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Al-Naimi Saudi Oil Minister talks about OPEC and the current oil supply situation while taking a walk in Vienna, where OPEC headquarters are located. Naimi says OPEC is a business organization, not a political organization. He says OPEC operates more like a de-politicized business organization. Yasser ElGuindi of Global Medley Advisors says OPEC's goal is to get the maximum price it can to meet the budgetary needs and investment plans of the countries and keep their economies growing, while at the same time making certain that demand is growing in the rest of the world. The Saudis believe that price is between $50-60. The Saudis play a critical role in keeping price in the $50-60 range, with less chance of a price decline as demand is steady and not likely to drop.

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Clemens Wergin of Germany's Die Welt newspaper offers an alternative German view on the disengagement policies adopted by Germany as the Middle East unravelled, and points to the costs of following the policies of doing little followed by U.S. president Obama. He says Europe faces a security crisis in its neigboring region of North Africa, similar to how it faced a crisis in the Balkans, which has resulted in the refugee crisis; and that it needs to work with its partners Britain and France to develop its own policies if the U.S. continues to pursue policies of disengagement from the Middle East, North Africa and other regions.

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Jean Francois-Cope, a protege of former president Sarkozy is declared a winner in the party election for the Union for Popular Movement (UMP) in France. Centrist candidate Francois Fillon continues to contest the vote and this decision. Fears of a fracturing of the centre right parties in France. Sarkozy moved to the right in the presidential election in an effort to draw votes from the right wing party of Marie Le Pen. Fillon stands for a more centrist nationalistic Gaullist position. The vote was so tight that Fillon contends he won by 26 votes and will challenge the decision in civil court. The Socialist party of prime minister Hollande faces problems of its own with the sharp decline in popularity of Hollande over his handling of economic issues.

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Gen. Chen Bingde, People's Liberation Army chief of general staff, leads a military delegation from China to the U.S. He made a speech at National Defense University in Washington D.C. in May 2011. In that speech he pointed out that China's military capabilities remain far behind the U.S. capabilities, which he described as "a gaping gap." He described China's military modernization as having "unfortunately aroused unfounded suspicion and exaggeration of China's defense and military capabilities." With the overstatement of the threat posed by China only "distorting China's strategic intention, tarnishing its international image, and polluting the political environment for Sino-U.S. military relations." In other remarks he said China "does not want to use our money to buy equipment or advanced weapons to challenge the United States." The meeting between Admiral Mullen and Gen. Bingde was the first in seven years between military chiefs of the two countries.

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Marc Lynch of the George Washington University Institute for Middle East Studies, says the U.S. should close its embassy in Cairo, and sever ties with the military government in Egypt. The policies of the Obama administration showing ambivalence towards the movement for democracy in the region has hurt U.S. credibility even as the U.S. media and people have supported the positive developments away from military run governments. The damage done will take a long time to repair.

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King Salman appoints Mohamed bin Nayef, 55 years-old, as the deputy crown prince in Jan. 2015. The crown prince is Muqrin Abdulaziz, 69 years-old. Mohamed Bin Nayef is the son of the Interior Minister, who worked under his father from 1999 till he became the new Interior minister in 2012. Nayef has pursued an aggressive program to remove Al Qaeda in Saudi Arabia. By taking action against all dissent inside Saudi Arabia Nayef has also jailed human rights activists, including the flogging of a blogger critical of the government. The defense minister Prince Mohamed bin Salman, is a son of King Salman. King Salman was defense minister till he succeeded his half-brother Abdullah. Ali al-Naimi continues as Oil minister, a position he has held for decades. Saudi Arabia established a panel in 2006 to work with future kings after King Salman to appoint an heir to the throne. Even with the appointment of Nayef, a grandson of Saudi Arabia's founder, Abdulaziz ibn Saud, as deputy crown prince, the leadership of the country remains within a small number of princes of the royal family. Under the Obama administration the relations between U.S. and Saudi Arabia have become strained with president Obama's failure to intervene in Syria. The Saudi have pursued their own policies since then, in first Bahrain and then Egypt the Saudis supported the monarchy and the military respectively to maintain power in the face of the Arab Spring. The danger is that Saudi policies may be contrary to the U.S. position supporting freely elected governments and basic rights, particularly when it comes to suppression of all dissent including peaceful dissent and normal criticism of government, and yet with the rise of Islamic State the U.S. puts itself inadvertently behind these very policies. The Saudis would say this has happened because U.S. president Obama failed to support the effort for freedom in Syria and a transition in Libya and Iraq (with the added complication of Maliki's sectarian policies), creating a war torn neighborhood in which the Saudis had to act on their own. These are the hidden costs of the policy of the U.S. president for the U.S. and for the Middle East- more sectarianism with Shiites and Sunnis openly in conflict, reversal of hard won gains in Iraq, reversal of the Arab Spring except in Tunisia, war torn Libya and Iraq- with a withdrawal that never truly happened because it required a firmly guided transition period of support in the region with lower cost and involvement of an extended period leaving no room for reversal of gains. It leaves both the Saudis and the U.S. in a more precarious position than a decade ago....

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Roshe gives an independent view of whats happening in the economy and sees a recession, sticky inflation that will last a long time for the US and the world economy in a semirecession for a long time. Roche of independent Strategy consultancy in London does not see the Fed's actions to increase liquidity having any effect in resolving the issues of solvency which have resulted from the overleveraging of brokerage and mortgage firms on Wall Street, only exacerbating the effects of a weaker dollar and higher inflation over the longer term. He points out that hedge fund and broker balance sheets or nondeposit financial institutions (NDFI's) half the size of banks in the USA and a quarter of the size of banks in Europe have their assets and liabilities financed by repurchase agreements. They lend and borrow against the collateral of assets that are marked to market, which means that they can borrow more and easily in a rising market cycle and can borrow less and with more difficulty in a falling market cycle. With the contracting cycle in place now they are facing insolvency issues. This may have been delayed till now because of investment banking profits and having credit lines for the duration of a contract. Till now investmet banking profits gave them leverage over lenders who made money from fees in investment banking. Now the banks hurt by writedowns of loans in mortgages and other areas are likely to tighten lending and call in their loans. What the Fed's actions will do is delay things a bit but not prevent a credit contraction and fall in asset prices. David Roche was Global Strategist for Morgan Stanley before starting Independent Strategy to provide fresh thinking and new insights on financial markets. His estimate is that reduction in available credit for corporate investment in technology, R&D and factories as a result of contraction in the financial system will require reducing corporate debt ultimately by 11-12 %. This will generate a loss of 5% points of real GDP growth for the US and put into a recession. For Europe he estimates loss of 2% points of real GDP growth. Global credit losses of $1.4 trillion would cause a contraction in world GDP of 2.5 percentage points or half the current rate of growth. For the global economy he sees a gray dull world of semi-recession and stickly inflation that will last a long time even without any major policy blunders. If this is original thinking and he is right then the Fed, the IMF, the Council of Economic Advisors, and general thinking on Wall Street that sees a short recession lasting several quarters may be in for a big shock....

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The National Front party of Jean-Marie Le Pen received over 20% of the vote in the first round of the presidential election in France. Socialist candidate Hollande received 27% and Sarkozy 25%, with about 80% of the votes counted. Jean-Marie Le Pen campaigned on the economy and fears of economic decline, as well as in favor of French national identity. She called for France to leave the EU.

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This Washington Post editorial says the Obama administration is complicit in the military attack on Morsi protester camps and civilians in Cairo on August 14, 2013, because of its failure to follow through on its warning that U.S. aid would be cut of in the event of the military taking a leading role in the overthrow of an elected government. U.S. legislation requires this action. By failing to call it a military takeover and by the administration's failure to strongly condemn the massive violation of human rights in the military attack on protesters and civilians, the Post says the Obama administration becomes complicit in the action. It sees this as self-defeating for the U.S., and unconscionable.

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Huge transfers of wealth and income were taking place in the US in the last 10 years leading to some of the glaring wealth gaps and unequal distribution of wealth and income in the US. This has threatened the social fabric of American society when combined with other factors such as unjustifiably high healthcare costs, and the shipping of American manufacturing overseas. This WSJ report looks at the transfer of wealth to the financial industry of at least $600 billion but much more than this since 2014 from interest rates of near zero. As over half of the population in the US concentrated at the lower end of the income and wealth spectrum does not invest in stock markets the policy at central banks designed by economists and the financial industry has engineered outcomes that have damaged the social fabric of American society. Distributed throughout the lower income groups, along with Made in America manufacturing, and other policies that takes working families and quality of living into account would have prevented the hugely unequal distribution of wealth and income in society. The pandemic marks a watershed period that has revealed this glaring weakness from long supply chains, to policies that were not good for working families, the impact on climate change, leading to the kinds of changes and investments in working families that are being made by the Biden administration today. ...

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This report in the WSJ by Peterson and Hackman shows how the American Health Care Act proposed by Speaker Paul Ryan provides less financial support and allows premiums to go higher for seniors approaching retirement in the 50-64 year age group. Premiums are allowed to go up 5 times that of premiums of young people in the Ryan House  plan compared to 3 times in the Affordable Care Act. Subsidies in the form of tax incentives provide $2000 to younger people going up by age not income to $4000 in the Ryan House plan. By contrast someone 60 years old making $20,000 a year can get Affordable Care Act credit of $9874, and making $40,000 a credit of $6752, according to analysis by Kaiser Family Foundation. The Ryan plan makes health care costs lower for young people in an effort to bring more young people who use less services into the system to support its overall financial condition. Another feature of the Ryan Plan is that it allows only for CPI index +1% even if health care costs are rising faster. Deep cuts to Medicaid affect lower income seniors on Medicare. As a result the AARP organization representing seniors has come out in opposition to the Ryan bill. The GOP plan wants to reduce premium costs yet in the process it makes vulnerable seniors with lower incomes pay more, which is likely to hurt Republicans who won by winning a large part of the senior vote. ...