margetts why not. find out what's really happening to the global economy in the report on r t. seven thirty pm in moscow these are your key headlines anti-government protesters in libya build up forces for a final assault on accountable one of the parts of the country still held by struggling leader colonel moammar gadhafi. other nations scramble to evacuate their citizens from troubled libya but while most ex-pats are eager to get out some are reluctant to leave behind the lives of the living and on a rest in the oil rich arab nations pushes fuel prices up with predictions the u.s. might intervene to stop its own economy getting into trouble. and britain's

prepared to tell all the latest national census but there is deep concern in the u.s. from collecting the information if you dish out the data to american intelligence tylenol. in a bag now to unrest in the middle east and north africa coming out paralleling his gas discussed whether the instability in the region will trigger even higher oil prices and cause another global economic slowdown slowdown cross-talk coming up next. can. start. flowing well and across our computer lavelle the price of oil the curse of oil will

be ongoing on rest in the arab world petroleum markets are more than reacting is the global economy on the edge of another deep recession and are a high oil price is here to stay is the price of oil time to arab revolutions and aspirations. can. start. to discuss the impact of all of this on oil prices i'm joined by michael klare and in springfield he is director of five colleges program in peace and world security studies and author of rising powers shrinking planet the new geopolitics of energy in new york we go to andrew sheaf he is director of communications and marketing at euro pacific capital and in frankfurt we cross to william engdahl he is an economic researcher and the author of a century of war anglo-american oil politics and the new world order and another member of our cross talk team yell in the hunger for a gentleman this is cross talk and you have different opinions i want my viewers to

see them william let's go to you first let's talk about the possibility of what's people are calling the return to the great recession so you do have a magic number what the price of oil would be for the entire economy to take another major dip name your price well i think we have to differentiate here the. the price of oil because of the the u.s. economy i think will have relatively little. effect on recovery because there is no recovery in the us of how it's going into a deep depression and it's deepening by the hour by the month by the by the year in europe it can have an impact in so far as it has an impact on growth in china because the local knowledge of the marvelous german recovery over the last eighteen months has been exports of machine goods and industrial products to china primarily so that could have an effect i don't think it would have an effect unless there's a sustained prize at least above one hundred fifty or thereabouts and we're not

that we're not there yet but by a long shot i think the hedge funds and the big players like goldman sachs and morgan stanley j.p. morgan chase are having a field day with what they see is a perfect storm a beautiful excuse to manipulate the i.c. futures in london in fact this thing up for all it's worth as long as it lasts ok so the typical people are going to the bank michael if i can go to you do you have a magic number do you think where we really do real the global economy you know i think that we have to see the multiple ripple effects of what's going on it's not just the price of oil it's also the price of food food is now higher than it's been ever according to the food and agriculture organization as the price of oil rises it pushes up the price of food in this i believe it's going to generate more protests and evils around the world this will create more chaos and more

disturbances and this could have further effects on the price of oil so the crisis that we see today in the middle east as far as i'm concerned is nowhere near that conclusion i think we'll see more ripple effects and the economic consequences of that are yet to be seen and if we know if i'm going to you right now what about you i mean that's a very good point because we see we see a lot of these riots that brought about these revolts in maybe revolutions we have to see how it's played out because of food prices and we have the added element here that some of these countries like libya are major oil producers. right well it's ironic that you know the trigger of these rule of revolutions were were food prices were the cause the rise of inflation these markets no i'm not saying that was the only cause of these rises or long simmering. regimes that have never been popular with it with with their people so the rise in inflation was really the spark not the cause but those prices were rising in the first place because of the

federal reserve policy i mean it's the united states that's primarily flooding the world with cheap money. that in order to bail us out of our own recession i agree with the first guest that we're not really seeing a real recovery in the united states but we are seeing a recovery based on the metrics that the federal reserve uses they see low inflation because they don't really count food and energy and they see a lot of spending which they consider economic growth now these higher oil prices and i do a greed that oil prices a say sustainable now north of one hundred twenty dollars a barrel that'll take a sizeable chunk out of u.s. g.d.p. growth that will slow the economy down but it's not going to raise inflation as the fed sees if they don't count energy as inflation so that will cause them to reliquefy the markets even more to try to keep us out of a recession and that will again ignite food inflation around the world and add more fuel to this fire william i didn't think you and andrew are going to agree so much do you want to elaborate because you've talked a lot about this in the past on crosstalk. well first of all the link that

michael mentioned between food and energy since two thousand and seven we've had a and insidious link through the subsidization by the bush administration and now the obama administration the european union of this madness called biofuels because that takes grain acreage out of production for corn forty percent of the american corn crop is now burned as a fuel alternative more c o two and more toxic if you want to measure c o two then even normal gasoline but the it has a beautiful effect in terms of the the grain cartel companies mong the a.t.m. and cargo and so forth to boost the grain prices wall street is having a ball with this so and that the twin effects of these two the synergies between the two are really a double circle that is highly dangerous i think that's something we have to address if countries in the o.e.c.d.

really want to do something about this they should end the biofuels subsidy madness they should reduce taxes on gasoline it's sixty seven percent of the tank of gasoline in germany is is state federal taxes so. you know there is much leeway here to move around but. ok and you want to. head the yet a bio fuel subsidy is very destructive it's not just for the big big conglomerates but also the. regular corn farmers the united states get it we have a huge lobby they benefit from it but i think the more important subsidy is not so much the biofuels but the subsidy of the u.s. dollar i mean again the fact that there's so many countries around the world that have to maintain their dollar peg in order to maintain their role in the global monetary system that allows this place and that we're creating here the united states to take root around the world and by by ending that dollar subsidy by

a loud american america to create its own inflation had that inflation be to remain at home that will lessen the burden that we're seeing in a lot of these places and that what i mean is taking this hour where all the reserve currency if i understand you correctly you're saying that we're all are no longer be made to reserve currency that then see the american hegemony in the world and the ok i think i'd like to go down that path a little bit later here michael fine go to you you know i started the program with geopolitics in our other two guys have gone to finance very quickly and in there that's an element of it but it is let's continue with the geopolitics of it all i mean when we see the spread of protests in the arab middle east we have to think of other cut the other producers that have been relatively quiet and very autocratic when we look at some of the places like saudi arabia now we see instability there and we have on edge as i was sitting down to do this program i mean iraq is on fire

now with protest as well i mean not that it's a major exporter right now but i mean what we're looking at the entire exporting region now that then we get into a really different ballpark here because different types of regimes could come into power not necessarily friendly to the united states could even be hostile to the united states now we're changing the oil. dynamic in the world in a very big way. you're right to raise this question that's why they developments in teeny bahrain are so they've been shoved to the news the past few days because of developments in libya but what's happening in bahrain is very significant even though the population there is less than one million people it is significant because it is a clash between a shiite majority and a sunni men minority and a monarchy as well and the if if that conflict plays out and

spreads to saudi arabia then we're in a very different ballpark now in saudi arabia of course you have a sunni majority and the shiites are only a minority but they are a majority in the oil producing region in the eastern province adjacent subpar rain so if they rise up as they have in the pay they could cripple oil production in saudi arabia and that would have a catastrophic effect on oil production around the world that would send prices way above one hundred fifty dollars a barrel now i'm not sure that's going to happen but certainly the saudi leadership is concerned about it offering ten billion dollars in new payments to young saudis this is a sign in my mind that they are very worried and william if i can go to you i mean the reason why i bring this up is that less than two months ago nobody expected any of these things happening in the greater middle east except for really insightful people like robert fisk and other writers on the middle east if c.n.n.

and fox and everybody all thought everything was hunky dory you know and all our great dictator friends who are still in power for stability reasons but i mean i bring up the saudi card because the unexpected is happened and who knows what the future consequences of what we're seeing happening right now will be. well let's go back ten years to when condi rice and the bush administration introduce the greater middle east in the g. eight in two thousand and four well in seven years and. this is part of a long planned scenario the pentagon is involved in at the state department is involved in it i think the reason that we're seeing these these riots the i.m.f. cause the food crisis in tunisia just at the time that the hedge funds and wall street were pushing prices up using the biodiesel and the harvest failures in russia and such things but the there's a geo political trigger to this that is coming out of washington they're trying is there one person in washington turned it creative destruction in the middle east to upset the chess board and make sure that in fact what has been happening since two

thousand and one is many of these arab countries are fed up with washington's militarization of the middle east they are fed up with the mess in iraq they're fed up with the heavy handedness that's coming out of washington and they're looking to china they're looking to russia they're looking to the european union for an alternative to the dollar and that i think is why we're seeing all this right now and yes if saudi arabia blows it's going to be ok we're going to tell you i want to go to the great after a short break we'll continue our discussion on oil and global economic state with our chief.

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with max cause or no holds barred look at the global financial headlines tune into all kinds of reports on r.g.p. . the kitchen sisters. welcome back across town i'm peter lavelle remind you we're discussing the prospects for sustained global economic recovery. to kick. start. but first let's see what russians think about their country's economy. own waves are made as protestants were ongoing outrage happening in the oil rich middle east region prices probably gold have risen dramatically many now say the under it has directed project on oil prices and global economic recovery

the russian public opinion research center asked citizens about their prospects for russia's economic situation forty four percent believe it will experience positive trends during the next twelve months however another twenty eight percent do not see this in such a positive light how will these attitudes change in local for the oil prices hikes as protests grip burn off their proca in the middle east and will it eventually do real the global economic recovery. ok michael before we went to the break we're talking about the strategic impact of all of these changes in the middle you stone inexpressibly the oil producers and you want to jump in and it may be extrapolated to continue with something that william was saying if it's say for example of saudi arabia were to go off the rails. yes well i i wanted to test the notion that the united states was somehow behind

what we see or seeks to benefit from this my sense is that washington's default position is to favor authoritarian governments in the middle east whether the qaddafi version or the mubarak version or the king will of version this is the then american policy for generations and i don't think that's michael that's the only reality series something different excuse me with an alternative all right william this is crosstalk. so let me build the reality since under different if hillary clinton brought into the the leaders of the egyptian cafaro movement to washington and to be trained to have a picture on my website of and the reshaping hands with many of these people well before this kicked off two thousand and eight the pentagon sent the rand corporation to train come. to be successful after they made some mistakes in an

earlier attempt the national endowment for democracy is up to their ears in all of this in every single country there is no neutrality of washington ok please tell you what barak start if you ok if you look at waffling to try to control events on the ground in the middle east and that's patently absurd of me there's no way we could be so chaotic if so who would believe me the only way to go on central and leave me there was a man when they would add that the cia is calling the shots it really defies description i mean i don't think america is necessarily doing a do your memory on this and it was my you're not up to speed on the latest techniques you know you were there was a look at all the revolution in. georgia was saying was he or or tripoli and you can realize this is not being gifted by washington but certainly did have a i think i'd interest in the status quo we weren't happy with these dictators i was unhappy with these dictators but you know the debt. well you know it was generally better than ever you don't know and we certainly don't know what's going to happen here i am not so concerned about what's going to happen in egypt and in

libya i think those populations are are relatively modern and have some pro western tendencies the big question as i said earlier is saudi arabia i mean we don't know what's going to happen now right now saudi arabia looks quiet but two months is an eternity you don't know what's going to happen there and if things do stabilize in saudi arabia i see a much greater islamised undercurrent in that country which could veer saudi arabia off in a very dangerous direction and that would have a severe geo political consequence an economic consummate argument there mark my cause if i go to you you know we all worry about that with the outcomes of these situations here but nonetheless i think logic would kind of dictate if you have a natural resource that other people want new governments hopefully democratic governments or governments supported by the people they don't want to sell this oil and reap the profits from that resource that they haven't been able to do for decades it's been stolen by dictators backed up by washington and and their

european allies now we could have a situation where we have different governments with legitimacy that would obviously want to export their oil to benefit themselves so i mean it's not a catastrophic situation it's just how we get there. well you have to distinguish between really because like michael you're listening michael michael michael first michael let me just finish my point yes this is a difference between pumping oil and pumping enough oil to satisfy the ever growing thirst of the world world market and my sense is there just because these new governments will pump oil i'm sure they will but will they pump enough to keep adding to world supply that i'm not sure of look at venezuela where you have a radical populist government they have not been able to increase production this is what i think is likely i think no matter what the outcome is this is my

prediction no matter what the outcome of all of this is we will not see the ever rising production levels that the department of energy and the international energy agency predict for the years ahead we should expect from their one diminishing levels of oil coming from these countries for technical and political and other reasons that's what i think not. only is now a little breeze what do you think ok we only as a political factor the idea that we're peaking on oil worldwide this absolute peak is is scientifically invalid and it can be demonstrated that's a longer discussion but the resources are there is just a political question of getting up there and we saw that in the caribbean cuba or the b.p. disaster it was probably because they had one of the deepest the migration channels going going in. and into the deep sea there to find oil the some some scientists

think it's another saudi arabia. or brazil it's be all is there it's a political question of whether the anglo-american oil giants and the governments behind them the military are going to let the let these countries develop for their own you. this is political reasonable decision this is it it's a chill logical question those fields you describe are at the very edge of the technological capacity and they may defy even the most strongest political will to do so or even on the monitor these would remind all the trees the peak oil thing is a myth that was created by more importation harbor and selling oil in the oil dry i think a maximum prices and you've been very very melody and you've been very patient go right ahead of the head. thank you a lot of the projections about all the man kind of discount how much demand will be coming from china over the next twenty or thirty years and i think they're assuming a wealth growth in china because of course china wants a lot more energy they're going to import

a lot more oil and if they do if they read if the chinese come to their senses and allow their greater appreciation of the r. and b. not only that will unleash their domestic demand because they'll have greater purchasing power and will be able to buy more oil around the world as oil becomes cheaper price than their own currency and they're going to experience a significant significant address was asian which could put severe strains on global global production and that would specially in dollar terms of the dollar remains a currency that we're using in that europe there are a lot i must watch of the world use the reserve you'll see the dollar price of oil go crazy. whether or not they they they start tapping offshore offshore brazilian oil fields ok well you know you think about that i mean we again i mean i guess we're going in different directions here i still think we will we will have these exporting countries and listening with the middle east because that's in the news right now they're still going to want to get their oil to market aren't they and they're going to want to have even the same customers they don't really care they want the money and russia is an energy exporter it just wants the money it doesn't

play politics with it. i was told by someone in washington about twelve years ago who's highly informed i won't give details that there's enough yet enough untapped oil u.s. intelligence satellite reconnaissance and other physical tests in the disputed territory between yemen and saudi arabia to feed the entire world economy for the next fifty years that's only one example somalia is another one the world is swimming in oil we're running into oil not running out of it so again i say this is a political a geo political question american power since nine hundred forty five has rested in control of oil control of oil everywhere and how the middle east situation develops is going to have a massive impact on that but that's a political question not a resource question michael if i hear your answer your question peter is yes they want to sell oil all right michael if i can tell you it respectively respectfully

anybody irrespective if you agree in the peak oil theory or not it let's pick out a side right now it's still going to be an issue of price and we include political turbulence will always for exporters drive up the price i mean again the kind of in the program where we begin i mean how we last accused that when we're going through in a recovery i mean where do we get a tripping point where then it doesn't really matter how on how much oil is because it will be too expensive because it will break economies. well i think that's the right question and i do worry very much about the american economy because this is an economy and life style that is heavily dependent on petroleum and there's already signs i mean i drive up to the gas tank every day and the price is really rising very rapidly in front of our eyes and that's going to have a dramatic effect on people's spending habits. ok andrew what do you think i mean i

think i've been clear i know you're all right everything's fine is still fine and refined i mean i think i think we're going to see right now we're seeing in the united states gas prices closing and closing in on four dollars a gallon. at best four leaders by the way it is getting close if it gets up to five or six i mean people are very strong out to begin with really trying to make ends meet if that oil prices were very inception energy intensive united states that could really send our economy into into a double dip recession and when that happens i said as i said earlier the federal reserve is going to are going to pull out more monetary open up the floodgates even more to flood the world again with more liquidity which is going to create even more problems around the world so it's this oil this situation the list does not help unfortunately was kind of inevitable given given what's been going on it for thirty or forty years yes inevitability here we're going to give you the last word ten seconds go ahead ok i think the oil price at this level of one hundred hundred

twelve is not a disaster if it's short term the u.s. economy is already a basket case and this is not going to tip it over it's already in a depression not a double dip recession right equally so thank you very much and many thanks my guest today in springfield frankfurt and in new york and thanks to our viewers for watching us here r.t. see you next time and remember cross talk was. taken. it's going. to be so much brighter if you live from times to question these.

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