percent to close at $35.10.  This time, there was more than just wishful thinking behind the price increase as pipeline outages shut in 600,000 b/d in Kurdistan and 250,000 b/d in Nigeria to cut global exports by 850,000 b/d. In both cases, it is unclear as to just when the pipelines will reopen. In Nigeria, the outage was due to an underwater leak while the situation in Kurdistan likely is related to one of many wars taking place in the region.

Despite the outages, the global market is still oversupplied and many traders are looking for the Saudi-Russian production “freeze” to morph into an actual production cut that will rebalance the markets. However, at the IHS-CERA oil conference in Houston last week, Saudi Arabia’s oil minister made it clear that a production cut was not going to happen despite all the hype and optimism. The Iranians seconded the sentiment saying they were not going to freeze or cut anything until their production was back to the pre-sanctions 4 million b/d. Moscow chimed in with the claim that even with a freeze its oil production could set a new post-Soviet record this year.

Amidst all the gloom and doom about low prices at the Houston conference, the IEA rolled out its most recent thoughts about the future of oil. The Agency naturally is concerned about the major cutbacks in capital investment that are underway and believes the industry will be hard pressed to recover after prices rebound later in the decade. The executive director of the IEA says he expects prices to climb back up to $80 a barrel by 2020. He also believes there will be a second leg to the US shale oil boom which will be quick to recover when prices rise and will send US domestic oil production to new highs by 2021.

In the meantime, the US oil industry is going through a major contraction with numerous bankruptcies and much selling off of assets. During the Houston conference, it was noted that the reason there are so few mergers is that many company debts become due the minute the company comes under new ownership. Few companies are willing to bear the upfront costs of paying off the debt of new acquisitions, even at bargain prices.

For the immediate future, it looks as if US shale oil production will be falling as the number of active drilling rigs continues to fall steadily. The week before last the rig count fell by 13 to 400. However, there still remains a backlog of hundreds of wells that have been drilled and are awaiting fracking before they can start producing. This backlog and increasing production from large offshore projects nearing completion in the Gulf of Mexico may be enough to keep US domestic production from falling as fast as many foresee.  Even the Saudis noted in Houston last week that the US shale oil industry is very light on its feet. Once having established itself in an area with drill sites, permits, and the logistic infrastructure already in place, shale oil production can be increased very rapidly in comparison to what would be required to increase OPEC members’ production. The problem in increasing shale oil production will come when the most productive “sweet spots” are all drilled.  Some knowledgeable observers believe this will come circa 2020.

Concerns once again are increasing that a shortage of oil and oil product storage capacity in the US could drive oil prices considerably lower within the next few months. The main US storage facility and futures delivery point at Cushing, Okla. is already 80 percent full, is turning away some types of business, and at the current rate of filling will be completely filled in another four months. The same problem is occurring in other facilities along the Gulf Coast and in the mid-west. Refiners in the mid-west are already cutting back gasoline production as the demand is simply not there despite the very low prices ($1.11 in parts of Minnesota) and the much-ballyhooed economic recovery.  Some analysts are convinced that another major down leg to the oil markets is virtually certain to occur before supply and demand come back into balance.

Another interesting situation is arising in the natural gas markets where prices touched a new 17-year low last week, below $1.75 per million BTUs. Most believe the cost of producing shale gas is in the vicinity of $4 to $6 per million; it is obvious that natural gas producers, and Wall Street, are losing a lot of money. Currently, prices are being pushed down by an unusually warm winter and stockpiles which are about 30 percent above normal for this time of year. Close examination of US natural gas numbers, however, shows that production is starting to drop and is now down about 1.2 billion cubic feet/day from last September’s output.

Obviously, prices cannot remain this low for long and a rebound before the end of the year is highly likely. Many gas producers used hedges to capture the $5 per million prices that obtained in 2014, but those hedges have now expired and producers are fully exposed to the low market prices. Some analysts believe that we will soon see rapid cutbacks in production with even the possibility of shortages later this year.  More electricity producers are switching to natural gas to comply with EPA regulations and US LNG exports are just getting underway amidst much hype about America supplying Europe and the world with cheap natural gas.

Conventional natural gas production in the US is down by 17 billion cubic feet/day since 2008 and continues to drop at about 5 percent a year. While this has been made up in recent years by the rapid increase of shale gas, it seems that this too will be coming to an end, both through low prices and geologic constraints. Given the ongoing decline in conventional gas production and the rapid depletion that takes place in existing shale gas fields, it will take an increase of 15 billion cubic feet/day of new production in 2016 just to keep US production level for the year much less meet the expected export demand. This demand is forecast to reach 7 million cu. feet/day by the end of the decade.

All this says that there is likely to be a major rebound in natural gas prices to economic levels in the next year or so, provided financially strapped drillers can find the financing in today’s markets. LNG exports do not seem to have a bright future.

 

READ MORE

http://peak-oil.org/peak-oil-review-29-feb-2016/

 

 www.firstfinancialinsights.blogspot.com

STOCKS CRASH - Panic Engulfs #China

China Devalues Yuan as Stocks Crash

We  Told You So 

As much as we truly hate saying it, as well  as, warning folks, time and time again, for years and months on end - about the huge, looming Chinese meltdown- it was  as if we are just talking to ourselves. Nobody appeared   to listen.  

Conditions here mirror the US markets and economy of the 20's that led  to that  BIG crash. This one is going to be worse, much worse . Why? Just because the extremes are greater and it's a much larger bubble number-wise involving 1.5 billion Chinese people  (US was near 100 million). That's tells you it is potentially 15 times worse in terms of ramifications  based on  China's economy alone. 

OK  - now are you going to lend us your ears...

http://pwa2100.blogspot.ca/2016/03/stocks-nosedive-panic-engulfs-china.html 

Why Singapore's Economy Is Heading For An Iceland-Style Meltdown

By  Jesse  Columbo,  Forbes 

http://www.forbes.com/sites/jessecolombo/2014/01/13/why-singapores-economy-is-heading-for-an-iceland-style-meltdown/#346ffdb113cc

Well, the global financial system has basically been teetering since 2008,  AND "insiders" have been expecting the dark forces to arrive any day. Looks like the first stop along the way may be  Singapore?     

http://pwa2100.blogspot.ca/2016/02/singapore-faces-icelandic-grim-economic.html

Mervyn King: The  Eurozone is Doomed   

Whatever boneheads thought that supra-constitutions were better  for economic stability or governing anything had more than a few loose marbles. Basically, such stupidity undermines both free enterprise and democracy , thereby destroying the fabric, inspiration and motivation of a society while concurrently leading to oppressive states that garner Soviet-style sluggishness and inefficiencies.

 Now, if you recall the Soviet system fell apart just for the reasons mentioned above  - meaning that it was a perfect time for the  Eurozone to copy their failed ideology ( so who needs a book to figure out common sense issues?  - More dumb!) 

Repeat after FFI folks, "Tear Down Those Walls Mr Gorbachev"  

http://pwa2000.blogspot.ca/2016/03/top-british-banker-dooms-eurozone.html

Arab States Face $94 Billion Debt Crunch on Oil Slump, HSBC Says

​ 

How many businesses can withstand a drop in revenues of 50% or more and expect to survive? Few,  if any! With oil prices being down by that percentage, expect many of the resource based countries to start defaulting on their debt and thereby crashing the global banking system along with the stock markets. It will cascade!

It was all a house of cards built on an exuberant credit bonanza fueled by unprecedented low loan rates that was doomed from the start. Now here comes the payback - and it won't be pretty.

All things revert to the mean - that's the first  law of common sense, just ask Soros!

http://pwa2000.blogspot.ca/2016/02/hsbc-yikes-arab-states-going-broke.html

 

www.firstfinancialinsights.blogspot.com

UK #PeakOil - UK North Sea Continues Production Slide

UK North Sea Oil Projects Collapse Amid Market Drop

By Danica Kirka ,AP
February 24, 2016, 12:11 am TWN

LONDON -- The number of new investment projects in the North Sea has collapsed amid a fall in oil prices, underscoring fears for the future of the basin and the jobs it creates.

Oil & Gas UK, an industry association, said in its annual survey Tuesday that some 1 billion pounds (US$1.4 billion) was expected for new projects, compared to the typical 8 billion pounds annually. It argued that the long-term future of the industry is at risk and that the government should reduce taxes "to minimize the loss of capacity in the downturn."

"We are truly trying to fight for our survival," said Mike Tholen, the economics director for Oil & Gas UK. 

Once one of the world's great oil regions, the North Sea's resources are being depleted. Production has dropped from a peak in 1999 — when the U.K. pumped 4.6 million barrels of oil equivalents a day — to 1.6 million barrels of oil equivalents a day last year. Oil & Gas UK's chief executive, Deirdre Michie, said the U.K. Continental Shelf is entering a phase of "super maturity."

That decline is being hastened by a collapse in oil prices, which have been falling for over a year. Brent crude, the benchmark for international oil, hit a 12-year low of US$27.10 a barrel in January, having been above US$100 a barrel in September 2014. It traded at US$34.46 on Monday.

The number of oil rigs being de-commissioned — that is, taken out of service and dismantled — is accelerating. The group said the number of fields expected to cease production has risen by a fifth to over 100 between 2015 and 2020.

The trade body said that if oil remains at around US$30 a barrel for the rest of 2016, nearly half of the U.K.'s offshore fields will likely be operating at a loss, "deterring further exploration and capital investment, and making additional cost improvement imperative."

With competition for investment cash fierce, Tholen argued that Britain needs to adapt the tax regime to make sure the industry can keep moving in the downturn. Tholen said thousands, if not tens of thousands, of jobs are at risk. Contractors and other suppliers rely on the industry, meaning that woes of the North Sea will be deeply felt across the country, not just in one region.

"A coherent approach by the industry, regulator and government will be critical to boost the industry's competitiveness and its investors' confidence," Michie said

www.firstfinancialinsights.blogspot.com