Yesterday, on
May 12, 2013, I saw Andrew, a good friend of
mine from Cyprus, in
Singapore. He was staying in a hotel on Sentosa Island
with his brother David. They had one week to find a local bank to transfer
their money from Cyprus .
When Andrew came down into the hotel lobby, I was shocked by his haggard look. He
greeted me stiffly and told me that it was the end of the road for him. We sat down
in the bar, and he immediately asked me if I knew any bankers he could talk to.
I told him about my irrelevant contacts in banking, and over the next hour he
outlined for me story of how he lost his own and his clients’ money – about US$
230 million all told, the money confiscated from them by the European Central
Bank.
I had never
met a man so profoundly shaken. The confiscation had a very profound adverse
effect on Andrew and David’s lives. I understood in theory what it felt like to
lose a loved one, and he must have felt in a similar way about his clients
down. I told him how sorry I felt for him. He replied that he’d much rather
would have died himself than losing his clients’ money through no fault of his
own. His face was a mask of despair and powerlessness. Then I told him how I
saw the problem to help him and David get over the hopeless feeling as soon as they
could.
I began by
telling them they had not really lost their money: the money was not theirs to
start with. This was money generated by sale of Russian crude oil and it was
money controlled by the futures market. It is a well-known, established fact that
it is not buyers and sellers in the spot market who determine the price of oil
and other commodities, but rather speculators on the futures market. The
futures market is based on monopolized information technologies controlled by
global companies which create and perpetuate the monopoly on technology for
specific countries, regulate the proliferation of technologies around the
world, and define the divide between technology superpowers and technology
periphery. These global, multinational companies are the ones defining the
prices on futures markets. And their dominance is fair, because they paid for
creating these markets.
Neither Russian
oil companies nor the Russian government invested in shaping the oil price
market. Nor did Andrew invest his money in financing the oil futures market. A fair
price of crude oil cannot be US$ 140/bbl or even US$ 110/bbl. US companies alone
were involved in this global project – raising and maintaining strong prices
for oil and other commodities. US as the superpower in this world order sets the
global tone for oil price dynamics, and the periphery (the rest of the world)
only relies on the results of its work. No sensible person would argue against this arrangement. However, the fair price of crude oil
is around US$ 40/bbl, and it would have been there but for the futures market. Could it have been US$ 10/bbl? What would Russian tycoons, the “oligarchs,” do
if oil were trading at that level? In this case, Andrew would not have any
clients for the very simple reason of their poverty. I told him he could
explain this logic to his clients and stop torturing himself.
I will write
the rest of this story in my next post.
[ Ana shell, NRGlab, NRGLab Pte Ltd, nrglab singapore, NRGLab Сингапур, sh-box nrglab, banking system, crystal technology ]
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