Rob’s comments below are in italics.Derek’s comments below are in normal font.
We’re taking another stab at current affairs today. We’ve done quite a few of these episodes recently because things are changing rapidly. So what has happened in the last week or so?
Well, of course, the big event this week has been the UN General Assembly. I don’t know whether this is an annual gathering of those people, but it was a pretty big deal. Trump gave an address to the assembly, which was both embarrassing and rather scary.
I don’t know how many people will have actually watched extracts from it. If it had been delivered anywhere, it would be pretty chilling. From the podium of the United Nations General Assembly, though, it was astounding to me that even Trump could say the things he did. Effectively, it was bullying, bravado and bragging.
For instance, on the subject of Venezuela, he essentially said that they had subjugated them and were stealing all their oil. He actually said, “To the victor go the spoils.”
But to actually assert that anywhere out loud is something else. It may be what your policy is in private. To be prepared to declare it, and apparently be proud of it, is another matter. Essentially saying we’re the toughest kids on the block and we can take whatever we want is pretty chilling. The Cuban delegation walked out almost as soon as he started, because he kicked off by describing Cuba as a failed state. To the extent that Cuba has failed, it’s because of the relentless embargoes. These have prevented it from carrying on any normal commerce with the rest of the world for what, the last fifty years or more?
That sounds about right, I guess.
Absolutely. Well, there you go. So there’s no sign of it letting up. What’s quite interesting to me is that Sergei Lavrov has said out loud that he’s concluded it’s a waste of time trying to talk to the Americans. It’s an even bigger waste of time talking to any of the Europeans. That’s a dire state for the world to be in.
Also interesting is that a whole group of people from alternative internet media were in Moscow this week. Lavrov spent three hours with them. That included Larry Johnson, Alastair Crooke and various other people from alternative information channels on the internet. He has now decided it’s worth spending that much of his time with people like that. Meanwhile, he’s essentially given up talking to authorised government representatives.
Then he went straight from there to the United Nations in New York. Iran’s President Pezeshkian gave an incredibly forthright speech. In summary, he said that Iran was the one being sanctioned. He said they weren’t the terrorists and that the Americans and the Israelis were the terrorists. Once again, the Western press has given all of this fairly light treatment. However, it’s there for the rest of the world to see, and it’s clearly authoritative. This in itself is pretty dramatic. Meanwhile, we now have three major conflicts going on.
One of them is obviously Ukraine versus Russia. Another is the attack on Iran, principally by the United States, having been egged on by Israel, which then sits on the sidelines letting them get on with it. The third involves Ansar Allah.
The Western media describes them as the Houthis, even though that is only one of several tribes involved in the movement. Once again, there’s a so-called recognised government of Yemen which is actually a Western puppet. In the same way, there’s an official government of Lebanon which is also a Western puppet.
You could indeed say the same of the entire Zelensky regime. It was installed, again with public bragging, by Victoria Nuland, the Assistant Secretary of State at the time. She acknowledged that America manipulated the situation to install a government that would do its bidding. It was before Zelensky was in position, but the legitimate president of Ukraine had been driven out in an armed coup in 2014. That is what started this entire thing.
The Saudis provoked Ansar Allah by bombing Sanaa airport when a flight of Yemeni mourners was returning from Iran. This was both reckless and obviously self-defeating, because it provoked Ansar Allah to respond. How could they have expected anything else? This has been simmering, but it had quieted down for several years.
However, the Saudis have been trying to impose their will through the puppet government in Yemen, which has almost no support from the population at large. Ansar Allah, by contrast, does have that support. Not only that, the so-called legitimate government of Yemen has not managed to prevail against them. That is despite carrying on this so-called civil war with enormous support from the West, including the United Kingdom, it has to be said.
Clearly, the Saudis haven’t got any serious military force of their own. They’re relying entirely on mercenaries. Of course, mercenaries who are just in it for the money run away as soon as they face a serious response. They have left behind, it has to be said, incredible amounts of modern military equipment, mostly American but generally Western. This has fallen into the hands of the so-called rebels, who have now taken control of a large stretch of the Red Sea coastline. That includes the Bab el Mandeb Strait.
That’s quite significant, isn’t it? There was some oil coming out through there, and that’s no longer happening.
Yes, exactly. Before the Strait of Hormuz was shut, in the very predictable response to the American attack on Iran, twenty million barrels a day of crude oil were coming out of the Gulf states. When the Strait of Hormuz was shut, that went down to maybe seven million, although some estimates put it closer to four million.
That was being shipped across Saudi Arabia by pipeline to the port of Yanbu and out through the Red Sea. Of course, now that the Bab el Mandeb Strait has been closed, no oil is coming out of there.
It certainly went down to zero when three pumping stations on the pipeline were hit, plus four or five other locations along it. They seem to have managed to get some through since then. Some estimates put it at about 1.6 million barrels a day.
However, that can’t get out into the Indian Ocean through the bottom of the Red Sea. It’s having to be loaded onto smaller tankers that can get through the Suez Canal. For that oil to reach Asia, where the bulk of Saudi exports were going, it now has to go up through the Suez Canal. From there, it goes across the Mediterranean and around the Horn of Africa into the Indian Ocean. As a result, virtually all East Asian nations are now being hit very hard by petrol and diesel shortages. Three factors have prevented the rest of the world from being as hard hit so far by these shipping restrictions.
One is that China has cut its own imports back enormously, from twelve million barrels a day to seven. It was relying on its own reserves to a degree. That is now coming to an end, because China is gradually increasing its oil imports again. This is taking a significant portion of what is managing to get out.
Another factor has been the drawing down of strategic reserves. Current estimates suggest US strategic reserves have fallen to 285 million barrels. Apparently, 250 million is about as low as they can go. Below that, the salt caverns they’re stored in could collapse. So that buffer is now coming to an end.
Once again, projections suggest this is bound to cause a global recession. It might even be a global depression. Some people are now describing it as an economic dislocation. That would mean not just that the numbers expressed in economic transactions are shrinking. It would mean that real economic activity around the world would be brought to a standstill in places. We’re all going to have to adjust to it. There doesn’t seem to be much recognition that this is coming. What do you say, Rob?
Well, as we’ve discussed on the show before, any work requires energy. That’s why we’ve dedicated episodes to energy, its importance and its role in any finance system. I remember joking to someone during the COVID lockdowns that it would be energy lockdowns next. Well, watch that space.
Right. The Iranians are under no illusion that the United States has finished its military onslaught on them. Apparently, it has moved a number of refuelling planes to what’s left of its air base in Qatar.
Iran has said quite clearly that it’s not going to wait to respond to future attacks. At the first sign of any aggressive activity towards it, it will go on the offensive. It won’t respond one for one, but at a ratio of ten to one, or maybe twenty to one. So I would expect those refuelling planes to be wiped out in short order if there’s any sign of aggressive activity, which is quite likely. Meanwhile, consider even the very narrow, self-interested view of Trump wanting his party to succeed in the midterm elections in November. We’re seeing every sign that the American population is getting more and more agitated about rising petrol and diesel prices. Everything else is rising in price too, because of higher transport costs. There seems to be no way to alleviate this before the beginning of November. Even hardline Republican voters may be having second thoughts about supporting their party in the traditional way if they’re being hit severely in the pocket.
Similarly, a lot of Western nations have become far too complacent about how long they can expect Russia to go without responding to the provocation. We’ve had the Russian elections, which went off entirely successfully despite severe attempts to disrupt them with record numbers of drones. Over 1,600 drones were aimed at Moscow. The Western media made a great deal of the handful that got through, particularly those that struck a couple of oil refineries around Moscow. Of course, these caused enormous fires. It’s not very difficult to cause a fire in an oil refinery if you drop anything larger than a hand grenade into one.
With 1,600 drones launched towards Moscow, plus others over various parts of Russia, they caused fires at perhaps two oil refineries. They also hit a warehouse or two and an apartment building, causing two deaths and six injuries. All the rest were intercepted by Russian air defences, so it was really a non-event.
People I’ve seen reporting from Russia said they hadn’t noticed anything at all from that attack. In any case, trying to disrupt an election is really an admission of defeat. I don’t know whether you’ve got any theories. The most plausible theory I’ve heard about the thinking behind it was that if they managed to disrupt the Russian election by firing a lot of drones and missiles, it would support Zelensky’s claim that he can’t possibly hold an election in Ukraine during a war. Ukraine’s election is well overdue. If Russia can hold an election while a war is going on, that undermines his argument. Any thoughts?
It’s a huge irony, given the debunked allegations of Russian interference in previous US elections. Well, the shoe’s on the other foot, maybe.
Yes, quite. Anyway, Putin’s party got the expected fifty per cent or so. It might even have slightly increased from last time. I’m not sure, but it’s around the same. The breakdown among the different parties is very much as expected, given their level of support in the general population. So it counts as a success.
We will have to see whether Russia takes any action against Poland, Romania, Germany, England and France. All of them are manufacturing drones and missiles which are being sent to Ukraine to attack Russia. Now that Russia is hitting the western parts of Ukraine, there’s a good chance it will completely disrupt the import of missiles and components. That would end, or at least hamper, Ukraine’s ability to carry out these strikes.
It’s one of those things where it looks like Russia will win this war. It’s been fairly obvious for a long time. It’s been going on for well over three years, and it could have been put to bed straight away. It was extended by the powers that ought not to be. There were secret meetings, flights over and messages to Zelensky not to negotiate. It’s all very sad, and the human cost is tragic.
It is. It’s truly tragic, the number of human lives that have been lost and blighted by all these conflicts.
The only positive thing is that, in these days of cheap, effective defensive and deterrent weaponry, we could reach the point where the futility of war is undeniable. It only makes sense to attack another country or grouping if you think you stand a chance of an advantageous result. It increasingly looks like that is implausible.
Yeah, we’ve seen that in Iran as well, haven’t we? Defensive missiles are much more effective than offensive ones, and they’re faster and cheaper to produce. Not that it’s stopped the Western Empire from trying.
Right. Of course, the Western Empire is using up its munitions faster than it can manufacture them, particularly its anti-ballistic missiles. That will bring the current circumstances to an end. Anyway, it’s going to be a very rough ride between now and when we get some stability in the world.
It will be a particularly rough ride between now and the American elections in November. Of course, Netanyahu is up for election too. Is it later this month? It’s almost on us, isn’t it?
He needs to go to jail, doesn’t he?
Yes. Mind you, we’re not seeing any other leaders emerging in Israel who are likely to pursue more humane objectives. So there’s not much scope for comfort or enthusiasm there.
I’ll just end with the usual message: keep standing in the light. Don’t swallow too much of the black pill. There’s a better future we can co-create.
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