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by
Ron
Horswell
and Jeff Calkins
During lhe crucial oil negotiatioos in
Teberan in
1971,
lhe U.S. State
Depart·
ment committed a key tactical blunder.
1t
cbose to
deaJ
wilh tbe oil·producing
countries.(koovJn as OPEC) as
a
group,
ralher Iban incüvidually. Tbjs
ro~
a
bitberto squabbling collection of divided
oil 6efdoms to barden into
a
poweñul
eommodity
cartel
Tbis
miscalculation was to have a
devastating etfcct on the world economy
two years beooe. Just following tbe Yom
Kippur
war
i.o
1973,
OPECs new-found
bargaining power pusbed tbe prioe of
oil
bcyond
$11
per barrel, a four-fold in·
crease wblcb entailed
a
massive bemor·
rhagc. of money from Wcstem oil–
c¡onsuming countrics.
Industrial natioos sucb as Britain and
ltaly almost went bankrupt trying to pay
for their oil, while underdeveloped
states sueb as lncüa and Bangladesb
fouhd it impossiblc.to afford oil at all. ,
Ma.oy
cb~.ngei..iñ
vocabuJa'iy
S\(rf'lliac!
as a
~~
of
~·
great oil
rób~.,Jk<,
forc
f973,
•petródoUars" werc unknown,:
and "(CC)'cling"
was
something we
dj~
wilh old beer
caos
and Colee bottles.
Now,.rccycling refers to money from lhe
Arabian Desert, aod tbose monies
(about
$60
billi<m per year} bave eamed .
tb.e cblcsobriquet "petrodoUars."
Petrokum Poker
Wilh. a little imagination and a
dís–
conoerting degree of
trutb.
we
can
liken
lhe wbole Jituation to a poker game.
Imagine, ir you would, lhe world's na·
tions gatbered around a poker tablc
stacked bigb wilh cbips.
In
one comer, members of lhc OPEC
eountries are raking in
S100
billion
per
year in winnings, based upon tbeir
•ace
íb
tbe
bote"
(also
koOWI>
as oil in lhe
weU}.
Certain overly
~pulous
and less..de–
veloped OPEC members, sucb as Nige–
ria and Indonesia, have littlc trouble
dncüng
ways
to spend tbeir sbare of tbe
loot at home. Meanwhile, lhe Mideast
mcmbers are busily replacing sand
dunes wilh $kyscrapers in an orgy of
conspicuous consumptioo.
Out of tbeir
$100
billion, however,
they can only spend about $40 billion.
At tbe poker table. tbat'a analogous 10
re-belting
$40
billion in tbe next poker
hand, while tbe olher
$60
billion is
drained out of tbe gamc.
For tbe most
part,
tbat troublesome
$60
billion (ca.Ued
~petrodollars")
has
been
sloshi.og tbrougb tbe bank pipe–
lines of Europe and tbe United States
Uke an under-lhe-table loan to oertain
good credit
rists.
Tbis
sort of gentle–
man's agreement
is
better Iban bicüng
14
tbe money under camel saddles, but it's
far from ideal.
Every_ooc (but OPEC)
"is
losiog tbe
game of petroleum poker. The real
problem is tbat only a few
"losen~
are
aUowed to play under-tbe·table poker
with lhe
$60
billion of surplus "petro–
dollars." In otber words, lhe under-tbe–
table stakes
are
so bigh tbat it won't be
Everyone but OPEC is
losing the game ofpetro–
leum. The real problem is
that only a
few
"losetS"
are allowed
to
playunder–
the-table poker
with
the
$60 billion of surplus
-~'petrodollars. "
too long before sorne ofdie players bave
to drop out of tbe game.
The Foarth
World Folcb
The 6rst natioos to be foroed from tbe
tablc
will
oenainly be tbose nations
known as tbe " Fourtb
Wodd~-
a hand·
fui of
Asían
and African rountries tbat
are tbe eartb's poorest credit
risks.
For example, to call Bangladesh
~r:
woulct be
a
complimentary
un–
derstatement.
lt
ha.sn't bad a winning
band sinoe it emerged
as
a notion in
1972.
The people of Bangladesb don't
use
mucb oil - perhaps ro:.r gaUons per
person eacb year (as comparecl to
sev–
era! bundred galloos
per
person
iD
the
industrialized West}- but eve.ry drop of
oil O.owing into Bangladesh is vitally
needed. _At four gaUons per person, little
guoline
will
be wuted cruising Daoea's
maindrag,.
In
1972 Bangladesb
's
oil bill wu $25
milüon, but by
1980
it could be ten
times tbat mueb.
Tbis
may not seem like
mueb in our triUion-doUar c>cOilOmy, but
it's a lot to tbem. They don't have com–
putersor F-l ll's toseU in exchange (or
oil. They bave precious little to sell at
aiL
Hence tbe need for "recycling petro–
dollars." In their· case, "recycling"
means dndiog some way of channeling
10
Bangladesh and otber losers some
part of tbe
$60
billion
lloating
around
u.nder tjle table.
FOI1DtrWlnners Now
Losen
Al tbe industrial end of tbe table,
tbi.ogs aren't aU
rosy
eitbcr. Certain
" 'have" nations are. also losing tbeir
shlrts. The outlook for some such oa–
tions is economic depression. Uofonu–
nately, dcpression in one major
industrial natioo .(sucb u Italy or Brit·
ain} could casily
~pple
tbrougb tbe
otber industrialized nations.
In tbe first year of waUet-wilting oü
prices, tbe internati.onal banking system
cüd a muCh bener job of recycling tbcse
petrodollars
tban
many tbougbt it could,
but every day lhe -surplus grows, it be–
comes clearer and clearer tbat the
present..day semi-<>f!lcial arrangemeots
can't bold up indednitely.
Given tbc current status quo,
it
seems
certain tbat
in
tbe coming roonths, some
players
will
be foroed to drop out of tbe
.game. Wbetber tbey'U fold witb
a
whim–
per or make an intemat.ional bang can't
now be foreseen. Wbat wc
can
be sure of
is
lhat wboever is
fo~
out of tbe game
will
defi.nitely be a "sore
loser.~
prophecy spealcs of a time. when "treo–
sures of gold and silver: wo,Pd exist in
lhe Mideast aml.
'
Up until
1974,
tbe Arab states could
bardly be considered "wealt!>y"
in
ternis
of gold and otber forcig¡l exchange.
Their present wealtb, however, now ap–
proacbes atatistical absurcüty. For in–
stance, ooe year's petrodoUar surplus
could buy out tbe.entire U.S. farm crop.
lf
the current OPEC
income
Vi-ere
extrap–
olated into the next oentury, the
oll
"'produoers would own aU tbe wcaltb of
tbeworld.
Lest
this sound too absurd, many ié–
'spected ecooomists have pointed out
that tbe current . mammotb · transfer of
IJ\Oney means not only tbat
boolc.·
keeping credits and
paper
currencies
will
cbange hands, but
aJso
tbat real "
w.ealtb ·- land, golcf, fac!Ories, corpora·
IÍODS -
wiiJ aJso
faU into Arab bands
iD"
lhe near future.
Tbis
has further prophetic implica·
Tumiag lhe Tables
tioos.
m
Daniel's words, a "king of lhe
What's really needed is for tbe poker
nortbn
will
eventuaUy take control
of
table to be tumed into
a
conference • tbese Mideutem utreasures."
As
Arab
table. Theoretieally, sucb a transforma-' money .accuroulates
in
European banks,
tion is no problem - just resbape the
it becomes vulnerable to confiscation
if
ilble, put a new
sigo
on tbe door, re-
lhe European powers becomc so in·
move tbe visors, stasb tbe cblps, and
elined. '
bring out the business dossiers - but to
The "king of the nortb"
\n
biblical
actuaUy
~egio
ro.operating:...
is'-
~c¡tber
bis_tory represents thc ancient
~oman
mauer.
o~J
.._
.•
.. ... ,
4 ,. -
rl;QlpUe-:.:Themodsq¡
SA"P'CmaA
qt.
that
~-
Talco, for eiample. tbe recent diplo- ' king
wóiil3
alsoiepresent
tbe
S&
DIC.
basic
matic efforts in Paris. Ten nations -
geographical
area
onoe dominated by
representing tbe Industrial World,
tbe Roman
~pire.
.
OPEC. and tbe Fourth World - gOt to-
Coosequeotly, an auuxratic leader of
getber, hopi.og to be able
10
c:ooperate
a future united Europe rould
fuUi.U
lhe
oo preparations for a future major con·
propbecy ofDaniel
,11:43,
•But he shall
ference between oil produoers and con·
have~power
over tlie treasure$ of gold
sumers. For
aU
tbey aecomplished, tbey
and silver, and over aU tbe pr.ccious
might as weU have met
m
a casino
in
tbings of Egypt ... .
n
To . fu161l
this
Monte Cario.
·
prophecy, thc •king
of
the north
~
would
wbat's needed is economic coopera-
only ,necd to expropriate · the pet·
tioo snch
u
lhe Free World enjoyed
rowealtb in
European
banks.
· immecüately following World War
n.
As
Arab wealtb mounts, tbere
will
be
Today, bowever, everyonc wants to
~
an overwhelmiog temptation for lhe
tbe pot. not split it. Natioos today seem
leader of a flllure Europe to ilatiooalize
to prefer aU-out. winner-take-aU gam-
this huge pool of mooey. The
result
bling
10
tbc teamwork and oooperation
could be ujustilied" by recalling tbat
· needcd to forge
~orld
peaoe and pr<>-
many of lhe Arab
oiJ
states aoquired
duclivity.
tbeir wealtb by nationali.zing foreign o.il
As
for tbe future. wc'U prohably
see
companies on tbeir soil.
.
some adroit belting. a IOt of blutling. no
Petrodollan have poaibly become !Ae
more raises (of oil prices), and quite
key ingredient to Daniel's loog-
likely a few catastrophic "folds." We
shrouded prophecy. Not on1y bavc tlfey
may even witness some auspicious "side
awalcened Europeán interest in tbe Mid-
betsn berwcen tolo table powers, to tbe ' cut. tbey have
aJso
increa.sed tension to
exclusion ofall olhers.
the point wherc lhe foU9Wing
is
a
fqture
Witb
tbis,
our analogy must en<l In· ' possibility:
temational economics
can
be explained
"And at tbe time of tbe end shall tbe
in mañy ways - aod
this
poker game
king of tbe soutb pusb at bim,
and
tbe
aoalogy certainly
~n't
lhe most aca-
king ofthe north sball come against
him
demic or aoeuratc way of reducing
high
like a wbirlwi.od, witb ch"'i.ots, and with
fin.ance
to
la
y tenns - but
it
servea to
horsemen, and witb many
ships . •• •
Introduce a furtber key to understancüng
uHe sball enter
a1so
into tbe glorious
petrodollars, a key wbicb most ecooo-
land . .." (modem-day Israel} (Daniel
mists ignore.
11 :4041}.
Until
1974,
wben lhe oil producing
natioos ralced in a record trade surplus .
of
$97
billion, Daniel
11:43
couldo't be
readily uoderstood. This amazing
The Arab petrodoUar
crisis
is a very
recent development. only 20 mootbs old
this June, yet it may serve as a prime
mover of tbe bibl.ical "cnd times," aód
an importan! catalyst toward fullill.ing
al/
of Bible propbecy.
e
WEEK ENDINO JUNE 7, 197S
·¡