Skip to main content

tv   Real Money With Ali Velshi  Al Jazeera  January 12, 2015 6:30am-7:01am EST

6:30 am
to the next village where more children are waiting for the first life-saving injection, nicholas hawk in sinagal. keep up to date with the news on the website al jazeera, there it is on the screen al oil prices is in a free fall, it's not good news. the sudden drop is a sign of bigger problems. talk about a dangerous job. we'll hear from a woman who makes a living smuggling oil for i.s.i.l. red states versus blue states, the deep economic divide between them put all of america's prosperity in jeopardy. i'm ali velshi. this is "real money".
6:31 am
for the first time since 2009, u.s. oil prices fell blow $50 a barrel, and many market watchers say prices could fall below 30 or $40 before going back up. that's great news, cheaper to fill up your car or heat your home. cheap oil has a downside. stack markets around the world experiences swings, all of this is played out against a nerve-wracking global back drop. political conflict is more heated now than at many times since the cold war. the eurasia group released a list of top risks. ian bremer is the president and number four is what he calls the weaponization of finance. >> it's not america's nuclear
6:32 am
arsenal or its conventional weapons or boots on the ground that is at the projection of american power. it's surveillance, drones, and importantly, it's the dollar. it's the importance of the dollar. it's access to the american markets. it's the ability of american financial institutions to meet out american policy and squeeze actors they don't like. what is being done against the russians and chinese and north koreans. at the same time if they don't behave, if you are an ally, the united states is going to use that unilaterally to be an issue, that is a risk in 2015. we saw, by the way, if the negotiations continue, we did see that iran would be talked to the table because of sanctions affected. because they were part of the global financial enterprise. we see the obama administration trying this with i.s.i.l., because it is a - it is an
6:33 am
organization that deals in oil and money. with limited success. it's in a world where the u.s. is getting less powerful, and opponents of president obama will say that he weakens americans in the eyes of the world. this is an area in which america is strengthened. a lot of people see america becoming unilateralists. all of these geopolitical conflicts have a negative effect on economies, and not on the united states. there's a lot of - there's less interest for america to take a proactive role. not so much one of bringing together a coalition of allies. that's a reason why the weaponization of february may be a tool against russia and iran. it's something that is driving the americans apart from the
6:34 am
traditional allies, the europeans, whose banks are increasingly on the wrong end of the american dollar. >> right. . >> how is this working in relation to the sony hack by the north koreans, and imposing sanctions, i find it hard to understand how sanctions having bank accounts or access to the united states is effective. it was relatively effective with the russians after the invasion of ukraine. >> there's no question it will hurt the people around them. a lot of sanctions have been organised. you look at bloomberg, and you see the top 15 billionaires in russia. the net worth is down there 50 billion in the year 2014. the united states boo love to see some folks turning and saying "hey", can you stop
6:35 am
wrecking the wealth. it's harder to do with north korea. there's no question of targetting individual bank accounts making it difficult for those close kim jong un. that's been a follow-on from sony, that we have seen north korea's internet being brought down on a number of occasions, and probably at the hands of the united states. and probably with some knowledge and complicity from china. through. >> we forget as isolationist as north korea does, we have a sponsor, and we think about china. is it strengthening or weak thing going into 2015. we know the economy slowed down. how is the oil price drop working, it that good or bad? >> you are the only man carrying around that as a prop. 50 billion that benefits the most, not just because they are
6:36 am
big importers because so much of what they do makes the state-owned enterprises more efficient. he can do that. and he doesn't have the political backlash because they benefit so much from the cheaper input costs. that is huge, the risk is not about chinese instability, the risk is not about oh, my god they are having a hard landing. the risk is xi jinping is successful in focussing on the economy. all of the countries selling them commodities, this massive wave of chinese commodities and growth in year will fall off. for australia, brazil, indonesia, sub-saharans and thailand - they are taking it on thechin. now. >> this is playing into china's hand.
6:37 am
the oil price is hurting russia, we spent most of the year talking russian natural gas. they don't make nearly as much money out of natural gas sent to europe on oil. whatever the reasoning behind the drop in oil, is it enough to really hurt russia. >> two points. first of all, no. the fact is that russia's approval rating for vladimir putin in the high 80 ks come down a lot because of oil, and go up because of sanctions on russia and ukraine. low energy price environment. vladimir putin in the corner, what is he going to do. this plays into china's hands. economically, there's no question. russia doesn't want to be isolated. they forge deals to help chinese out. china benefits. like north korea, rite, thea was the deal that the chinese loved for a while. suddenly now they are becoming a problem. the chinese own north korea, and
6:38 am
when the north koreans do things that are senseless and crazy. the chinese don't have the ability to reign them in. china is doing better. others are doing worse. do the chinese want to own the problem. strong. >> let's talk about europe. the squirmish with russia cost europe. they had an economy over the last few years that lurched and recessed. they are not in a good place. >> and radicalism spilling to europe and the united states. not only social instability. then you have all of this politics within europe. greece is now a primary election
6:39 am
for the germans and domestic politics. germany has become a big issue for the greeks. it is a bad thing. clearly what we are seeing is that all of these countries, greater pop u lis that is making them turn inward and creating tougher relations. the single thing that is working well in the teeth of the economic crisis. so, you know, i'm a political scientist. the fact was the economist were worse three years ago. the politics are better. today the economics are okay, they are not great. the politics on every front massively worse. for us in 2015, the politics of europe are the number one. >> it's the dark underbelly on oil business never get the chance to see it. in 2 minutes you meet the foot soldiers smuggling oil for i.s.i.s. >> where did the oil comes from? >> translation: it comes from
6:40 am
syria, they bring it across the river, take it across the river and store is in their homes.
6:41 am
6:42 am
the terror group i.s.i.l. put together a budget of $2 million. it relies on revenue it gets from selling stolen oil, which is no longer telling it at premium prices. it will make it difficult for the group to meet financial goals. odd as it may sound. as nick schifrin reports, i.s.i.l. has other ways of finding resources. we must warn you the story you are about to see contains graphic images. >> reporter: down a bumpy road a few feet from the syrian boarder we set out in search of i.s.i.l.'s income. our guide, a 22-year-old female smuggler. her tools, gerry can ear marked for gas. >> we see how i.s.i.l. recruits.
6:43 am
our recruiter is a 27-year-old syrian it expert. his tools, keyboard and mouse. on the river in istanbul, over cups of tea, we learn how i.s.i.l. is organised. our expert, a syrian employed as an i.s.i.l. salesman. how were you organised? >> i.s.i.l. needed civilians not connected to them. i help them sell the products. >> reporter: three people who demanded anonymity show how the management and wealth are dependent on foot soldiers whose main motivation was income. they work for a self-declared state who might flag the state of islam. our journey begins on the road with 22-year-old seth. were a lot of people smuggling,
6:44 am
was it easy to smuggle through the area. every night she would take the turkish rode through the syrian boarder. the destination - on this day our car had the road to itself. argy is close to syria, the border is a river. refugees can be rode across. he is best known as a home to smugglers, tractors used to transport, and the jerry cans to store i.s.i.l.'s main source of the income. oil and gas. the town smells of it, said to smuggle it across the river. >> translation: it comes from syria, they bring it across the river, take it to their village and store it in their homes. inside syria and iraq i.s.i.l. controls a dozen oil refineries. i.s.i.l. sells 30,000 barrels a day, for one to two million.
6:45 am
it is smuggled into turkey. turkish soldiers smuggle how the gas is pumped into pipes or it is moved across the river in jerry cans. the gas is transported in vans or in secret gas tanks inside of buses. we instruct a gas tank to hold 35, 40, 50 gallons. if there's no army, you can make good money. >> for these people it's not ideological, it's business. >> these people are outsiders. >> we weren't buying. the town didn't like that. after we filmed the jerry cans, smugglers stopped the cause. we tried to get aa. - away.
6:46 am
they released us after he was convinced. anyone interrupting the business and profits isn't welcome. >> how much money did you make? >> your income depends on how much gas you bring. if you bring a tonne, you make 400, 900, 1300. you bring 10 tonnes, depends on how good you are. the only thing that separates syria from turkey is a thin river. the area has been a smuggler's haven. that means goods like gas is fighters. >> we have brothers from bangladesh, iraq, cambodia, australia, u.k. foreign fighters fuelled i.s.i.l. and its rapid rise. they star in i.s.i.l.'s unprecedented media campaign.
6:47 am
. >> i'm your brother. i'm from south africa. >> reporter: foreign fighters reject their citizenship. a few dozen are american. >> we are coming for you president obama. >> reporter: this is the man that helped to convince them to join. online. >> they will follow anything you tell them. they have been brainwashed. we talk about religion, paradise and finallyins. in a hotel room over half a packet of secrets. the 27-year-old reveals i.s.i.l.'s social media strategy. for a large salary he and three others would spend days online and painted i.s.i.l. as a prosperous army. the fighters is incompetent
6:48 am
infidels. false? >> almost all of it was lies. exaggerations. for example. we claimed other groups raped women. that was not true. >> the americans are always trying to hack into these accounts. how did you avoid other people gaining access to your accounts. >> we changed the accounts passwords every 12 hours. we hand wrote down our contact. if the accounts were hacked we reach everyone again. the u.s. says every month more than 1,000 foreign fighters joined i.s.i.l. propaganda videos feature fighters. the foreign fighters that joined i.s.i.l. gave their friends contacts. media is the important thing for i.s.i.l. to attract fighters and
6:49 am
create popularity in syria and iraq. try and create popularity that spans generations -- spans generations. i.s.i.l. calls them its cubs. their mind not old enough to resist propaganda. a man who wants to be known as omar saw the children up close, he headquarters. >> what they working on most is recruiting children. they become strong willed and believe they will find redemption when they are martyrs. omar used to sell goods that i.s.i.l. sold. in raqqa, many civilians worked for i.s.i.l. in this city, men prayed on the street, women are covered. and many keep the piece. he changed a lot.
6:50 am
>> at first they brought in a thug, an alcoholic, a criminal and appointed him amir. now they have pushed them out. in their place they have appointed educated people with a strong presence. >> the group is organised like a spider web. at the center a self-described man and his deputies. each group of amirs and fighters are isolated. they receive orders but have no leadership. >> they received orders but the source isn't known. the amirs within i.s.i.l. information. >> a complex and effective structure connecting every ruthlessness. >> they value spilling blood. they have no mercy. islam is merciful. for them people's lives are cheap. >> through fear, through promises of profits, i.s.i.l. fills the state with people who may fight it.
6:51 am
today, i.s.i.l. controls an area the size of belgium. its population is equivalent to new york city, and officials warn the war to remove i.s.i.l. will take years. the battle between red and blue states is fought every election day. what about the other 364 days a year. who lives better. there's an answer, i'll have it for you when they come back.
6:52 am
6:53 am
beyond politics there's an economic division between the red states and the blue liberal counterparts. that split is the subject of a recent opinion piece by author richard florida, a leading authority on cities and urban issues. he asks the questions is life better. richard sites data showing though housing costs are twice as much in deep blue markets than in red markets. $227 versus 119. red states have done a better job of offering a higher standard of living. relative to the housing trusts. florida writes that inque quality grew fastest in blue states with vibrant knowledge economies. those include new york and massachusetts.
6:54 am
the last line of the peace reads the red state, blue state divide threatens to kill the dream. richard florida is the director of the martin prosperity institute. i asked him to explain why the place. what the opinion peace in the times argues is that the american dream, the one i grew up with in new jersey, of a nice something family home for a middle class person and a car, a couple of cars is becoming almost completely out of reach for a person in an expensive blue state metro area, boston, greater new york. but in a red state, because they have the extraction, because they benefitted from the energy boom, because of fracking, because they can build houses leek wild anywhere, hissing is cheap, and for a person, a working person, they can afford
6:55 am
to have a decent house. trouble is this is the hook in the peace. that old version of the american dream in the american state is not sustainable, because an energy extraction billed a bunch of housing economy is not a real economy. it's a blue state knowledge economy innovation economy, which is our future. but it's expensive to live there and expensive to run the economy phases. >> play this out. if things go down the track they are going on. these blue states with knowledge economies, that are more dense and expensive to live in continue down the road. and red states within with the way they are going, where does that leaf us. >> the red stages - energy, pull it out of the ground, it's billed out in the suburban sprawl. they can do that and have a low tax of the the blue states and metros, the cities that are the
6:56 am
centers of ippo vacks, the new york -- innovation, the boston are dead, not only housing. they have to pay for the state universities, they have growing inequality. they have to pay for transport system and rail systems to get people around. they are shrinking dream is a product of a more expensive economy. what i fear, and what worries me is in this fiction. old red state dream is captivating. i quote eric perry saying that is how he's running the campaign, he'll show the low cost, low tax way of the country, maybe it's the way for texas or the red states, i feel it will eat the seed corn. it will threaten. it will threat the investments we need to make in great universities, in developing people with education, in adding transit and infrastructure, a horrible threat.
6:57 am
the future has to be on knowledge, but it is not delivering the dream, people are getting frustrated. >> what is the solution. the folks in red states, those that run in red states or govern them are not going to read your piece and say "we're going to raise our taxes, they'll milk this for as long as they can." the writing tells me i'll paint as bleak picture. inequality is worse in the red states. the real problem lies on our progressive left. i think bill de blasio, a man who i admire, it's a tale of two cities, the city of the rich and poor. it's not a vision of the unit future. it's not a visionful fdr, fran line roosevelt of all americans prospering much the blue state progressives have to get off the kick that it's us and them, a big divide.
6:58 am
we have to build a middle class. we have to get with upgrading the low wage jobs, building affordable housing of expanding housing, building transit. we need a vision that all americans can get england. republicans and the red state have a vision. a house on the periphery, a car and commute to work. the blue state has to create a dream that is more than bemoaning the divide, that aptly faces us. we need to progressive vision of a future for every american to prosper and have a hope for the dream. what is interesting to me, you probably know this, the state in the united states, with the lowest unemployment rate, we have from an employment perspective is north dakota, because of fracking. i mean, hoping north dact's economy will be -- dakota's economy will stay stable. that throws russia and parts of
6:59 am
the middle east and venezuela in turmoil. i said this. i noticed if ultimately unsustainable red state dream. i think this could send the red states into turmoil. because higher energy prices and all the activity, that has to slow down. in that sense, we in america - look, we are fortunate in the united states to have a knowledge - we talked about this before. a knowledge and an energy economy. what a two-fer we have, we have to stop thinking of them as antipodes, and use the resources from energy, and build the economy, address in the transit. right now it seems the cheap version, the red state version has the upper hand and in your peace, which is worthy of a read, you end up in a place i'm fond of. that is use the money, resources and invest in infrastructure, something we do not do effectively.
7:00 am
>> always a pleasure to see you, i look forward to having you on the show. richard is the director of the martin prosperity institute. that's our show. i'm ali velshi, thank you for joining us. >> tight security in france one day after nearly 4 million march across the country to honor the victims of those two shootings. a woman wanted in connection with the attacks. >> schools reopening. the new security children face as they return to class. >> search that crews discovery the