U.S./Emirates go nuclear... deal

What is small, smart and full of oil? No, it's not Dick Cheney's heart - it's the United Arab Emirates.

The U.A.E. is one of the most forward thinking and advanced countries in the Middle East and I would venture to say, the world. As a small confederation of mostly tiny desert emirates the UAE is looking to the future.. and that future includes international cooperation, an expanded relationship with the US, and energy stability.

I know you're probably scratching your head going "The UAE? Aren't those guys swimming in oil?" and yes, yes they are. The UAE is one of the most oil rich countries in the world, especially considering its puny size and small population. Unlike other Arab and oil-producing countries the Emirates are looking forward to the age of energy-independence and oil's inevitable decline.

If 2008 has taught the oil-producing countries of the world anything it is that fortunes can swell and then disappear very quickly. In the past year oil prices climbed from 70 dollars a barrel up to 150 at the height of summer, then down to $40 at the end of the year. That means most OPEC countries had horrible years because they expected the prices to either keep going up or hold stead at the price of $75/barrel. There were very few bright spots, one of those was the Emirates due to their plan to turn their tiny country into a travel, tourism, and foreign investment destination as well as their own economy's diversification.

There is one great weakness however in the Emirates, energy. How? Well, when you at home and you plug go to the electrical outlet where does your power come from? A coal plant? The UAE has no coal. A wind farm\solar energy? The Emirates would have to build a wind mill or solar panel every 20 ft to meet their needs. A hydroelectric dam? Good luck finding rivers in the desert. Finally, the most efficient, a nuclear power plant. Well.. the UAE is on its way.


The UAE signed a nuclear deal with the United States for nuclear fuel and access to important knowledge regarding the construction of one or more power plants. This deal is mutually beneficial, the Emirates get their precious energy, the US has something to cement their relationship with the oil-rich country, the US gets loads of cash (which they need), and the whole thing will be overseen entirely by the International Atomic Energy Agency.

I do love it when a plan comes together.

What do you think? Do you think this is a smart move by either party? Any aspects you think I'm missing? Enlighten everyone with a comment!


Links:

U.S. and UAE sign nuclear deal

Auto Bailout: Corporate We(a)l(th)fare

Seriously democrats? Seriously?! Democrats got a huge mandate to do what they will with the nation by capturing the Presidency and enlarged their margin in the House of Reps and Senate. What do they do? What will their first lame duck move be? Trying to get the Big Three Auto companies (Ford, GM, Chrysler) to either be allowed to received money from the 700 Billion dollar bailout already passed or to pass another bailout just for American Auto companies.

Here's a better idea: Let them suffer. The crisis these companies face can be divided into two main problem areas: Management and Unions.

Management

It would be hard to imagine a company losing Billions of dollars for many quarters in a row and two or three years after having consecutive negative quarters beginning to respond with changes to structure and product design. The Big Three have done just that.

What did Ford and GM focus on while gas prices where skyrocketing? They were producing and actually expanding SUV production. Now they claim that somehow it is the economic climate that is causing their losses and they claim it is foreign competition that is adding to their woes. That's like wondering why the sidewalk lemonade stand doesn't do so well in winter and then blaming the lack of lemonade sales on the fact that there is a Starbucks 10 feet away.

Of course gas prices affect Auto sales, even Toyota had some losses last quarter (in the US) and it is also obvious that competition makes it more difficult for a company to sell the same product and have the consumer buy it without thinking. The management at the Big Three always seem to have their eyes on Washington for a handout ever since they decided that American consumers wouldn't trust new Japanese cars that came flooding into the US in the 70's when gas prices were sky high and they couldn't stop making gas guzzling boat-cars. It is true that American consumers like buying products that are made in America and have brand-name allegiance but there is a limit. The companies had fair warning that quotas on foreign cars were going out the window and should have gotten the message when "foreign" vehicle plants started popping up in the South and now have 100% American labor. These big company executives just refuse to believe that their reality from 1965 has changed.

These management executives have to realize a few things. 1) American consumers are smart, they will buy the best vehicle for their needs no matter how many million dollars is spent on researching a trendy model name. 2) Making a bad product should not make you eligible for a handout. 3) Unlike banks, if you fail there are plenty of other companies that can pick up the slack, there is no Auto Tsunami in the making. 4) React to the economy, don't sit around and wait until it beats you to death. 5) Deal with the Unions (UAW), they are sucking your carcass dry.

Unions

Bargaining organizations are an important part of the advocacy of blue-collar workers. Unions also played an important part in the fight against oppressive businesses and the politicians that were in Big Business's pockets. There.. proof I do not hate unions.

Now, moving on to the UAW (United Auto Workers), the union dealing with the the Auto companies in question. The UAW is largely corrupt and has turned from an advocacy group to a group that seeks to feed itself by extortion. This union isn't working for the true interests of workers it is making moves and spreading misinformation amongst those who may not know as much as them in order to cause walkouts and strikes. The effect of this being the UAW is extremely powerful and of course.. that means they want more. The UAW keeps finding the weakest points of the Big Three and then making sure they pay dearly before their workers return to the line.

The sad part of this setup is that it is the workers that are being hurt. First they lose wages when they are not working then they go back to work feeling better but without receiving any substantial increase in meaningful work benefits or work conditions. Meanwhile the unions gain more clout and more memberships.. They ought to change their title to UAE - United for Auto Extortion.

Conclusion

Democrats, no doubt, have a debt of gratitude to pay to Unions who endorsed them and made sure their members turned out in large numbers for their candidates but it is time to stand up to corrupt unions and failing big businesses and say "Help doesn't mean handouts!"

Iraq and Her Suiters.. Cheating on the US

When you take your eye off the ball chances are you are gonna get a pitch thrown right into your face. When the cat is away the mice will play. Ah... you get the point.

The United States is beginning to lose its grip.. in the past couple months we've seen that allover the world things are happening that wouldn't happen at any other time except Election season in the US. You think Mugabe would be beating up his rivals, Georgia could be invaded and then partially-occupied, Serbians would muscle their neighbors, or Iraq would be openly cavorting with Iran if the United States was at full strength in terms of foreign relations? Probably not.. or at least not as openly as they are doing it now. I've said it before.. I'll say it again, this President Bush has undone so much of what his father did its like one Bush wiped out his father's legacy and then dragged it through the mud. Sad.


Back to the issue at hand... Iraq... and China. Now what would China want with a bunch of sand and Arabs? Perhaps they want one-humped Arabian camels to complement their two-humped ones? No.. perhaps they want a bunch of goo that is beneath the sand and is one of the major supplies needed to run a regional or global superpower? Ding! Ding! Ding! Ding! That's right!

Iraq signed a three billion dollar ($3B) oil contract with China to export crude and service one of their oil fields as a continuation of a deal made with Saddam Hussein in 1997. The Chinese national oil company will first import oil at a laughably low amount then eventually more than quadrupling that amount. China is the first country (besides the US) to sign a deal with Iraq on oil fields and exports since the Iraq War began. Scary. It seems the best way into the "loyal" Iraqi government's heart is a whole lotta green paper. The oil contract according to officials and sources on both sides is just the tip of the iceberg with China looking to drain every drop of oil out of Iraq as quickly as it can to feed its exploding demand for the stuff. China has turned up its foreign policy charm since 2005 in the Middle East, Africa, and Southeast Asia trying to get its hands on natural resources to keep the dragon at home satiated as it grows at a phenomenal rate - an average of 9.9% since 1978! China had approached the Iraqis before but the Iraqis backed off at the last moment about the oil issue because of problems with the oil revenue sharing plan and US pressure to keep all the oil contracts coming their way (or at least to Halliburton.. which is now Headquartered in Dubai). China, however, is relentless when it sees something it wants.. even if it means waiting until the perfect moment when the US have their sights all set at home instead of abroad.

If you've read this blog in the past you might accuse me of just repeatedly attacking the Iraqi government or perhaps the Chinese one.. this is not the case. The Chinese government has every right and logical reason to seek to secure resources as it vies to become stronger and perhaps a superpower... however it is the role of the United States to if not deter competition to keep up and stay far ahead for their own national interests. The Iraqi government deserve my complaints and ire because they are seemingly getting a free pass only because they were installed by a country that just happens to have 130,000 troops around and it would look really bad to throw them out after you hailed them as modern saviors to democracy and Thomas Jeffersons of the Middle East.... they are more like Benedict Arnolds, and even he had more honor and dignity.

Iraq has taken advantage of the loss of American focus to sign deals with Iran, Russia, China, and a withdrawal plan with the US. Sounds like someone is ready to move out.. and play with the big boys. Some call the US an empire and Iraq a colony but it looks like this colony is already cheating with our adversaries.. and all it has left for the US is a flirty "good bye!"

Links:
China hails three-billion-dollar oil deal with Iraq - AFP
China, Iraq reach $3 billion oil service deal - AP

Does China Regret Olympics?

It seems you cannot read a newspaper or spend more than a few minutes online without getting inundated with negative press on China and their Human Rights abuses. First it was political strife, the Tibet, then Human Rights abuse, then speech and protest censorship, then Internet censorship.. and the list goes on. The question we ought to be asking ourselves is, Does China regret pursuing the Olympics bid and then trying to use the Olympics as a coming out party?

The Spin: Press

Let's start out with the press who is hounding China on these claims of abuse. Obviously with all this coverage of the Olympics it wouldn't be complete coverage if they didn't cover China's government and their actions. That being said, China should have expected a historic retelling of their rise from 1959 to today. China also could expect, like Greece, before it that the press investigates every misstep and will sensationalize anything - especially civil strife - to create a good story. China hasn't exactly been apologetic, either. They can control their own press and information but not the foreign press and so they should have known that the boys down at FOX are always fishing for a Human Rights abuse scandal (as long as its not being perpetrated by Americans.)

Freedom: Where to go?

Where is China really in terms of Freedom? According to Freedom House, China ranks a 7 and 6 (with 10 being the worst) for Civil and Political rights, respectively. That's not so good. The good news is that for the first time since the Communist Revolution major reforms and overhauls are being done. That means a lot more economic freedom and then a lot more civil rights freedoms. The Chinese government isn't doing these things out of the kindness of their heart though.. or from outside pressures, they are changing their ways mostly due to a threat from civil unrest. So, on the "Freedoms" front, while things are not so great right now they are definitely heading in the right direction. A few to dos include: allowing opposition parties, freeing political prisoners, working on corruption in government, and effectively dealing/compromising the Tibet and Xinjiang Uyghur Autonomous Regions.

Subtlety or Bravado

The Chinese obviously were overjoyed when they received the Olympic bid but a lot of work was to be done. Back when the bid was awarded in July 2001 China was a long ways away from hosting a huge international event. The effort that went into getting everything ready early (unlike Athens) and then testing and retesting every little thing to make sure things went off without a hitch was really a herculean effort. That along with the amazing economic growth and cultural revitalization of China are note-worthy and admirable without a doubt. It is also clear that while China is straining just as hard as they can to show off their goods they are trying to be subtle in pushing their image. Subtlety however has never been a strong suite of the Chinese and what was suppose to be a glorious coming out party has become an explosion of Chinese Nationalism and an ever louder beating of the drum to the tune of China's growing military, economy, and influence.

Strong Moderate

Please share your opinions on this!

Who owns us?

Recently I read an interesting post on whohijeckedourcountry.blogspot.com which lead me to this very interesting article titled How much oil it'd take to buy the US by Scott Burns of MSN Money. [Part of this post was a response to that post and entry]


He argues that basically the United States is worth 400 Billion barrels of oil or so.. which is approximately the amount of oil that Saudi Arabia and Iran have combined. So basically both of those countries "own" us and he believes that oil has basically become an international currency that is more powerful and telling than Dollars, Euros, or overall buying power.

I, however, still think China "owns" us. First off, they along with foreign nations hold about 44% of US public debt. As of the latest data released (April 2005), China owns 502 Billion Dollars worth of debt, that is 20% of the total debt held by other nations, the 2nd most of any single country (Japan is 1st). So why is it that China is the one I've singled out? Because with so many of the countries on the loooong list of creditors holding US debt, China is the most independent - they don't import very much from the US besides boatloads of cash. Considering we both run a yearly trade deficit of over 60 Billion Dollars (and that number keeps increasing by a few billion every year) and the Chinese Central Bank keeps is aggressively buying US debt, you should be concerned. The more debt that they own the more sway they hold over US policy towards themselves and soon towards others within areas they wish to influence.

What about all those Oil states and the sway they hold with their oil money? Couldn't they organize and influence the US in a far stronger fashion? Nope, because the Gulf states and most other oil producing countries are socio-political messes already under the control/influence of the US, Russia or China.

Furthermore, the two countries picked the Kingdom of Saudi Arabia and Iran can agree on only one thing: they hate each other. So no chance of them two getting ahead.


The big blaring flaw with Mr. Burns' argument about oil currency is that it can only be used one way and only once. Unlike Gold or a precious metal which can be hoarded then sold later once oil is used.. it is gone. So the oil currency is not a zero-sum game.. but a negative-sum game. In addition to natural resources like oil the true "currency" of nations lies in things like geography, human workforce, innovation, and governments. I don't mean to detract from the absolutely enormous value and importance that sweet crude oil has on nations but to think of it as a "currency" is dangerous and economically unsound.

So until something radically changes make out all checks to "People's Republic of China".

Strong Moderate

Feel free to comment! Just stay respectful.

Links:

International Monetary Fund - US Economic Data
Brillig - Debt Clock
Burea of Economic Analysis, US Dept of Commerce - US International Transactions Account Data