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Will The Day Of Rage In Saudi Arabia On March 11 Send The Price Of Oil Into Unprecedented Territory?

The price of oil is shaping up to be the number one economic story of 2011, and right now the eyes of the investing world are closely watching the developing situation in Saudi Arabia.  All of the other recent Middle East revolutions have been organized on the Internet, and now all over Facebook and Twitter there are calls for a "Day of Rage" in Saudi Arabia on March 11.  The Saudi monarchy is attempting to head off any protests by promising to give $37 billion in "benefits" to the people and by publicly proclaiming that all political demonstrations are specifically banned.  In addition, the Saudi government is stationing thousands of security forces at various potential "hot spots" around the country.  So far similar measures have not done much to quell unrest in other nations in the Middle East, but Saudi Arabia will be a true test of the revolutionary fervor that is sweeping the region.  The Saudis have a long history of brutally repressing their own people.  They simply do not mess around.  So a revolution in Saudi Arabia will not be nearly as "easy" as it was in Tunisia, Egypt or Libya.  However, if a revolution does sweep across Saudi Arabia, it is going to send the price of oil into unprecedented territory.  Saudi Arabia is the number one exporter of oil in the world, and if their oil fields get shut down even for a little while it is going to have a dramatic effect on the global economy.  With the world already on the verge of a major sovereign debt crisis, the last thing it needs is for the price of oil to start soaring into the stratosphere.

Right now the investing world is not sure what to think about all of this, and financial markets do not like uncertainty.  One piece of really bad news could send markets all over the globe crashing down.

Speculation in oil futures is absolutely rampant.  A recent report on CNN noted the following....

The speculative fervor is so remarkable that the big trading firms now have nearly twice as many long contracts open as they did in 2008, when oil spiked to $147 in the summer, a development that either foreshadowed or caused the global economic meltdown, depending on how you look at it.

In particular, the number of investors that are betting that a revolution in Saudi Arabia is going to send the price of oil up to $200 a barrel has exploded in recent days.

$200 a barrel?

Are people actually betting that is going to happen?

The all-time record is only $147 a barrel.  Just a few months ago it was absolutely unthinkable to most economists that we could potentially see $200 oil in 2011.

But it would be a mistake to assume that a full-blown revolution is guaranteed to break out in Saudi Arabia.  Remember, this is a nation that has a very, very long history of denying even the most basic freedoms to the people.

For example, in Saudi Arabia the practice of any religion other than Islam is strictly forbidden.  By law, citizens of Saudi Arabia are not permitted to change religion.  Even foreign visitors are forbidden to openly practice any other religion.  It is a whole different world.  You cannot go to the store and buy a Bible in Saudi Arabia.  In fact, if you try to pass out Bibles in Saudi Arabia you will be thrown into prison.

Beheadings and other brutal public executions still happen in Saudi Arabia to this day.

So if you plan of being a revolutionary in Saudi Arabia you had better put your big boy pants on, because the Saudis play hardball.

Much of the rest of the globe is desperately hoping that a revolution does not happen in Saudi Arabia because the global economic situation is precarious at best.

In Europe, if the price of oil causes a significant economic slowdown right now it could have global implications.  Moody’s Investors Service just slashed Greece’s debt rating three levels all the way down to B1.  But Greece is far from alone.  Several European governments are finding it much more expensive to finance their debts these days.  We are right on the edge of a major European sovereign debt crisis and the chaos in the Middle East could potentially be just the thing to spark a panic.

The United States could feel a rise in the price of oil even more than Europe because the U.S. economy is so spread out and it is so dependent on products from overseas.

Did you know that in 1960 only 8 percent of the things Americans bought were made overseas but that today 60 percent of the things Americans buy are made overseas?

It's true.

So what would happen if the cost of transporting all of those products suddenly doubled?  All of the products we buy must be transported somehow, and a rise in transportation costs will be passed on to U.S. consumers.

But the truth is that the pain is already here.  Already, millions of American families are starting to feel some very real financial pain from the chaos in the Middle East.

From February 18th to March 4th, the average price of gasoline in the United States rose 33 cents.  That was the biggest two week increase ever recorded.

Ouch.

The rise in the price of oil has some broader economic implications as well.

The more the price of oil goes up the bigger our trade deficit is going become.  As the trade deficit gets bigger, that means that more money is going out of the country and less money is going to support American businesses and American workers.  When American workers lose jobs, that means that they aren't producing wealth anymore and they aren't paying taxes anymore.  Instead, they become a drain on the system as they start receiving government handouts.

When millions of Americans go from being productive, taxpaying workers to unemployed welfare cases it causes our federal budget deficit to become even larger.

Most Americans do not understand how connected our trade deficit and our federal budget deficit really are.  One feeds right into the other.

Unfortunately, the Federal Reserve seems to think that the solution to any economic problem these days is to print more money.

According to Atlanta Fed President Dennis Lockhart, if the price of oil goes up high enough, it could force the Federal Reserve to do even more quantitative easing.

Really?

One of the reasons why the price of oil and other commodities has been going up over the last six months is because of all of this reckless money printing.

Now Lockhart is saying that because of the oil price increases they may have to do more money printing?

How bizarre is that?

Unfortunately, several other top Fed officials have dropped hints about a possible "QE3" lately.  It just seems like the insanity never stops.

Let us hope that the Fed does not go there because the U.S. dollar is falling apart fast enough already.

In any event, the rest of 2011 is certainly going to be very interesting to watch.

Even if a revolution does not happen in Saudi Arabia, the price of oil will most likely continue to slowly move higher just as it has been doing for months.

But if a full-blown revolution does happen in Saudi Arabia, it could literally change the global economy almost overnight.  The entire world financial system would be thrown into a state of chaos.

Oil is the lifeblood of the world economy.  Without a continuous supply of very inexpensive oil, life as we know it would dramatically change.  Most of us just assumed that we would always live in a world where we would always have an endless supply of very cheap oil.

Well, the times they are a changing.

You had better buckle up because it is going to be a bumpy ride.

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  • Frank

    I live back in the woods, ya see. My woman and the kids and the dogs and me.
    I gotta shotgun, a rifle and a four wheel drive, and a country boy will survive.
    Country folks will survive!
    We grow good old tomatoes and our own smoke too, ain’t too many things these old boys can’t do.
    And a country boy will survive.
    The interest’s headin’ up and stocks will go down, n’ you only get mugged if you go downtown.
    I make my own whiskey and my own bullets too. Ain’t too many things these old boys can’t do, and a country boy will survive.

  • Frank

    And I own Yamana Gold Mining company shares, too. N’ a country boy will survive.

  • Faux Gary

    Simple solution: just tax the rich and redistribute the wealth to everyone. Then they can afford gas. Duhhh……

  • http://wvoutpost.com WV Treehugger

    You got that right Frank, we country folk will survive! City people will be in total panic, with no clue on how to live without the finer things in life.

  • Jordi

    I think you are absolutely right when you say that a revolution in Saudi Arabia would have a huge impact on oil prices; but isn’t exaclty that what the minds behind all those revolutions in Arab countries are looking for? When the revolution in Egypt started, I remember reading in the Aljazeera news site that the internet (Tweeter, Facebook…) couldn’t have possibly helped to spark the civil unrest. Why? Because in a country like Egypt where most of the population is not able to read or write, how could new technologies have helped people to start a revolution so suddenly? That made me think quite a bit. But even if you do not agree with that, don’t you think it’s a bit strange that the revolutionary spirit from the arab population on all those countries just exploded at once, without any warning? I personally believe that there is someone orchestrating all this events, call it as you like (one-world government, global elite…) because all these huge events can not be happening by chance. The economic crisis that started on 2007 could have been created artificially and it could perfectly be that the minds behind all this global meltdown are now looking for a way to finish their job, trying to sink the world into a global crisis, as that would allow the richer to become even more powerful than what they already are.

  • roadrunner

    Good move Frank. From one country boy to another…I hope you also have some physical buried out in the back 40, as well as those paper shares.

  • http://ceeuropeaninfo.blogspot.com/ Tony W

    One of the most oppressive societies, and the corporate mass media has long been silent, instead blaring on about Russia, or Iran, or China, all, of course, U.S. enemies at worst, ‘challengers’ at best. I wish the Saudis well. May they have the courage and fortitude to throw off their yoke of oppression. Of course the West could care less. Let them live in oppression, I’ve gotta fill my gas tank!

  • Brums

    Frank, frankly, your living in a fantasy. You won’t be going it alone in the woods for long.

  • Phrygian cap, aka Michael2

    The blog moderator perceptively notes, “with the world already on the verge of a major ‘sovereign debt’ crisis”. . .

    Now there’s an oxymoron. How can a sovereign nation have or be in a “sovereign debt crisis”? Especially in a country like America where the Congress is supposed to handle the presses that print the currency. I guess the question of one of the little people does not matter. And in fact it feels more like I am supposed to be afraid of saying what I think or feel.

    Oh, here’s how a sovereign nation is in a “debt crisis”, “Before Joe Stiglitz was fired he took a large stack of secret documents out of the World Bank. These secret documents from the World Bank and the International Monetary Fund reveal that the IMF required nations”:

    And another tid bit from the same piece, “And the IMF just got handed the Great Lakes. They have the sole control over the water supply now. The IMF and the World Bank is 51% owned by the United States Treasury”. http://www.blacklistednews.com/

    The article concludes with a warning about converting to the Monkey Money, aka, gold/silver standard because those (precious metals) are so monopolized.

    As far as the “Day of Rage” and the price of oil, I try to look for the silver linings in the in the gathering economic storm clouds. So I concluded, like many people, it’s time to get away from oil, in fact this is at least 2 decades overdue. It will be tough but there is technology and innovators in place that will help take the edge out of getting off the crude. I am not one for the panic, fear/anxiety and hysteria.

    Meanwhile for more news about the ‘illustrious elite’, Jeffrey Epstein ‘kept a diary of his under-aged victims’

    The Duke of York’s billionaire paedophile friend kept a secret journal, described as “The Holy Grail” by lawyers, which listed his alleged under-aged victims and the celebrity guests he entertained at his Florida mansion.

    http://www.telegraph.co.uk/news/worldnews/northamerica/usa/8363169/Jeffrey-Epstein-kept-a-diary-of-his-under-aged-victims.html

    With the esclating rash of American children mysteriously disappearing makes one wonder what the hell is really going on, on this planet. There are black hearted, diabolical megalomaniacs in control, the proof is all around us to confirm this. They seem to really believe we are prey items at their complete mercy and subjects of their whims and fancy. Sounds more like the Old World system, rather than a true New World Order.

  • http://www.the-resistance.net J. Michael Warner

    Hey Frank, I make some pretty good BBQ Sauce, Rub and Ribs if you want to barter for some of that whiskey! LOL

  • kaswaro

    @frank

    When push comes to shove these country boys will be the first one these regular folk will go to. Really want that blood on your hands?

  • Dan McDonald

    If Saudi unrest does take place bringing oil to $200 a barrel, it will likely do to oil what John Lewis did to coal. Alternatives won’t rise in a day, week, or a year, but in the years ahead, people will look back and say that that was the day the oil industry’s dominance in energy was doomed. Physicists tell us energy is everywhere. The question is simply how best to harness and deliver it. But in the meantime, economic chaos would be pretty much guaranteed.

  • http://www.progressivesunited.org/ C

    Good luck Frank. You never do really know what the future will bring. Oil is pretty important though, it’s a crazy addiction unlike no other.

  • http://economiccollapse Jackie R

    Tried to send you an E-mail but comes back as failed

    • Michael

      Jackie:

      Try again – hotmail has been buggy lately but if you keep trying it will get through

      Michael

  • Jeremiah

    Frank, we could do with a little less of your bragging. Here is a quarter. Call someone who cares.

    For the rest of us who do not own gold/silver and live in the city, how are we to survive?

  • http://erectuswalksamongstus.com Max Hardwood

    Boy, oh, boy…..we are so close! I’m willing
    to bet that the ‘stock market collapse’ will
    occur soon, probably within the next 1, 2 or 3
    weeks. The stock market is going lower than it
    was in March, 2009. Everything is about to
    crash. What exactly happens when the World
    Financial System Collapses?

    There will be no cash available, banks/atm’s
    will be shut down. Store shelves will be empty
    in 2 or 3 days, at most. The welfare checks
    will stop coming, with no way to cash them…
    hungry, pissed-off ‘people’ will start to
    gather in crowds, spreading out to the ‘burbs’
    in search of food…and fun! These people
    actually get a kick out of ‘wilding’, so,
    there will be lots of crime, etc, just for
    the sheer fun of it! I can’t wait…I just
    don’t know where, exactly, I’ll put the bodies, but anyone trying to break into my
    home is gonna say hello to my lil fren!

  • impeachRonPaul

    Overall this is a good thing. We need to conserve more and become more independent from oil. Americans will never sacrafice for others. The only way to change behaviors is through the wallet. I hope we get $5 a gallon soon!

  • Liberte

    @Frank

    Glad to hear it. Make more babies.

    @Everyone

    Monolithic usury predetermines QE3 and predetermines failure.

    (someone prove this wrong)

  • DownWithLibs

    Let’s hope not!

  • Glencairn Murray

    Love the poetry,Frank,country boys got it made but what about the rest of us city dwellers,perhaps older and not a strong young man in site?..community is so important ,too bad nieghbors barely speak in this time.I lived ”on the land”for a long time,but have found myself at 65 to be in the above situation.i have plans here to utilize unused areas for food production,but its difficult without a lot of assistance.Community gardens need to be more important and a relationship with Farmers Markets.just sayin.

  • Gabrial Singh

    yeah frank, you country bumpkin, that 4×4 isnt goint too far with no gas. I hope you can eat that gold too, because FOOD is the number one commodity, followed by WATER. Gold is good, if someone else has what you need. Now if you werent a hillbilly, you would have bought 6 months of MRE’s, a generator that makes water out of air, because that gold you are saving up, will be worthless when society that values gold, is long gone. and as for the scare tactics of this website…why should I care about the european debt crisis?? I have my own debt crisis to worry about. that is what is wrong with you multi nationalists, you want me to worry about other peoples troubles. well, dont bother, I have my own, thank you!

  • Maria

    “One of the reasons why the price of oil and other commodities has been going up over the last six months is because of all of this reckless money printing.”

    Every fiat currency on earth will fail…including U.S. dollars and SDRs! When that happens, every person on earth will need gold, silver or something to barter with…6 billion people and counting. People will flood into commodities. The dumping of every paper currency on earth will drive the price of commodities to levels we cannot imagine at this point in the road. Food will become money. So will water. All commodities will. Including gold and silver.

    If the industrialized, oil-dependent world survives…silver will become more valuable than gold.

    Here’s why…

    http://dont-tread-on.me/the-silver-bullet-and-the-silver-shield

  • Maria

    GOT SILVER?

  • http://google Ash

    What do you mean by that Frank?

  • Patriot One

    I could be wrong, but a day of rage in Saudi Arabia would be a death sentence for those who participate. You never know though, with enough cameras around the protestors may think they are safe.

    These people are killers. If they can’t buy you or control you they will kill you. Its that simple.

    The radicals promoting this day of rage don’t care how many people die, theirs is a green agenda and they have partnered with muslim radicals.

    The NWO must collapse the system.

  • Antonio Gonzalez

    They are living bad, then they need the revolution. The world do not
    care for them, the occidental world only need cheap oil and still
    running and living easy a dolce vita.
    But is clear they do not care for what you call the world and is clear
    too the NATO will be bombing the people in Saudi Arabia, only for
    the oil.
    You know EE UU is the main supporter of the saudi kin, and america
    people will be killing saudi people for the oil, and to keep the saudi
    regime.

  • http://endtimeinfo.com Doe

    Will see which way it’ll go…
    A Perfect Storm of Various Problems could Threaten Saudi Rulers

    This could be the last nail in the economy’s coffin, but might not be easy for the global elite to contain, so they might not let this play out, but if they do the economy would fall.

  • comnenus

    Watch the movie True Grit. Well, the girl’s line is not very likely to survive, isn’t it?

    I am sorry. Not too many of the pioneers who went to the West left surviving descendants. It’s simply not a good territory for breeding.

    The pioneers’ line died out, and the current crop of residents in these areas came from New York, Chicago and Houston, or South of the Border.

    Pioneering is fun for a generation but not for two or more. Few pioneers left descendants beyond the 3rd generations.

  • http://www.danielrevelationbiblestudies.com Robert Stout

    Another excellent article and very clear message!!! You are going to see prophecy being fulfilled right before you eyes!!! If Saudi Arabia has a big revolution, the last movements will be rapid ones!!! Don’t wait, prepare today!!A possible scenario could be a nuclear strike from the frustrations of many countries fighting over oil!!! Read Matthew 24:3-27 in the Bible and you will see just how close we really are to the end of time for Earth!!!

  • SunFighter

    Frank

    Good song by Hank Jr. Seems some of these boys don’t know their country music…

    LOL

  • Phrygian cap, aka Michael2

    This week, delegations of homeowners and community leaders from nine state will deliver that petition and its thousands of signatures of support to their state Attorney General.http://crimeshouldntpay.com/

  • chester

    Hey Frank! Your “Dork Factor” is in the triple digits!!

  • http://www.osixs.org morpheus

    I will be a pitty to see the middle east free itself before we do.

    WAKE THE HELL UP AMERICA! – Join the Revolution
    Read “Common Sense 3.1” at ( http://www.revolution2.osixs.org )

    We don’t have to live like this anymore.

  • Jason

    Honest reporting is hard to come by these days. Thank you for keeping us informed. I agree with you oil prices are going to skyrocket and with it food prices and everything else. We are putting away as much food as possible. We just spend our ENTIRE tax refund on food storage. If your looking for reasonable prices check out http://www.ShelfRelianceSanAntonio.com. We buy almost everything through this company. The food tastes great! Don’t wait another day!

  • http://libertyandfreedomradio.net Sovereign

    When you factor in that the Moslem Brotherhood was created and funded and supported by the CIA, British MI-6 and the ISRAELI MOSSAD, you can put the pieces together and get that this whole turmoil in the Middle East was STAGED DELIBERATELY by the GLOBALISTS… to drive oil to $200 per barrel and give us a reason to open domestic supplies the GLOBALISTS CONTROL in the US. The final act of the Middle East Play?

    The Take-Down of Saudi Arabian Oil Production.

  • Tony

    Saudi Arabia is a country that holds the largest oil reserve and has been reliably and responsibly supplying the world economy with the energy needed. Most of the comments posted are very shallow and lack a good understanding of the world as a whole and the Muslim world in particular. Nothing is going to happen in Saudi and there is no need for anything to happen, reforms and improvements come with time, just imagine how the Kingdome was 50 years ago and what it is now? it is one of largest 20 economies with full scale development that has the potential to be among the most advanced countries in the near future.

  • Paul

    Well, if products cannot be produced at the end of the world because transport is getting too expensive, then they can be produced around the corner, and the kids get a job and are too tired in the evening to spray paint on people’s homes.

    I’m looking forward to it.

  • http://www.pathtoasia.com rhea

    The U.S. produces about half the oil it did in the 70′s because we have sucked the wells dry, and while active rigs have actually gone up, yes up in the past couple years, no new domestic discoveries are on the scale of the super fields of years past that are now mostly depleted.

    Plus somethings boiling down in Saudi Arabia and the entire Middle East crisis.

    “Retire or work in Asia – we can help. http://www.pathtoasia.com/

  • 1whoknows

    It may sound as though Frank is bragging(if you are a winer), try looking at it as advice. Get off you panty wearing fat crying lazy ass and get to work. The gub aint gonna ketcha every durn time.

  • Marelli

    OPps I see on here it is both March 11, when I got the email it said May 11th. I got it now. Wierd how that happened.

  • Pino

    It’s about time for the Saudi theocratic crime syndicate to be deposed. One must wish best of luc to the Saudi Arabian people because they deserve their freedom and yet are facing a brutal regime that seems even more repressive than those of Mubarak or Gadaffi.

  • Mark

    Did Saudi Arabia figure out yet that they’ve been screwed by the international bankers yet?

  • endofamerica2011

    I hope gas goes to $10 a gallon soon. Won’t stop me from driving my H2. I’ll burn more fuel, consume more goods. Let the markets crash cause I shorted them last week and am just sitting back waiting for the show! “I’ve got front row seats to the end of the Earth” LOL

  • karen

    Just to give you a heads-up we are about to have some mega earhtquakes this month, March… We will have a supermoon the 19th go research and you will see, PREPARE!!!!

  • Stan The Man

    Frank the Country Boy will survive , the only worry ya have deep in the hillbilly backwoods ……..is that after some good moonshine , and while lying there in a drunken stupor , be wary of toothless Jethro and his boys …..lest ya get CORN HOLED” right there in the woods…..aka Deliverance Style LOL!

  • Matt

    Here’s a video that was taken today in Saudi Arabia. Seems like it’s gathering steam and it’s not the 11th yet. They start killing protesters they will cause a storm in that country and drive the people mad. Here it is http://www.youtube.com/watch?v=EiWBu6DQH3k

  • http://www.mat-rodina.blogspot.com Stanislav

    Actually, Russia is the number one exporter of oil and one of the biggest consumers too. Been that way since 2006.

  • http://yahoo.com billy

    The oppression that lasted years over majority the people in saudi arabia has reached its max level now it has to be exploded.
    I know so many saudi people with great deal of financial difficulties to extend that their children could not sleep in the night for hungry.Some of them turn to look for food rubbish dam area

  • http://yahoo.com billy

    I can not wait to see royal family member fleeing from the country with empty hand.Because they have already took their of country resources.

    In Usa I have see Royal family memebers doing all nasty things and wasting money

  • http://yahoo.com wash

    I do not see any logic reason that Saudi to be safe from current uprisings in middle-east.
    Everyone wishes Saudi to be the first experience political and social changes so as the saudian to be free oppression and economic disparity they have been suffering of over years.
    So many well educated saudi turn to pursue Islamic studies after they could not find job, because every prominent position is occuppied by a member of royal family.

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