Y Tu, Evo?

If Willy Sutton were alive today, he’d be eyeing the oil industry. Sutton, you’ll remember, was once asked why he robbed banks. "u2018Cause that’s where the money is," he replied.

According to our sources, Evo Morales may be doing a Willy Sutton number. As candidate for President, he promised the Bolivian peasants a big pay increase. Then, when he got into office, the mean people at the national treasury had a little talk with him. "Where was the money going to come from?" they wanted to know.

Evo looked around. He was losing popularity fast. What did the country have that was worth anything? Coca leaves. Yes, but coca growing is a business best done in the dark of night. If he were to nationalize it, he’d have a revolt from his old friends and supporters — that was the business they were in. And, cocaine is a high-margin business only so long as it remains illegal. That’s just another way the world degenerates, dear reader. The cops and robbers collude to protect the industry.

No, Evo had to find something else. He must have read a paper. Or, maybe he called Hugo Chavez in Venezuela to ask for advice. Maybe he talked to America’s Democrats, who are proposing a "windfall tax" on the oil industry…or the Republicans, who cravenly call for stiff penalties on oil companies convicted of "gouging," whatever that is. One way or another, he’s found where the money is: energy.

From Moscow to Mecca to Maracaibo…oil and gas revenues are irresistible, and they are changing the shape of the world’s wealth and its politics. We have been writing about the Exodus of wealth and power from the West to the East. Incomes are soaring in India and China. Savings are piling up, and the economic power of Asia will soon surpass that of the United States. But there’s another side to the Exodus. While the U.S. runs a $700 billion trade deficit, an almost-equivalent surplus is being enjoyed by the world’s energy exporters: Russia, Venezuela, Saudi Arabia, Iran.

And thus, the great American empire — direct heir to the British, lineal descendant of all the great European empires from Athens to Paris — now finds that its major creditors worship other gods, speak incomprehensible languages, dance to tunes they can’t snap their fingers to and generally wouldn’t give a damn if all Western Civilization collapsed in front of them in a heap tomorrow.

We see the evidence of the big Exodus right here in London. Despite the huge salaries paid in the City, London’s answer to Wall Street, a large part of the spending here comes from Russians, Arabs, and other foreigners. By one estimate, the oil exporters together will earn about twice as much free cash this year as the Chinese.

What a change. Even a couple of years ago, the only time you heard Russian speakers in London was when the waiters spoke to each other. Now, it is the customers who are speaking Russian, and the people shopping for luxury apartments or buying Maseratis and Lamborghinis on Brompton Road.

Back in 1998, the Russians were so broke they reneged on a $5 billion loan from the IMF. The crisis that followed sank the world’s most prestigious hedge fund, Long Term Capital Management, and threatened to bring down the whole international financial system with it. Now, Russia earns about $5 billion every week, and just for the month of April, its foreign currency reserves rose $15 billion.

That is the money that is helping — for the moment — to hold up the dollar and the upper end of property markets all over the world.

And so, the Exodus of cash continues…to the product exporters of Asia…and the energy exporters all over the planet. What can Pharaoh do about it? He owes money all over town. His enemies hold a mortgage on his pyramids. He may bluster and threaten, but he depends on them for his daily bread…and to pay his army.

And now, almost in his back yard, Evo Morales thumbs his nose at the U.S. Empire. He says he doesn’t care who owns the companies that pump oil and gas from Bolivian ground; from now on, he’s in charge.

Will ordinary Bolivians be any better off as a result? Of course not, but soon, we predict, Evo’s cronies will be buying condos in Miami.

Bill Bonner [send him mail] is the author, with Addison Wiggin, of Financial Reckoning Day: Surviving the Soft Depression of The 21st Century and Empire of Debt: The Rise Of An Epic Financial Crisis.