Obama’s Secret Deal with Al-Qaeda

Marin Katusa, Chief Energy Investment Strategist

"There will be no negotiation with terrorists of any kind."—Ronald Reagan

Well, looks like President Obama just tossed that out the window.

Because it's becoming pretty clear that the Obama administration is not just negotiating with terrorists, it's straight up funding and arming them.

It's no secret that Obama and his misguided foreign policy in the Middle East has led him to support and fund the Syrian rebels against embattled Syrian President Bashar Al-Assad.

And who do you think is part of this group? You guessed it—al-Qaeda.

An Excuse to Start a War

As you probably well know, al-Qaeda is a militant Islamic organization established in the late 1980s by Arab volunteers who had fought the Soviet troops in Afghanistan. They are known or believed to have been behind several operations against Western targets, including the bomb attacks on US embassies in Africa in 1998.

And of course, the destruction of the World Trade Center on September 11, 2001.

Remember the chemical attack in the Syrian capital of Damascus back in August? And how hell-bent Obama was on launching a full-scale military assault on Syria?

The chemical attack may not have been a hit by Bashar Al-Assad against his own people, after all. More likely, it was executed by al-Qaeda's Syrian branch—Jabhat al-Nusra.

Wait… now it all makes sense.

The United States supports al-Qaeda with weapons and money. In return, they launch a chemical-weapons attack and give Obama an excuse to start a war against Syria.

With the real unemployment rate at 13%, the healthcare debate continuing to rage, and Obama's popularity dropping like Newton's apple, a war is the perfect way to jump-start the economy and distract the American populace.

Unfortunately for him (but fortunately for American taxpayers), it didn't work out.

A Boon for Russia

When Russian leader Vladimir Putin stepped in and acted as a mediator between the Americans and the Syrians, he was able to bring both sides to a peaceful resolution while disarming Syria's chemical-weapons arsenal—an action that gained Putin gained a massive amount of PR and at the same time embarrassed the White House.

Obama's blunder is a huge black eye for him… and is beginning to alienate even the US's staunchest ally, Israel.

The Israelis aren't impressed with Obama to begin with (he never even visited Israel during his first term in office). And they're even angrier now that he's begun to negotiate with Iran over the country's nuclear program. It's pretty clear that Obama is willing to sacrifice Israel and move forward with a two-state solution between Israel and Palestine.

The Israeli government senses this and is moving closer to Russia than ever before. If this trend continues, it may leave America without a true ally in the Middle East, allowing Russia to become the dominant player in the region.

Putin's Winning Streak

Russia will have to walk a fine line with Israel, as it also supports both Iraq and Iran, two countries that Israel is not fond of. But if Putin plays his cards right, Russia will become the main power broker in the Middle East.

Putin is clearly not going the route of the United States, trying to dictate the domestic policies of other countries. He's after one thing and one thing only—energy.

He already has control over a vast energy empire: Russia and the former USSR states form the largest producing block of oil, natural gas, and uranium in the world. By combining this with the oil-producing machine in the Persian Gulf, Putin could extend his control of energy over the entire world.

Once he does, he can charge whatever he wants for energy. So Russia—and especially Vladimir Putin—is the clear winner from Obama's flawed policies.

But you don't have to just sit back and watch the events unfold—if you take smart steps today, you can get in on the action.

The next battleground in this "energy cold war" will no longer be the Middle East—but Europe.

You see, Europe is more dependent on Russia for oil and natural gas than ever before, and Europe's leaders have simply had enough. (If you think that most of the European leaders get along just fine with Putin, here's a little anecdote for you: At a meeting between the heads of state in 2007, Putin used his pet Labrador to intimidate German Chancellor Angela Merkel, who has a pathological fear of dogs. And just this year, they abruptly canceled the joint opening of a controversial Russian exhibit of art looted from Germany in World War II.)

The stronger Russia becomes, the harder its opponents will push back. The anti-Russia protests in Ukraine reflect the sentiment building in Europe—that Russia is not an ally, but an enemy.

That has nothing to do with nationalistic tendencies; it's all about energy.

The only way Europe can escape Russia's clutches is by producing energy within its own borders. But after years of decline, European energy technology and infrastructure lags far behind North America's.

The first phase of this European Energy Renaissance, then, must begin by bringing modern technology to old oil and gas fields in Europe. The smart money in the Old World is already positioning itself to profit from this revolution.

And there are some oil-rich fields ripe for the picking—it's basically like getting into the legendary Bakken formation in 2003, before anyone knew about it.

There's one in particular—I call it the "Next Bakken"—that has the potential to return multiple times your original investment. The company we're following sits on a 2-million-acre concession and has just completed its pilot well. The next step is to expand, expand, expand, until it's the go-to oil producer in Europe.

When I traveled across Europe, the price at the pumps was around $9.97 for a gallon, twice as high as in North America. Tough for the Europeans, but with oil prices having to go nowhere but up, savvy investors—like the Casey Energy Report subscribers—are set to make a lot of money.

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Additional Links and Reads

Japan Should Embrace Nuclear Power, Government Panel Says (Economic Times)

This panel recommendation definitely supports Prime Minister Abe's plan to reduce energy costs and to jump-start Japan's struggling economy. It's no secret that Abe wants to restart reactors as soon as possible. We expect this is just to appease the opposition and will not come to fruition.

Ex-Chesapeake CEO McClendon, Partnership File to Raise up to $2 Billion (Reuters)

While McClendon was at Chesapeake, he was able to invest in wells drilled in a program known as the Founder Well Participation Program. It looks like he's about to cash out, as the prospectus specifically states the new partnership may acquire oil and gas properties in which McClendon owns interest in. The story is still very early, and we're interested in how the street views McClendon's new deal.

Inexpensive Oil Vanishing at Alarming Rate (Globe and Mail)

The most important takeaway from this article is that oil prices cannot go into long-term declines, as conventional oil fields are in rapid decline. The cost of extracting oil will only go up as easy-to-access deposits become exhausted. Exploration companies will be forced to look offshore or to politically unstable countries, which come with increased risks and higher price tags.

Dec 17, 2013
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