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Iran, Russia working to seal $20 billion oil-for-goods deal

Public Policy

Iran and Russia have made progress toward an oil-for-goods deal that sources said could be worth up to $20 billion and enable Tehran to boost vital energy exports in defiance of Western sanctions, people familiar with the negotiations told Reuters.

In January, Reuters reported that Moscow and Tehran were discussing a barter deal that would see Moscow buy up to 500,000 barrels a day of Iranian oil in exchange for Russian equipment and goods.

The United States has said such a deal would raise “serious concerns” and be inconsistent with the nuclear talks between world powers and Iran.

A Russian source said Moscow had “prepared all documents from its side”, adding that completion of a deal was awaiting agreement on what oil price to lock in.

The source said the two sides were looking at a barter arrangement that would see Iranian oil exchanged for industrial goods including metals and food, but no military equipment was involved. The source added that the deal was expected to reach $15 to $20 billion in total and would be done in stages with an initial $6 billion to $8 billion tranche.

The Iranian and Russian governments declined to comment.

Two separate Iranian officials also said the deal was valued at $20 billion. One of the Iranian officials said it would involve exports of around 500,000 barrels a day for two to three years.

“Iran can swap around 300,000 barrels per day via the Caspian Sea and the rest from the (Middle East) Gulf, possibly Bandar Abbas port,” one of the Iranian officials said, referring to one of Iran’s top oil terminals.

“The price (under negotiation) is lower than the international oil price, but not much, and there are few options. But in general, a few dollars lower than the market price.”

Oil is currently priced around $100 a barrel.

Iran and world powers reached an interim deal in November to ease some sanctions restrictions, which went into effect in January, in exchange for a curb to Iran’s nuclear program. Work continues to reach a final settlement.

In Washington, the State Department on Wednesday said it could not confirm that any progress had been made on the possible Iran-Russia deal, but underscored U.S. worries about it.

“We have made our concerns crystal clear to both sides that if the deal were to move forward, it would raise serious concerns,” State Department spokeswoman Marie Harf said during a news briefing.

Harf said such a deal would be “inconsistent with the terms” of Iran’s agreement with world powers on its nuclear program and “could potentially trigger U.S. sanctions against the entity and individuals involved in any related transactions.”

Harf’s comments were bolstered by Treasury Undersecretary David Cohen, who is responsible for U.S. sanctions. Speaking at a Senate hearing, Cohen said he had seen many reports about an imminent Iran-Russian deal, none of which had come to fruition so far. If true, however, he said the United States would be ready to impose penalties.

“We’re not unwilling to apply sanctions against Russian entities and Russian individuals if the facts dictate,” Cohen said.

The Iran-Russia talks come against the backdrop of high tension between Moscow and the West since Russia took control of Crimea, a Ukrainian Black Sea peninsula, and formally annexed it.

Under the sanctions accord, Iran’s exports are supposed to be held at an average of 1 million barrels a day for six months to July 20, but sales have stayed above that level for five straight months, oil tanker tracking sources told Reuters last week.

“The deal would ease further pressure on Iran’s battered energy sector and at least partially restore Iran’s access to oil customers with Russian help,” said Mark Dubowitz of Foundation for Defense of Democracies, a U.S. think-tank.

“If Washington can’t stop this deal, it could serve as a signal to other countries that the United States won’t risk major diplomatic disputes at the expense of the sanctions regime,” he added.

The Iranian official said missiles would also be part of the deal, together with Russia providing assistance with building two nuclear plants in Iran. The Iranian official did not produce any documentation, and Russian government officials declined to comment.

reuters



38 Comments on "Iran, Russia working to seal $20 billion oil-for-goods deal"

  1. andya on Thu, 3rd Apr 2014 1:04 am 

    With Russia developing an alternative to SWIFT, more options are becoming available to nations who say Nyet to the petrodollar. Having a global reserve currency provides massive benefits to the controller of said currency. Once the status is lost, say bye bye to the benefits. A huge military seems to be a zero sum game in terms of cost benefit. The decline of the American Empire will be slow, but it is assured.
    FWIW Russia did not annex Crimea, they merely recognised the results of referendum, sounds reasonable to me.
    To think that if everyone had kept a rational open mind, as opposed to an adversarial mindset, things could be playing out differently now.

  2. Davy, Hermann, MO on Thu, 3rd Apr 2014 1:19 am 

    This is a complicated situation on the one hand political and the other economic. We already know the political situation. Economically this is a clear shot across the bow of the petrodollar. It is not very significant in amount but it is important as a statement. Now the PPI’S here (political propagandist ideologues) are crowing because they smell blood. They are like hungry wolves following a wounded ELK and salivating at any sign the great ‘SATIN’ I.E. USA is dying. Well economically there is little chance of the death of the dollar as the petro dollar or the global reserve currency in the near future (10 years). There are no other currencies that are in the position to step in. The Euro and the Yuan both have issues as a reserve currency. As a replacement for the petro dollar they are not much better. When you have an economy that is ¼ of the global GDP you just don’t muscle it off its seat. Like Rock says look to the money. Also you can beat down the dollar by claiming it is being monetized by the fed’s QE policies well folks look around who isn’t monetizing their currency or reacting to the global monetizing? “NOW” it is better for all involved including the US if we see more use of other currencies as reserve currencies options. The US is 62% of the total. The global economy would be far more stable with that amount down around 40% to 50%. The same is true for the petro dollar. Resilience comes with diversity with most things and currencies are no different. The coming financial correction will be ugly and it will be volatile. We need any tool we have to stabilize this economic hazard we are fast approaching.

  3. Poordogabone on Thu, 3rd Apr 2014 1:36 am 

    “The source said the two sides were looking at a barter arrangement that would see Iranian oil exchanged for industrial goods including metals and food, but no military equipment was involved.”

    “The Iranian official said missiles would also be part of the deal”

    My head is spinning.

  4. rockman on Thu, 3rd Apr 2014 2:14 am 

    Just reminder of how sh*t rolls down hill. The world didn’t agree to the sanctions…the P5+1 did. The same P5+1 that was turned into the P4+1 recently when Russia was uninvited to the recent gathering. Just guessing but I’ll assume that getting dumped from the “club” as punishment for Crimea the Russians figure they don’t have to honor P5+1 promises because they’ve been kicked out of the club house. And, as seen below, the “law” isn’t exactly that tight…exceptions have been made for other countries. The P5+1 is a group of six world powers which in 2006 joined the diplomatic efforts with Iran with regard to its nuclear program. The term refers to the P5 or five permanent members of the UN Security Council, namely United States, Russia, China, United Kingdom, and France, plus Germany.

    From last November: Reuters – The U.S. State Department extended six-month Iran sanctions waivers on Friday to China, India, South Korea and other countries in exchange for their reducing purchases of Iranian crude oil earlier this year. The waivers had been expected. Under a law governing sanctions imposed on Iran’s disputed nuclear program by the United States, the State Department is required to determine whether the Islamic Republic’s oil consumers have reduced their purchases.The decision comes even after the United States and five other global powers, known as the P5+1, agreed in Geneva this month to ease Iran’s access to about $4.2 billion in foreign currency reserves for six months in exchange for Tehran’s taking steps to curb its nuclear program.

    Also this doesn’t necessarily mean more oil in the market place. First, Russia doesn’t have to physically possess the oil. They can simply do a “paper swap” where they assign the ownership of the oil to someone already buying Russian oil under contract. Might even some a fair bit of transport cost. The oil would be shipped direct from Iran to the buyer. Russian can sell the contracted oil to someone else or just keep it in the ground to sell down the road. The Russian gov’t then gives the revenue from selling the Iranian oil to the Russian companies supplying the goods.

  5. bobinget on Thu, 3rd Apr 2014 2:46 am 

    Only the beginning folks. Before we know it, Saudi Arabia too will be begging for food in exchange for oil.
    The main thing to watch, how do Russians, Iranians price whatever is up for barter? Right, USD’s.

    Rat now we could trade a shipload of toilet paper to Venezuela in exchange for CL. In fact a few container ships filled with essentials will go a long way toward cementing cracked relations. TP Caracas and win friends. I’ll say ten million dollars worth of canned goods, frozen chicken could bring down Venezuela’s government.

  6. DC on Thu, 3rd Apr 2014 3:01 am 

    Barter deals-the uS hates em those even more than ‘resource nationalism’. With barter deals, there is no need to give NY or London their ‘cut’. Bypasses them completely. Still its funny, the Us threatening even MORE sanctions over this barter deal. Is that even possible now? I thought the uS had already imposed all the sanctions physically possibly. If they could sanction breathable air, though probably try that too. Oh wait, Exxon, Chevron, BP and the koch bros are already working on that. In any event-good on Russia and Iran. 20 billion is not a large amount, but got to start somewhere.

    Q/The United States has said such a deal would raise “serious concerns” and be inconsistent with the nuclear talks between world powers and Iran.

    The only ‘serious concern’, the snakes have is that oil is being bartered, and even worse, between its two biggest enemies.The snakes dont give 2 shyts about their ‘nuclear maguffin’. But barter or non-dollar trade? Might give other folks around the world ideas about creating new trade frameworks. Now with Russia being excluded from a lot of the uS’s bully boy clubs, Russia can now drop the pretense that it agrees with the ‘wests’, ahem, position on Iran.

  7. Boat on Thu, 3rd Apr 2014 3:02 am 

    andya The decline of the American Empire will be slow, but it is assured.

    What American empire. After WWII the goal was to increase trade and show another path for nations. The fact of having a military 2nd to none hasn’t changed. A much higher percentage of the world now participates in free trade and the number keep growing. Technology and communication gives countries an edge in competing and America still has that. Even though many countries have become very good in certain areas also.
    It is the collective cooperation of countries in the world that advances freedom and despite our warts, America leads in that area.
    But an American empire? I don’t think so. It’s not in our DNA. If you were to ask the average American they would say stay out of the problem in Ukraine but when it comes election time they will be more pissed at the new regulation of having to have a camera to back up in their car.. It took us 20 years to get used to seat belts.

  8. Boat on Thu, 3rd Apr 2014 3:04 am 

    20 billion? Thats just the price of an app nowadays.

  9. Makati1 on Thu, 3rd Apr 2014 6:18 am 

    Boat, the US has been an empire since at least WW2. A country that has 800+ military bases in most of the countries of the world is definitely an Empire. Think Rome …

    As for it staying number one, I would say the Us is NOT number one in any good area, and will never be number one again in the world. Oh, it is number one in debt, drug use, terrorism, and plundering, regime change, assassination, oil use, waste, obesity, etc., but has to hitch a ride on a Russian shuttle to go to the space station and relies on Asia to make it’s electronics.

    As for the dollar losing it’s reserve status, I would say that is in the bag. With over half of the population of the world now trading in non-dollars, it is only a matter of time. Probably before 2020.

  10. DC on Thu, 3rd Apr 2014 7:50 am 

    Clearly the idea of being cutting more of the ties to the uS petra-dolla is gaining more traction.

    http://rt.com/business/russia-payments-rubles-trade-977/?utm_source=browser&utm_medium=aplication_chrome&utm_campaign=chrome

  11. Arthur on Thu, 3rd Apr 2014 7:59 am 

    Russia is like Germany-1933. They also tried to circumvent Anglo finance and engage in barter with South-America and USSR. And it worked, much to the chagrin of Wallstreet and the City. Meanwhile the US has cancelled all aerospace cooperation with Russia short of the ISS. The US has created the conflict and will attempt to escalate wherever they can. For them it is now or never. The US rulers are going to use the resources of America to create their final World Empire of the Chosen, consequences be damned. Germany-2014 will try to de-escalate where ever they can to avoid becoming deprived of unreplaceble resources from Russia and at the same time avoid making extremely difficult geopolitical decisions, namely turning to Moscow, like they were forced to do in 1939. Russia meanwhile has a vast Eurasian pipeline network, so they can pump Iranian oil in all directions.

    Here is a very good American source about what is happening:

    http://vineyardsaker.blogspot.nl/2014/04/a-new-cold-war-has-begun-let-us-embrace.html

    As he says, war is coming and it should be embraced. It is high time for yet another 1492-Isabelle & Ferdinand moment, the big one, the planetary one. And it is time for Paris-Berlin-Moscow and resurrection of European Civilization.

  12. andya on Thu, 3rd Apr 2014 8:01 am 

    “But an American empire? I don’t think so” Well I guess you havn’t been paying attention to how the US deals with other countries. As to America advancing freedom, what does that mean, and how is America doing that? America pursues its own self interest, supports dictators, installs puppets and generally acts like the school Jock. Who put Saddam Hussien in power? Gaddhafi, Mubarak etc? Supplying guns to the rebels in Syria perpetuating the slaughter, sanctioning countries for pursuing their own self interest. Where is the freedom? What is the US doing that is leading the way in freedom? Free trade? Gimme a break, it’s only free trade if the US has something to sell or wants to buy something, otherwise fugedaboutit. Much free trade in the agriculture sector? Only if the US is selling.

    “Now the PPI’S here (political propagandist ideologues)” Doesn’t sound like you at all Davy Herman. As to replacing the reserve currency, you don’t actually need to ‘replace’ it, you can just stop using it.

    “NOW” it is better for all involved including the US if we see more use of other currencies as reserve currencies options. ” Wrong it is very, very bad for the US if there were to be a lack of market share by the US dollar.

    “Resilience comes with diversity with most things and currencies are no different.” Diversity in and of itself does not make resiliency, it’s the redundancy that you can create with diversity that is resilient.

    There are still plenty of nations that believe in the US$, so no end soon. The thing is that of those that would rather use other forms of money, a relatively high proportion are oil exporters. Do you think the US could afford to consume 25% of the worlds oil without the implicit support of all the oil exporters?

  13. Harquebus on Thu, 3rd Apr 2014 10:21 am 

    Russia is the world’s largest producer of crude oil. How is it that it still needs to import the stuff?

  14. rollin on Thu, 3rd Apr 2014 10:34 am 

    Heavily discounted oil that Russia will resell, while it pumps up it’s industry at home. Win, win for the Russians.
    The Iranians get Russian built stuff to sell to their own people and who knows where. I guess it’s a plus for them. As far as getting missiles, they already have lots of them, guess they may be upgrading.

  15. Davy, Hermann, MO on Thu, 3rd Apr 2014 10:38 am 

    DC SAID – Might give other folks around the world ideas about creating new trade frameworks. Now with Russia being excluded from a lot of the uS’s bully boy clubs, Russia can now drop the pretense that it agrees with the ‘wests’, ahem, position on Iran.

    Yeap DeeC, one banana republic trading with another. Funny bedfella’s too with Russia clearly an enemy of Islam and Iran an exporter of Shia revolution. But hey, they found a love nest for their hate and discontent in Syria with the model of a world leader Assad. All three are great friends and buddies and having a whirl of a time in Syria. We see what both countries are good at when we look to Syria. Yeap Deec, the Bully boy club is a bit useless like the clubs you see here in the US that are really dated for the times. These folks achieve little but it looks great and I am sure they have fun thinking they are special and effectual at these gatherings.

    BOAT SAID – andya The decline of the American Empire will be slow, but it is assured.

    Echo Boat, Andya yes, the America’s position in the world will decline but within the context of a declining multipolar world. There is no one to step up and push the US aside as top dog. There are no top dogs anymore the US included. These geopolitical situation will be a classic balance or power like we have seen in history. It will be a time of alliances and positions. Yet, we are in a complex interconnected global system where actions have consequences and unintended consequences. The US is a very large % of the global GDP with a diversified economy and a major food exporter not to mention with large energy reserves and largest military. It has a lot of low hanging fruit to pick on a gradual decent to a more normal level in the world. This picture is far from desperate for the US like the ideologues here consistently try to paint. Ideologues here remind me of the desperate “lobby of plenty folks” that crow the more the reality they fantasize about evaporates.

    MAKI SAID – As for it staying number one, I would say the US is NOT number one in any good area, and will never be number one again in the world. Oh, it is number one in debt, drug use, terrorism, and plundering, regime change, assassination, oil use, waste, obesity, etc., but has to hitch a ride on a Russian shuttle to go to the space station and relies on Asia to make it’s electronics.

    Maki you are speaking like a true political propagandist ideologue. One can see right through a statement that begs for a fantasy to be true. You dream is for the destruction and the end of the US as we know it. Dream on MAKI!

    ANDYA SAID – As to replacing the reserve currency, you don’t actually need to ‘replace’ it, you can just stop using it…..Wrong it is very, very bad for the US if there were to be a lack of market share by the US dollar….Do you think the US could afford to consume 25% of the world’s oil without the implicit support of all the oil exporters?

    Andya you have some thinking lacking thought! There is something called world trade that requires an excepted reserve currency you don’t just willy-nilly stop or start actions. The complexity of the global financial system is such that trade requires liquidity the dollar is that trade liquidity now. Why do you think the trade or barter deals are so small? It is because it is not economic except in small deals. There is a cost to the US for less use of the dollar but the cost is much less than the PPI’s here would like it to be. Andy, the use is an oil producer so it only uses 15% of the world crude per imports! Facts straight???

    One thing you PPI’s need to understand is the US is Germany’s 2nd biggest trading partner. Do you think that makes it irrelevant in this Russian situation? Russian is not even in the top 10 on exports and it is 7th in imports of which is energy from Russia. Russia being a exporting banana republic of natural resources and mafia.

  16. Arthur on Thu, 3rd Apr 2014 11:16 am 

    MAKI SAID – As for it staying number one, I would say the US is NOT number one in any good area, and will never be number one again in the world.

    Here is a good indicator of what is coming:

    http://www.telegraph.co.uk/education/leaguetables/10734609/OECD-league-table-English-pupils-11th-in-job-skills-ranking.html

    Now, mainland China is not in the list, but have a look at this and shiver:

    telegraph . co . uk/education/10645090/Chinas-poorest-beat-our-best-pupils.html

    Any other long term geopolitical arrangement than The North (Europe, Russia, USA) and The East (China, SE-Asia) is madness.

  17. DC on Thu, 3rd Apr 2014 11:25 am 

    Great article Arthur, thank you for the link.

    And for Davvheeee, a handy guide, a primer if you will. Perhaps you will find some wisdom therein, or maybe not.

    http://www.scribd.com/doc/52659993/Ideology-and-the-Individual-The-Use-and-Misuse-of-Labels-in-Political-Propaganda

    I found this sentence in the essay especially relevant,me being a card carrying member of the PPI club and all.

    “Morris asks: “What is it that makes a human individual one of ‘them’,to be destroyed like a verminous pest, rather than one of ‘us’, to be defended like a dearly beloved brother? What is it that puts him into an out-group and keeps us in the in-group?” (130).(hint:Be a PPI?)

    Out group indeed!

    Oh well, Im sure all of us PPI’s have been called worse by better at some point on our lives-and were still here.

  18. Davy, Hermann, MO on Thu, 3rd Apr 2014 11:45 am 

    Deec, nothing wrong with being a PPI and or your mission. There are political sites where your mission belongs probably not the best place on this site but it has a niche. I admire you for being honest that’s all. I hate when people don’t own up to it. I am a mild doomer that has no love for Wall Street, the US leadership, nor the far flung overextended US military presence. I do not hide my label. “BUT” you PPI’s need to quit trying to blow shit up my ass that says the US is in terminal decline and your “POSTER GIRLS” will be the new super powers in world domination. MAKI is the worst. I admire you DEEC and ART. You guys are well researched and have insightful reads I appreciate because I want the whole picture. DEEC, I highly admire and can relate to your environmental position. It is a pity you and others here are so bent on you new world political order. Especially the love you have for “POSTER GIRLS” who are second rate powers and economic basket cases. Russia, China, and Iran are a mess and set to deteriorate significantly. I might add along with the west. I dislike propaganda. I like balanced facts. You chastised me once for balance DEEC but balance is an important part of the scientific process which is objectivity and not subjectivity. Leave the subjectivity to the spiritual realm. We tend to look at facts here not religion.

  19. rockman on Thu, 3rd Apr 2014 11:55 am 

    DC – “Im sure all of us PPI’s have been called worse by better at some point on our lives”. Heck…imagine working in the oil patch when it went to $145/bbl. Difficult to get more “out” than that. LOL

    Saudi “oil for food” is an old story: http://oilforfood.info/?tag=saudi-arabia

    One taste: “Harrigan says that the US used the food weapon in retaliation to the formation of OPEC, which is not something that Oil for Food claims, as the height of the food weapon was in the 1970s and it was used or contemplated in retaliation to the Arab oil embargo, the Iranian hostage crisis, to rein in Nasser, to entice moderation in the Arab-Israeli conflict and push an already established OPEC to cooperate on global food issues during the World Food Conference 1974.”

  20. Davy, Hermann, MO on Thu, 3rd Apr 2014 12:23 pm 

    Rock, I’m tellen ya, Food will be a weapon someday especially with China if we see economic and strategic resource wars!!! PPI’s what do you think about that? Some of your own medicine. Damn just imagine if I convert from a Doomer to a PPI you guys will really get tiered of the poop!

  21. Arthur on Thu, 3rd Apr 2014 12:58 pm 

    Great article Arthur, thank you for the link.

    Uhuh, sure, Canada looks rather good.lol

  22. Davey on Thu, 3rd Apr 2014 1:15 pm 

    Art, ask Deec what he is going to do when all those desperate AMERICANS stream north into BC? I mean you guys are predicting the end of the US aren’t you?

  23. rockman on Thu, 3rd Apr 2014 2:22 pm 

    Davey – That’s why I coined MADOR (Mutually Assured Distribution Of Resources) instead of MADOO (Mutually Assured Distribution Of Oil). And it obviously extends beyond oil and food. A lot of different resources to keep any society growing…or at least treading water. LNG is looking to become almost as critical as oil some decades down the road. And it seems obvious to me where we’ll be going with coal eventually. In 30 or 40 years we may become Saudia America. But with respect to coal…not oil.

  24. Makati1 on Thu, 3rd Apr 2014 3:04 pm 

    The US imports-
    100-90% of:
    Arsenic, asbestos, indium, manganese, strontium, yttrium, bauxite,alumina, columbium, fluorspar, graphite, mica, quartz crystal, rare earths, rubidium, thallium, thorium, gallium, platinum, and bismuth.
    80-90% of:
    Tin, antimony, diamond, titanium, palladium, and tantalum.
    70-80% of:
    Barite, rhenium, cobalt, iodine, tungsten, chromium, and potash.
    Over 50% of:
    Magnesium metal, titanium mineral concentrates, silicons, peat, zinc, beryllium, and silver.

    How can a nation that relies on so many necessary imports manage when the SHTF?

    What happens when these have to be paid for in gold or Yuan or rubles and not dollars? THAT is when the S— will REALLY hit the fan in the West.

    BTW:
    17 of those come from … China.(yuan/gold)
    Another 9 come from … Russia.(rubles/gold)

  25. Davy, Hermann, MO on Thu, 3rd Apr 2014 3:24 pm 

    Maki, many of those minerals are in North America. Globalism has unfortunately made china and Russia cheap extraction points. The US can always start mining many of these minerals again. Sorry fooled again!

  26. Arthur on Thu, 3rd Apr 2014 3:48 pm 

    Art, ask Deec what he is going to do when all those desperate AMERICANS stream north into BC? I mean you guys are predicting the end of the US aren’t you?

    Uh not really. As I said several times before, the US will remain a rather favorable place to ‘survive’ the end of the oil age, certainly your middle America. No need to move to colder Canada. I do expect a crash of the Anglo-financial system, after which the US is going to be ‘downsized’ to say, European levels. Europeans with or without cowboy hats creating European society, that’s a no-brainer. But, $ reserve currency + empire with 800+ global bases –> exit stage left (hey, feel some comfort that we Europeans know exactly how that feels, thanks to your operations between 1941-1945, nanananana.lol).

    America First nostalgia is going to be all the rage. You are going to have a difficult decade after the crash, but also the opportunity for American manufacturing to recover, within the new confinements of the ‘peak-oil problem cluster’. Mexican majority states will go back to Mexico, restoring more or less old pre-1834 borders:

    http://en.wikipedia.org/wiki/Territorial_evolution_of_the_United_States

    Mega out: Fed, ADL, CFR, diversity, feminism, Jon Stewart, holidays to Acapulco, divorce, Porsches, ‘Mercs’ and ‘Beamers’.

    Mega in: constitution, home gardening, old fashioned marriage, horses, cycling, women with long skirts, men wearing hats, Norman Rockwell paintings, old Star Trek and Bonanza movies, to be watched on your tablet.

  27. Davy, Hermann, MO on Thu, 3rd Apr 2014 3:51 pm 

    Good recap Art. As always you have excellent research and handle on the data. I just love to test you !ol

  28. Makati1 on Thu, 3rd Apr 2014 3:54 pm 

    They may be in North America, and they may not, but minerals in the ground are not useable without huge investments, that will be profitable, and years of development, not to mention a fantastic amount of build-out energy we don’t have. Not going to happen in today’s financial world. Nor do we have decades to build out new systems to produce and refine them, not to mention that the factories to actually use them are almost all out of the country and not coming back.

    BTW: China thanks you for your gift of technology, equipment and training to make it possible for so many millions of Chinese to move up into the middle class.

  29. Davy, Hermann, MO on Thu, 3rd Apr 2014 4:05 pm 

    I disagree Maki, US and Canada have large scale production facilities, mining interests, equipment, people, and infrastructure currently that can be brought back on line in little time. If I were China I would be looking at trading some minerals for food because they are in sorry shape on the food front being in massive overshoot to carrying capacity, daily destruction of their soils and water supplies, and massive pollution. I feel sorry for the average China man being fleeced by the corrupt leadership and nuvo-rich. No wonder the nuvo-rich in China are taking every bit of money they can and coming over to Canada, US, and London and buying assets. The Chinese rich are not stupid they know where relative stability is. They know where a government can turn on a dime and confiscate everything you own (China).

  30. Arthur on Thu, 3rd Apr 2014 5:59 pm 

    You are right Davy. North-America has all the parameters that are favorable: no real enemies, protected by two oceans, a lot of territory, temperate climate, relatively low population density, competent people. Don’t worry about the US in the long term.

  31. Northwest Resident on Thu, 3rd Apr 2014 6:44 pm 

    It looks like the Chinese (at least the ones with enough money and/or connections) are planning to relocate to America. I wonder why? Could it be that they have read the tea leaves and realized that getting the flock out of China is a pretty good idea, and that America is one of the better if not the best destination to start a new life in?

    zerohedge dot com/news/2014-04-03/chinese-are-buying-large-chunks-land-across-america-and-zillow-now-enabling-it

  32. louis wu on Thu, 3rd Apr 2014 6:57 pm 

    As the mushroom clouds blossom the music plays in the background: We’le meet again, don’t know where, don’t know when, but I know some sunny day we’le meet again.

  33. Arthur on Thu, 3rd Apr 2014 8:15 pm 

    It looks like the Chinese (at least the ones with enough money and/or connections) are planning to relocate to America. I wonder why?

    Perhaps they are bringing the dollars to that location where they can not be refused as legal tender, after they have bought up every piece of gold they could lay their hands on.

  34. J-Gav on Thu, 3rd Apr 2014 10:22 pm 

    Rockman – How do you figure? In essence I agree with your premise but grade 2 or 3 coal (which is what we’re largely into) doesn’t ring very Saudi-Arabia-ish to me, particularly when the environmental devastation which that entails is taken into consideration.

  35. Makati1 on Fri, 4th Apr 2014 1:48 am 

    Davy, “They know where a government can turn on a dime and confiscate everything you own (China).”

    Guess you have not been keeping up with Obama’s executive orders. He now has the legal authority to do the same in the US, including your farm, food supplies, retirement accounts, bank accounts, etc. Better do some catch up on O’s doings

  36. rockman on Fri, 4th Apr 2014 2:04 am 

    J-Gav – True but as someone said: a one eyed man is the king in the land of he blind. The US has made big gains in coal exports in recent years. Can you name any other source of energy that the US is a net exporter of? And that’s today…how will that develop as the world continues to deplete oil/NG?

  37. Makati1 on Fri, 4th Apr 2014 10:28 am 

    Davy, I look forward to the end of the Us as it is now, not as it once was. The sooner the empire collapses the better for the world we do have to live in. I’m not a brainwashed patriot like some on here. I’m a realist and I don’t try to pretend the world is not what it is,or my home country.

  38. Boat on Fri, 4th Apr 2014 6:42 pm 

    I think a huge part of the discussion that is missed is the almost 4 mbpd of finished petroleum products exported by the US. Yes I realize we import 7.2 mbpd of oil. And yes we still import nat gas to the tune of 7%. You think that is because were lucky? Better looking? Because were so dumb we live 30 miles from our jobs just to find suburbia instead of a hotel tower? Heck a lot of our commenters expect an American demise.

    I suspect it hast more to do with our refineries are the most efficient with the least waste and much of them in the gulf coast are now refining with Nat Gas instead of oil.
    So when we say the US is not a net exporter of nat or oil exporter we still have figured out a way to import oil, refine it and resell it to the tune of 4 mbpd of finished petroleum products.

    So has our nat gas exports made a huge difference even though though we are a net importer?. I would say it is an easy yes.

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