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CHAPTER I


THE VIRUS COMES UP AND THE OIL GOES DOWN

The president of Russia is on the telephone talking to the Chinese president in early December 2019.

I have intelligence information that there is a virus starting in China, says the President of Russia. It seems to be quite a severe outbreak. Have you any idea where it came from and what it will take to stop?

The President of China No, we do not yet know the source other than a general area in a city. We do know the nature of the virus, which is a SARS type we call it COVID-19, as we cannot identify it as one of the known types. We, indeed, seem to have a problem, but I think it is under control as it is remaining local. In any case, taking measures to avoid a pandemic will be extremely costly and something that only China would bear the cost of, which would severely damage the economy short term. T e could then lose our position in many markets, or market share at least. We are hoping to avoid these losses. If we do have to take measures, we must discuss the best strategies so that we do not damage our economic position. I think Russia and China could work together closely. We may be able to get some leverage on the West and others if the COVID-19 does spread in a rapid fashion, then at least the shutdown would be general and hopefully China and Russia could open up before our competitors.

(They generally talk as agreed in international protocol, in mostly pre-prepared, large sections over a video link, allowing translation, and less delays or misunderstandings than would occur if each point were individually replied to.)

The President of Russia - I think this is an excellent idea. If there is a problem here, I can see,looking forward that the Oil price will be very much lower than we can manage our economy. I can see that any reduction in demand from China will certainly topple the Oil price, which has been unstable for many years now. This may be the time to correct the situation and get some people, their countries, and companies out of the game. We can get better leverage over a cartel that can better regulate the industry. We must also take the opportunity to reduce American Oil production, as their only aim to date is to increase production continually, which in the end reduces our market share.

To be effective you must keep me informed ahead of anyone else about the situation and your intended actions. I need to be able to predict the timing of the Oil price drop so that I can use my resources to their best advantage. The newly formed Russian Sovereign fund has the equivalent of 124 billion USD in it, and although this sounds like a lot, we are intending to use it to help compensate the loss of revenue in this Oil price drop. As you can understand, this will not last long, especially as we will have the extra costs from the virus measures as well as having to replace the Oil cash inflow. This number is not a lot if you look at how long and how low the Oil price will need to go to get the shale boys out. We normally earn about that much (124 Billion USD) per year from Oil and Gas alone.

We must tread carefully not to allow unintended consequences. In Venezuela, the immediate outlook is one of bankruptcy. They will be especially vulnerable at very long period of low Oil prices. One way out of that would be to have regime change, therefore better government, and better world co-operation. But I would like to avoid a regime change as I know this is a result which would be welcomed by America. We will have to consider how to help Venezuela as we proceed. Maybe we can get Iran to assist them, they usually get along well.

(Both parties know the position of Iran, and its Kurdistan region run by the KRG, it is a semi-autonomous region, which relies completely on funding from the central Iraq government. To date, it is in turmoil and has not been paid for six months. During this Oil price attack there could be millions of deaths there due to hunger and civil unrest.)

The Russian President continued- Maybe Turkey can assist with the problems in the Kurdistan region of Iraq, and then the Middle East, in general, the region needs our care and attention. It often serves as our buffer between us and the West, so we need to keep it. Wars by proxy have been fought there for decades now. I believe Iran is at great risk of American invasion or US backed Israeli aggression against its nuclear deterrent building. We must back them up and assist with the extreme poverty and suffering that the low Oil price will provoke there, otherwise millions will die of the effects. I believe that Syria will be additionally affected, so we must take care of Assad. Maybe direct funding will be the only way to allow him to continue paying for his heroic defence against the persistent greed-motivated western aggression. Which is destroying a people and a beautiful historic land.

There may be other opportunities as well, which we can opportunistically exploit, whilst we seize this lull in demand for Oil to attack the price without a physical war and reduce competition in the Oil markets in the future. Maybe there could be the possibility to bankrupt the US, or at least cause enough monetary loss to permanently damage their economy and allow our countries much better world freedom. We could at least end up with the power we had through Middle East co-operation to crush the Western economy through Oil. Remember the events of 1973. Whilst America is the world’s leading producer, we no longer have the power we had then, we need to get it back then we will dominate the world as America does now.

President of China replies, this is a complicated situation which requires some detailed planning. I think it will become clear in the next one or one and a half months, what action we need to take on this COVID-19. I believe the best we could do would be to allow it to get a hold as a pandemic before I shutdown and try to eliminate it from China. This will give us a timing advantage and a greatly weaker world economy to combat against.

We must consider, if we were to shut down now and ensure that no pandemic occurred, we would be severely weakened by the Oil price. Our loss in industry and the lead in many technologies such as electric cars, computers, batteries, telephones, and Wi-Fi would be severely worsened. For this reason, I must take the risk to allow some more time for the COVID-19 to permeate Europe and America before I take any action which will weaken our economy. I will try to unofficially limit visa restrictions communicated to my officials, but make this public, limiting travel to friendly countries as well as some of the poorer ones that may have trouble dealing with the outbreak.

President – I must ask you this, although I trust I know what your answer will be. Did you create the COVID-19 in a lab? Because if it was modified in anyway, then of course as we all know, the West will be able to see that. If they see that, they will consider it a chemical attack, which will almost inevitably lead to full scale physical World ar. I think neither of us wants that, so we would have to take a different course of actions were that the case to limit damage.

President – We were researching the COVID-19 in the lab to see how easy it would be to make effective antiviral drugs on vaccines for viruses that can occur. The origin of the COVID-19 was entirely natural, and we have not modified it. We do believe, but will never admit, perhaps one of the lab employees did make a mistake and infect himself or even infect himself in order that he could try the remedies. In any case, world relations towards China will never be the same again. I also believe that society will never be the same for decades because the remedy to this COVID-19 will shock the world greatly and hey will remain in great fear every winter. There will be huge money to be made on vaccines and antiviral drugs. This is an area that we were already looking into and want to aggressively pursue, which is why we have delayed giving out any sample of the COVID-19 from the sick people to foreign laboratories for analysis. Chinese laboratories have been growing in strength and capability significantly over the last ten years. We see the opportunity with ageing populations, not least our own, for significant drug requirements in the future. the antiviral drugs and vaccinations really do seem to be a huge opportunity.

resident of Russia I agree, but the timing and extent of the measures must be well thought out so they do not appear to be too late or in fact premeditated or contrived to cover up something. I would suggest that when you do commence any shutdown, probably around the end of January, you do so extremely aggressively. Shutdown China before the rest of the world has really grasped what is happening.

The shutdown should be enormous. It will trigger a similar response from other world leaders as soon as they start getting a lot of cases. For the next one or two months whilst the rest of the world is probably still unaware, they will not really be taking it aggressively. A flu bug comes every year with usually low severity, and many times rumours start that it will be deadly and pandemic, but then it just fizzles out. You must co-operate with and mislead the WHO so that they keep the West calm.

With this COVID-19, the incubation and transmission methods will not be obvious because of the symptomless carriers, and it lives much longer than normal outside of the body, even up to nine days on hard surfaces. Think about that! it will be so hard to track where infections came from and who then got it. The West will panic when they realise, they must find how to discover who is infected, and then get all the testing, tracking, equipment, and treatment centres in place it will also take time.

Even when they do put shutdowns in place (their weak leaders may well hesitate to implement a shut down and for sure will be reluctant to enforce one.) They do not have the control over their people like we do, and many will disobey so it will take much longer for them to control the COVID-19 than us. We can continue to work on understanding the COVID-19 and recovery and planning from now so that we will already know. This preparedness and early start for us will hopefully mean that we could control the outbreak as in a short possible time for ourselves and are open for business before all the other countries are opening their businesses and at a lower cost.

There is a huge opportunity here for me to deliberately lower the Oil price to a level much lower than that at which the American shale boys and most of the industry can make a profit. Hopefully this will severely curtail the rest of the worlds producers (not ones in the OPEC plus Cartel) from overproducing and make the Oil price much more stable and higher for the future as people will have fear of what can happen, what we can do, having seen this huge drop in price and the consequences.

There is a great advantage to doing this during shut down as we estimate that the demand for Oil in a world that has major shut downs in place would be less than Two Thirds of the current production this means we would need to cut over fifteen million barrels a day off the current production which with OPEC alone is virtually impossible and would lead to OPEC in any case having a lower market share and less influence in the future. Our cutting without agreements with America and other countries outside of OPEC plus would also allow continual growth of the them and still a weak Oil price.

The only way we can improve our situation is to be the key to the price as OPEC was designed to be but making a larger OPEC where other partners traditionally non co-operative are forced to co-operate. This world shutdown would offer a unique opportunity to alter the balance sheets of many of these countries making them much weaker and alter the balance of power for air transport, world transport and many other consequences that we can then take opportunistic advantage of. We must make a concerted effort including with the OPEC countries to ensure that this Oil crisis although not too short lived is extremely damaging in all areas by using the COVID-19 shutdown to maximum effect. There will be millions of additional deaths, so we need to protect areas where these are not in our longer-term best interests.

Later the same day the President of Russia is calling the Saudi King of Saudi Arabia.

(Again, the call is managed, as the call with China was earlier in the day, to allow for the best result in different languages over a video link and mostly in sections, rather than free flowing conversation.)

I am glad to be having this call, I am very keen to talk to you on what I think is a very important matter as I am sure that you are aware we are to work on the Oil price to have an agreement by March this year, I want to agree a road map for this with you as I think that the road is complex. I don’t know what you think but inventories are high again (above 5 year averages) and we are losing market share with the cuts which don’t seem to be working and will be required to be even deeper this time. A straight cuts strategy does not seem to be working in the right direction and we need to discuss how to turn this around or include more countries in the cuts somehow as you have done with us Russians in the OPEC plus deal to date. This will be exceedingly difficult to negotiate as many of the non-OPEC countries are not friends of each other and some of them desperately need the Oil revenue in the short term.

The King of Saudi Arabia - I am sure that what you have said has an awful lot of merit I am not sure what is the best way to go about this, as we did try to overproduce and put the shale Oil companies out of business in 2014 as you know. I think we agree that it did not work as we did not get the Oil price low enough for long enough, but we did suffer an awful financial loss. We never expected the shale Oil companies to rebound so quickly and taking even more Oil share, then other countries outside of OPEC not agreeing to any cuts and deliberately overproducing whilst there was a gap in the market but we have learnt.

With modern technology there seems to be an awful lot of places where hydrocarbons can be found over the next 15 to 20 years. Renewables will take a larger part and therefore make hydrocarbons less valuable. I believe the consumption of Energy will still outpace the ability to grow renewables which can be harvested especially with the use of electric cars and other infrastructure which is power hungry However in the short term I believe there’s a space for as much power as we can generate using all the current methods; I mean they’re still even using coal in some places of the world which is about the worst thing you can use for the climate.

We need to get a strategy to somehow balance supply and demand and have some form of agreement over market share, because I understand my economy and now it requires around $81.00 per barrel to balance. infrastructure growth is needed because of the youth population.

I have been trying for many years to get over the hump. I have to create an infrastructure here which costs less to run, maybe build infrastructure with solar power in our un-modernized society and to unleash to a greater better educated and motivated workforce, get better worldwide acceptance, but to date I’m nowhere near the point that I want to be.

We also do need to build a renewables infrastructure for the countries’ future Energy requirements which even in our excellent sunny climate will cost us dearly. This means that any attempt I make to modernise and secure my nation’s future will need loans I cannot guarantee to repay, in other words I’ll be bankrupt unless the Oil price is stabilised soon and for the next 10 years or so at $80 per barrel, or maybe $70 would also be ok depending on budget cuts and loan rates but not much less.

Today I have an agreement with the Americans of course that I can supply them Oil and should do so at any rate they request for as long as my country continues to be able to produce Oil. This is in order for the Saudi Royal Family to be protected by the Americans (more like a protection racket scam than an agreement) I am of course referring to the agreement with Roosevelt back in the mid-1940s. I wonder if I could somehow use that against America as well in order to depress the prices in America for longer maybe even focusing in that area rather than other countries?

President of Russia - I agree with all of your points we cannot simply continue to reduce to affect our market share and we certainly need to have a harder stop in order to reduce levels of production to the point where they could possibly be effective.

We can commence for example by noisily pulling out of the OPEC next accord agreement and immediately start to overproduce, this coincides with what I believe will be a lower demand cycle because of some events that you may be aware of occurring in China.

The strategy will cause a double blow, we continue to flood the American market with Oil in Very Large Crude Carriers (VLCCs) that will maintain the crude Oil price low for an extended time and can maintain it close to historic l I think you must target America by overproducing and send Oil to them on tankers stored off the coast until each tanker is emptied, two million barrels of Oil each will ensure that the Oil price there stays low, for longer. maybe even to a negative Oil price.

The great advantage we have now is that the American president believes that he is omnipotent in the extreme for this I will be able to utilise my current good relationship, shall we call it, with him in order to keep him off guard. Until the potential overall effects of the China shut in and the Oil situation is much more severe than he would like.

There is a danger that he will become extremely unstable as we lead up to the American elections so we must ensure that to some degree his economy recovers prior to the month of November this year and that in some way he can blame someone and gain some of his popularity back. Otherwise there is an extreme risk that he will start a war and that could be with any of our allies, I doubt very much that he will start it directly with one of us, more like an intensifying of a proxy war in Syria, or Iraq, but you never know.

King of Saudi Arabia- Wow I had not quite expected such a radical approach but do agree on the need for extreme action. I was thinking of exciting international tensions but indeed they are already high and that would be dangerous with The President of Americain this position.

Starting a war against a popular enemy would almost ensure him election victory as normally only a good US economy does. I am sure he knows that, and he will be in great danger of not having a good economy by November if we try to solve the Oil price. He could easily use Iran for example as it has been many years considered as troublesome and terrorist by the Americans. They are already in quite stressed relations and I’m sure he could easily turn that into a war which would devastate the rest of the Middle East, killing millions by it’s terrible consequences and leaving millions homeless, in any case as indeed Syria has, as well as Iraq but that didn’t stop them.

President of Russia- How well this will pay-out is exceedingly difficult to say. It’s going to be a long and difficult road and we will lose billions if not trillions in the short term but I think that there is no alternative but to go into a form of commercial war rather than any form of actual war. In actual war not only would we lose many trillions of dollars but also thousands of millions of people would die both in the actual war, the aftermath and all the effects of it.

To illustrate what I mean it is not a coincidence that the Spanish flu that we talk about so much each possible pandemic, occurred after the First World War and affected one third of the world population at that time killing twenty to fifty million people, out of one point five billion world population. If a similar thing was to occur after a war now, because the world population is 6.9 billion then it’s easy to see it around 2 1/2 billion people would be affected out of which we can expect up to 250 million dead. I think because of population density and other effects more like 4 billion would be affected and the death toll could be 400 million.

Of course, during the war and after many millions will also die of hunger and exposure.

This would make the first and Second World wars and the Spanish Flue Pandemic seem like a little tryst, the death toll would also be high as the health systems would not be in good shape either after a physical war.

Obviously even the economic effects of what we’re doing would also have tragic effects on many countries, meaning many millions of dead but we’re talking about millions of dead rather than 10s hundreds or thousands of millions of dead. I therefore think we are doing a really good thing. I hope I can count on your support by discreetly, absolutely discreetly, formulating the plans with your allies I will keep you informed and agree with you some wording of statements and actions over the coming months so that you can best prepare yourself, muster your resources and lose as little as possible.

King of Saudi Arabia- I have on many occasions enjoyed the support of Russia much better than the continued and enduring support that I get from America, as the American support always seems to come with conditions that makes it extremely beneficial for America and not extremely beneficial to me. If it were not absolutely necessary for me, I would not take the American help.

I trust you also as an ally and will do my absolute best to make this form of economic conflict finally decisive I could never do anything like the scale of this on my own.

I realise that Saudi will always require powerful allies as the entire GDP of the Middle East is only the size of the GDP of one European country alone. I therefore understand that I could not have any long-term resistance or effective resistance to the world powers even in economic terms alone never mind military. It seems to me like a very modern mode of war and in fact has parallels with the European Union ruling Europe, with a few key countries and all the rest must follow because of finance and Laws. Perhaps at some point in the future we can come to a (more equal) version of a similar thing.

Although we have always been small in economy and military strength, I remember in the days before a diversified Oil industry. Oil was the worlds soft underbelly and many great countries were vulnerable without Oil supply from the middle east. In 1973 for example when indeed OPEC had enough market share to have effective control over the Oil price and could indeed bring countries to their knees with the help of other wider Arab relationships.

Even though the Europeans and Americans ensured continued turmoil in the Middle East and North Africa, with the installation of rulers like the shah of Iran and Saddam Hussein to mention but two, who were Westernised and Militarised by them. The ensuing war with Iran and Iraq lasting 10 years and supplies for it being bought by both sides from the same suppliers, meaning among others the Western powers. This crippled 2 of the strongest Arab nations for many years and constant interference has certainly meant that the Middle East could never be unified or become a cohesive entity by ensuring that the religious and political poles that exist were not ever resolved and that conflict has been an almost constant situation in the Middle East and North Africa.

These facts not to mention the effect the (mainly American) constant support to the state of Israel has on the region and conflicts. If one looks now to the war in Syria and the constant suffering of the refugees and misplaced people. The constant bombing and ruining of most of the country’s infrastructure along with the polarised population who after years like this will probably never reunite and reweld. Many of the best and most capable will have left the country and most of the infrastructure will have gone. The education level will be much lower and any trust in government and the military will have gone too.

I do therefore think that this could be the start of a way to move away from conflicts with the dominant countries. Manipulating world economies using a more economic method of war if you like, that does much less overall damage to people. I think your vision might work but we need to work at it so if you keep in contact and we agree actions. I will do my upmost inshallah to meet the targets as a start to this brave new future. Goodbye.

President of Russia – Goodbye. I will call you again in 4 weeks’ time, I probably do not need to say this but please do not breathe a word of this to the West, we need the element of surprise. That should not be hard with Europe who view the Middle East as unimportant and far away except where refugees are concerned or of America as the President is generally too busy watching himself (in the mirror or on TV), playing at being big and tough, and looking for praise whilst declaring himself a Genius, to do any serious work. He does not look in detail at issues with cause and effect analysis of future consequence provisions. We should also use the fact that he never listens to his Advisors but just does what he thinks would be popular with his supporters with a direct view to getting re-elected. He could not abide, not getting his second term and he will do anything to get it.

I believe we should therefore give him the opportunity to do that and have also a weak president for a further four years which by the end of that time should mean we have made major progress.

The Third World War Is in Progress Now

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