The Devil Is in the Details: 4 Reasons Why We SHOULD Let the UAE Run Our Ports
I understand why people are upset that the Bush administration OK’d the sale of operation of six major American ports, including New York, Baltimore and Miami, to Dubai Ports World.
After all, DPW is controlled by the United Arab Emirates, which really means our port operations are now owned by the UAE royal family. The CIA once held off on targeting Osama bin Laden because half the UAE royal family was visiting him in Afghanistan.
And sure, the Bush administration does many things that hurt America’s security. From blowing the cover of a CIA agent whose beat was Iranian nuclear weapons…to abandoning the hunt for Osama bin Laden…to pursuing a fruitless war in Iraq…to cutting military benefits… there is a long list of examples of how asking George W. Bush to safeguard America is like asking Al Capone to guard your local bank vault.
But the sale of the port authority to the UAE isn’t a serious breach of national security. Indeed, it might actually be in America’s interests!
I’ll give you four reasons why…
1) Foreigners already run our ports. DPW is buying the rights to those American port terminals from a British company. International shipping became truly international about 30 years ago.
Foreign firms already control more than 30% of the port terminals in the United States. No matter who runs the ports, Americans will still work there. I think if DPW started recruiting its Baltimore dockworkers from Baghdad, it might raise eyebrows.
2) It might actually INCREASE security. Only 5% of the shipments into America’s ports are inspected now. Compare that with Hong Kong, which inspects 100% of shipments at ports. Since 24 of the 25 biggest ship terminal operators worldwide are foreign based, most of the containers sent to the United States leave terminals operated by foreign governments or companies. So if terrorists want to send a nuclear bomb via container ship into an American city, they’re not waiting for the UAE to control the ports. They’ll just do it anyway.
Point is, the UAE taking over control of six American ports might actually shock the do-nothings in Washington into funding a port security system with real teeth.
3) All your bases belong to us! The United Arab Emirates provides docking rights for more U.S. Navy ships than any other nation in the Persian Gulf. Dubai’s port of Jebel Ali is a favorite port of Navy ships in the Gulf, and is the most frequented port outside of the United States. The U.S. Air Force also has a refueling squadron at the al-Dhafra air base in the UAE.
U.S. operations in the Persian Gulf would become very difficult without help from our friends in the UAE. We obviously trust them enough to station our sailors and airmen there. What will it tell them if we won’t let one of their companies run our ports? It might sour relations in a hurry.
4) Sweet, sweet, black gold — crude, that is. How could we have a kerfuffle concerning the Middle East without oil and gas being involved? The UAE has 8% (98 billion barrels) of the world’s proven oil reserves. The UAE also has the world’s fifth largest reserves of natural gas.
So what if we balk at the deal? I’m sure the UAE could find other customers for its oil and natural gas. After all, the China Daily just reported that a “shortage of natural gas has put the bulk of China’s gas-fired power plants on the verge of closure.”
China doesn’t rely on natural gas much…yet. At the end of 2005, natural gas-fired power plants accounted for just 2.1% — 10.7 GW — of China’s total power-generating facilities (the United States has 380 GW of natural gas-fired power plants). But China Daily tells us that “the country will increase the gas power capacity to 30 GW by 2010 and further to 60 GW by 2020.”
So China is going to TRIPLE its natural gas power generation in the next five years and then DOUBLE it again the decade after that. You think China won’t buy any gas the UAE wants to sell? Think again.
Meanwhile, U.S. natural gas wells are depleting at 15-30% a year. Nevermind Peak Oil — Peak Gas is coming to America, and it is going to be brutal.
5) We need all the friends in the Persian Gulf we can get. The UAE royal family visits Osama bin Laden for probably the same reason George W. Bush meets with Pat Robertson — to pander to the solid part of their support base that is composed of religious nutbags.
That aside, if we want to win the clash of civilizations, we would do well to encourage the “moderate” voices in Islam, such as they are. And the UAE is one place you’ll find them. It’s a place where you can actually have “fun” — something outlawed in Iran and Saudi Arabia, to name two hells on earth.
If you want to get angry at the Bush administration, get upset about Dick Cheney authorizing the leak of a covert CIA operative’s identity for short-term political gain (Scooter Libby’s defense is Dick Cheney told him to do it). That story seemed to fall by the wayside — the idiots in the mainstream media would rather talk about Dick Cheney accidentally shooting one of his friends.
No matter how this problem of the UAE running American ports works out, I’m pretty sure that oil and natural gas prices will be higher — maybe a lot higher — in the next 6-9 months!
And right now, natural gas is hitting its lowest levels in a year. It’s cheap! Some long-term call options on natural gas or crude wouldn’t be a bad investment right now.
Gold is headed higher, too. Where do you think the Persian Gulf princes are putting all their oil money? In gold!
Oil revenues in OPEC nations will hit a record $522 billion this year, according to a forecast from the EIA. You can adjust for inflation all you want — it’s still the highest level in 25 years.
So it’s no surprise that gold demand in the Middle East rose 11% in the most recent quarter. In the UAE, demand for the yellow metal surged 13%. Dubai, the UAE’s party playground for oil-rich sheiks, expects to increase its gold imports by 23% this year. Wow!
It’s all part of the rampaging bull of a commodity market that is going on right now…and should last at least another 10 years.
Yours for profits in futures,
The Secret Order of Jurojin
February 26, 2006
Quote of the week: “Using force to compel people to accept money without real value can only work in the short run. It ultimately leads to economic dislocation, both domestic and international, and always ends with a price to be paid.
“The economic law that honest exchange demands only things of real value as currency cannot be repealed. The chaos that one day will ensue from our 35-year experiment with worldwide fiat money will require a return to money of real value. We will know that day is approaching when oil-producing countries demand gold, or its equivalent, for their oil rather than dollars or Euros. The sooner the better.” ~ Ron Paul