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26 of 27 people found the following review helpful:
5.0 out of 5 stars
THE OIL CARD, September 30, 2008
This review is from: The Oil Card: Global Economic Warfare in the 21st Century (Paperback)
The Oil Card: Global Economic Warfare in the 21st Century
The author has done an excellent job of researching an incredibly complex subject and committing it to paper...He shows a real depth of knowledge and perception of not only the mechanics of the energy markets, but also the history and politics behind them.
He daylights the government's strategy against Russia starting during the Reagan administration ...He documents and proves beyond doubt the point that the US government and its allies artificially kept oil prices low for years to starve the Soviets of income, an important tactic that was essential to winning the Cold War. The contrarian thesis of this book is that the government is now attempting to do the same to China by weakening China's economy by keeping energy (and other commodity) prices high. Showing the background and illuminating the methods employed in the futures/derivatives markets and by controlling the physical oil market supply itself, the author makes a compelling argument that is entirely believable. He very accurately and completely portrays the genesis and the implementation of the energy price manipulation activities in the futures/OTC markets that many of us firmly believe is exactly what has occurred. For years many of my colleagues and former major players in the energy market have critically discussed the Wall Streeters and hedge funds involvement and tactics of bringing non-oil players into the energy markets. The net result is these players are driving market prices and ignoring traditional market fundamentals, artificially driving oil prices upward based upon self generated bogus risk factors and alleged technical analysis.
This is definitely not a book for amatuers however...Because of the detailed information provided, it takes considerable energy market knowledge and experience to understand what he is saying, not an easy read, more like a text book and a great primer for market players. Certainly many will find the chapter on China itself interesting and informative. However if you want to read a fascinating story of how and why we got to $146/bbl crude oil, this is the book for you.
Richard Perkins
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7 of 8 people found the following review helpful:
2.0 out of 5 stars
Very interesting, indeed; true? Another matter, February 18, 2010
This review is from: The Oil Card: Global Economic Warfare in the 21st Century (Paperback)
Another way to phrase it is, this book's ideas might look great from a distance, but look up close and it's a different story.
Why? The dots Norman uses to connect his story? They can be connected in other ways. And, he ignores or tries to explain away dots that aren't convenient to his position.
First, with more than half the world's proven reserves in the hands of foreign national countries, it's not so easy for the USofA to manipulate oil markets as he claims.
Second, the claim that the invasion of Iraq was about not just oil, but China's attempts to get its claws on Iraqi oil after the likely lifting of U.N. sanctions? Just one problem with that. The French and Russians both had contracts for far more oil exploration in Iraq in 2002 than did China. And, according to Norman's quasi-conspiratorial theme, both of those countries were "on our side" in trying to manipulate oil prices against China.
Third, Norman's casual, even cavalier dismissal of Peak Oil is made without much in the way of evidence to back up such dismissal.
Fourth, the one big piece of empirically examinable support he offers is ... abiotic oil. That's a **definite** minority belief. But, given his quasi-conspiratorial angle, not a surprising belief for him to hold.
Fifth, why is the market, especially for light sweet crude, so "inflexible," in his words, unless we ARE getting closer to Peak Oil?
Finally, he minimizes the role of speculators even while covering in detail how lax Commodity Futures Trading Commission oversight, combined with general economic bubble conditions, have given them such control.
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2.0 out of 5 stars
Yet another conspiracy book that history soon demolishes, August 25, 2010
This review is from: The Oil Card: Global Economic Warfare in the 21st Century (Paperback)
This book was recommended to me, but I found the theme all too conspiratorial for my liking and factually wrong in many instances (or at very least, facts taken selectively to shore up a shaky theory).
As others have noted, the idea that the US and its allies used low oil prices to drive the Soviets into oblivion is convenient theory, but doesn't pass the smell or facts test. You'd have to "forget" the OPEC embargoes in the '70s (when the Cold War was in full force) and how oil prices rose ~10 fold in the decade - just how was that helping drive the Soviets into oblivion? Methinks the Soviets collapsed on their own accord - they rotted from within.
A few facts. Oil averaged $3.39 bbl in 1970. When the Soviet Union collapsed in ~1990, it averaged $23 bbl, but that was down from $37.50 bbl it averaged in 1980. So yes, oil did have some wild gyrations, but in the ~20 years before the USSR collapsed, the Soviets enjoyed vastly higher earnings. At the same time, Soviet oil production was rising. As a result, they enjoyed the dual benefits of strongly rising prices AND production. Yet the author concludes that "low prices" were the cause of the Soviet implosion? Methinks history/facts clearly show otherwise.
While the author points to Reagan and steadily falling oil prices during his 2 terms (from a inflation wracked/OPEC embargo/Jimmy Carter high in 1980 of $37.50 bbl), he blithely ascribes the decline in oil prices to a conspiracy of the US and its allies. I find that idea preposterous.
The author ignores the role that inflation had on USD fx rates and how that would have driven prices higher (and lower) as inflation rose/declined, absent any other reasons.
However, there is a more obvious/glaring reason why prices fell in the '80s - vast over capacity within OPEC and lack of production discipline. This intellectual "oversight" effectively crushes the author's conspiracy theories.
How did prices fall from $37.50 to $23 in the '80s? It was simple - supply and demand. OPEC failed to heed basic economics (should have got a few copies of Adam Smith's Rise of Nations) - they failed to realize that if oil spiked from $3.39 to $37.50 bbl in just 10 years that there would be huge shifts in usage/efficiencies by the consumers as a result. OPEC simply got greedy - they saw the huge rise in earnings due to rising prices. As a result, they all added capacity to drive revenues even higher - or so they (wrongly) hoped. OPEC spent hundreds of billions building new capacity. But when the bills and interest payments came due, coupled with less than anticipated demand (exacerbated by a deep recession in the early '80s and concurrent 20% inflation and rising energy efficiencies in the West), OPEC was forced to sell ever-more oil into a buyers market. There was no conspiracy to drive oil prices lower to gain some sort of economic advantage over the Soviets - it was just simple supply and demand at work.
Prices only rebounded after the Saudis got serious about enforcing OPEC production disciple. The Saudis did so by opening up their taps and drove prices down to $10 bbl. That caused so much economic pain in OPEC that they (finally) took production quotas seriously, balancing an over supplied market. As a result of OPEC's new-found production discipline, coupled with the unexpected demand from BRICs (and consequential reduction of excess capacity), we saw oil rise 10 fold this decade...
For all the conspiracy theories this author offers us, the simplest explanations (i.e, supply and demand) seem much more rational explanations for oil prices. But hey, if you tend to believe conspiracy theories, facts rarely get in the way...
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