tv Cross Talk RT April 27, 2020 4:30am-5:01am EDT
disastrous policies the energy market may never recover. to discuss this and more i'm joined by my guest dmitri bobbitt in moscow he's a political analyst and editor of you know smee media project and glenn beason in oslo he's a professor at the university of southeastern norway as well as author of russia's geo economic strategy for a greater eurasia originally across the uk rules in effect that means you can jump any time you want and i was appreciated let's go to oslo 1st glenn we have this pandemic ongoing and we have been in crisis in the energy markets and it's easy to conflate the 2 and one in the energy situation in the markets has gotten worse as a result of this pandemic but they are very separate things and i would say right off the bat that this is the result of disastrous policies particularly by the united states using
a series of tax breaks sanctions and really just unprincipled market behavior to try to support american energy companies and it's all blown up in their face in a pandemic has made it even worse and i don't think there's any really any real road back i mean this is some of the most worse was poorly thought out policies i can imagine and people and average working people are going to pay for it go ahead learn. it well i agree with that assessment because. this has been very much all shared all of the u.s. media for quite some time and indeed it has been very spectacular that it's going to stay to it's taken from a huge energy importer to become a big exporter and they're going to trump celebrated america again this energy independence which high priority however this was achieved on many things was not just the shale take knowledge of us also. also able to
a large extent to replace the energy or oil coming out of iran and venezuela by sanctioning them and replacing it furthermore since the russians and the south has been trying to stabilize prices by cutting production in the us especially been able to move and failed to demand so it is been able to increase. fuel this sheller of lucian on many aspects but one i would also. keep in mind that america's oil companies have been running up huge debts. especially since the global financial crisis in 2008 they've been enjoying almost 0 percent interest rates and the problem with 0 percent interest rates is super much lending away money for free and in such you have a lot of male investments that is syrup making investments where they shouldn't be made and i sense a lot of consulting companies are able to continue to operate so a lot of this a lot of observers of the shale industry been waiting for some time now to see you
know when this house of cards might collapse or what is the pin that will pop it well obviously this coronavirus has been a well hell of a pin but nonetheless it's kind of demonstrated so yes the corona crisis has helped to crush the energy markets in the u.s. no one is you know driving flying well producing this thing but at the same time it's important to note that the foundation of it was already there flawed so i guess we're all celebrating or at least americans were celebrating energy independence and this economic a miracle it is worth noting but it. didn't didn't have the most stable foundation and of course for the whole thing to fall apart now in the current crisis just makes it. a good. look at any good you know i did there was criminal intent here ok i'm not going to be kind about it at all ok i mean using sanctions as a political weapon to prop up your own energy companies i mean that is just you know they need that. that is just throws in the face of international law and the
entire concept of free trade here i mean this is this is anti free trade i mean to but to a point we've never seen before ok that is what that is one of the basis of the anti venezuelan problem policies and anti rand is to support american energy companies and the illusion the illusion of energy independence which is gone and it probably will not come back and then you have this cascade effect where these oil companies will write off what glenn was saying what they're you know they're going to default on these loans and it's going to ricochet all the way through the financial system hundreds of thousands if not millions of people are dependent on this like on that part of the economy so this is that you know when that house of cards falls it falls cattle stop catastrophic glee and that's what we're seeing right now with the rest of the economy spiraling down as well and that's why i said in my introduction i don't see any return to coronavirus for the for the energy markets here go ahead. well indeed according to all that
american conservative was a logical politician involved the situation and the article called the way that. there have been either states removed about 2000000 barrels a day or production. by imposing sanctions on man soil and iran since 2018 you know that i think it was vice squad greta and it's headlined. this is the beginning on that and on the u.s. energy independence. it's all b.s. you know it's your business that it was a mistake to war against you know poor people are important countries with economic sanctions you know these predatory drum you know it was also adequate and by he is anti east trade war because the trade war against china decreased the demand for oil so basically that your mind has been going dahlan
since 2018 and now the whole of our field it. so always to clear what we have in the united states now is and we want an industry insiders call tank tops you know when it just evolved all their war young's all the possible walliams for story of the oil can be a field during the next few weeks maybe months but you know i don't think that the reasons for it excludes it really material you know the european union which if it had been indeed represented in the interests of european countries it would be very much interested in russian oil and gas but the european union did everything to wreck the brought it all solved stream and it didn't do any to save north stream so when the united states went. just ever. the north when the u.s.
basically illegal pretty big illegal sanctions on any companies that will help russia finish the broader basically the e.u. and it won't do anything to stop the united states from doing that i don't need any money to provide a little bit that the germans did push back and they made it very clear their position there would be dictated by washington but on the whole i agree with you here you know from the same article as scott ritter that demon was bringing up here and i love this there's a line that really stuck out to me or oil contracts come and go but bad policy is for ever and they think that that's really well put now i mean you know on the one hand i think it's perfectly fine you want to have competitive advantage in advantage in the marketplace i get that and that there are consumers and there and for shareholders here but those are the predatory nature of this it's all it's like karma coming back in
a hard way because that these distortions of the market has made it even worse and again of course we have to recognize we have the pen demick on top of that we're demand is just flat lining all over the place so bad policy is forever in this case got headline. it's worth noting when we talk about policy because a lot of the problems behind this are physical in nature that is minus interest rates to be helping to set up a lot of this say well this house of cards is not collapsing but i keep in mind that often not just in the u.s. but around the world now you see many countries moving in to minus interest rates or you know paying money to companies to borrow and spend and now we have of course they're going into in mind this. sort of negative oil prices in which it's quite remarkable now we're actually having oil companies have to pay. people to take the oil out of their hands now this is quite ready quite an interesting. and because.
they're the among mentioned there's no storage in them or the tankers are you know they're just hanging around the ports looking for somewhere to live in a 100 what sorry and there's no demand there's no demand and that's a problem so again in the economy if you have supply and demand this will demand in a more. the 1st thing of course debt to start stop pumping out but the problem with a lot of oil wells especially when shale is account just simply turn off the well studies often have to fill it up with various chemical states and if you want to reopen them later on the you might not to get the same profitability out of it if you can at all so it's hard to just stop the pumps especially if they think it's short term then it's easier just to continue to rack up and sell it at a loss but i think the problem now is what well what will be the be the american solution to this i mean in a capitalist system what you really have is you allow a lot of these oil companies in the u.s. hundreds of them to go bankrupt and by having less supply the demand the prices
will increase and other oil companies can survive but it seems the solution for the united states for everything to stay seems to be simply be bailed him out print more money see if you can keep the party going on a little bit longer you know how it will be a little less force but what you're saying glenn is on the one hand the cynic in me and you should be cynical in these days is that you're bailing out shareholders of these companies that have been done underwritten by the taxpayer i mean the moment is enough enough ok because this was a big can i get wanting to have energy independence i mean i believe in sovereignty here but the means of will not by the way they went through this process here is a as i said earlier is going to have a cascade effect all the way through the economy just to keep your friends that have shares in these companies that it's very expensive you have to have high whole
prices but a. same time you know you you have this tendency to want to put tendency you this drive to put your own oil on the market and demanding other people not participate in it again the most kind of anti-capitalistic anti trade process you can imagine go ahead dean well i think it's not their only market it's and they nature of i mean they fear that they're in that that states should not be using the oil wrong then yes well i you know where by the will of what you know there was a lot of tropical forests in there and sometimes and there's a lot of oil in venice so it just makes sense to use it in the united states this a year is simply a nature of the same story with the european union and the war from ratio which is mostly of basically russia you know they year there are the european union which is basically a big big minstrel you know stretch and you know the southwestern direction of
being eurasia that they gear their these peninsular is not going to use that well and the gas from the rest of the kwanten and is absurd it's a ludicrous it's against their their their their laws of nature so when they hear this award energy independence it's not about independence it's about discrimination it against other countries it's a lot yes you're right bailing out your france who are producing quite using this very very controversial acknowledge your freaking hope hold out we're going to go to a short break and after that short break we'll continue our discussion on the oil markets with r.p. . i'm max kaiser one more of my guide to financial survival this is the hedge fund it's
a device used by professional scallywags to earn money. that's right these has flaws are simply not accountable and we're just adding more and more to the. totally destabilize the global economy you need to protect yourself and get informed kaiser. when i see it. i was on the floor some days and i bounced you know trying praying. this time west. i was having children fever i didn't have any sense of smell. most young women. would you.
recently she you know sometimes you just used to. have to. push myself to do for me in the 5. as the u.s. economy was booming growing numbers of people were made homeless. you can work 40 hours 'd a week and still not have enough to get housing everybody believes america still is the land of opportunity the reality of we're not financial inequality and the lack of affordable housing for a living minimum wage give many people no choice. that's been a problem with the city can always turn a return and told to stay way out of homes. because of the
records. the most vulnerable were abandoned on the streets to become invisible clerks. welcome back to cross talk we're all things are considered i'm peter about to mind you we're discussing the global energy markets. ok let's go back to that glen in in our slow week and the 1st part of the program we put all our focus on what's going on with the oil price and demand and storage which plays a very important role in all this but how does this change american hegemony in the as we enter the post corona. virus pandemic i mean there is a lot of people saying that that had to monic presence has been in decline ever since its peak at the end of the cold war but now we have this because because
energy has been if there was a key element in the air in the unit polar moment for for the washington consensus then and now that's been pretty much blown out of the water i mean we have no idea where the global economy is going to go and anyone that says you know that they don't know what they're talking about because we don't have an updated point see i mean every countries are going in a different direction and trying to find solutions to a different a rate of problems. and there are all intermingled right now but i mean this is something that's been going on ever since the peak of the universe whole moment and if the energy is not going to be such a powerful tool in the strategic tool box how does that change the trajectory. of the unit polar moment that the the americans are so proud of which seems to be a berry very much illusory today. well. you're right a lot of the problems we have today is largely about this competition for for
global hegemony or primacy and energy always has a key. a key role and it's not well the main problem for the united states is that it's a power in relative decline and it base insecurity on privacy that it's global hegemony no days it could do you could make an argument for it probably wouldn't do the main argument was from the early 1990 s. that if the u.s. was simply dominates the world this could lead to more peace because you know this will dissuade a large powers from competing against each other especially having this concentration of power now i was from the early 1990 s. the us old 80 indicated this would be its main security strategy that is security through dominance and it was formalised and it's a curious strategy in 2002 no problem obviously the rising power stay they will have to be pushed back in order to maintain or to preserve. the problem over the last few years or has been done to us in relative decline so this
makes the us a big threat to countries from china russia iran and though you know the european union and the rising power is seen as a threat to this model of privacy so really the u.s. only has 2 main options that is one could begin to accommodate the other large powers and censorship the way in strategy global dominance or primacy and start to call it a more multipolar system or you can keep the party going a bit longer by suppressing rising power stuff means more investment in military force and this actually pushing back anyone who doesn't hold the line now. the problem with this strategy and always the latter is what appears to america's been following in its thing and if we keep things going a little bit longer but not only. are there exhausting all their resources but you still have a multicolor 'd world forming the only difference now is countries like china russia iran this initially formed multiple or system in opposition to the united
states because they all see the us as the main threat trying to prevent their eyes now again obviously people be looking at the we can a country. print it how it will play out after this crisis but the price will probably put the us in a very difficult economic situation so far the chinese appear to be able possibly to benefit to some extent. you know the information coming out about russia and the west is worth noting that over the past 23 decades russia has been while today kate it's just been working to fix its financial house in order. paying along his debts and he's actually put in a very good situation to you know. to get through such a storm you can even there you know all this attention has also put the u.s. russia in a position where it can handle a very difficult situation as opposed to for example in the u.s. where they made everything deficient to such an extent that they count there really
such a sharp. well i've always been a big fan of sanctions ok import substitution work it's worked really well ok all right the breach ease and calm bear wasn't so good but now they've got it up to speed ok i mean it just took a little bit of time ok in the capital across the economy and you know de mint one of the interesting things here is that when we look at how. the international system is changing is that it seems really interesting is that in the 1st part of the program we discussed energy and that that tool in the in the tool box is tool boxes is spent are being spent the financial system is in chaos right now the dollar decline but there's only one thing that hasn't decline and that's military spending at the expense i would argue strenuously at the expense of infrastructure and what is what needs to be done in the us itself because because with the
lacking a health care system that accommodates the entire population that deals actually with help and profit the u.s. is going to suffer from that for a long time to come and so you have all of this holds a rate of issues coming to a head at home but at the same time you have enormous defense spending and that seems to be the card that washington wants to play is that maybe they can't be the same kind of financial powerhouse. not the energy head german but they have the military it seems to me that is the most brittle and probably the least forward looking i mean the international system is so complex now involving very quickly in ways that we don't even understand as we get through this pandemic relying upon the military seems like. a primitive way of looking at the international system it means we're going to use force not international law. well you're exactly right and this is what russia has in other and against the in the. our foreign minister
sergei lavrov ceral it's our time sad that we want to talk about international war and the united states and the european union they want to talk about what they call rules based order which happens to be the sole called international or liberal or no. and they're talking about hegemony and there was a very will die because of gaining their american conservative called please tell the establishment that us hegemony is all we're where they're off there then you know larry some basically said they're doing that the states least its dominance you know its claim to dominance during the last 3 d. kids on this idea that they and what one can protect these international liberal order you know with out there this order would collapse well it is already collapsed with our president and states you know doing anything dramatic
simply because it is order is unsustainable and what you describe very directly you know they fear there you are just mining your may give our stupid people a shoe knew you spent 2 trillion dollars to fix it all though the damage done by the coronavirus and at the same damn you borel minute by few it keeps. about $700000000000.00 or us defense every year well sort of that the minds of the british empire that's how great britain went down in the middle of the plane that century and they didn't do this any battles actually won the war against germany but the military machine that they have already before the war it was sustained all only thanks to all forms they had to war all money to keep their military machine working and it could not be sustained for a long time you know it was not the fault of individual put it to chanson it was an
internal draw to us that great britain basically it's ceased to be a water fall. so the question is not a ball of us can gemini whether it will continue or not it rolled continue or it will shrink the problem is how will their magic and the wall that large how will we manage these decline you know you leverage if you suggests some logic like the i mean demon you bring up something that is it's very difficult because if you're weaned on american exceptionalism it's almost like a cold you can't imagine the world otherwise and then it's going to be a it's a huge psychological problem that the political class has and and if they don't they can't come to terms with it it's going to be it's going to get messy and tragic unfortunately glenn i mean defending the liberal international order i don't see what's particularly liberal about it and i and actually this is just a code word for american hegemony ok i believe you could have
a liberal order but it doesn't necessarily mean you need a hedge of money. no and you can argue that the rules based order having this liberal are rules based order it's. actually contradictory to have to moan cause if you're going to maintain the pressure of them on it leads to a lot of. well a lot of rule breaking and furthermore the whole idea of a multilateral rules based system yes if you don't mind if one disorder is central about east a whole idea that they were able to. to uphold this liberal order but it depends on west their solidarity so it's a western led liberal order though the problem with this is if you go to western and order their 1st principled and will be that we need in unity internal unity within the west but then it became because they're a difficult question how can you actually have a rules based order and i think for countries like russia space especially
recognize that whenever there's a tension in the international system let's say russia worse hole in the russia versus the u.k. it would be any possible scenario where russia is not in the wrong where russia is not the bad guy because if you if you get a rules based system but it depends on western unity they were the west will always hold together and russia will always be in there also this whole idea that. there's a lot of internal contradictions within this liberal international order and as the international distribution of power has been shifting away from the west and towards the rest of the world i guess upholding pension money relies more and more on course of its power that it's not just military power that everybody can only sign it and nothing else important i mean that means. a liberal order as defined by the washington consensus means you have to use coercion i mean what value is that in itself violence of a demon rapidly running out of time then. well there was
a book published recently on this issue of the office and xander cooley and then next and there the title of the book is exit from hegemony on revenue and all of them magic and all the all of that and the 2 office abio that basically this so-called liberal international or that is maintained by some very illegal ringback means i mean pressure on china demonizing russia basically alienating the contessa like iran when you're so ally and a lot of other important independent countries and the biggest question is legalize the sleeper or that there is international law there is the organization of united nations what else do we need to have a system based on justice that's why russia and china insist on their return to even if it will have to end on this note you can't have meaningful international law if you have a hedge a man that doesn't recognize the value of international law it is deemed quote
unquote against their interest that's all the time we have gentlemen i want to thank my guests in moscow and in oslo and i want to thank our viewers for watching us here and our teacher see you next time remember. when else still seems wrong. why don't we all just don't call. me old yet to see people out just to come out to. and in detroit people to trade. when so many find themselves worlds apart we choose to look for common ground.
somebody. just let me see yes. i was on the floor something's in my basket or you know trying praying. there's time for us to doubt what i was having children fever i didn't have any sense of smell has been the most you can get the words would you. recently she you know sometimes or just used to feel. that one simon is on the grounds of the research. i have heard and. push myself to do for me in the 5 years ago time.
african countries take a distinct approach to fight the spread of coronavirus warning its population about the dangers through graffiti and songs. also this hour r t joins moscow's disinfection squads as they battle not just covert 19 but public fears that they may not be who they claim. plus u.s. mainstream media are usually so eager to cover sexual assault allegations strangely quiet on new claims against presidential candidate joe biden. and hundreds of amazon workers in a mass sickout refusing to.
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