Iraq: Has the US Cut a “Deal” with al Qaeda?

It’s a shocking concept, I know.  But the data is beginning to shade exactly in that direction.

The US stock market is set to open down 100 points, or so, on the Dow this morning because things have gone to crap this week in Iraq. 

Starting off in Mosul, Sunni militants/al Qaeda, are now pressing toward Baghdad and we find many people wondering how we could be so stupid as to think that Iraq could “defend itself” when that’s obviously not the case?

You will also see the price of oil has popped up to the $107 range.  Even though that oil doesn’t come to the US, it does go to other markets, like Europe, which will be going elsewhere for supply and that is going to play havoc with geopolitics going forward.

I spoke to Oilman2, a friend, rig engineer, and designer of specialized drilling bits, to get his assessment of things:

“Oil industry facts:

1) Largest recent find of natural gas is offshore of Israel/Lebanon/Syria – the Levant Basin. Egypt could also lay valid claim to southernmost part of Levant.

2) Working O&G drilling hub for Iraq is Kirkuk, freshly annexed by the Kurds today (officially – unofficially they been getting paid to conduct business freely by many service companies)

3) Just look at the map .

[Map courtesy of used with permission]

Mosul controls oil from Iraq overland. Kirkuk sits atop the largest oilfield in Iraq. Note the proximity of Kirkuk to Iran.

Note the distances: Tblisi Georgia to Damascus Syria = 1000 miles; Tehran Iran to Kirkuk Iraq = 550 miles

For comparison: Houston to Washington DC is 1500 miles…..

Azerbaijan is right there – as is Georgia go the north, Iran to the east and Turkey to the north….

The DC Idiocracy’s al-Queda rebels working in Syria suddenly have the firepower and manpower to actually take Iraq – wonder where they got all that??

My Egyptian friends working in Kirkuk left Monday for homes in Egypt/Dubai, etc. Same for my American consulting friends. They just don’t know what’s next, but drilling operations are all but suspended due to interdicted roads and people trying to get to somewhere safe. Most of the oilfield supply outfits in Kirkuk are shut down due to the same. Rig moves are suspended.       (this from emails to firms I do design work for)

Anyway, make what you will of all this, but there is a definite “dry tinder” feeling to the entire setting of this, and I never even mentioned that the distance from Sevastopol to Kirkuk is 1350 miles – less than Houston to DC…

And we supported insurrection in Ukraine for what exact reason??  If I were Russian, I would certainly be feeling rather Bearish at Uncle Sam’s Idiocracy.


While this morning’s big story is how “Iraq scrambles to defend Baghdad” we are more worried about some of the other, lesser noticed moves.

For example, in Ukraine, there has been movement of tanks in the eastern part of the country.  Depending on who you listen to, the Russians are selling this as “leftover tanks pressed into service by pro-Russians” but the Kiev view is that they are Russian tanks that crossed the border.

One thing is clear:  “Relations shill as Ukraine suspects Russia of sending rebels tanks.”  The Kiev government says it has taken back Maripol.

Large (regional to global) wars don’t happen overnight.  But the US has been moving material and resource into Europe and with the Sunnis on the move toward Baghdad, we can begin to see how the tumblers on the lock to nuclear conflict are falling into place.

It won’t happen quickly, but one scenario to roll around goes something like this:  While it’s true that the US is losing Iraq to the al Qaeda forces, there may be something much more sinister at play:  Namely that the administration has formed an alliance with al Qaeda at a much broader level, in order to oppose Russia in Syria.

Senator John McCain may be seen as crucially involved in such a hypothecated turn of events:  He’s been a supporter of giving US arms to al Qaeda to fight president Assad’s forces from the north in Syria.

If the US somehow has in its game plan to use al Qaeda, in return for some future consideration, is it not possible then that once Sunni forces have Baghdad, they will press to the west and finish taking out president Assad’s government, which in turn would be a huge blow to both Russia, which has plans to sell Syria at least eight more nuclear power plants, plus it will contain the Iranians, who don’t want to go to war presently against Iraq…

There may be a strategic case to be made that such an alliance (US with al Qaeda) could be a tool to contain both Russian interests as well as Iran’s.  But the worry is that in order to undertake such a strategy, the US would need to believe that our “allies” that McCain seems to support as well, can be trusted.

I don’t think that’s a sound bet and anyone who believes any promises and representations is both a fool and woefully ignorant of the militant mindset.  For that side, there is no “dealing” and yes, we are just scum barely suitable to be slaves of the believers.  Lose track of that mindset and idiotic policy follows.

I would point to the one-for-five Bowe Bergdahl (home today) swap as evidence (hidden in plain sight) that the US-al Qaeda/Sunni alliance has been formed.    And one of the five Taliban released was purportedly an architect of 9/11!

You do remember Taliban are Pashtun but leaning Sunni, do you not?  And that strongly Shiite Iran is a sworn enemy of the Taliban? T’is a delicate dance step.

Using Al Qaeda as a proxy against Russia and to box in China from access to Middle East oil?  Unthinkable?  Maybe last week, but as the data comes in, we need to at least be open to the idea that this is indeed some harebrained idea from the nitwits in Washington.  

Possibly, if we get it right they might be a 50% chance things could work out.  But get it wrong, and Dale Chihuly has country-sized competition.

And that’s why you might want to call Shane over at and get stocked up well before the stuff hits the fan.

We often find ourselves torn between the definition of paranoia versus rational strategic planning. It really comes down to the question do you want to be 100% prepared for a 50% probability; or 0% prepared? 

Sometimes these prepping decisions really are that easy.  Remember who’s been working on his air-tight studio/safe room?

More after this…

Producer Prices: Flat to Yucky

Hot off the press release desk at the Bureau of Labor Statistics:

The Producer Price Index for final demand fell 0.2 percent in May, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This decline followed increases of 0.6 percent in April and 0.5 percent in March. On an unadjusted basis, the index for final demand advanced 2.0 percent for the 12 months ended in May. (See table A.)

In May, the 0.2-percent decrease in final demand prices can be traced to the indexes for final demand services and final demand goods, both of which also declined 0.2 percent. Within intermediate demand, prices for processed goods edged down 0.1 percent, the index for unprocessed goods was unchanged, and prices for services fell 0.4 percent.

This “final demand” being up 2% compared with a year ago points out the financial train wreck we’re in.  You see, if you look at the latest money supply figures (M2, in the H.6 report here) you see that the “print rate” of money is running about 6.5%.  That’s dialed back slightly from the 6.9% rate last month.  The Fed is keeping a close watch on Consumer Debt (in their consumer credit report, but it’s really about how much debt we are taking on).  They don’t want inflation back.

Gold and silver investors can still read, it seems. 

And the problem continues to grow as the Velocity of Money (think of it as the turnover ratio – how many times each year a dollar is spent) and look at this to scare the hell out of you:

As interest rates crater, it takes even more huge piles of money to pay the wealthy a living wage…so they pile up the dough and the turnover in the economy collapses.

The Baltic Dry shipping index – often a 90 day lead time indicator on economic direction – is down 33 points in this morning’s reading to 906.  That will show up in Monday’s MSM and much handwringing should ensue.

Maybe as much as losing Baghdad…

Surveillance State

US pushing local cops to stay mum on surveillance.”  Brown shirt optional.

Star Wars Injury

Suffered by Harrison Ford on the set of the upcoming flick.

Dropping By CNN?

Car crash into the lobby of the news network in Atlanta this morning.  So we take you to ABC’s coverage, lol…