The Legend of the Oogy-Mi-Booli Tribe

Before glaciers covered all the lands, there lived a tribe of rather primitive people, the Oogy-Mi-Booli. They occupied the forested region bordering the mountain steppes of what is now Lower Slobbovia. The village was on the only river in the area.

Sure, they could write and add and irrigate and such, but they were primitive in their thinking, in their predominantly short-term thinking. However, they thought themselves sophisticated because their economy was so complex. More on that later.

One evening, to everyone’s astonishment, a group of hunters had brought home with them a gargantu-nocerus, alive! Despite dispatching many of it’s kin, they had spared this one from the kill. Apparently, the gargantu-nocerus had spoken to one of them, the shaman. It wanted to make a deal. The animal was a young mother (after experiencing child-birth, gargantu-nocerususes lactate for life) who had just lost her only offspring to an even more gianter beast.

[Gargantu-nocerus milk was extremely nourishing; it was what sustained the hunters and allowed them to haul back such massive quantities of meat for the women and children of the tribe. Unfortunately, it didn’t keep. During a hunt, it was customary for the fastest runner to bring back as much milk as he could carry so that all the children in the village could have a taste before it went sour. Animals would chase him. Often-times, when the hunt was far, or the weather was hot, he would return with nothing but rancid butter.]

Upon arrival at their village (called Kshepaw-Oozju-Rendoo, where everybody lived in the same lodge-house,) the shaman called out all the villagers (which they found troubling, given the late hour – they had been tending to their pagan rituals) and instructed them on what needed to be done.

The animal in question, in a bargain for it’s life, was to be revered, made sacred, and placed in what was to remain, for all time, the most prominent spot in the village… on the roof of the communal house. It would be pampered, and cleaned, and fed, and attended to, and most of all, it would be protected from it’s other natural enemy, the enormo-saurusus (which stayed far afield of the human village on account of the smell.) The animal would be their de-facto emperor. In exchange, it would provide them with all the fresh gargantu-nocerus milk they could drink.

So the villagers got to work. A throne needed to be built, scaffolding had to be erected to reinforce the roof, and stairs needed to be constructed for the scores of volunteers attending to the behemoth which slept above their beds. Their prayers to the new emperor overhead would mostly be about structural failure, design flaws, and engineering specifications, or a desired lack, thereof, and sometimes, during the dry season, about getting more rain. Being mostly carnivorous – they ate some fish and insects, too – they didn’t need the rain for crops. They just enjoyed playing outside in it. The only thing better than rain showers, in the eyes of the people, was being ‘blessed from above’ by the animal’s showers of excrement. What an honour that would be, to be shat upon by the emperor! But first, they had to get the beast up there. Once they did, they could harvest the super-nutritious milk.

Needless to say, the task was a monumental one, but little by little, the throne was fashioned, the scaffolding and the stairs were built, and it didn’t all come crashing down onto the villagers’ heads. With this new supplement to their diet, gargantu-nocerus milk, the children grew up healthy, and strong, and with the belief that this lifestyle had to be protected, for the sake of the next generation. Stronger hunters make for bigger hunts. Bigger hunts make for more people to go on bigger and bigger hunts. Can you say ‘exponential growth curve’ or ‘doubling function’?

Every year, the gargantu-nocerodes’ genitals would be rubbed down and its musk would imbibe the rags. These rags would then be used to lure other gargantu-nocerodes during the hunt, making it less time-consuming, hence, more beasts could be felled.

One year, the emperor’s health began to fail, and another had to be captured in order to take its place. This tradition grew with time as did the need to expand the lodge-house. The hunts had never been so successful, and gargantu-nocerus meat could be smelled cooking for miles around, all day long. Boom-times !!

Well, with all the additions to the lodge-house, and with all the fires used to cook the Oogy-Mi-Booli’s meat, the forest in which they lived began looking more and more like the adjacent steppes, where the gargantu-nocerus roamed, treeless. The tribe’s economists (who were necessary now that the economy was booming) started developing insurance schemes, derivatives contracts, and other tools to mitigate the losses should anything really bad ever happen (of course, ‘really bad’ had only one result: doomsday. Nevertheless it re-assured the people that the smart ones, the bankers and businessmen, really did know what they were talking about.) It had gotten so bad, that the trek to get wood was now even longer than the trek to the hunting grounds. A generation later, there was no wood to be found anywhere, not even up-river, where the bankers lived.

The emperor’s excrement was gathered with nets (it was fibrous enough, given her vegetarian diet) and was used to stoke some of the fires (so much for manna showers – austerity became a noble goal,) but it was not enough. Eventually, people started to use wood from the lodge-house to cook their plentiful meat. When all the walls and the roof had been consumed they had reverted back to covering those surfaces with gargantu-nocerus skins. After the floorboards had been used, the scaffolding was next.

Life became like a game of ‘shortest straw’, nobody knowing when the shavings of wood they salvaged from the structural members of the scaffold would weaken it enough to initiate its collapse. The architects and the engineers (all the chief’s men) were called in by the shaman to reassure the people that “…at the present rate, the structure could withstand this whittling for decades to come, long enough, surely, to find a more permanent solution to this most pressing, but not by any means urgent situation. Everything’s fine; nothing to see here. No need to panic.” But ‘present rates’ tend not to stay ‘present’ for long; they grow.

One morning, while everyone else slept, the emperor’s head attendant peeled off some splinters of wood from the creaking structure to boil a pot of water for the emperor’s morning tea. Before anyone knew what had happened, they were all crushed by the weight of their utopic dream. All but the bankers, that is, but they all starved to death within a month.

Growth kills.

The Most IMPORTANT Video You’ll Ever See (part 1 of 8)  (9:17)

Ottoman Insulation

Turkey’s recent (and seemingly inexplicable) foray into the spotlight of middle-eastern affairs has baffled many international observers. Turkey’s provocations against Syria, Russia, and now Iraq, and their alleged support of terror groups in support of their energy industry appear to have angered Washington (and NATO,) have puzzled Kazakhstan, irked China, and have put Europe in a difficult situation. Nobody seems to know what Erdogan is up to.

Resources are the default excuse, but cultural ties to the region’s other local actors play an important part. Is Turkey creating a buffer zone between Russia and the middle-east in order to inflate its importance? How many of the ‘-stans’ are on his side?

“In concrete terms, the only achievement was the announced agreement to launch the Trans-Anatolian Natural Gas Pipeline (TANAP). «Trans-Anatolian gas pipeline – TANAP can be launched sooner than it was initially scheduled», said Mr Ahmet Davutoglu at a joint press conference with Azerbaijan’s President Ilham Aliyev.

Some 6 billion cubic meters of gas of 16 billion cubic meters will go to Turkey, while some 10 billion cubic meters of gas will go to Europe. TANAP will connect the giant Shah Deniz gas field in Azerbaijan to Europe through the South Caucasus Pipeline (SCP), TANAP and the Trans Adriatic Pipeline (TAP).”

Is Turkey using Azerbaijan to further its goal of regional dominance or is Turcic concern for its neighbours genuine? The move north and east puts several other states, especially Georgia, into harm’s way. No wonder Putin included Yunus-Bek Yevkurov in its meeting with the Saudi defense minister Mohammad bin Salman Al Saud. This aggrandization of the empire would serve as a bonding agent solidifying Turkey’s plan for regional dominance. Turkey already controls all the land-based pipelines into Europe from the middle-east and seems to have no qualms about using less legitimate groups to help further its agenda. The term ‘deep-state’ was coined in reference to Turkey, after all. (Note the black Turkish flag in the above image.)

“The rulers of re-emerged Ottoman Empire are trying to rekindle the conflict in Nagorno-Karabakh. The fighting between Armenian and Azerbaijani forces has escalated recently. The Paris Armenia-Azerbaijan summit slated for December 1 was indefinitely postponed.”

Turkey has many battle-fronts now; they look to start conflict with everybody it would seem. A war forces states to take sides, and with Turkey controlling a great deal of European energy, as well as the water from the Euphrates river, perhaps Erdogan is trying to force his ally’s hands. He thought he had NATO support, but that is as yet uncertain; Turkey did fight a war against Poland in the 17th century. He seems to have Washington’s, in any case. But will Russia and the US both fall for the ploy, or will the two super-powers turn against him? He may well take Assad’s place as the next Gadaffi. Turkey’s role is at least as important as Ukraine’s, and they just got about the same amount of money from Europe as the IMF gave the Ukraine. Will we see increased terror attacks across the Caucasus as Putin has feared since the Sochi games? Time will tell.

*Update*

Just to push the point of Caucasus-ISIS young men with no better options than to make war with each other… The trickle-down is military, minute, and manipulative. War is a job; it comes with training, decent pay, glory and valour, and it leaves more women for the surviving (or conquering) men. The nomadic mercenaries are the Highlanders of the middle-east.

Russia says rebel killed in Caucasus was trained in Syria

“Turkey, the US, Russia, Syria – all these countries, the Kurds are all involved in the struggle against ISIS in Syria and in Iraq.

Yes, yes they are – and maybe that’s part of the reason why Erdogan despises them more now than ever.”

– Tyler Durden

Saddam, Saud, and Sino-Petrol

The Kingdom of Saudi Arabia is hurting. Their move of increasing oil production with the goal of lowering prices in order to gain a larger market share (Saud denies this but they are trying to put US shale out of business – low interest rates in the US have contributed to staving off the death blow, for now) has hurt all net oil exporting economies worldwide, including Saud, itself. The secondary effect was to pressure Russia into leaving Assad to the jackals. Russia bit the bullet and did not yield. Strike two. The war in Yemen as well as the financing of Syrian rebels costs the kingdom a lot of money they just don’t have. Steeeerike three.

Oil represents about 80% of Saud’s revenue. With ISIS competing for market share by selling oil to Turkey at $20/barrel – thereby undercutting the market by half, their economy can simply not withstand this price point for much longer. So what can they do?

They could find other sources of income, they could cut output of oil, they could de-peg from the US dollar, or they could start selling oil in yuan. Remember what happened to Saddam Hussein when he tried to sell his oil in Euros. Everybody was a loser in that affair.

Today, the renminbi (yuan – for all intents and purposes) will likely be included in the IMF’s SDR basket of funds. There is an OPEC meeting this Friday.

*Update*

Saudi Aramco is rumoured to be going public, that is to say, privatized. An IPO is being considered. Of course the Saudis wouldn’t let this corporation fall into the wrong hands (5% for now,) so is this simply a variation on a stock-buyback scheme of epic proportion? This way they can raise their stock price without raising the price of oil. Since doing so would hurt the stock price, this would more or less guarantee low oil prices for a while. This would be a bad thing for all oil net exporters; Canada will be especially hard hit.

One wonders if they will allow Yuan transactions for their shares.

China Secures SDR

While the world was busy watching the aftermath of the Paris attacks, the IMF just gave its recommendation to place China’s Renminbi in the global Special Drawing Rights (SDR) basket of funds.

In an ironic twist, while the IMF has historically delayed the moment of acceptance, it caved just months after China officially devalued its currency for the first time in decades to stimulate its exports, and has unleashed an unprecedented campaign (using overt and covert means) to stabilize the Yuan as capital outflows in the past several months have soared. ”

This puts pressure on the faith in the US dollar and its world reserve currency status and has many international consequences, as well.

*Update*

Today is the day. Is the beginning of the end nigh for the US dollar?

“In 2009, amid the West’s scramble for signs of recovery, Zhou Xiaochuan, the governor of the Peoples Bank of China, called for a new financial order with a global reserve currency replacing the U.S. dollar. The Financial Times noted, “If, as expected, the imf this month approves the inclusion of China’s renminbi as a reserve currency, it will mark a small step for Mr. Zhou’s 2009 vision but a big move for the renminbi.” ”

“The US Dollar might have reached the top of its strength and could see a downward correction in the next few weeks.”

With the Fed expected to raise interest rates in December, more outflows from the US dollar to the Yuan (renminbi) and some downward pressure on the dollar can be expected in the short term. Long term, the dollar still looks strong, but the renminbi is set to catch up.

It’s official, the yuan will be part of the SDR basket starting Oct. 1, 2016 with a weighting of 10.92%. Could this be a catalyst for portfolio re-allocation? If it is, and if new buyers of yuan stem the outflow of capital from China, the yuan may soar undoing all the devaluations to date and, ironically, hurt the already faultering Chinese economy. Could China’s hard landing turn into a crash?

While You Weren’t Listening

The first and current President of Kazakhstan is Nursultan Nazarbayev. In his speech to the UN today, he made several recommendations to the council. They were monumental in scope, especially considering the limited international status of his 25 year old country. Then again, based on what Putin said about the UN (or rather, didn’t say,) perhaps there are things in the works about which we don’t yet know.

“When the Soviet Union collapsed in December 1991, Kazakhstan inherited 1,410 nuclear warheads and the Semipalatinsk nuclear-weapon test site. By April 1995, Kazakhstan had returned the warheads to Russia and, by July 2000, had destroyed the nuclear testing infrastructure at Semipalatinsk.”

“On 2 December 2009, UN Secretary General Ban Ki-moon and the Republic of Kazakhstan designated 29 August as International Day against Nuclear Tests, anniversary of the date the Semipalatinsk test site closed in 1991.”

Kazakhstan is the largest landlocked country in Asia and has the strongest economy in central Asia. They have enormous oil reserves and are a leading exporter of uranium (ironic as that is.) It is also a world leader in coal, iron, and gold production.

Their elections have been largely considered to be unfair and anything but free in the eyes of international observers.

Kazakhstan is vying for a non-permanent seat on the UN Security Council in 2017. They enjoy good diplomatic relations with both Russia and the Ukraine.

He proposed five main points:

  1. That there be one global currency to replace the favoured status of a reserve currency and the unfair advantages it confers upon the country that controls it.
  2. That the IMF be folded into the UN’s mandate removing it from US control (since they won’t have the reserve currency, anyways.)
  3. That the IAEA Low Enriched Uranium (LEU) Bank in Oskemen, Kazakhstan (agreement signed this August,) which removes the need for individual countries to enrich their own uranium by centralizing the distribution thereof, be the only source for enriched uranium. A kind of central bank for fissile material. This bank would be overseen by, and indeed, folded into the UN and included in its mandate.
  4. That nuclear weapons be banned, outright.
  5. That the UN headquarters be moved out of the US and into Asia.

Given that France and Mexico et al. have proposed that the veto right of the permanent members of the UN Security Council be severely limited, It doesn’t look like the world is going to leave a lot of meat on the bone for the US to cushion its fall from grace. Could this be the impetus for WWIII which the UN was formed to avoid?

There is a short follow-up article here.

Quagmire [kwaɡˌmī(ə)r] – An Awkward, Complex, or Hazardous Situation

American Imperialism is alive but perhaps not so well in the middle-east. There are many stories about the region and its mind-boggling complexity in the news these days, but there doesn’t seem to be any over-arching analysis of the entire situation which stretches from the Crimea to the Yellow Sea. The big picture is frightening in scope and potential.

Let’s start with some basic facts:

Upon further reflection, the rest of this article will be left to the reader’s imagination. However, the main takeaway should certainly be the fact that this quagmire in Asia has (to a large extent) been engineered to protect the US Dollar. It may not work out that way, in the end.