Spitfire List Web site and blog of anti-fascist researcher and radio personality Dave Emory.

For The Record  

FTR #561 Economics 9/11, Part II

Recorded July 16, 12006

Listen: MP3

Side 1  Side 2


Fischer-Tropsch Process Schematic

Muslim Brotherhood Coat of (ahem) Arms

Introduction: Continuing discussion of the economic implications of violence in the Middle East, this program identifies the oil-price increases stemming from the bloodletting as being of paramount importance. The more violent and unstable the Middle East becomes, the more wealth pours into the coffers of the oil companies and the oil producing countries. The effect of this increase is to erode the position of those individuals and institutions in the world least able to afford the across-the-board inflation resulting from the rise in oil prices—the poorest. Will the current round of price increases result in a rightward shift in world politics, as was the case in the early 1970’s? The increase in the price of oil also accelerates the re-investment of petroleum wealth in Western corporations and the US academic infrastructure. The broadcast notes that the Bush administration’s insane wartime tax increases have done much to realize Osama bin Laden’s goal of bankrupting the United States. Concluding with an update on the development of synthetic fuel technology, the broadcast notes that the increase in the price of oil has made the use of the Fischer-Tropsch process economically viable.

Program Highlights Include: Review of the fascist economic agenda and history of the Muslim Brotherhood; a Saudi bid for a significant stake in the Bank of China; the president of Iran’s endorsement of high oil prices; Osama bin Laden’s endorsement of high oil prices; the fact that the US national debt is actually closer to 49 trillion dollars, rather than the 8.3 trillion that the Bush administration is trumpeting; Shell Oil’s development of a coal-to-liquid plant in China.

1. The broadcast begins with review of the history of the Muslim Brotherhood’s alliance with Nazi Germany and its affiliation with fascist ideology. Discussing the diaspora of the Muslim Brotherhood following its expulsion from Egypt, the program discusses the establishment of Munich as a primary base of operations. The site was chosen in order to further the cause of Nazi/Islamist alliance. Note that it was Said Ramadan who selected Munich as the eventual place for European Brotherhood relocation. (For more on Munich as a center or Islamist and Muslim Brotherhood activity, see FTR#518.)

“ ‘Why Munich, why Germany?’ I asked. Rifaat Said. ‘Because there, one finds old complicities that go back to the late 1930’s, when the Muslim Brothers collaborated with the agents of Nazi Germany. [Emphasis added.] . . By soaking up the savings of these Muslim workers, Youssef Nada, like Said Ramadan, took advantage of an extremely favorable context and used it as a springboard for the Muslim Brothers’ economic activities.’”
(Dollars for Terror: The United States and Islam; by Richard Labeviere; Copyright 2000 [SC]; Algora Publishing; ISBN 1-892941-06-6; p. 153.)

2. Highlighting the political philosophy of the “Fraternity” (author Richard Labaviere’s nickname for the Muslim Brotherhood), the program sets forth the fascist orientation of this organization.

“The history of the Fraternity makes the Brothers’ concept of the Islamic State clear: a theocratic State of fascistic inspiration. . . .Some of them were fellow travelers of the Nazis, and are still trying today to resuscitate the old alliance of Islamism and the swastika.” (Ibid.; p. 121.)

3. More about the Brotherhood’s brand of Islamic fascism:

“Muhammad Said al-Ashmawy continued: ‘All my research always brings me back to the same point: at the beginning of this process of the perversion of Islam are the Muslim Brothers, an extreme Right cult.’.. . An extreme Right cult? ‘The history of the Muslim Brothers is infused and fascinated by fascistic ideology,’ Said al-Ashmawy adds. ‘Their doctrines, their total (if not totalitarian) way of life, takes as a starting point the same obsession with a perfect city on earth, in conformity with the celestial city whose organization and distribution of powers they can discern through the lens of their fantastical reading of the Koran.’ This ‘Fascistic affiliation’ would crop up in the analyses of several of our interlocutors, in particular that of the journalist Eric Rouleau, who is a specialist in the Middle East, former French ambassador to Tunisia and Turkey.” (Ibid.; p. 124.)

4. As noted in FTR#332, FTR#340 and FTR#343, the fascists used anti-colonial sentiment in the Third World to recruit confederates against Britain and France. The Muslim Brotherhood was utilized in this fashion.  (For more on the Corporate State espoused by Mussolini, see RFA 1Miscellaneous Archive Show M42 and FTR#268.)

“Lastly, the emergence and the rise to power of Fascism, hostile to French and British colonialism, gave rise to many analogies with corporatist propaganda and the methods of mobilization of Mussolini’s gangs.” (Ibid.; p. 126.)

5. The theocratic fascism of the Brotherhood was enunciated by the organization’s founder Hassan al-Banna.

“ ‘Islam is doctrine, divine worship, the fatherland, the nation, religion, spirituality, the Koran and the sword.’” (Idem.)

6. Further highlighting the comparisons between the Brotherhood’s economic program and those of Mussolini and Hitler, the broadcast continues:

“Taking Italy’s choices under Mussolini for inspiration, the economic program set three priorities . . . The social policy foresaw a new law on labor, founded on corporations. This economic program would more directly reveal its relationship to totalitarian ideologies a few years later, with the works of Mohamed Ghazali . . . . Mohamed Ghazali recommended ‘an economic regimen similar to that which existed in Nazi Germany and fascist Italy.’ . . .The moral code is also an important component in this program, which is intended to create the ‘new Muslim man.’ . . . The notion of the equality of the sexes is inherently negated by the concept of the supremacy of male social responsibilities . . .the ‘natural’ place of the woman is in the home.” (Ibid.; p. 127.)

7. Next, the program reviews al-Qaeda strategy with regard to the world petroleum markets. Osama bin Laden has previously expressed his intent to collapse the U.S. economy. The former head of the CIA’s al-Qaeda task force believes that this strategy will involve attacks on the petroleum infrastructure in the U.S. and elsewhere—not destruction of oil wells themselves. It is interesting to note how the strategy of bin Laden and other Islamist terrorists dovetails with the goals of the oil industry—driving up prices and, as a result, maximizing profits. As will be discussed at greater length below, the global increase in oil is effecting an enormous transfer of wealth from the accounts of every individual and institution on earth—both private and public—into the coffers of the petroleum related interests, both nations and commercial enterprises. (Remember in this regard that virtually everyone and everything uses petroleum, either directly or indirectly. This transfer of wealth is an altogether profound phenomenon, and one that will prove decisive in the course of human affairs if it is not altered.)

“The US and its Arab allies must expect an increase in attacks on their oil infrastructure in the next phase of the war by al-Qaeda targeting the US economy, the former Central Intelligence Agency official who was responsible for hunting down Osama bin Laden warns today. Writing for the Jamestown Foundation, a Washington security think-tank, Michael Scheuer says Mr. Bin Laden’s intention to bankrupt the US economy by driving up world oil prices is very likely to lead to attacks inside the US by al-Qaeda, its allies or unrelated groups. Houston’s gas refineries, oil import facilities and ship canal and pipeline systems, and the trans-Alaska pipeline are potential targets.”
(“US ‘Must Beware’ Rise in al-Qaeda Oil Strikes” by Guy Dinmore; Financial Times; 5/15/2006; p. 6.)

8. “Al-Qaeda’s failed attack on Saudi Arabia’s Abdaiq facility on February 24, which led to a $2 a barrel jump in world oil prices, should also be seen as the beginning of a new and more systematic phase of targeting of the kingdom’s oil infrastructure. Two days after the attack, an al-Qaeda-affiliated cleric issued a religious justification for attacking oil-processing installations. The cleric, using the Internet, also claimed that attacks on prominent Muslim oil officials were justified. The militant organization’s media apparatus is also being used ‘to stir the troubled pot of oil-related international worries,’ Mr. Scheuer writes, noting encouragement for Nigerian insurgents in the Niger Delta and ‘mujahideen’ in the Caspian Sea region.” (Idem.)

9. Note that bin Laden’s strategy dovetails nicely with the agenda of the oil industry. Note also how the administration of George W. Bush is doing an excellent job of realizing bin Laden’s goal of collapsing the U.S. economy. It is Mr. Emory’s long-held view that the Underground Reich is manipulating both “W” and bin Laden.

“Tracing al-Qaeda’s evolving strategy, Mr. Scheuer, who left the CIA in 2004, notes that Mr. bin Laden has never threatened to cut oil supplies to the US. Instead he is driven by the belief that Muslim oil is bought too cheaply. In December 2004, Mr. bin Laden wrote that a minimum of $100 a barrel was a ‘fair price.’ In his September 1996 ‘Declaration of War against Americans,’ Mr. bin Laden argues that oil in the Islamic world is a treasure to be preserved for future generations of Muslims and thus should not be wasted through attacks. As a result, Mr. Scheuer says al-Qaeda’s plans rule out attacks on oil wells but focus on the infrastructure needed for refining and transporting oil, as well as industry personnel.” (Idem.)

10. Assessing the state of the US economy (and the extent to which George W. Bush’s administration is realizing Osama’s goal of destroying the American fiscal landscape), the program notes that the administration is not reporting the true state of American financial ruin. Although the administration is reporting the national debt as being $8.3 trillion, the actual figure should be $49 trillion!! The Bush administration’s slash and burn approach to the economy has been obscured by all the hoopla surrounding the ‘war on terror.” The “war” is in the process of realizing the goal of bin Laden.

“The federal government keeps two sets of books, but the Bush administration only wants you to see one of them. There is the highly publicized ‘President’s Budget’ issued by the Office of Management and Budget, and the almost-secret ‘Financial Report of the United States’ issued by the Department of Treasury. The budget says that the 2005 US fiscal deficit was $319bn, but the Financial Report claims it is $760bn. Which view is correct? Is the deficit a mere 2.6 per cent of gross domestic product and shrinking, as the former OMB director and now White House chief of staff Joshua Bolten claims, or an alarming 6.2 per cent of GDP and growing, as John Snow, Treasury secretary, writes in the Financial Report?”
(“A Truer Measure of America’s Ballooning Deficit” by Jim Cooper; Financial Times; 5/1/2006; p. 11.)

11. “The budget that is hand-delivered to every congressman’s and senator’s office is calculated on a cash basis, that is, the government only counts dollars as they are received from taxpayers and spent by government only counts dollars as they are received from taxpayers and spent by government agencies. This says the ‘deficit’ for 2005 was $319bn. In contrast, the financial report was issued without a press release and measures government activity on an accrual basis—when income is earned or expenses are incurred, although no cash may have yet been transferred. According to the report, the US obligated itself to spend $760bn more than it collected from taxpayers in 2005, so the ‘net operating cost’ was $760bn. . . .” (Idem.)

12. “ . . . The budget says that the national debt is $8.3 trillion; the report indicates that the present value of our obligations is more like $49 trillion. That unimaginable sum is how much money we must set aside today to pay the full Social Security and Medicare benefits that Congress has already promised. The budget says Americans’ personal share of the national debt is $28,000; the report says it is $156,000. That means that a family of five owes roughly $750,000. As David Walker, US comptroller-general, says, you owe your government the equivalent of a luxury home, only you do not get to live in it. You only get the mortgage. [Emphasis added.] . .” (Idem.)

13. To date, analysts observing the violence engulfing the Middle East have focused on one or another real [or imagined] cause—“the U.S. wants to control Iraqi oil ”; the Iraqis [or Iranians] want to bankrupt the American economy by pricing oil in euros instead of dollars”, etc. Sounding the keynote to this broadcast, Mr. Emory notes that the violence itself is driving up the price of oil and precipitating an enormous transfer of wealth from the pockets of every individual and institution [public or private] on earth! It is Mr. Emory’s opinion that it is this transfer of wealth and its results that are the goal of the Underground Reich!! Note that the “Israeli-Palestinian mess” is not “simmering down” and the Saudis are financing Hamas; the Iranians are financing Hezbollah. Of course, Iran and Saudi Arabia are two of the world’s largest oil producers, and benefit from the “mess” not “simmering down.” Note that the price of oil began its current enormous climb in 2003, the year in which the Bush administration launched the invasion of Iraq.

“Since the price of oil began its rocky but seemingly inexorable climb above $40 a barrel in 2003, there has been widespread debate about what is driving it. Crude bears have contended higher energy prices are heavily influenced by a ‘risk premium’ amid fears of terrorist or political disruption to supply. Bulls, conversely, acknowledge a premium, but say it is far less important than the soaring demand from developed and developing countries amid ever-tightening supply. So far, the bears have been punished mightily, while the bulls have been among the best-compensated investors in the world. ‘Clearly, there is some risk premium,’ said James Melcher, manager of Balestra Capital, a New York-based hedge fund that has notched up strong returns in recent years, in part thanks to energy-related bets. ‘If the Israeli-Palestinian mess simmers down, Venezuela settles down and the Iran situation progresses in a benign way, I think oil will come down to maybe $55 or $60—but it isn’t going back to the $40s.’”
(“Fear Factor and Soaring Demand Blamed for Crude Price Leap” by Kevin Morrison and Stephen Schurr; Financial Times; 7/5/2006; p. 6.)

14. “There has been no shortage of events to fuel the fear factor. Notwithstanding the failed attack on Saudi Arabia’s Abqaiq facility, Nigerian militants closed significant parts of the country’s production early this year. There are the continued attacks on Iraqi oil infrastructure and the nuclear stand-off continues between Iran and the west. All of which have kept oil traders busy, and stoked concerns about future oil supplies, which has helped push oil prices to more than $70 a barrel this week. . . .” (Idem.)

15. Among those openly hailing the increase in the price of oil is the president of Iran, the Holocaust-denying architect of some of the fears (and, perhaps, the eventual reality) of violence in the Middle East. Note that Hezbollah, currently applying the match to the Middle East, is backed by Ahmadi-Nejad’s Iran.

“Mahmoud Ahmadi-Nejad, Iran’s fundamentalist president, yesterday said rising crude oil prices were ‘very good,’ reflecting his belief that events are moving in Iran’s favor as Russia appeared to rule out sanctions against Tehran without proof its nuclear program was designed to produce weapons. Oil prices yesterday rose above $75 a barrel on concern that shipments from Iran and Nigeria will be disrupted. The president’s remarks will be read in some quarters as a warning, to those who advocate action—either economic or military—against Tehran over its nuclear ambitions, that Iran’s position as the fourth largest global oil producer makes it a difficult target.”
(“Rising Crude Oil Prices Very Good, Says Ahmadi-Nejad” by Gareth Smyth and Guy Dinmore; Financial Times; 4/22-23/2006; p. 2.)

16. “On Thursday, Mr. Ahmadi-Nejad announced Tehran was studying a dual pricing scheme to cushion poor countries against high oil prices while countries with ‘hundreds of billions of dollars should pay the real price of oil,’ Since becoming president last year, Mr. Ahmadi-Nejad has faced western condemnation for fiery verbal attacks on Israel but his support for the Palestinians AND Egalitarian slogans have courted popularity among many in the Arab and Islamic worlds. His proposal that ‘poor consumers’ should get lower oil prices plays into that same populism. . . .” (Idem.)

17. An important part of the program involved Mr. Emory’s discussion of the historic impact of increasing oil prices on the social fabric of world society. A principal element of this discussion concerned the role of the 1973 Arab oil embargo on the social democracies in Europe. The inflation resulting from that enormous oil price increase placed great strain on those social democracies, because the increase in oil prices strained every individual and institution in those countries. The resulting social strife did much to undermine belief in the social machinery in those societies. In Britain, for example, the wage/price spiral generated by the combination of enormous oil price increases and the demands of the UK’s powerful labor unions subverted support for the Labor Party, and ushered in the reactionary regime of Margaret Thatcher. Because everything and everyone uses fossil fuels, directly and/or indirectly, the across-the-board increases in oil prices occurring worldwide will result in an unforgiving manifestation of social Darwinism. Those individuals and institutions best able to afford the price increases (the wealthiest) will fare relatively well, while those least able to absorb the increased cost of oil (the poorest) will do very badly indeed. For a glimpse of the sort of social catastrophe that might result from this, see FTR#534.

18. Another result of the increase in oil prices is the reinvestment of “petro-wealth” in Western corporations. In recent years, the rising tide of anti-Semitism has re-fueled the old saw about the “Jewish control of the news media.” The reality of American media corporate ownership is fundamentally different, and reflects the growing influence of oil producing nations in the corporate landscape. AOL/Time-Warner—the world’s largest media company—is controlled by a minority consortium of Saudi princes, led by Prince Alwaleed. Alwaleed is also the second largest stockholder (behind Ruppert Murdoch) in Newscorp. Alwaleed is also heavily invested in Disney—ABC/Disney is the third largest media corporation in the world. Other examples of reinvested oil wealth on the US corporate landscape are the 7 per cent stake owned by the Kuwaiti Investment Authority in Daimler/Chrysler, the Kuwaiti Investment Authority’s major participation in Aventis, the world’s largest pharmaceutical company, and the Iranian government’s significant stake in Thyssen/Krupp, the largest heavy industrial firm in Western Europe.

19. Growing Saudi oil wealth has also permitted them to buy influence in the academic world, as well. Earlier in 2006, there was a paper published out of Harvard by two professors who lambasted the Israel lobby. What largely escaped public notice was the fact that, several months before the Walt/Mearsheimer paper was published, Prince Alwaleed gave millions of dollars to Harvard in order to promote Muslim/Christian understanding. Alwaleed made a similar endowment to Georgetown University, following the footsteps of other Saudi donors who have helped to fund Middle East studies programs at American universities. The Saudi investment in American education is interesting because Saudi Arabia has a literacy rate of roughly 50 per cent.

20. Next, the program highlights some observations by a professional associate of Mr. Emory’s. A former investigator for the SEC, this person noted the attempts by the Saudis to buy a considerable share of Bank of China. In the professional opinion of this highly qualified individual, this acquisition by the Saudi group headed by Prince Alwaleed would give the Saudis added influence on the financial landscape. New shares issued by Bank of China are aimed at raising $9.7 billion, constituting 10.5% of its capital share. The Saudi consortium is led by Prince Alwaleed’s al Azizia, and also features Ma’an bin Abdulwahid al Sanie, Muhaidib Group, Olayan Group, Olayan Saudi Investment Co., Bahamden Holding Company, and Amwal al Khalej Commercial Investment Co.
(“Saudis Seek Bank of China Stake”; Wall Street Journal; 5/26/2004; p. C4.)

21. Mr. Emory’s SEC contact viewed the Saudi bid as an attempt to further utilize its accruing oil wealth to increase its influence in other countries.

“IF Bank of China has the traditional balance sheet of 10% capital (stockholders equity and retained earnings) with the classical balance of 20% outside debt and 10% accruals and 60% deposits (Chinese government), and the stockholders equity is 90 billion (U.S.), that means they can own any number of governments around the world, their entire central banks. I see the role of Alwaleed, UBS, Royal Bank of Scotland, and ‘Bank of Tokyo’ (Mitsubishi) to be one of ‘sweet talk’ to encourage governments to borrow from Bank of China where the bank could then exercise tremendous influence over those governments. In the international community, they are likely not as interested in consumer lending (outside of China) and I don’t know what they charge in interest for domestic loans, as I’ve not studied the bank yet, but I see the geopolitical purpose as one of serving empire (of which the Saudis are part).”

22. The concluding part of the program returns to the subject of the development of the Fischer-Tropsch process to synthesize oil. For a number of years, Mr. Emory has predicted that the FT hydrogenation process would be rejuvenated in order to synthesize fuel, now that prices are rising so dramatically. (For more about this, see—among other programs—FTR#385, 506, 552.) With enormous coal reserves and a rapidly growing appetite for petroleum, China is working with Royal Dutch Shell to develop a CTL (coal-to-liquid) plant in order to begin to address its energy needs. “Royal Dutch Shell and a Chinese partner yesterday committed to a three-year study of a coal-to-liquid fuel plant in western Ningxia province, which if it went ahead would be one of China’s largest foreign investments. Lim Haw Kuang, executive chairman of Shell in China, said a plant of the size envisaged would cost $5bn-$6bn to build, although Shell said this was a preliminary estimate and should not be taken as a guide to the final cost. The Shell joint venture is part of an investment surge into CTL plants in China, driven by a combination of the country’s abundant coal, rising energy demand and record oil prices. Just under 30 such projects are in the detailed planning or feasibility stage, according to a report by Credit Suisse, with a projected output equivalent to 10 per cent of the country’s present oil demand.”
(“Shell Eyes $5bn Coal-to-Oil Fuel Plant in China” by Richard McGregor; Financial Times; 7/12/2006; p. 13.)

23. “The costly, capital-intensive CTL plants are generally considered to be financially viable when oil prices are above $35-$40 a barrel, which the industry thinks is a good bet. Coal is China’s ‘real strategic reserve,’ says the Credit Suisse report, because it could all be sourced locally, rather than imported. China has another 30 coal-to-methanol plants being built or going through the approval process. . . . The technology to turn coal into gas and oil was invented in the 1920’s in Germany, where it was used to make fuel for the armed forces in the Second World War. More recently, it was developed by South Africa during apartheid-era sanctions. [Emphasis added.]” (Idem.)

24. Reviewing information originally presented in FTR#385 (and recapped in FTR#552), the broadcast sets forth the [ostensibly fictional] forecast of the eventual development of the coal-to-liquid variant of the hydrogenation process by the petroleum establishment—after the price of oil has risen sufficiently to ensure the profit margin of the oil companies!! For a complete understanding of the argument Mr. Emory presented concerning The Formula, see the two programs cited in the preceding sentence.

“ . . . .Steiffel walked up to the big glass window, and Barney sat down in a chair facing the circular desk. ‘Don’t feel too disheartened, son,’ Steiffel said, turning to Barney. ‘We will manufacture synthetic fuel. And in great quantity. We already own most of the coal in the country. We know what’s coming. We have the formula. We have the Mangan catalyst, and we have the technology. But we must be certain of profit. By 1990, the country will be on its knees to OPEC. The government will then turn to us. And in their desperation they will insure our profit position in the manufacture of synthetic fuel.’. . . .”
(The Formula; by Steve Shagan; Copyright 1979 Cirandinha Productions, Inc.; Soft Cover edition published in 1980 by Bantam Books; 0-553-13801-4; p. 330.)

25. Lending substance and considerable credibility to Mr. Emory’s musings about the possible existence of a technology analogous to what is represented in The Formula as the “Mangan catalyst”, a recent article noted that two U.S. researchers have introduced a catalytic process to make the conversion of coal into oil (CTL technology) more efficient and economically viable. Have they innocently duplicated a previously existing technology? Or did someone deliver the catalytic process to the researchers “in a brown paper bag?”

“As the cost of oil soars and worries over the U.S. dependence on foreign petroleum escalate, coal is becoming an increasingly attractive alternative as a feedstock to make a range of fuels. Now chemists have invented a new catalytic process that could increase the yield of a clean form of diesel made from coal. The method, described in the current issue of the journal Science, uses a pair of catalysts to improve the yield of diesel fuel from Fischer-Tropschs (F- T) synthesis, a nearly century-old chemical technique for reacting carbon , monoxide and hydrogen to make hydrocarbons. The mixture of gases is produced by heating coal. Although Germany used the process during World War II to convert coal to fuel for its military vehicles, F-T synthesis has generally been too expensive to compete with oil. [Emphasis added.] . . . ”
(“Clean Diesel from Coal” by Kevin Bullis; MIT Technology Review; 4/19/06.)

26. Concluding this description is a quote from an Arab investor concerning the effect of war on the price of oil. Note that this article was published eight days after the broadcast was recorded and confirms Mr. Emory’s views on the effect of war on oil prices and the investment climate that results from the “war inflation” ” ‘Lebanon is far away,’ says Waleed Abdullah, a sales manager in Sharjah, one of the United Arab Emirates, who has been buying stocks in neighboring Dubai and Abu Dhabi. ‘Our investments here aren’t affected really by what happens there.’ For investors like Mr. Abdullah, conflict in the Middle East means one thing: higher oil prices. ‘It’s always good for us,’ he says. [Emphasis added.]. . .”
(“Mideast Stocks Hold Up Well Amid Conflict” by Karen Richardson and Yasmine El-Rashidi; Wall Street Journal; 7/24/2006; p. C1/)


One comment for “FTR #561 Economics 9/11, Part II”

  1. […] Economics 911 – Part 2 […]

    Posted by The Economics of 9/11. When greed becomes high class virtue: social darwinism on the horizon | lys-dor.com | May 31, 2011, 7:56 am

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