Record­ed July 16, 12006

Lis­ten: MP3

Side 1  Side 2

REALAUDIO

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 1, Mis­cel­la­neous 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/)