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Saturday, February 28, 2015

A Better World Is Coming! The Impending Collapse of Big Oil, It's Children, Grandchildren and the Financial Collapse of It's Creditors -

The Impending Collapse of Big Oil, It's Children, Grandchildren and the Financial Collapse of It's Creditors


This is a great day for the world! Big Oil and Gas are downspiraling and the end has been brought on by their own greed. Only a fool would invest in Oil and Gas Wells or oil company stocks now.

"US Crude should hit around $25 per barrel in 2015 as production is cut all over the world. New technologies that are cheaper and cleaner will compete for your dollars- no matter what country you live in on the planet." - Mark Winkle, Founder, The Winkle Institute for Worldwide Economic Stability (2015). 

The following article was found at wolfstreet.com through due diligence in our research of the oil and gas industry's greed, environmental damage, effect on the world's economy, and the toxic pollution and contamination of the planet by the oil and gas industry. May it be replaced quickly by a cleaner, less expensive source of energy.  





The Fracking Bust Exacts its Pound of Flesh
by Wolf Richter • February 27, 2015

Breath-taking booms and obliterating busts have made the oil and gas business. Booms draw money, which begets more money, which allows for technologies to be invented or perfected, and it builds enthusiasm that turns into blind faith among investors, and they throw more money at it. The money gets drilled into the ground. The debt remains on the balance sheet. Production soars. Demand doesn’t keep up. Storage levels rise. The price begins to plunge. And all heck breaks loose.

The fracking bust didn’t start last summer when the price of oil began to skid. It started in October and has progressed with phenomenal rapidity. In the latest week, according to Baker Hughes, which publishes the data every Friday, drillers idled an additional 33 oil rigs. Only 986 rigs were still active, down 38.7% from October, when they’d peaked at 1,609. In a period of 20 weeks, drillers have cut the number of rigs drilling for oil by 623, the steepest, deepest rig-count nose dive in the data series:

US-rig-count_1988_2015-02-27=oil


The result should be lower oil production.

But it’s not. That mountain of debt the oil and gas industry has piled up during the fracking boom needs to be serviced even though revenues are crashing as a function of the price of oil. So they cut operating costs and capital expenditures. And they’re concentrating their remaining resources on the most productive plays and the most efficient technologies to maintain some sort of survivable cash flow.

Because they’re all doing it, US production continues to soar, after a mind-bending 84% increase from about 5 million barrels per day in 2008 to over 9.2 million barrels per day in January 2015. This is what a real and ongoing boom looks like:

US-oil-production-2000_2015-1

But demand is not keeping up, and crude oil inventories keep pushing deeper into record levels in the US. Excluding the Strategic Petroleum Reserve, crude oil stocks rose by another 8.4 million barrels to 434.1 million barrels in the latest reporting week, the highest level in the data series going back to 1982, according to the Energy Information Administration. Crude oil inventory levels were 71.7 million barrels, or 20%, higher than at the same time last year. The upward surge in crude oil inventories (gray line) defies the 5-year range (gray:

US-crude-oil-stocks-2015-02-25

Drillers also idled 9 rigs drilling for natural gas, which brought the gas rig count down to 280, the lowest since May 1993, and down 81% from its peak in 2008. Despite the evisceration of drilling activities, production has continued to surge over the years to new records and has turned the US into the largest natural gas producer in the world. This is what the conundrum looks like:

US-rig-count_1988_2015-02-27=gas Picture)


But take the rig-count split between oil and natural gas with a grain of salt. Whether a rig is drilling for oil or gas is a distinction made by the driller. Most fracked wells produce a variety of hydrocarbons, depending on the shale formation. A well might produce a mix of oil, natural gasoline, natural gas, and natural gas liquids like propane or butane. In theory, the driller would classify the rig based on the dominant hydrocarbon.

But in 2011-2012, the price of natural gas was plunging, while the price of oil had soared. So drillers began classifying rigs as “oil rigs” that they’d previously classified as “gas rigs” because it looked a heck of a lot better in their investor presentations. Fracking for oil was making money at those prices; but fracking for gas, at the prices prevailing at the time and still prevailing today, was an exercise in self-bleeding regardless of how drillers tried to twist it.

If investors had known reality, or had wanted to know reality, they might not have forked over that money that has now been drilled into the ground. But drillers on the dreadful fracking treadmill constantly need new money to drill more to make up for the sharp decline rates of the wells they’d just drilled. Hence their efforts at the time to beautify their wells by calling them “oil wells” even if they were getting more gas than oil. Almost nothing in the world of fracking is quite what it appears to be at first blush.

Dropping gasoline prices have perked up American consumers. After years of post-financial-crisis struggles, they finally see some light at the end of the tunnel. But suddenly, it all starts to crumble again. Read… What the Heck Has Suddenly Hit American Consumers?






6 comments for “The Fracking Bust Exacts its Pound of Flesh” (including mine)

Gil Obrero
February 27, 2015 at 10:18 pm

One comment that I have yet to see and one that for me at least, represents a far bigger threat to any muppet who invested , is the ration of leveraged debt to current wells.

That debt, no matter how you dress i up and try to smear it across a whole plethora of mostly fictitious or simply ignoring utterly bleeding activities, or discount or remove any decommissioning costs, such as redundancy payments, asset protection measures, after ll you cant just abandon a rig and simply leave it out of all the equations, there has to some efforts to preserve the capital costs, even if its for future sale of either the bankrupt company to simply to to use as an additional accounting fiction to dd to the balance sheet,

BUT whatever the bot tom line is and will remain the overall total debt divided by the number of productive and active rigs and the and the value of that debt is inversely proportional to the future cash flow generation minus the operating costs and the expected future reduction in rigs
You can also include the depreciation and include the expected LOSSES, by bringing onstream current rigs in the pipeline that will increase met production, ( as the net rig count is rigs taken out and adding new rigs that are more efficient being brought onstream) but are capable of pumping oil and therefore losses at a an ever greater rate.

By my best estimates, and I don’t have all the numbers to validate it, but I am sure there are some experts out there who can take all the above in a more detailed consideration, but I think currently debt even at its current level is more than 2.5 times overvalued.

You have to very brave indeed if you own any oil debt of any description.
Reply
Wolf Richter
February 28, 2015 at 8:26 am

A good example of what happens to fracking debt is Samson Resources, owned by PE firms, led by KKR. It has now hired a “restructuring” firm. Which means it is trying to do a prepackaged bankruptcy. Equity holders will get nothing (KKR has already written down its equity investment by 95%). The company will be handed to the creditors (they’ll get the assets). The low end of the creditor totem pole will get nothing or next to nothing. Samson has been fracking mostly for natural gas, whose price has plunged years ago. But these things take time.
Reply
mick
February 28, 2015 at 8:29 am

At the investment firm where I work in Canada, just yesterday a syndicated debt issue rolled in from one of the smallest tier 1 banks in Canada. Paying 7% plus a 4% commission, a very juicy offer for a bank.
I looked them up, they’re heavy into real estate and energy, both of which are in trouble now. When banks have to pay these kind of rates to get money, you know problems are brewing. They aren’t a big bank mind you, but it always starts with the weakest links.
Reply
Colin
February 28, 2015 at 10:02 am

If there is a drop in oil production due to the cheap price, it’ll take several months before we will know. It doesn’t happen overnight. I generally enjoy this site very much, but the articles about oil seem off from other things I’ve read.
Reply
Wolf Richter
February 28, 2015 at 12:11 pm

So why has production of natural gas not dropped, though it has traded below the cost of production at most wells for years? Companies like Samson Resources will go bankrupt before they cut production. They cannot afford to cut production. They have too much debt. Decline rates of fracked wells are such that drillers have to drill just to maintain a survivable cash flow. It’s a terrible catch-22 for these companies.

So for now, they’re focused on efficiencies – getting the most production for less.

Eventually production might decline, but not nearly as soon as people expect.

There is a lot of hope out there that this oil bust will be over in a few months. The last real oil bust (not the Financial Crisis) I went through lasted years! And it took down with it 700 banks.
Reply
David
February 28, 2015 at 11:23 am

Excellent article. With companies continuing to focus on their most reliable production wells oil production should eventually decline since the shale generally has a production shelf life of less than 5 years, don’t you think?

So without new drilling and eventually the most profitable will decay, supply should abate.

Finally, although these companies can ramp up easily if oil prices rises, but if it’s capital intensive and many will file BK or be in distress wouldn’t lenders be reluctant to provide lending given a bust that’s looming or after one occurs?

I do enjoy your articles and thoughtful analysis into these topics.




Mark Winkle
February 28, 2015 at 8:04 pm

Fracking was always a bad idea. Pumping toxic wastes back into the ground. When a well pipe becomes brittle and cracks due to chemical contamination or from back pressure of the fracking process, toxic chemicals are leached into the water supply. As a result of the greed of Oil and Gas companies around the world, I applaud the demise of the greedy and the selfish. They are their own worst enemies. When they go bankrupt, let them eat their own oil and drink their own contaminated water from their ponds.
The gas and oil industry has done what environmentalists could not, they killed the brown (not golden) goose. The death spiral of the industry has only begun and oil and natural gas prices will continue to decline. Oil should reach $25 per barrel in 2015, closing all but the largest companies- suckers!
This lesson should be learned by every oil and gas worker- “You don’t mess with Mother Nature.”

And by the way, after all the toxic waste lawsuits are finished, and the Superfund cleanups are ordered for well rigs, few of the largest will survive. The beginning of the end for big oil (notice the small letters), has begun. Thank you for doing my job for me.

The Winkle Institute for Worldwide Economic Stability
Fin., Env., Legal, Human Rights Consultants to the world.
"Making the world a better place to live for everyone."




Saturday, February 21, 2015

Nice to Know You Were Listening- Now On To The Matter of Russia and Ukraine

                    Thanks for making me proud of all of your fair minded somewhat geniuses that the EU countries call Finance Ministers. Common sense must prevail in your meetings. You made me very sad to hear that you were permitting Germany to set the tone for Greece's finance package. I thought there were 29 countries in the European Union and that the EU was run by a parliament and commissioners, not by a doddy old queen- (Germany has repeatedly opposed uniting the European Union because it thinks because it has the largest economy that it should be the ruling country. However, in a democracy, every citizen and every state has a vote. Germany even blocked a You Tube video of the Proposed Constitution of the United European Union and has since 2012. Because it wants to call the shots instead of allowing each country to have a voice.

Why did the Russian- Ukraine talks end so badly and why was the outcome so poor and one sided? Germany wanted to cut a sweetheart deal with Russia- as did France, (but France is more loyal to the European Union and more of a team player than Germany will ever be)- with the exclusion of a majority of the ECB staff including Mr. Draghi. They are loyal to the European Union.


Had Merkel stayed home and minded her own business, a better deal would have been negotiated. However, no deal with Russia, whose economy is crumbling faster than they want anyone to believe, will be maintained until Vladimir Putin is removed as dictator in chief. You need to cut the head off of the snake.

Russia is now threatening the United Kingdom, Ossetia, Moldova, Bulgaria, Hungary, and the Netherlands. When will NATO Command find their testicles and send troops into Ukraine? Twenty thousand troops would do the job. No nuclear war, no invasion of Europe, cut the head off of the snake in eastern Ukraine and allow the separatists to be exiled in Russia for the remainder of their lives.


                                             Now to the big stuff............SANCTIONS


Considering the fact that the world is in a political and economic war with Russia, and that war will continue as long as Russia has an economy, and that the dictator of Russia who was not legally and democratically elected in a fair election will continue to attempt to destabilize the word's economies as long as he is permitted to, there is only a few alternatives left to the remainder of the world and none of them are pretty.

It will require great fortitude and a strong stomach to read this as many tens of thousands may die regardless of what path is taken. Think strongly on these things before you act as each one will bring retaliation from the snake in Moscow- evil as his heart is.

1. Death knell: Dead bank letters ending all currency transactions by and between any bank outside of Russia and imposing swift sanctions on countries that assist the criminal enterprise of Vladimir Putin and his oligarchs.

2. Replacing the natural gas supply from Russia with LNG from Mexico, Brazil, the US, Canada, and many other countries. 120 days equipment conversion is definitely possible.

3.  Slower death: Dead Bank letters to half of the 50 largest banks in Russia.

     The problem is that snakes don't have legs and don't rely all that much on balance to keep them slithering along before they strike. Also, the other half of the banks would be required to share the pain of the dying banks.

You need to look at Putin as a wounded rat in a corner bearing its fangs. A broom will not kill it. It can still cause you great harm. On the other hand, a .45 calibre handgun would make an awful mess of things.

In this battle of propaganda and economics, China is acting like Switzerland did in WWII. Not taking sides, but benefiting from both sides. (Sorry Swiss, but it is the sad truth). Your apologies are accepted. China needs cheap oil to keep its own economy running, so don't look for help or peril from China.

The problem is that the weak responses to date have been your bane. You need to send NATO troops and equipment into Ukraine to balance the threat of an invasion (impending, as if you don't realize it yet)!

Putin thinks we want to take over Russia - REALLY!!!  The reality is that we DON'T!!!   If you have not noticed he has not looked the camera in the lens in months. Why?  The bags under his eyes, the loss of sleep, his nervous nature, his megalomania, all Hitler like qualities of an insane person who thinks he will get away with murder if he threatens the jury.

Putin and his country are trapped- like rats on a sinking ship. In nine months, tens of thousands will be dead or dying in Russia due to slowly declining value of the ruble. The continuing decline in the price of oil, despite oil worker strikes and sabotage at refineries- as a result of the greed of the oil and natural gas companies and the political cooperation of Iran and the House of Saud in Saudi Arabia (yes,we are playing both sides of that one too), will gradually cause an economic rebellion and then a political rebellion in Russia over the next year.

Putin's reign is over, but he refuses to give up the reigns. More likely than not, a military commander loyal to the Communist Party will temporarily take control. Putin will be taken into custody and turned over to the Hague for war crimes (Malaysian Flight MH 17) and supplying eastern Ukraine separatists with lethal arms.
Unfortunately, this too will take a year or more.

The issue is resolve. How resolved are the members of the United Nations to seeing a peaceful end to this mess? We have yet to hear from them about sponsoring a negotiated treaty that is beneficial to everyone. Why not allow the United Nations and the International Court weigh in,  but that takes time too.

Because of this one man's mental disease, people have died by the thousands. What is it worth to free Russia and the world of his terrorism? Ten thousand people? Twenty Thousand people? Thirty thousand people?
Fifty thousand people?

There will be no nuclear war. This was a hollow threat and always has been. There will be no invasion of Russia. Only the removal of a few rats and cockroaches.

You could post NATO troops along the borders of European Union countries, impose an embargo of trade with Russia- but, that too will take time. Make Russian an international no fly zone. That would speed things up quite a bit- but still would take time and international cooperation.

I believe a three pronged approach just might work though.  1) Suspending Russia from membership in the United Nations as long as it financially supports eastern Ukraine separatists and maintains troops, spies, or military equipment  in any sovereign nation including Hungary, Bulgaria, Ossetia, Georgia, Uzbekistan,and Kazakhstan. 2) Issuing Dead Bank letters this month (February 2015) to Russia's 50 largest banks, and
3) embargoing trade from entering Russia by air, sea, and truck and imposing sanctions on non-cooperative countries- results of this tri-fold approach-  economic collapse in 90 days, a strategic launch by Putin within that time frame ended by NATO.


Now, be forewarned, if you wuss out, thousands to tens of thousands will die, Putin will take control of even more land- and then the United States will wade in and remove the snake and stomps its head with its heel.


Biblical isn't it? -- No. "There will be wars and rumours of war, but the end is not yet (Matthew)."  The big one will come when China crosses Mongolia.

So, what do you want to do?  Economic stability will not come while the snake is in the market.

,

In the end, no matter what,  Russia will economically implode. If oil prices continue to fall, and they will, more than likely down to $15 to $25 per barrel crude US and $10-15 more for Brent crude stabilizing next year at around $56-65 per barrel for US crude.

If the European Union unifies, the collapse of Russia will happen at nearly the same rate, but the economic fallout would be lessened among every state of the EU if it were united.

Be forewarned, Russian spies and plants are everywhere throughout the EU trying to keep the EU from unifying as one country.

This is the beginning of a new age- step strongly forward and choose your neighbor's poison. The world is waiting.




Friday, February 20, 2015

Another Greek Tragedy: Campaign Promises and a Knife in the Back From a Loanshark

                  No one disputes the facts that a majority of Greece's problems are as a cause of their own buy now, pay later lifestyle. They have the most liberal retirement policies, massive overpaid government, and waste money by the bucketful. Let alone the continuing tax fraud, backstabbing, and back room deal making- and that's only what is going on in political circles. Who knows how much chicanery is going on that is not seen or brought out into the light of day?



                   What Greece needs is an old fashion revival. A revival of truth, honesty, and transparency. Greece needs an enema t shite out all of the bad politicians and bankers from its system.

                    As for the Greek debt fiasco going on in the press, this is all politics. Sit down already and stop grandstanding. Come to an understanding that Greece cannot leave the Eurozone, as there is no legal pathway that exists for it to happen- and none is likely to be voted upon unanimously. This is one time that the idiocy of unanimity might save you squabbling children. If I was over there at the Finance Minister's meeting this weekend, I would give you all such an earful!

                    How dare you undo the four years of my work, the work of Mr. Draghi, the IMF, and others with your petty squabbles over money and your personal angst against one another. Your actions are causing peril throughout the free world! Idiots! Morons! Imbeciles! How dare you!

                    Now, sit down and listen to me! What you are going to do is reach politely across the table, shake hands, and apologize for being such snooty bastards. Greece is in trouble. Your fellow countrymen and home of your ancestors is in need. Ease the pain. Help them revive their once brilliant country and restore faith in their government and in the banking system once more.

                     If you lunkheads were not so abhorrent to the idea of a unified European Union (Germany stands in the way), this problem could be resolved by a plural vote of each country's citizens within a month. Want to try democracy at its roots? I dare each country to give its citizen the opportunity to join a United European Union, create a united treasury, move the ECB to Belgium, and win another Nobel Prize for working together- again for the common good.

                    Remember Jon Nash's Game Theory of Equilibrium- Everyone wins- including Greece.
Somewhere along the way you forgot that.

                    A six month extension of the current loan is not unreasonable if the proceeds are used to create jobs and create cash flow in the Greek economy. 


Sincerely,
Mark Winkle
CEO/Founder
The Winkle Institute for Worldwide Economic Stability

Friday, February 13, 2015

Ten Reasons Why The Recently Negotiated Russian-Ukraine Deal Is Bad For Everyone - But Russia

            The hardest thing for me to get from the European Union is to do the right thing,  at the right time, for the right reasons. Consider the recently brokered peace deal between Ukraine, Russia, and the European Union- It is the WORST POSSIBLE DEAL that anyone save Putin could have come up with.
             Angela Merkel screws up yet another negotiation, just by showing up. Who endowed her to negotiate on behalf of the European Union? Her only concern is what is good for Germany, not what is best for Ukraine. That Angela Merkel would get the message that her input was not needed and was interfering with the men sitting down and hashing things out over a few drinks. But, no! Merkel messed things up again!

Here is why this deal is bad for everyone- but Russia- for a long time:

1. If you let Russia get away with breaking the United Nations accords this time, there will be no impetus for them to stop at anything.

2. Russia has been in violation of international law by invading the sovereign territory of Ukraine on multiple occasions- this deal rewards those invasions.

3. The eastern Ukraine rebels are war criminals for shooting down Malaysian Flight MH17 with weapons supplied by Russia, who is complicit in those war crimes.- This deal gives them immunity- for committing war crimes against citizens of an uninvolved country.

4. The eastern Ukraine rebels are war criminals for kidnapping, raping, pillaging of Ukraine citizens of Donetsk and Donbass regions- this deal gives them immunity from horrendous war crimes.

5. Russia has been supplying eastern Ukraine rebels with food, military weaponry, troops, fuel, and God knows what else in complete violation of the United Nations accords. This deal rewards them for being international criminals.

6. Russian troops have been fighting alongside eastern Ukraine rebels in violation of international law and the United Nations accords. Those troops have murdered innocent civilians of Ukraine and soldiers of Ukraine in violation of United Nations accords. This deal rewards those actions.

7. Crimea was illegally seized in violation of international law and United Nations accords. This deal rewards the kidnapping and holding hostage millions of innocent civilians.

8. This deal benefits Russia by giving Russia and its allies control over most of the eastern geographical and economic sections of Ukraine- this is not acceptable.

9. This war against Ukraine was initiated as a retaliatory action against Ukraine in response to Ukraine seeking asylum in the European Union- it would be criminal and against the United Nations Human Rights
Accords to provide rewards to Russia for these atrocious acts of barbarism.

10. Russia and the eastern Ukraine rebels have not made reparations to Ukraine, the citizens of Ukraine, or the  heirs of the victims of Malaysian Flight MH17 in this deal- that is untenable.


For the above reasons, the European Union MUST STOP THIS DEAL FROM BEING RATIFIED BY NATO OR BY THE EUROPEAN UNION.

IT IS OBVIOUS WHERE THE UNITED STATES STANDS ON THIS DEAL. We were not even at the negotiating table.

THIS IS A BAD DEAL FOR EVERYONE- BUT RUSSIA!

 We Do Not Negotiate With Terrorists or Reward Criminals For Their Crimes- EVER!!



Sunday, February 8, 2015

What Is Needed Most Now Is The Uniting of The European Union- The Only Lasting Economic Solution

                As an international consultant who has provided advice to 38 countries, the IMF, the EU, the UN, the USA, and other government entities, it is inherent in my duties as the CEO and founder of this advisory to advise governments what the best "medicine" is to solve their current problems.
                As we have advised since 2011, the best course of action to resolve economic disparities throughout the European Union, to resolve economic conflict between member states, and to ensure the survival of the Eurozone and the European Union, is to unite the member countries of the European Union under one central government, one central banking system, one currency, one commodities trading commission, one stock brokerage commission, one bank regulatory system, and one set of universal laws that are generated through consent and ratification of the citizens of the European Union.

               In February of 2012 I drafted the Proposed Constitution of the United European Union - "Winkleland" - to date, some of it has been adopted by the European Union Human Rights Commission, some of it has been enacted into EU law, but the entire document has not been adopted and ratified by the citizens of the European Union.

               The way to save Greece is already in action at our request by the ECB Mr. Draghi. The purchase of Greece's government debt as well as the purchase of a majority of the other member country's government treasury debt provides a more stable economic climate for the European Union. That debt, now held by the ECB can be bundled into Euro Bonds (a term I coined back in 2011). The ECB acting as the European Union's Treasury and central bank can bundle the debt of all European Union countries and sell the bundled debt as Euro Bonds providing cash flow to the member states and stability to each state's economy.

               The only major hurdle that I see keeping the European Union from uniting under one banner is pride. You will still have your own state governments. You will still have your own state flags, you will still have state sovereignty, you will still have economic security, you will have a unified military under the United European Union or United European States banner, you will have a central government, a constitution that provides greater opportunity than the constitution of the United States, and you will have more freedoms than you ever had before.

               Greece's economy will be saved as well. There is no need for Greece or any other country to leave ever. Each country in the United European Union has something to contribute economically, spiritually, and culturally to the whole.

               Each member country signed the Treaty of Maastricht and the Treaty of Lisbon declaring that you would defend and assist one another in their time of need. This is Greece's time of need, Italy's time of need, Portugal's time of need, and other member countries' time of needs. You all need one another.

               It is best for each of you to set aside your differences and petty disputes and resolve to work together to adopt and ratify the attached Constitution to the European Union and unite yourselves to the task of seeing one another as friends and countrymen, regardless of your ethnic origin.

               I charge you my friends of the European Commission, the European Press, and the European Dignitaries, Prime Ministers, Cabinet members, Kings, Queens, Senators, and Delegates-

              To serve a higher purpose than yourselves and unite your fellow European Union citizens under one constitution this year (2015).

              God willing, this union will stand the test of time and become the "truest democracy in the world."


              And it will become the truest democracy in the world if the constitution is adopted and ratified just as it has been submitted to you below and by attached email today. Brave hearts will win the day! So stand firm in your resolve to set aside your differences and to work together to solve your collective problems.

And get rid of that ridiculous unanimous consent garbage. It is only holding you back and allowing cetain countries to hold legislation hostage for their own personal gain.


             Now get in there and make it happen!

Sincerely,
Mark Winkle Founder
The Winkle Institute for Worldwide Economic Stability
1354 Ohmer Avenue
Suite A
Dayton, Ohio 45410
USA

Proposed Constitution: Drafted January 2012
Amended February 2015


The Constitution of the United 

European Union

We, the citizens of the United European Union, assemble ourselves to create a new democracy, a true democracy that protects the individual rights of every citizen of the country.
In this time of mankind, that we find ourselves in, we see that it is more profitable to our spirits and to those of our neighbors, to work hand in hand with one another, for the benefit of all creation.

Article I. Rights.
Among these rights are liberty, life, freedom of speech without government interference or obstruction of any kind, freedom of religion, freedom to openly express their religious beliefs; freedom from tyranny imposed upon them by their government, economic freedom from financial tyranny imposed at the hand of any person or government (that among these rights are: the right to buy and sell, the right to barter, the right to be free from excessive usury fees (above 10%), the right to purchase and sell real estate without interference or obstruction by any government agency or authority lest it be taken as a seizure in part (whereby, the owner in possession must be doubly compensated for the properties’ value which can only be set by a jury of the property owner’s peers, the right to sue and be sued, the right to a fair and just wage, the right to a safe workplace, the right to be free from excessive prices for basic amenities such as: food, shelter, home heating fuels, clothing, transportation fees and fuels, communication services, medical expenses, insurance fees, and banking fees); and the right to buy and sell interest in any company or corporation at an agreed upon price between the buyer and the seller;
freedom to peacefully assemble, the right to keep and bear arms for their personal defense and the defense against tyranny, and the freedom to seek redress from the government by any peaceful means, and the right of privacy;
the right from unreasonable search or seizure of their persons, their homes, papers, effects, vehicles or their property of any kind without probable cause and without a warrant describing the persons, place, or property to be searched or seized and the sworn affidavit upon which the warrant was issued must be affirmed by a court of common jurisprudence, wherein in may be challenged, the right to a fair trial, the right to counsel at every point of criminal legal jeopardy;
Furthermore, no citizen shall be held to answer for a criminal offense without indictment by a Grande Jury of their peers including members of the armed forces. No person shall be tried for the same offense, or be forced to provide oral or written evidence against themselves by any means, or be deprived of their liberty, life, or any kind of property without due process of the laws of this union. No property may be taken by the state by any means without double compensation of the “fair price of that property.” No proceeding for eminent domain shall be held without the presence of a jury of the peers of the property holder who will be the sole judges of the value of the property.
All non-criminal offenses (those with incarceration of a period less than six months) shall be dealt with administratively by area Magistrates whose term shall be no longer than six years during their lifetime.
In all criminal cases the accused person(s) shall have the right of an impartial and speedy trial held in the area where the crime was alleged to have been committed, to be served the indictment against them, to have an attorney appointed to represent them, to hear the testimony from the witnesses’ mouths, to subpoena witnesses for their defense, and to one timely appeal at the expense of the union.
In lawsuits involving amounts in excess of $1,000 Euros, the right to a trial by jury shall be preserved. Every fact tried by a jury may be appealed to a higher court if any of the rights mentioned in this document have been abused by the court. Said higher court must then retry the case as an original case before the court if prejudice or a violation of the aforementioned rights is found to have taken place.
The privilege of the Writ of Habeas Corpus shall not be suspended unless public safety may require it. No bill of attainder or ex post facto law shall be passed.
In criminal cases, bail shall not exceed ten times the damage caused by the crime. Excessive fines shall not be imposed nor emotional, mental, physical, or psychological punishments be inflicted once the criminal is in custody. No prisoner may be tortured to gain testimony against themselves or others by any means.
The inclusion of any right or privilege by this document shall not interfere or obstruct any other right given to the citizens of the United European Union; however, the rights given in this document may not be taken away by judicial or legislative means or modified by any other means than a majority popular vote of the citizens of this union.
A person charged with a felony who flees from justice, will be bound over to the federal courts for return back to the state where the offense was committed in order that justice may be done for both the victim and the accused criminal.
The judicial powers of the United European Union shall not obstruct any citizen from commencing litigation against any state or citizen of any state, or by citizens or subjects of any foreign country. Each state may initiate litigation against its citizens, and each citizen may initiate litigation against any state or citizen to obtain redress or property or any violation of any right or liberty herein included.
There shall be no involuntary servitude, even for criminals, as our Union’s moral laws are held to a higher standard, that every person shall be free from tyranny, and excessive punishment by the courts. The punishment issued by the court shall fit the crime. Leniency of the sentence or fine shall not be predetermined by the prosecutor in any prior arrangement with the judicial authority of the court.
No state shall make or enforce any law which would interfere with any of the rights provided to the citizens by this document, or deny any person the right of equal protection under the laws and rights afforded by this document.


Article II. Elections.
Each citizen having attained the age of eighteen years of age may vote in any election and may hold any office including judicial, and Parliamentary representative, except the office of the Presidency and the Vice Presidency whose election requires the office holder to have attained the age of twenty-five years of age.
The election days for all political and judicial offices will be set on the first weekend of February, thus allowing for every citizen to cast their vote over the two days period.
The votes for all offices in the United European Union shall be counted, and the winner of a majority of the votes shall take office within thirty days of the election date.
Every elected official shall be subject to a recall vote by the citizens who shall retain this right to remedy their errors in human judgment. This right may only be taken away by a majority vote of the citizens of the United European Union.


Article III. Duties and Conduct of the Legislative Branch.
All legislative authority granted by this founding document shall be vested a representative Parliament subject to the will of the citizens of the United European Union. Representatives of Parliament shall be appointed to each state dependent upon the population of each state to make and pass laws, except any law that will infringe upon any of the rights or liberties provided in this document.
Each present state, candidate state, and any future states added after the ratification of this constitution, shall be represented by nine representatives of Parliament.
The Parliament will meet the eleventh day of March every year and shall remain in session until an annual budget is passed.
Said representatives of Parliament shall not be less than eighteen years of age.
The term of each duly elected representative shall be six calendar years from the date of their being sworn into office. Said representatives may serve a maximum of two terms (twelve years) during their lifetime in order to avoid corruption of the office.
Said representative of Parliament may be removed from their office by a recall vote of a majority of voters in their appointed district. Said recall shall not be subject to an appeal to any court of the Union.
The representatives will be required to resign their office thirty days from the date of any finding of guilt of any felony offense by in any court. The required resignation shall not be stayed by an appeal to any court in the Union, excepting the Supreme Court, who shall issue a finding within ten days of the appeal. Said appeal will not extend the thirty day requirement for resignation if a finding of guilt is upheld by the court.
The representatives will hold the right to impeach the President or Prime Minister, the Vice President or Assistant Prime Minister, and any Federal Judge including every member of the Supreme Court if of any felony offense.
The Parliament must have a quorum present to conduct business. The Parliament may set such rules and administrative requirements to insure proper conduct and decorum of its members. The Parliament may set such rules as to its own procedures. Parliament, by a majority vote of its members may expel a member.
Representatives of Parliament shall be compensated for their services at the rate of $100,000 Euros per year with an annual increase of (2) percent plus inflation. Such increase may be suspended by Parliament by a majority vote of the representatives.
A Representative of Parliament may be arrested just as any ordinary citizen, for any offense. However, they may not be arrested in the course of a meeting of the Parliament, but said arrest shall be permitted after the day’s adjournment.
Parliament shall have exclusive authority to legislate and collect taxes, duties, imports and excises, to pay the debts and provide for the common defense and benefit of the United European Union. No individual state may impose such duty, import tax, or excise without the express permission of the treasury. All such collected monies shall be deposited into the treasury of the United European Union. Every duty, import tax, and excise shall be uniform in every part of the Union.
Parliament shall regulate commerce with foreign Nations, and among the several states. To establish a uniform rule of immigration and naturalization, and uniform laws on the subject of bankruptcies throughout the United European Union, coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures, provide for the punishment of counterfeiting the securities and current coin of the United European Union, and to establish Post Offices.
Parliament shall : promote the progress of science and useful arts, by protecting the copyrights of intellectual property; to establish courts inferior to the Supreme Court;
define and punish piracy and felonies committed on the high seas, and offenses against the law of nations, declare war, grant letters of reprisal, and make rules concerning captures on land and water;
raise and support Armies, but no appropriation of money to that use shall be for a longer term than one calendar year, provide and maintain a navy, make rules for the government and regulation of the land and naval forces and to provide for the suppression of insurrections and repel invasions;
exercise exclusive legislation in all cases whatsoever, over such Government District (not exceeding twenty square miles as may, by cession of particular states, and the acceptance of Parliament, become the Seat of the Government of the United European Union, and to exercise like authority over all places purchased by the consent of the legislature of the state in which the same shall be, for the erection of military bases, dock-yards, and other needed buildings, and
make all laws which shall be necessary and proper for carrying into execution the foregoing powers, and all other authority vested by this Constitution in the government of the United European Union, or in any department or officer thereof.
Every Bill which shall have passed the Parliament, shall, before it becomes a law, be presented to the President of the United European Union. If the president approves it the president shall sign it, but if not they shall veto it. If the Parliament reconsiders the bill and passes it by a majority vote, the bill will become law. A vote of the yeas and nays will be determined and the names of those voting said yeas and nays will be recorded. If any legislation shall not be acted upon by the president with fourteen calendar days after its receipt, it shall become law, unless an adjournment of Parliament made it impossible to return. In such case, the time will extend, and be taken up at its place of leaving on their first new day of business.
No appointments to any government office shall be made by the president during the time that Parliament is adjourned or without their approval at any other time.
Every Order, Resolution, or Vote to which the Concurrence of the Parliament may be necessary (except on a question of Adjournment) shall be presented to the President of the United States; and before the same shall take effect, shall be approved by the president, or being disapproved by the president, shall be passed by a majority of the representatives of Parliament, according to the rules and limitations prescribed in the case of a bill.
Parliament shall have the power necessary to make rules and regulations concerning all property owned by the United European Union.


Article IV. Executive Branch of the Government.
Leadership. The President and the Vice President of the Union shall be elected by a majority vote of the citizens. The term of each office shall be for six years. Each office may be held for two non-consecutive terms in the lifetime of the elected official. The president and vice president must be natural born citizens of the United European Union, and produce legal documented proof of said citizenship to the Secretary of Parliament (who shall verify the authenticity of such citizenship documents prior to the president swearing or affirming the oath of office.
The president and vice- president shall be compensated at a rate of $150,000 per year plus a (2) percent annual increase plus inflation.
The President and Vice President must resign their office thirty days after they are found guilty of any felony offense in any court or as a result of impeachment by the Parliament. The required resignation shall not be stayed by an appeal to any court in the Union, excepting the Supreme Court, who shall issue a finding within ten days of the appeal. Said appeal will not extend the thirty day requirement for resignation if a finding of guilt is upheld by the court.
The President and the Vice President may be removed from office by a majority recall vote of the citizens of the Union. Said removal from office will occur thirty days from the date of the recall vote by the citizens of the Union.
The president and Vice- president shall both take an oath of office that they will execute their respective offices to the best of their ability, and preserve, protect, and defend the Constitution of the United European Union.
The office of President and Vice President shall be filled by separate ballots to avoid corruption of the office of the presidency.
If the president dies in term, he shall be replaced by the Vice President, who shall be replaced by the president of the Parliament. If a citizen that has been elected as president dies before taking office, a new election will be held within thirty days of said death, thus maintaining the sole right of the citizens to choose their leader. If a president dies in office, the vice president shall succeed him for a period of six months whereupon, an election to elect a president of the Union. If the vice president dies in office, the president of the Parliament shall fulfill their term of office.
If the president is unable to fulfill his obligations of the office due to physical or mental capacity, they shall be replaced by the Vice President for the balance of their term, unless such physical or mental capacity is remedied. If such physical or mental capacity is remedied, the president will retake the office for the duration of their term.
The president shall be required to give notice to the citizens the state of the union twice annually. He shall receive ambassadors and other public ministers. He shall insure that the laws be faithfully executed, and shall commission all the officers of the United European Union.
The President shall be Commander in Chief of the military of the United European Union, they may require the Opinion, in writing, of the principal officer in each of the executive departments, upon any Subject relating to the duties of their respective offices, and he shall have authority to grant reprieves and pardons for offenses against the United European Union, except in cases of impeachment.
The president shall have authority, by and with the advice and consent of the Parliament, to make treaties, provided a majority of the representatives present concur; and he shall nominate, and by and with the advice and consent of the Parliament, shall appoint ambassadors, other ministers and consuls judges of the Supreme Court, and all other officers of the United European Union, whose appointments are not herein otherwise provided for, and which shall be established by Law: but the Parliament may by law vest the appointment of such inferior officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Departments. Said appointments and treaties shall require a majority vote of the Parliament.
Article V. Judicial Branch.
There shall be a system of courts wherein The Supreme Court may decide issues of constitutional matters and appeals from lower courts. The courts are not afforded the right to create or make law by their decisions as such is the exclusive right of the Representatives of the people of the Union. Each justice of the Supreme Court and any Federal Court of Appeals or of any United European Union District shall have a set term of twelve years in totality during their lifetime in order to prevent corruption of the bench.
The Courts of Appeals and District Courts may also hear constitutional cases, appeals from other courts, and original cases involving rights, liberties, and property. Each justice and Federal court judge and magistrate will resign their respective office thirty days after a finding of guilt of a felony offense in any court. The required resignation shall not be stayed by an appeal to any court in the Union, excepting the Supreme Court, who shall issue a finding within ten days of the appeal. Said appeal will not extend the thirty day requirement for resignation if a finding of guilt is upheld by the court.
The judicial authority shall extend to all cases, in law and equity, arising under this Constitution, the laws of the United European Union, and treaties made, or which shall be made, under their authority;--to all cases affecting ambassadors and representatives of other nations, to all cases of admiralty and maritime jurisdiction; to any controversy to which the United European Union shall be a party; to controversies between two or more states; between a state and citizens of another state, between citizens of different states, between citizens of the same state claiming lands under grants of different states, and between a state, or the citizens thereof, and foreign states, or citizens.
The judicial authority of the United European Union shall be granted to one Supreme Court, as well as regional federal courts and state located throughout the Union as Parliament shall require. The number of said courts shall be based on the increase or decrease in a region’s population, but shall not be less than one regional federal court in every state. The judges shall be compensated during the tenure of impartial adjudication of cases.
In all cases affecting ambassadors from other countries, and those in which a state shall be party, the Supreme Court shall have original jurisdiction. In all the other cases before mentioned, the Supreme Court shall have appellate jurisdiction, both as to Law and Fact, with such Exceptions, and under such Regulations as the Congress shall make.
No member of any legislative body, administrative office, cabinet office, or judicial office may accept gifts, contributions, or amenities of any kind from any legal person or their representatives by any means, whether directly or indirectly.
The acceptance of said payment shall subject said person to an immediate recall election by the populous of their respective citizens who voted them into office. Such is necessary to prevent the corruption of these high offices which are privileges granted to them by their fellow citizens. No government official or their employees shall be excluded from any of these rights and liberties or from any part of the enforcement of the rights or from any laws of the Union may be passed in the future. .
Representatives of Parliament, and every member of the state legislatures, and all executive and judicial officers, both of the United European Union and of the states, shall be bound by oath or affirmation, to support this Constitution of the United European Union.


Article VI. Monetary Policy of the Union.
The Treasury of the United European Union will have complete control of the monetary policy and the economic future of the United European Union and is hereby afforded the authority to issue Euro bonds on behalf of the Union to satisfy all public debts of the union. The Treasury will be the sole issuer of currency, in any denomination, and the sole issuer of public debt issued on behalf of the United European Union. All debts contracted by any states of the United European Union, before the adoption of this Constitution, shall be as valid against the United European Union as consolidated debts of the union and shall be assumed by the United European Union
The public debt must be paid in a timely manner to afford for the “Economic Stability of the Union.” No member state shall have a deficit in excess of their respective income to their state in excess of one year. The budget of the Union must be economically stable and balanced.
The Parliament shall have the obligation to lay and collect taxes on all income, at a flat rate of twelve (12) percent, without regard to any census or enumeration.
No money shall be drawn from the Treasury unless appropriated by law. A copy of the annual budget of the United European Union shall be published annually and provided at cost to every citizen upon request.

The drafter (author) of this document Mark Randolph Winkle, shall be named as a citizen of the Union with joint citizenship between the Union and the United States of America. 
 
There shall be no titles of patriarchy or payments of any kind to any person of present privileged patriarchle position  affording them a stature above any other citizen of the Union.
No tax or duty shall be laid on articles exported from any state. No Preference shall be given by any regulation of commerce or revenue to any port over another. No state may charge duties or import taxes on vessels bound to, or from one state to another.
Parliament shall have the authority to borrow on behalf of the United European Union in order that its debts and encumbrances will be met.


Article VI. Enforcement.
This Constitution, and the laws of the United European Union made in reference to and in compliance with its requirements, and all treaties made, or which shall be made, under the authority of the United European Union, shall be the law of the land; and the judges in every state shall be bound by them, unless they are in conflict with this Constitution of the United European Union.


Article VII. Amendments.
The citizens of the United European Union shall propose amendments to this constitution by obtaining the valid signatures (written or electronic) of ten percent of the adult population of the Union. Upon such verified obtainment of the required signatures a ballot will be placed before the citizens of the United European Union at the next annual election. A majority vote in favor of the amendment is required for passage. Parliament may also elect to propose amendments to this constitution. Said proposed amendments will be subject to a majority vote of the citizens of the United European Union.
The United European Union shall guarantee to every State in this Union these rights and liberties and shall protect each of them against invasion and from internal violence.
Additional states will be admitted by Parliament into the United European Union, by a majority vote of the citizens of the state or country seeking admission, and by the signing of this document by their duly appointed representatives.
Full faith and credit shall be given in each state to the public acts, records, and judicial proceedings of every other State. The citizens of each state shall be entitled to all privileges and immunities of citizens in the several states.


Article VIII. Treason.
Treason against the United European Union shall consist only in levying War against them or by providing aid to an enemy of the Union. A person shall not be found guilty of treason unless it was committed with malice and forethought in the presence of two or more sworn witnesses.


Article IX.. Declaration.
We, the citizens, hold these truths and liberties to be applicable to every citizen regardless of their race, color, gender, or creed, holding none to be above another. In this way, all of mankind, having come from one creator, and placed on this earth to do the bidding of our creator, do hereby pledge ourselves one to another, and to our God, for the common good of all mankind. Let us be worthy of our task.
It is upon our shoulders, that none shall fall prey to the many vices of tyranny that would bind a man to another, nor to the vices that would cause turmoil between one another. We endeavor to assist one another, in their time of need, that no person should suffer needlessly, not starve as a result of freedoms withheld from them. Their thirst for such freedoms as any person would so desire, will be freely quenched by every citizen for one another without demand or charge of any kind. For such, is the meaning of a “true democracy” pursuant to the words in this founding document of a new nation.
The ratification of this document, The Constitution of the United European Union, by fifteen states, shall be sufficient for the establishment of this Constitution between the States in their totality including the votes of all candidate states presently seeking inclusion into the United European Union.
We, the constitutional representatives of the member states of the United European Union, do hereby affix our signatures, thereby binding our citizens, our nations, and our hearts in the name of liberty and freedom from tyranny of any kind.
Signed: Sign your name and representative’s country and date.

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This document, until ratified is the sole property of Mark Randolph Winkle, © Winkle Publishing, United States of America. All Rights Reserved 2012, 2013, 2014, 2015. It may be distributed for educational purposes only. If enacted into law by ratification in part or in whole by the United European Union, or by the European Union, the copyright will be transferred to the United European Union gratis, in the interest of humanity and democracy.


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