Tuesday, December 30, 2014

5 Reasons Why World Oil Prices Will Rebound Strongly by 2Q2015


World oil prices will eventually rebound. The questions are when, how quickly, to what price point and what will be the drivers. I predict world oil prices will rebound to $100/bbl by 2Q2015 based on the following confluence of developing events that could take place during the next 6 months:


1. Vanishing Surplus: The world oil inventory surplus will vanish by early 1Q2015. China is taking advantage of the 5-year low oil prices and is using this opportunity to beef up their strategic reserves.

2. World Oil Demand: There will be a tepid, perhaps modest, increase in world oil demand by mid 1Q2015 as Asian and European moribund economic growth recover.

3. U.S Regulatory Rail Transport Constraints: According to the WSJ article “Railcar Bottleneck Looms Over Oil” on December 22 a report by the consulting firm Brattle Group indicates that the US DOT will require rail companies transporting oil to retrofit 75,000 older tank cars with crash-resistant components for safety purposes. The completion of these new standards and compliance deadlines are expected sometime 1Q2015.
In an earlier WSJ article “In Plain Sight: Shale Oil’s Rolling Pipelines” on December 4, U.S. rail companies transport 1.1 million bbl/day  today vs. only 21,000 bbl/day in 2009 as a result of shale oil production. Retrofitting railcars will significantly reduce the amount of oil transported which in turn will force lower oil production. Rail is significantly more cost-effective and can transport considerably more oil than trucks. Think of this as a self-imposed regulatory sanction.

4. Faltering Venezuelan Oil Production: Economically Venezuela is between a rock and a hard place with only $21 billion in reserves, an overwhelming reliance on oil exports for 96% of its revenues (the highest of any oil producing country), high debt ($40 billion in loans to China), and capital controls. Additionally, oil production has decreased dramatically since 2008 from 3.4 million bbl/day to 2.45 million bbl/day in 2013. This has been a result of the exodus of experienced oil workers and paltry investment in development due to restrictions on western energy firms’ participation. These factors create a highly volatile political situation which has put President Nicolas Maduro, with an approval rating of only 25%, in a corner with almost no room to maneuver.  Any regime change will result in a further reduction (albeit short-term) in oil production, enough to frighten the markets.

5. Winter Weather: The wild-card factor would be a change from the current mild winter weather to consistent seasonal or slightly below seasonal temperatures which will increase demand.



Copyright Indo-Brazilian Associates LLC 2014. All rights reserved.



Indo-Brazilian Associates LLC is a NYC-based global advisory service and think tank with connections at the highest levels specializing in international investment, political and security risk assessments. International business is increasingly complex featuring a highly mobile professional class in all corners of the globe. We provide you the tools to successfully negotiate cross-culturally in your global business endeavors. Tell us about your challenges.  We'll get on the "Short List".

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Friday, December 26, 2014

How Diplomatic Backdoor Channel Maneuvering Will Lift Russian Sanctions


The brutal oil price meltdown and anticipated continued low prices for the upcoming months has forced the mothballing of mega-energy and overall industry wide retrenchment. Several western firms have pulled out of their agreements with respect to multibillion dollar mega shale gas exploration projects in Ukraine including Royal Dutch Shell and Chevron. The reasons, according to an unnamed source, were due to a combination of plunging oil prices and disappointed geological results in a war-torn eastern Ukraine. This pullout means that Ukraine will continue to be totally dependent on Russia as its sole supplier for its energy needs. Ukraine is Russia’s cash cow with respect to oil revenues. 

Because Ukraine is technically bankrupt it depends on IMF, World Bank and EU funding to pay their energy bills, a dependency that perpetuates Russia’s huge political leverage in the region. More unsettling for these western funding sources is the fact that Ukraine is ranked 135 of 175 with Transparency International which is hardly reassuring that these funds will be fully used to secure energy.  

The reasons for why the oil giants’ dropped the oil shale projects are certainly not because of low oil prices or hostilities for several reasons. 

First, oil firms undertake these mega-projects as a strategic operation and don’t fold camp due to the historical cyclical whims of the energy market.  

Second, these firms certainly wouldn’t sign multibillion dollar agreements if there wasn’t proof of potentially highly profitable findings. Before the CEO puts his John Hancock “on the line that is dotted”, all forms of due diligence, including geological surveys, have been performed. 

Third, they go where the oil is and that has historically included mostly war-torn territories where they’re highly experienced in security protocols for personnel and installations in hostile geological and political environments.  

One possible reason is that this might be part of a grand back-door political deal with the West so that President Putin has a face-saving way to have the sanctions eased or lifted. Easing or lifting of sanctions would allow Russia to access to capital markets to reschedule payments to pay about $365 billion in capital debt to foreign banks due in 2015. Without such harsh economic encumbrances the ruble can stabilize and then rise gradually eliminating the need to continually raising interest rates, force state-run companies to sell foreign currencies, or touch their $400 billion foreign reserve.

The oil firms’ participation in Ukraine represented the West’s perceived economic energy infringement into Russia’s Near Abroad. The oil firms’ withdrawal is an economic, not military retreat and an economic, rather than military solution to a political logjam.

With this economic withdrawal by the west, we’ll probably see reduced overt Russian military activity in eastern Ukraine and possibly even barely noticeable withdrawals as part of the implicit agreements between the West and Russia. There will be gradual and progressive official lifting of sanctions by the end of 1Q2015, with unofficial tacit agreements to quicken the pace contingent on Russia’s positive political and military “behavioral modifications”. It does not serve large European or American financial and energy firms to have a bankrupt or severely weakened Russia.  

Any crisis always provides excellent cover for countries to engage in unusual practices out of convenience or necessity. A current example is China’s voracious purchase of oil at low prices to bolster their low strategic oil reserves. Because of clever data reporting, it’s difficult to discern how much of the total Chinese oil purchases are for commercial and military use. 

Applying this cover in Ukraine, this possible conveniently orchestrated arrangement makes it all but impossible to link the sudden withdrawal of large Western energy firms that signed multibillion dollar agreements only last year, to soon-to-be more favorable economic treatment of Russia. 

This deft mutual maneuver will put Russia in a positive position as surplus oil inventories are drawn down by an improved world economy. And because several mega-exploration projects were halted, it will be difficult to restart immediately to have an impact to meet growing world demand for oil which will result in an upward price trend.
 
Copyright Indo-Brazilian Associates LLC 2014. All rights reserved.

Indo-Brazilian Associates LLC is a NYC-based global advisory service and think tank with connections at the highest levels. International business is increasingly complex featuring a highly mobile professional class in all corners of the globe. We provide you the tools to successfully negotiate cross-culturally in your global business endeavors. Tell us about your challenges. We'll get you on the "Short List".
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Wednesday, November 5, 2014

Turning Point for ISIS- Stalingrad at Kobani


The Economist (Nov. 1, 2014) quoted Polat Kan, a Syrian Kurdish commander, who compared the Battle of Kobani to the Battle of Stalingrad, the infamous WW II battle that took place in 1942-43. This battle was the turning point on the Eastern Front when the previously unstoppable German 6th Army seemingly had captured Stalingrad before the arrival of Soviet reinforcements and the infamous brutal Russian winter combined to destroy the German Army in early February 1943.


Of course this battle in a small city next to the Turkish border is more like a WW II skirmish yet there are many powerful and eerie parallels to Stalingrad. Not long ago it seemed inevitable that Kobani would fall and that and a resultant slaughter would follow. Yet the Kurds have held thanks to US air attacks against ISIS positions plus furnishing supplies and intelligence information to keep them from collapsing.

Although these reinforcements number only in the hundreds, they bring with them heavy weapons – superior firepower - which counters ISIS weaponry. Several weeks ago the beleaguered Kurdish fighters were literally counting bullets for their light firearms. ISIS, who utilizes numerous foreign fighters, now must contend with reinforced Kurdish forces and US air support. This parallels the German 6th Army’s reliance on foreign fighters, the reluctant Romanians, Italians and Bulgarians guarding their flanks, and the Russian winter which severely hampered operations.

With respect to the bigger picture, during the same period on the Eastern Front the Germans reached as far as the suburbs of Moscow, the Russian capital. Similarly ISIS is near Anbar which is within striking distance of Baghdad, the Iraqi capital. The Germans never took Moscow after their defeat at Stalingrad. Certainly the Kurds don’t have the manpower to perform an encirclement yet ISIS now experiences what all armies, sovereign nations and militants, inevitably will face – a choice of unpalatable options. Either they continue fighting in a meat-grinder with the odds of victory greatly diminished or suffer a humiliating retreat after expending countless fighters and materiel in a high-profile battle.

The German 6th Army’s defeat at Stalingrad represented the beginning of the end for Nazi Germany. Symbolically Kobani may be the turning point for ISIS and the beginning of their downfall. An ISIS withdrawal leaving the Kurds firmly in control of Kobani would be a huge political win for the US administration justifying their use of exclusive air power and training of local fighters to defeat well-disciplined militant groups. Additionally it would give an enormous psychological boost to the moral of several Iraqi divisions currently training for the planned 2015 spring offensive whose objective is to cut-off supplies to ISIS and isolate them in the cities.

 
Copyright Indo-Brazilian Associates LLC 2014. All rights reserved.

Indo-Brazilian Associates LLC is a NYC-based global advisory service and think tank with connections at the highest levels. International business is increasingly complex featuring a highly mobile professional class in all corners of the globe. We provide you the tools to successfully negotiate cross-culturally in your global business endeavors. Tell us about your challenges. We'll get on the "Short List".
Available for speaking engagements and workshops. Check out my international media profile as TV panelist and published articles:
Cable TV appearances on 2014 Emmy-award winning international talk show "Fresh Outlook":

http://www.speakermatch.com/profile/GlobalAdvisors/videos/
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Sunday, October 26, 2014

Tycoons Under Tyranny - From Hong Kong to Moscow


One often imagines that the life of a tycoon, even under a totalitarian government, is a life brimming with excitement and glamour, jetting off on a moment’s notice on their amenity-laden customized private jet to close a deal, then spend lunch or dinner with friends and associates at a Michelin rated eatery overseas before returning back the same night to one of their many worldwide starquitect-designed penthouse condos. However a tycoon’s life under a totalitarian regime is, as the saying goes, “Is complicated.”

In order to operate, even exist under such a regime, a tycoon must be pro-government. It’s the government that guarantees them sole source lucrative, contracts and shelters them from mutual enemies. It’s a Faustian bargain in which the government secures the tycoon’s silence to their brutal practices of pacifying the population in order to loot the country’s riches. Despite their billions, non-conformance to government policies can result in imprisonment, even execution. The government controls the security apparatus and broadly ‘interprets’ or breaks the law of the land with impunity.

On the street the citizens decry the tycoon’s silence on discriminatory economic and humanitarian matters. The citizens can’t materially harm him because he manages the monopolistic industries that manufacture and provide the basic goods and services that the citizens need. As a result only the tycoon’s public image takes a hit, not their bottom line.

As a result a tycoon is caught in the middle.  He’s nothing more than a wealthy pawn of the government who can easily replace him on a whim with the preferred next choice. The government conveniently uses a tycoon as a front to implement unpopular economic policies. And should the citizenry violently oppose these policies, government media-run propaganda can placate the citizenry by using the tycoon as a convenient scapegoat.

The most demanding role of a tycoon is to endlessly curry favor with the right governmental inner circle of power and influence. Like any large and powerful organization regardless of their political or ideological belief, these organizations operate on a particular logic. Tyrannies are not monolithic. Like any large group they’re composed of layers of various groups within and peripheral to the inner circle who are constantly jockeying for influence. Sometimes there are mini-coups in which today’s inner circle is suddenly replaced which may find the tycoon now on the outside looking in.

In a worst case scenario, his personal bank accounts can be frozen, passport confiscated and mini-empire dismantled through an arm-twisting merger at below market price for no reason whatsoever. The tycoon is nothing more a wealthy working stiff whose assets can vanish overnight. For him it’s a perpetual effort to placate the right group of the political Rubic cube and is subject to the same blackmail as corporate drones whose superiors demand unwavering exclusivity of their services and loyalty.

Through equally ruthless and brutal methods of his own, he’s made a choice to sell his soul to achieve fame and fortune. The cleverer of this breed less bound by ego, already have options to flee the country, squirrel away their assets overseas, and even purchase foreign citizenship.

This proves that tycoons have far less influence on political power and government policy that is perceived. Just because you’re a tycoon, you’re still answerable to a higher, more powerful authority. That’s why it’s the concept of becoming a dictator rather than a tycoon is much more appealing to those who crave total control. Politically power trumps money.

Copyright Indo-Brazilian Associates LLC 2014. All rights reserved.



Indo-Brazilian Associates LLC is a NYC-based global advisory service and think tank with connections at the highest levels specializing in international investment, political and security risk assessments. International business is increasingly complex featuring a highly mobile professional class in all corners of the globe. We provide you the tools to successfully negotiate cross-culturally in your global business endeavors. Tell us about your challenges.  We'll get on the "Short List".

Available for speaking engagements and workshops. Contact us at:

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Wednesday, October 22, 2014

Cuba: Exporting Good Will or Good Business?


Sometimes it takes a humanitarian crisis to reveal the extent to which a foreign country with significant business investments is committed to improve the well-being of the community. Recent news reports indicate that China is contributing 170 doctors to tackle the Ebola crisis. Despite China’s tremendous investments in Africa, Cuba, which has almost none, is providing 460 doctors, almost three times as many as China. Cuba’s population is equivalent to the Chinese city of Shenzhen and half that of Shanghai.

Outside of the U.S., the other countries with substantial political or business investments in Africa include Brazil, India, Japan, Russia, South Africa and France. Most of them just wrote checks. Only Russia and France are sending medical assistance, 8 virologists and 15 medics respectively.

Cuba doesn’t engage in external activities unless there’s a tremendous upside. Decades ago Cuba exported armed revolution to Africa with soldiers to fight the apartheid South African government. Years later they changed tactics and exported doctors to Venezuela (with a smattering for security specialists for the late Hugo Chavez) and continue to do so in exchange for preferred oil prices.

Now Cuba is exporting doctors to Africa to combat a more implacable foe than the armed forces of apartheid era South Africa. However their humanitarian efforts thousands of miles away in another continent are actually aimed for political benefits a mere 90 miles from their coast. Cuba’s political profits are derived from exports.

The announcement of exporting doctors to West Africa was cleverly politically timed with Fidel Castro’s publicly released statement requesting the US to restore diplomatic relations and lift the decades old embargo. Although the contribution of 460 doctors is needed and will be well-received in West Africa, it’s exceptionally unusual for a poor country to send medical personnel to an even poorer country that’s not even a neighbor.

Cuba is putting a human face on a dictatorship with their version of “soft power” through a medical assistance contingent for the purposes of receiving favorable political considerations. This export of good will to save lives runs contrary to their domestic practice of torture and deprivation to their political prisoners and other refusniks who criticize the Cuban government’s policies.

Interestingly both the US and Cuba are over-stretched in these disciplines. Cuba’s long-time medical and security advisory service presence in Venezuela secures cut-rate price oil. The long-term US military presence in the Middle East secures and insures additional oil supplies at cut-rate prices. The question is to what extent is their participation overseas draining their military and medical resources domestically and for how long will their respective citizenry tolerate it?
Copyright Indo-Brazilian Associates LLC 2014. All rights reserved.


 
 Indo-Brazilian Associates LLC is a NYC-based global advisory service and think tank with connections at the highest levels specializing in international investment, political and security risk assessments. International business is increasingly complex featuring a highly mobile professional class in all corners of the globe. We provide you the tools to successfully negotiate cross-culturally in your global business endeavors. Tell us about your challenges.  We'll get on the "Short List".

Available for speaking engagements and workshops. Contact us at:

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Shadow Market Guardians - The Valkyrie of the Federal Reserve


Painful as it might be, think back to the near economic apocalypse of 2008 when we were at the brink of a worldwide economic collapse. The catalyst to our fears was not just the rapid stock market downfall, it was that no one knew the values and relationships of exotic financial instruments like derivatives. Even in a reasonably transparent financial environment this lack of hard information to explain the warp-speed market downdraft exacerbated the crisis. In turn, the inability for any of the economic or financial brain-trust to pinpoint the causes to the stark downward movements to employ a stop-gap or even a “kill switch” to halt the fall early in the crisis was unsettling.
Nowadays, the shadow market, unregulated, off-the-books and legal, is the Federal Reserve’s dark angel that is propping up economy around the world. The shadow market has a positive purpose even in good economic times if it’s limited in size and scope because containment is much easier. But once it grows to the size of 800 lb gorilla you have problems. Today we’re dealing with King Kong.
Shadow markets are everywhere, notably China because of its dominant size relative to the regular economy. Then again, because of conflicting economic data, China’s economy is one large shadow market equally mysterious to the Chinese and more developed foreign financial markets. Remember that we could barely get a handle on what was going on with our own transparent market. So imagine the reaction when a similar scenario occurs in the Chinese market. You can’t control what you don’t know. Shadow markets are not “too big to fail.” They’re just too big. The shadow market is like a scud-running (flying at low altitude), fully-loaded, fully-fueled A-380 jet in heavy fog with no radar and unable to climb higher than its current altitude. The eventuality is an economic fireball.
This brings us to the post-economic crash, crowd-control. Once the markets crash, the Fed’s financial Blackwater group called the militarized police, now a permanent presence - legal and in plain sight, could be used to literally quell panic in the streets – chiefly Main Street. Their suspiciously, unfettered and rapid development has occurred during the lowest violent crime period in decades since, ironically, 2008.
Now compare this 21st century law enforcement armament growth to the period after the Vietnam War.  Then during the 1970s surplus military equipment was never donated nor assigned to local law enforcement despite record high violent crime. Today, the armed-to-the-teeth militarized police are pre-positioned with several years experience to effectively pacify the citizenry when all hell breaks loose in the financial markets again.
This development is an unsettling parallel to “Operation Valkyrie” established by Nazi Germany to insure that there is a “continuity of government” in case of a general breakdown. The operational responsibility for this was the Nazi’s Reserve Army. The 1944 plotters who attempted to overthrow Hitler, successfully modified the policy earlier. With this modification, assuming the successful assassination of Hitler, a situation was created so that it appeared as if the assassination was a SS plot and that the Reserve Army would unknowingly support the plotters.
Perhaps we should take a closer look as to what government branch ultimately controls the militarized police (jump to minute # 32 to listen) during an emergency. Supposedly as the guardians of a free society they may be ordered to suppress rights legally instead of uphold them under a policy that may remain in place indefinitely. You’ll need more than umbrellas to protect yourselves.
Copyright Indo-Brazilian Associates LLC 2014. All rights reserved.

 
Indo-Brazilian Associates LLC is a NYC-based global advisory service and think tank with connections at the highest levels specializing in international investment, political and security risk assessments. International business is increasingly complex featuring a highly mobile professional class in all corners of the globe. We provide you the tools to successfully negotiate cross-culturally in your global business endeavors. Tell us about your challenges.  We'll get on the "Short List".

Available for speaking engagements and workshops. Contact us at:

http://www.indobrazilian.com


Ebola - Bad Social Medicine


As the real and imagined threat of Ebola increases daily so is the temptation for psychologically unhinged lone wolves and hate groups to exploit these fears. Already there’s a sense of inevitability that more cases will occur outside of West Africa particularly due to the ease of international travel and less than perfect border controls. It’s easier to smuggle in a virus than a box of Cuban cigars. The timing of this outbreak couldn’t be worse because of start of flu season during which the early symptoms of the Ebola virus are similar to the flu.

Our society consists of millions of law-abiding citizens who are over-medicated, de facto hypochondriacs with legitimate prescriptions living in a bubble world with no lethal communicable diseases. Suddenly Ebola is looming as a psychological dagger poised to burst this bubble.

Working in tandem with Ebola is another virus that has no cure: discrimination. This ancient virus has adversely affected humankind more than all the plagues combined throughout history. People-to-people eradication are known as pogroms. Virus-to-human eradication is known as a pandemic. We’ll eventually find a vaccine or cure for Ebola well before we find a cure for discrimination, a virus that may be permanently incurable.

The Ebola events are playing out like one of those far-fetched, sci-fi movies but with real-life, day-to-day psychological casualties. Because Ebola originated in Africa, African immigrants who live outside the affected regions are significantly more at risk to verbal and physical attacks. The scenario is inflamed by the high media profile and “less enlightened” celebrity types who unabashedly use Ebola as a reason ratchet up public fear of immigrants and justify closing the borders.

To take this further, it could result in the return of that despicable period when people of color and other “undesirables” based on their origin, couldn’t enter or use certain public places. Closed minded people may not physically post signs exclaiming, “No Africans allowed”, however it’s equally insidious and evil relative, the “soft” discrimination, may manifest with deliberately surly service. Or they could be subjected to a Gestapo-style interrogation with respect to where and when they’ve traveled and with whom they associate.

And amazingly there still remains a cadre of so-called top medical experts who exhibit professional hubris by claiming that it’s difficult to transmit Ebola and that developed countries can easily contain the virus. I can’t help thinking that perhaps these professionals are descendants of the scientific and religious brain-trust centuries ago who insisted that the earth was flat despite overwhelming evidence to the contrary. Often the most lethal pandemics are the ones that infect the psyche and are more damaging than the actual pandemic itself.
 
Copyright Indo-Brazilian Associates LLC 2014. All rights reserved.
Indo-Brazilian Associates LLC is a NYC-based global advisory service and think tank with connections at the highest levels. International business is increasingly complex featuring a highly mobile professional class in all corners of the globe. We provide you the tools to successfully negotiate cross-culturally in your global business endeavors. Tell us about your challenges. We'll get on the "Short List".

Available for speaking engagements and workshops. Check out my international media profile as TV panelist and published articles:


Cable TV appearances on 2014 Emmy-award winning international talk show "Fresh Outlook":
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Monday, October 6, 2014

The Dragon’s New Crowd Control Playbook


Hong Kong (HK) law enforcement, undoubtedly with explicit direction from the mainland Chinese government, applied savvy, soft containment tactics during the students’ weeklong demonstrations.
Firstly, there was no militarized police whose presence would have seriously aggravated the problem despite facing far more demonstrators than in Ferguson, MO.
Secondly, they did not apply kettling tactics which are designed to keep groups of people confined in one area for extended periods of time. The purpose of kettling is to tire out demonstrators and identify any agitators in the group. Instead, protestors were able to rotate, go home, shower, rest, eat and then return later. Although this enabled the protestors to prolong the demonstrations, this tactic was a safety valve to keep violence to a minimum. The young student protestors already feel restricted by China’s unethical and illegal application of the governance agreement, and being physically restricted as well could be the spark fuel for the demonstrations to spiral out of control. Remember, Hong Kong is one of the world’s most densely populated cities. It’s the equivalent if all 7.2 million Hong Kong residents were to occupy only Manhattan, an island measuring a mere 13 miles long and 2 miles wide.
Thirdly Hong Kong law enforcement was aided by the students’ strategy of demonstrating specifically in the business district and not marching elsewhere or demonstrating in multiple areas of Hong Kong. A mobile crowd or one which occupies multiple venues simultaneously would have posed an ominous challenge for HK law enforcement by stretching their resources and control crowd ability.  A mobile crowd can easily spawn smaller, possible more violent crowds.  Thus it was to HK law enforcement’s advantage to engage a static crowd.
Permitting a prolonged mass demonstration and letting it take its course is unusual for a totalitarian regime. China’s handling of this particular situation may be perceived as a new chapter for China in its crowd-control playbook, “kinder and gentler”. This is an illusion.
Many have compared the HK demonstrations to those in Tiananmen Square in 1989. There are critically distinct differences between them. Tiananmen Square is located near the heart of the Chinese government to which the demonstrations represented a direct challenge. Any concessions or conciliatory gestures by the Chinese government would have been tantamount to a humiliating loss of face. Remember that during period globalization didn’t exist and China still had a relatively small economy with hopes of entering the world stage.
HK democracy has been a highly transparent democracy many years. Today globalization rules and HK, far wealthier than mainland China, is geographically far from Beijing but occupies a critical post in China’s access to global business. In both instances the demonstrators were a narrow demographic: young people and students, which doesn’t worry Beijing all that much. Beijing would be far more concerned if the demonstrations were composed of a broad-based coalition of working class and all age groups which would signal far deeper problems for them. As a result, Beijing can more easily isolate one group, one class and unleash their propaganda machine to discredit this “ungrateful” troublemaker group. For Beijing if they control the media, they control the people.

Copyright Indo-Brazilian Associates LLC 2014. All rights reserved.

Indo-Brazilian Associates LLC is a NYC-based global advisory service and think tank with connections at the highest levels specializing in international investment, political and security risk assessments. International business is increasingly complex featuring a highly mobile professional class in all corners of the globe. We provide you the tools to successfully negotiate cross-culturally in your global business endeavors. Tell us about your challenges.  We'll get on the "Short List".

Available for speaking engagements and workshops. Contact us at:

http://www.indobrazilian.com



Thursday, September 25, 2014

Petro-Blockade: How To Decapitate ISIS’ Financial Lifeblood


The ISIS killing machine runs on oil, its financial life-blood, that enables it to acquire material and human resources worldwide. Oil is a fungible commodity which is always in demand worldwide regardless of price, particularly the high-quality light sweet crude in Iraq. This means that there’s always a buyer. In the case of ISIS, its buyers are shadowy intermediaries and smugglers who have no political or moral scruples at the ready with all cash payments. There are ways to disrupt these transactions but never shut them down enough to adversely impact ISIS’ operations.

Instead of attacking its army, coalition ground troops (a.k.a. US troops) should focus on its revenue source directly: the dozen or so oil refineries under ISIS control. Defending these facilities is a lose-lose proposition for ISIS. The sudden and severe loss of revenue will soon separate the wheat from the chafe amongst ISIS fighters. In other words, when things get tough or even dire the financial shortfall will cause internal fissures amongst the militants and will reveal which are true believers (fighting for ideology) and which are doing it for cash. More than likely the de facto mercenaries consist of the foreign fighters. It’s not only a method of progressively denying ISIS a major source of funding, it will also create rifts in the ranks making it more difficult for the leadership to control and inspire them to hold fast and push forward. As Napoleon Bonaparte said, “An army travels on its stomach.” For ISIS add petro-dollars.

There are three ways this can be accomplished, each one with its own particular risk:

1.       Blockade/siege: low risk with ground troops who establish themselves on periphery of the oil facility cutting oil pipes and preventing vehicles from entering or leaving. Possible drawing out ISIS forces elsewhere for reinforcements cut down aerial attacks because of open dessert. Isolation of ISIS units.

2.      Invade: High risk with high ground troop losses, damage to the oil facility and possible scuttling of the facility by ISIS forces.

3.      Destroy: Low risk with airstrikes which are currently underway to destroy or disrupt the operations of the oil refineries. Nonetheless ground troops will be required to “mop up” otherwise the militants will undertake repairs.

In WW II the US Marines performed island-hopping amphibious assaults against Imperial Japan in the Pacific. Similarly ground troops would perform oil refinery hopping in the vast desert oceans of the Mideast. This tactic can be undertaken one oil refinery at a time or a simultaneous attack on several.

Once ISIS begins to lose control, a regime at the brink of collapse like a cornered dying beast, is likely to strike out viciously and commit more horrific atrocities if that’s even imaginable.
 
Author: A Goldson
 
Copyright Indo-Brazilian Associates LLC 2014. All rights reserved.


 

Indo-Brazilian Associates LLC is a NYC-based global advisory service and think tank with connections at the highest levels. International business is increasingly complex featuring a highly mobile professional class in all corners of the globe. We provide you the tools to successfully negotiate cross-culturally in your global business endeavors. Tell us about your challenges. We'll get you on the "Short List".
Available for speaking engagements and workshops. Check out my international media profile as TV panelist and published articles:

Cable TV appearances on 2014 Emmy-award winning international talk show "Fresh Outlook":http://www.speakermatch.com/profile/GlobalAdvisors/videos/
Speaker Profilehttp://www.speakermatch.com/profile/GlobalAdvisors/
Published articles:http://ezinearticles.com/?expert=Albert_Goldson


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Tuesday, September 23, 2014

America's Iron Cross: West Point Aristocrats Aim for Glory


The movie Cross of Iron (1977) is directed by Sam Peckinpah and stars Maximillian Schell (Captain Stransky) and James Coburn (Corporal Steiner) as German soldiers in 1943 on the Eastern Front. The aristocratic Prussian Captain Stransky transfers from occupied France to the Eastern Front for an opportunity to earn the coveted Iron Cross. This medal was first awarded in 1813 during the Napoleonic Wars for distinguished service well before the rise of Nazi Germany. Captain Steiner goes through Machiavelli-type methods to “earn” the medal and frequently buts heads with NCO battle-hardened Corporal Steiner who has contempt for this military social climber.

According to a NY Times article 13 April 2014 entitled “In New Officers’ Careers, Peace Is No Dividendthere’s an eerie similar parallel in the US with some West Point graduates (military aristocrats) in the class of 2014 who are actively seeking combat participation.  The purpose for such a request is that experience in combat duty is a tremendous career booster for future military career opportunities which served the earlier graduates rather well. The same scenario occurred during the Vietnam era when the war was winding down and recently graduated West Point officers requested assignment there to obtain the combat infantry badge.


The article continued stated that these new graduates will be asked to lead men and women who have completed multiple tours in battle-ravaged Middle East without themselves having to face enemy fire. Undoubtedly there’s no substitute for those officers who have “been there, done that” with boots on the ground leading men under fire. Justifiably these soldiers get greater consideration for advancement than those without combat experience. Notwithstanding, despite their deployment stateside to for peaceful assignment, these recent graduates still may get their chance in America’s “forever war” in the Middle East with Special Operations units. But even within Special Forces, advancement may be limited.

I’m sure that not every graduate has a burning desire to enter the cauldron of war. But for those who do, I wonder if they’ve ever visited a VA Hospital or spoken with the families of loved ones killed or maimed serving their country and truthfully explain why they’re anxious to serve in those hotspots.

A career as an officer in the armed forces is a serious commitment, particularly from a prestigious and elite institution. We need men and women like them to defend us in a perpetually turbulent world. War is self-serving a business with bombs and bullets that kill and maim. I just hope for all of our sakes that the vast majority of them are doing it for the right reasons.
 
Author: A Goldson
 

 The NY Times article link:


  The trailer to Cross of Iron (1977)

http://www.youtube.com/watch?v=fV3gBzBnzr8

Copyright Indo-Brazilian Associates LLC 2014. All rights reserved.

Indo-Brazilian Associates LLC is a NYC-based global advisory service and think tank with connections at the highest levels. International business is increasingly complex featuring a highly mobile professional class in all corners of the globe. We provide you the tools successfully negotiate cross-culturally in your global business endeavors. Tell us about your challenges.  We'll help you get on the "Short List."

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Sunday, September 14, 2014

ISIS at the Crossroads


From the perspective of the ISIS leadership they realize that they’ve arrived at a critical crossroad of their existence. Just imagine that you’ve achieved unimaginable success that no other militant group has accomplished in the region in a short period of time.  This wildly successful military and terror campaign have resulted in your soaring popularity amongst your fighters, a booming recruitment of additional militant fighters worldwide and daily revenue of $1-$2 million from oil revenues, kidnapping and other criminal activities.  What lays before you through your binoculars are militarily feeble and corrupt governments who are unable to come together to form a strong ground force coalition for a counter-attack despite the air support of the US, the most powerful country in world history.

On a small scale, these early conquests parallel Nazi Germany who in 1940 conquered most of Europe within months and neutralized Britain. By1941 they made the fateful decision to invade the Soviet Union, the curse of over-stretch, which eventually doomed them 4 years later.

Throughout history all totalitarian regimes think that they’re different and that they’ll change history because of new tactics and new technology to conquer and hold additional lands. Early dramatic victories often result in the delusional thinking that this successful trend will continue.  Often, just as when you win big early in the poker game, you end up borrowing money for a taxi ride home. ISIS is at this crossroad.  Their options are as follows:

Wait: The counter-intuitive, savvy strategy is to halt their expansion, consolidate their power and wait. Any future coalition composed of regional tribes will be weak. By not mobilizing to invade further reduces the urgency to form such a coalition. Then in the near future they can attack each of those parties individually who won’t have the support of their coalition partners with low grade attacks by nibbling at the fringes.

Attack: If you had to pick the jewel in the crown for ISIS it would probably be Baghdad, a capital city of a major oil producing country and OPEC member.  It’s an astoundingly tempting option.  Symbolically it’s the unofficial US military capital in the Middle East and its capitulation will rock capitals worldwide.  If ISIS can sow enough internal chaos and confusion in the city prior to an attack, this could be the major thrust of their next campaign.

But the ISIS doctrine is based on a warped, fanatical religious belief driven by emotion, a collective Messiah Complex, not by logic. Quite importantly, such organizations are not monolithic because there are always various factions jockeying for influence. Often there are differences on matters of execution and other times there are differences on strategic matters. The question is whether the religious and military leadership of ISIS are on the same page strategically.

The former Iraqi military brass is well aware of its operational limitations however the religious leadership doesn’t care. To what extent will this create an internal conflict? This is Western intelligence’s opportunity to inject misinformation and disinformation to create enough internal conflict and dissonance in the ISIS leadership to weaken it, make them turn on each other, and perhaps render it ineffective.

Chances are that the religious faction will prevail because ISIS, like Nazi Germany, is psychologically geared for perpetual war and enslavement of people. The problem for intelligence services is that their governments don’t have strong options as a cause for ISIS fighters to defect. That’s why they joined ISIS in the first place because not even al Qaeda could offer them satisfaction. The only way is to make ISIS an unappealing organization that can’t satisfy their desires.

All power has its limitations politically and militarily.  There is always a line in the sand, not necessarily articulated by Western governments, but when crossed will provoke the US to react and respond accordingly beyond air support.
Copyright Indo-Brazilian Associates LLC 2014. All rights reserved.


Indo-Brazilian Associates LLC is a NYC-based global advisory service and think tank with connections at the highest levels specializing in international investment, political and security risk assessments. International business is increasingly complex featuring a highly mobile professional class in all corners of the globe. We provide you the tools to successfully negotiate cross-culturally in your global business endeavors. Tell us about your challenges.  We'll get on the "Short List".

Available for speaking engagements and workshops. Contact us at:

http://www.indobrazilian.com