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Forecast Psychology & Rebuttal to Gary NorthForecast Psychology & Rebuttal to Gary North

  Oct 03, 2013 Here is a list of the current ongoing forecasts, with no outcome yet, all pending. A. Fall of the House of Saud, the end of Saudi Arabian Regime  (happening) B. Death of Petro-Dollar, the USMilitary Displaced in Persian Gulf (happening) C. Global Dumping of USTreasury Bonds, the Return to Sender  (happening)… ( Leia mais » )

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A New Reality in U.S.-Israeli Relations – George Friedman

After more than a decade of being focused on the Islamic world and moving aggressively to try to control threats in the region militarily, the United States is moving toward a different stance.  The issue is not whether the United States would intervene to protect Israel’s existence; save from a nuclear-armed Iran, there is no… ( Leia mais » )

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Currency Wars!

1 March 2013 Today the world is “buried” in debt. The US is the most indebted nation in the world with $16.5 trillion of official debt, plus “off balance sheet” or unfunded liabilities estimated to be between $70 and $100 trillion. Most economists agree that the US will never be able to repay these debts…. ( Leia mais » )

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Japan Shows How to Defuse Debt Time-bomb

[T]hreatening to default should not be a partisan issue. In view of all the hazards it entails, one wonders why any responsible person would even flirt with the idea. – Alan S. Blinder, Princeton professor of economics, former vice chairman of the Federal Reserve A game of Russian roulette is being played with the national… ( Leia mais » )

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No U.S. attack on Libya! – Sara Flounders

Abstract: The worst thing that could happen to the people of Libya is U.S. intervention. The worst thing that could happen to the revolutionary upsurge shaking the Arab world is U.S. intervention in Libya. Who is de opposition en Libia? What is the role of the CIA? Go to: http://www.workers.org/2011/world/no_us_attack_on_libya_0310/

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The Chances of a War with China are Rising

Global Research, October 22, 2010

The United States conducts monetary policy the same way it conducts foreign policy; unilaterally. When Fed chairman Ben Bernanke signaled last week that he was planning to restart his bond purchasing program (Quantitative Easing) he didn\’t consult with allies at the IMF, the G-20 or the WTO. He simply issued his edict, and that was that. The fact that the Fed\’s policy will flood emerging markets with cheap capital, pushing up the value of their currencies and igniting inflation, is of no concern to Bernanke. He operates on the same theory as former Treasury Secretary John Connally who breezily quipped to a group of euro finance ministers, “The dollar is our currency, but your problem.”

Bernanke\’s 15 report could have been reduced to nine words: Inflation is too low and unemployment is too high. That said, Bernanke is not going to sit back hemming and hawing until congress figures out that the economy needs more support. He\’s going to put downward pressure on the dollar until inflation rises to the target 2%, increasing the prospects for lower unemployment, a narrowing of the current account deficit, and a faster rebound. Economist Edward Hugh sums it up like this:
“Unemployment in the United States (which is currently at 9.6%, and may reach 10% by the end of the year) is causing enormous problems for the Obama administration. The US labor market and welfare system are simply not designed to run with these levels of unemployment for any length of time. In Japan the unemployment rate is 5.1%, and in Germany it is under 8%. So people in Washington, not unreasonably ask themselves why the US should shoulder so much extra unemployment and run a current account deficit just to maintain the Bretton Woods system and the reserve currency status of the US Dollar.

My feeling is that the US administration has decided to reduce the unemployment rate, and close the current account deficit, and that the only way to achieve this is to force the value of the dollar down. That way it will be US factories rather than German or Japanese ones that are humming to the sound of the new orders which come in from all that flourishing emerging market demand.”

Bernanke has drawn the same conclusions as Hugh, but that doesn\’t mean his strategy won\’t inflict considerable damage on US allies. It will. His beggar-thy-neighbor QE program will force trading partners to implement capital controls and other protectionist measures to maintain price stability. QE will also lead to more competitive devaluation as the world\’s largest economies fight for a bigger share of the export market. The impending clash could bring about the dissolution of the present trade regime and a sharp reversal of 30-years of globalization.

Bernanke\’s biggest problem is China. China was America\’s darling when it was loading up on Treasuries and fueling a historic consumption binge that filled Wall Street\’s coffers. But now that the purchase of US debt is preventing the Fed from implementing its monetary policy, Bernanke wants a change. Unfortunately, China is not cooperating. It\’s piling up foreign exchange reserves at record pace to maintain the dollar peg which is widening the current account deficit to precrisis levels. The yawning trade imbalance is pushing the world towards another crisis, which is why Bernanke and Co. are determined to persuade China to let its currency to appreciate to narrow the gap. (China\’s foreign exchange reserves surged to $2.65tr in the 3rd quarter)

Bottom line: The Fed cannot jump-start the domestic economy if the trade deficit continues to grow. It\’s impossible. The stimulus just gets flushed down the plughole. China is soaking up the lion\’s share of global demand by underbidding the US on everything under the sun. That\’s the real effect of the dollar peg, it gives China an unfair advantage over its competitors. A free-floating currency helps to level the playing field (even if US labor is competing with some of the world\’s worst paid workers) Bernanke\’s announcement last Friday, is just the first shot fired over Beijing\’s bow. There will be more to come. This weekend\’s meeting of the G-20 provides Treasury Secretary Timothy Geithner with the perfect opportunity to put the spotlight on China and to rail against currency manipulation. Many expect him to make a strong statement demanding changes to the policy.

An update by Reuters on Wednesday confirms the US position. Here\’s a blurp:
“The United States wants Group of 20 finance chiefs to commit to allowing market forces to set currency values and will discuss using targets for trade to measure progress, a senior U.S. Treasury Department official said on Wednesday.

Ahead of weekend G20 meetings in Gyeongju, South Korea, the U.S. official made clear Washington wants currency levels to be a focal point of the meetings and sees current account surpluses and deficits a vital part of the discussion….

From our perspective we believe these issues are fundamentally, inherently linked and that it is important for the G20 to be able to undertake cooperative action facilitating orderly adjustment of imbalances and also ensuring more effective adjustment of exchange rates in line with economic fundamentals,” the official said.” (“U.S. wants G20 commitment to allow currency rises”, Reuters)

Neither the Obama administration nor the Fed want a full-blown trade war with China. They\’d rather see China “assume its position in the global system”. (as US diplomats aver) But that means that China will have to compromise on, what it considers to be, a matter of national sovereignty. And, there\’s the rub. China is a proud nation and doesn\’t want to be told what to do. But that\’s not how the system works. Behind the facade of free markets and international institutions, lies an imperial system ruled from Washington. That leaves Beijing with two options; they can either bow to US pressure and fall in line or shrug off Washington\’s demands and continue on the same path. If they choose to resist, relations with the US will grow more acrimonious and the probability of conflict will rise.

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From Global Depression to Global Governance

Global Research, October 19, 2010

We now stand at the edge of the global financial abyss of a ‘Great Global Debt Depression,’ where nations, mired in extreme debt, are beginning to implement ‘fiscal austerity’ measures to reduce their deficits, which will ultimately result in systematic global social genocide, as the middle classes vanish and the social foundations upon which our nations rest are swept away. How did we get here? Who brought us here? Where is this road leading? These are questions I will briefly attempt to answer.

At the heart of the global political economy is the central banking system. Central banks are responsible for printing a nation’s currency and setting interest rates, thus determining the value of the currency. This should no doubt be the prerogative of a national government, however, central banks are of a particularly deceptive nature, in which while being imbued with governmental authority, they are in fact privately owned by the world’s major global banks, and are thus profit-seeking institutions. How do central banks make a profit? The answer is simple: how do all banks make a profit? Interest on debt. Loans are made, interest rates are set, and profits are made. It is a system of debt, imperial economics at its finest.

In the United States, President Woodrow Wilson signed the Federal Reserve Act in 1913, creating the Federal Reserve System, with the Board located in Washington, appointed by the President, but where true power rested in the 12 regional banks, most notably among them, the Federal Reserve Bank of New York. The regional Fed banks were private banks, owned in shares by the major banks in each region, which elected the board members to represent them, and who would then share power with the Federal Reserve Board in Washington.

In the early 1920s, the Council on Foreign Relations was formed in the United States as the premier foreign policy think tank, dominated by powerful banking interests. In 1930, the Bank for International Settlements (BIS) was created to manage German reparations payments, but it also had another role, which was much less known, but much more significant. It was to act as a “coordinator of the operations of central banks around the world.” Essentially, it is the central bank for the world’s central banks, whose operations are kept ‘strictly confidential.’ As historian Carroll Quigley wrote:
“The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations.”

In 1954, the Bilderberg Group was formed as a secretive global think tank, comprising intellectual, financial, corporate, political, military and media elites from Western Europe and North America, with prominent bankers such as David Rockefeller, as well as European royalty, such as the Dutch royal family, who are the largest shareholders in Royal Dutch Shell, whose CEO attends every meeting. This group of roughly 130 elites meets every year in secret to discuss and debate global affairs, and to set general goals and undertake broad agendas at various meetings. The group was initially formed to promote European integration. The 1956 meeting discussed European integration and a common currency. In fact, the current Chairman of the Bilderberg Group told European media last year that the euro was debated at the Bilderberg Group.

In 1973, David Rockefeller, Chairman and CEO of Chase Manhattan Bank, Chairman of the Council on Foreign Relations and a member of the Steering Committee of the Blderberg Group, formed the Trilateral Commission with CFR academic Zbigniew Brzezinski. That same year, the oil price shocks created a wealth of oil money, which was discussed at that years Bilderberg meeting 5 months prior to the oil shocks, and the money was funneled through western banks, which loaned it to ‘third world’ nations desperately in need of loans to finance industrialization.

When Jimmy Carter became President in 1977, he appointed over two dozen members of the Trilateral Commission into his cabinet, including himself, and of course, Zbigniew Brzezinski, who was his National Security Adviser. In 1979, Carter appointed David Rockefeller’s former aide and friend, Paul Volcker, who had held various positions at the Federal Reserve Bank of New York and the U.S. Treasury Department, and who also happened to be a member of the Trilateral Commission, as Chairman of the Federal Reserve. When another oil shock took place in 1979, Volcker decided to raise interest rates from 2% in the late 70s, to 18% in the early 80s. The effect this had was that the countries of the developing world suddenly had to pay enormous interest on their loans, and in 1982, Mexico announced it could no longer afford to pay its interest, and it defaulted on its debt, which set off the 1980s debt crisis – collapsing nations in debt across Latin America, Africa and parts of Asia.

It was the IMF and the World Bank came to the ‘assistance’ of the Third World with their ‘structural adjustment programs’, which forced countries seeking assistance to privatize all state owned industries and resources, devalue their currencies, liberalize their economies, dismantle health, education and social services; ultimately resulting in the re-colonization of the ‘Third World’ as Western corporations and banks bought all their assets and resources, and ultimately created the conditions of social genocide, with the spread of mass poverty, and the emergence of corrupt national elites who were subservient to the interests of Western elites. The people in these nations would protest, riot and rebel, and the states would clamp down with the police and military.

In the West, corporations and banks saw rapid, record-breaking profits. This was the era in which the term ‘globalization’ emerged. While profits soared, wages for people in the West did not. Thus, to consume in an economy in which prices were rising, people had to go into debt. This is why this era marked the rise of credit cards fueling consumption, and the middle class became a class based entirely on debt.

In the 1990s, the ‘new world order’ was born, with America ruling the global economy, free trade agreements began integrating regional and global markets for the benefit of global banks and corporations, and speculation dominated the economy.

The global economic crisis arose as a result of decades of global imperialism – known recently as ‘globalization’ – and the reckless growth of– speculation, derivatives and an explosion of debt. As the economic crisis spread, nations of the world, particularly the United States, bailed out the major banks (which should have been made to fail and crumble under their own corruption and greed), and now the West has essentially privatized profits for the banks, and socialized t
he risk. In other words, the nations bought the debt from the banks, and now the people have to pay for it. The people, however, are immersed in their own personal debt to such degrees that today, the average Canadian is $39,000 in debt, and students are graduating into a jobless market with tens to hundreds of thousands of dollars of student debt that they will never repay. Hence, we are now faced with a global debt crisis.

To manage the economic crisis, the G20 was established as the major international forum for cooperation among the 20 major economies of the world, including the major developing – or emerging – economies, such as India, Brazil, South Africa and China. At the onset of the financial crisis, China and Russia’s central banks began calling for the establishment of a global currency to replace the U.S. dollar as the world reserve currency. This proposal was backed by the UN and the IMF. It should be noted, however, that the Chinese and Russian central banks cooperate with the Western central banks through the Bank for International Settlements – which the President of the European Central Bank, Jean-Claude Trichet, recently said was the principle forum for “governance of central bank cooperation” and that the G20 is “the prime group for global economic governance.” In 2009, the IMF stated that the BIS “is the central and the oldest focal point for coordination of global governance arrangements.” The President of the European Union, appointed to the position after attending a Bilderberg meeting, declared 2009 as the “first year of global governance.” The 2009 Bilderberg meeting reported on the desire to create a global treasury, or global central bank, to manage the world economy. In 2009, prior to the Bilderberg meeting in fact, the G20 set in motion plans to make the IMF a global central bank of sorts, issuing and even printing its own currency – called Special Drawing Rights (SDRs) – which is valued against a basket of currencies. In May of 2010, the IMF Managing Director stated that “crisis is an opportunity,” and while Special Drawing Rights are a step in the right direction, ultimately what is needed is “a new global currency issued by a global central bank, with robust governance and institutional features.” Thus, we see the emergence of a process towards the formation of a global central bank and a global currency, totally unaccountable to any nation or people, and totally controlled by global banking interests.

In 2010, Greece was plunged into a debt crisis, a crisis which is now spreading across Europe, to the U.K. and eventually to Japan and the United States. If we look at Greece, we see the nature of the global debt crisis. The debt is owed to major European and American banks. To pay the interest on the debt, Greece had to get a loan from the European Central Bank and the IMF, which forced the country to impose ‘fiscal austerity’ measures as a condition for the loans, pressuring Greece to commit social genocide. Meanwhile, the major banks of America and Europe speculate against the Greek debt, further plunging the country into economic and social crisis. The loan is granted, to pay the interest, yet simply has the effect of adding to the overall debt, as a new loan is new debt. Thus, Greece is caught in the same debt trap that re-colonized the Third World.

At the recent G20 meeting in Toronto, the major nations of the world agreed to impose fiscal austerity – or in other words, commit social genocide – within their nations, in a veritable global structural adjustment program. So now we will see the beginnings of the Great Global Debt Depression, in which major western and global nations cut social spending, create mass unemployment by dismantling health, education, and social services. Further, state infrastructure – such as roads, bridges, airports, ports, railways, prisons, hospitals, electric transmission lines and water – will be privatized, so that global corporations and banks will own the entirely of national assets. Simultaneously, of course, taxes will be raised dramatically to levels never before seen. The BIS said that interest rates should rise at the same time, meaning that interest payments on debt will dramatically increase at both the national and individual level, forcing governments to turn to the IMF for loans – likely in the form of its new global reserve currency – to simply pay the interest, and will thus be absorbing more debt. Simultaneously, of course, the middle class will in effect have its debts called in, and since the middle class exists only as an illusion, the illusion will vanish.

Already, towns, cities, and states across America are resorting to drastic actions to reduce their debts, such as closing fire stations, scaling back trash collection, turning off street lights, ending bus services and public transportation, cutting back on library hours or closing them altogether, school districts cutting down the school day, week or year. Simultaneously, this is occurring with a dramatic increase in the rate of privatizations or “public-private partnerships” in which even libraries are being privatized.

No wonder then, that this month, the Managing Director of the IMF warned that America and Europe, in the midst of the worst jobs crisis since the Great Depression, face an “explosion of social unrest.” Just yesterday, Europe experienced a wave of mass protests and social unrest in opposition to ‘austerity measures’, with a general strike in Spain involving millions of people, and a march on the EU headquarters in Brussels of nearly 100,000 people. As social unrest spreads, governments will likely react – as we saw in the case of the G20 in Toronto – with oppressive police state measures. Here, we see the true relevance of the emergence of ‘Homeland Security States’, designed not to protect people from terrorists, but to protect the powerful from the people.

So while things have never seemed quite so bleak, there is a dim and growing beacon of hope, in what Zbigniew Brzezinski has termed as the greatest threat to elite interests everywhere – the ‘global political awakening’. The global political awakening is representative of the fact that for the first time in all of human history, mankind is politically awakened and stirring, activated and aware, and that generally – as Zbigniew Brzezinski explains – generally is aware of global inequalities, exploitation, and disrespect. This awakening is largely the result of the information revolution – thus revealing the contradictory nature of the globalization project – as while it globalizes power and oppression, so too does it globalize awareness and opposition. This awakening is the greatest threat to entrenched elite interests everywhere. The awakening, while having taken root in the global south – already long subjected to exploitation and devastation – is now stirring in the west, and will grow as the economy crumbles. As the middle classes realize their consumption was an illusion of wealth, they will seek answers and demand true change, not the Wall Street packaged ‘brand-name’ change of Obama Inc., but true, inspired, and empowering change.

In 1967, Martin Luther King delivered a speech in which he spoke out against the Vietnam War and the American empire, and he stated that, “It seems as if we are on the
wrong side of a world revolution.” So now it seems to me that the time has come for that to change.

Andrew Gavin Marshall is a Research Associate with the Centre for Research on Gloalizion (CRG). He ico-editor, with Michel Chossudovsky, of the recent book, “The Global Economic Crisis: The Great Depression of the XXI Century,” available to order at Globalresearch.ca.

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The US Economy is Faltering. An Inflationary Depression is in Progress

Global Research, October 9, 2010
In spite of the disinformation, misdirection and outright propaganda the economy is faltering without the addition of stimulus and quantitative easing. The benefits of inventory accumulation over the past 17 months, which accounted for 60% of the strength in the economy is at an end. We either get more stimulus either governmental or from the privately owned Fed or growth is going to continue to drop. We are looking at indexes that for the most part are at or near their lows. We see short reactive rallies but certainly nothing that leaves us to believe that any kind of a recovery is at hand. The longer we have to wait for Congress and the Fed to act, the more difficult it will be to regain upside momentum. It could be the plan is to simply go sideways for the next two years. The problem with that is that it will cost $5 trillion to accomplish. Production is starting to fall with the exception of a temporary increase in automotive manufacturing. Inventory build is retracting and both the absence of further build, and production should herald a 2-year low by yearend. The administration had other priorities and they missed the boat on getting support. The Fed as usual was too far behind the curve. Consequently we are actually looking at the distinct possibility of economic crisis and higher unemployment soon. Will the administration be able to get a lame duck Congress to approve $500 billion in spending? We won’t know until we get there and that is only two months away. The Fed is obviously waiting until the election is over before they open the floodgates of QE2. Will it be by $1.5 trillion? We’ll have to wait and see. If they do lend that sterilized float it will be monetized and it will hit higher inflation very quickly. Will business spend the $3 trillion they have on hand? They’ll certainly spend some of it, but how much no one knows. Will our government continue to give us obviously bogus numbers? They probably will, but most professionals have finally caught on to their 3-card Monte game. Wait until the real ISM figures show up for September, after August’s blatantly bogus figures. All the recent statistics are at lows not seen for 1-1/2 years, including the ATA’s truck tonnage index that fell 2.8%. If there is a recovery the public doesn’t think so. All indications are that buyers are depressed.

The public realizes an inflationary depression is in progress and the QE1 policy only took the economy sideways for 18 months at the cost of the Fed tripling its balance sheet. As a result the public does not think the Fed will be anymore successful in QE2, than they were in QE1. Future expectations are that 2/3′s of consumers believe that economic conditions will be bad and only 25% believe they will be good. We know the public doesn’t understand what is happening, but we also can see that whatever leadership is providing is bad and it isn’t working.

China and Japan look to be the leaders in the new currency wars. As a result the Fed on Tuesday dumped a larger than expected $5.19 billion of POMO into the market and the Dow obediently rose 193 points. This is how the Fed has been doing QE2 since June and in the process elevating the market. For four months the economy has done little. It is in a slow fade. This is part of the Illuminist program to keep the more pliable Democrats in office and to avoid having to pay the cost of paying off new congressional members. The correlation between a strong stock market and political affinity is strong. It makes people forget when their wealth is increasing. The Fed, Treasury, administration, House and Senate are in a preservation mode. This could very well be your October surprise, a Dow at 11,700 or perhaps even at 14,200 – who knows. If we are correct, and we usually are, this could be a blatant attempt to keep incumbents in office to defy our demand, and to deny Republicans a majority in both houses and congress. The stakes are high for the elitists and their ilk for the further concentration of wealth and power. If these insiders lose, the economy could collapse.

As a result of this commentary and what the Fed is doing today we hark back to 1931 when the Fed and the NY Fed both increased credit and cut interest rates furiously, as they have done recently, until gold began to rise globally in the fall of 1931.

Later in 1936, under the Smoot-Hawley Bill, they were able to monetize debt, as they are currently doing until the bond market reversed in 1936. That is what we have in our current future.

Incidentally, while the depression scam was being done in the US in the 1930s, these elitists were trying to put in power a fascist government in America, similar to that in Germany. These are the same people who were instrumental in financing the Third Reich. This is what history is all about, a repetition of the machinations of power and subjection.

We now have an economy where families shop when welfare or food stamps arrive, as consumers spend less. We wonder what will happen when the welfare stops? Empty bellies make for revolutionary times, as monetary policy gets easier and easier. Remember, there is a limit to how long rates can fall. Personal disposable income rose 0.5%, but 70% of that was a huge retroactive emergency payment of jobless insurance checks, which boasted income 1.6%, or by $35 billion. Thus, consumer spending would have been up 0.1%, not 0.4%. That is a big difference that government and Wall Street conveniently overlooked. This means there is no recovery in sight. It is very disconcerting when government accounts for 20% of disposable income. That means 50% of the recovery since 2009 came via stimulus. In August alone 70% of growth in income came from government. Even auto sales gains in September were overstated due to Labor Day. Sales should be 50% higher due to low financing costs and the same is true with housing, but that is not happening. That means household debt is still too onerous to allow increased spending. Only 1/3rd of consumer de-leveraging has taken place. There is still at least $6 trillion to go. That is why Goldman’s chief economist said things are bad, very bad. In the midst of all this FICO scores continue to fall leaving only 47% of the consumers with decent credit scores. The bottom line is this is all about government intervention and stimulus. The bottom line is if QE2 and government stimulus doesn’t occur the economy will collapse.

We do not see a bounce and support for the dollar on the USDX until it enters the 74 to 75 zone. We predicted this four months ago. The upward move on the euro and the other five currencies will run out of steam soon as economic contraction begins anew. The benefits of a cheap euro are over for now. Do not forget the eurozone still has plenty of problems, just as bad as those in the UK and US.

The beggar-thy-neighbor currency war continues unabated. The US subtly pushes QE2 via the repo market, as Japan and others lower their interest rates. Appreciation is a bad word when it comes to currencies. Whether you knew it or not currency wars are really trade wars. We are already seeing trade barriers on Chinese goods by the US and China has retaliated. As time goes on this will expand and official barriers will be erected. In addition, the Fed chairman said recently that he supports further expansion of the Fed’s balance sheet and that means the money supply is about to be expanded. The only way to stop this subtle trade war is to officially declare tariffs, which includes a calculation on currency values.

As a result of this, gold and silver hit new highs each day against all currencies. As you can see in the end gold and silve
r are the only real money. The rest are backed by empty promises.

Quantitative easing does not add to household wealth; it causes inflation and higher prices, as you are currently seeing.

Due to current policies that are focused on bailing out elitist corporations resurrection of employment is left in the dust. Even Fed member banks see a ½% increase in unemployment over the next eight months. We see a 1% increase to 23-5/8%, a new high. This problem is simply not being addressed at all.


Bob Chapman is a frequent contributor to Global Research. Global Research Articles by Bob Chapman

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Predatory Finance: The New Mode of Global Warfare

Global Research, October 12, 2010
What is to stop U.S. banks and their customers from creating $1 trillion, $10 trillion or even $50 trillion on their computer keyboards to buy up all the bonds and stocks in the world, along with all the land and other assets for sale, in the hope of making capital gains and pocketing the arbitrage spreads by debt leveraging at less than 1% interest cost? This is the game that is being played today. The outflow of dollar credit into foreign markets in pursuit of this strategy has bid up asset prices and foreign currencies, enabling speculators to pay off their U.S. positions in cheaper dollars, keeping for themselves the currency shift as well as the arbitrage interest-rate margin.


Finance has become the new mode of warfare – without the expense of military overhead and an occupation against unwilling hosts. It is a competition in credit creation to buy global real estate and natural resources, infrastructure, bonds and corporate stock ownership. Who needs an army when you can obtain monetary wealth and asset appropriation simply by financial means? Victory promises to go to the economy whose banking system can create the most credit, using an army of computer keyboards to appropriate the world’s resources.


The main hurdle confronting this financial Lebensraum drive is that it requires the central banks of targeted economies to accept electronic dollar credit of depreciating international worth in payment for national assets. U.S. officials demonize countries suffering these dollar inflows as aggressive “currency manipulators” for what Treasury Secretary Tim Geithner calls “‘competitive nonappreciation,’ in which countries block their currencies from rising in value.” Oscar Wilde would have struggled to find a more convoluted term for other countries protecting themselves from raiders trying to force up their currencies to make enormous predatory fortunes. “Competitive nonappreciation” sounds like “conspiratorial non-suicide.” These countries simply are trying to protect their currencies from arbitrageurs and speculators flooding their financial markets with dollars, sweeping their currencies up and down to extract billions of dollars from their central banks.


Their central banks are being forced to choose between passively letting these inflows push up their exchange rates – thereby pricing their exports out of foreign markets – or recycling these inflows into U.S. Treasury bills yielding only 1% with declining exchange value. (Longer-term bonds risk a price decline if U.S interest rates should rise.)


The euphemism for flooding economies with credit is “quantitative easing.” The Federal Reserve is pumping a tidal wave of liquidity and reserves into the financial system to reduce interest rates, ostensibly to enable banks to “earn their way” out of negative equity resulting from the bad loans made during the real estate bubble. This liquidity is spilling over to foreign economies, increasing their exchange rates. Joseph Stiglitz recently acknowledged that instead of helping the global recovery, the “flood of liquidity” from the Fed and the European Central Bank is causing “chaos” in foreign exchange markets. “The irony is that the Fed is creating all this liquidity with the hope that it will revive the American economy. … It’s doing nothing for the American economy, but it’s causing chaos over the rest of the world.”


What U.S. quantitative easing is achieving is to drive the dollar down and other currencies up, much to the applause of currency speculators enjoying quick and easy gains. Yet it is to defend this system that U.S. diplomats and bank lobbyists are threatening to derail the international financial system and plunge world trade into anarchy if other countries do not agree to a replay of the 1985 Plaza Accord “as a possible framework for engineering an orderly decline in the dollar and avoiding potentially destabilizing trade fights.”


The Plaza Accord derailed Japan’s economy by raising its exchange rate while lowering interest rates, flooding its economy with enough credit to inflate a real estate bubble. IMF managing director Dominique Strauss-Kahn was more realistic. “I’m not sure the mood is to have a new Plaza or Louvre accord,” he said at a press briefing on the eve of the IMF meetings in Washington. “We are in a different time today.” Acknowledging the need for “some element of capital controls [to] be put in place,” he added that in view of U.S. insistence on open, unprotected capital markets, “The idea that there is an absolute need in a globalised world to work together may lose some steam.”


At issue is how long nations will succumb to the speculative dollar glut. The world is being forced to choose between subordination to U.S. economic nationalism or an interim of financial anarchy. Nations are responding by seeking to create an alternative international financial system, risking an anarchic transition period in order to create a fairer world economy.


Re-inflating the financial bubble rather than writing down debts


The global financial system already has seen one long and unsuccessful experiment in quantitative easing in Japan’s carry trade. After its financial and property bubble burst in 1990, the Bank of Japan sought to enable its banks to “earn their way out of negative equity” by supplying them with low-interest credit for them to lend out. Japan’s recession left little demand at home, so its banks developed the carry trade: lending at a low interest rate to arbitrageurs to buy higher-yielding securities. Iceland, for example, was paying 15%. So yen were borrowed to convert into dollars, euros, Icelandic kroner and Chinese renminbi to buy government bonds, private-sector bonds, stocks, currency options and other financial intermediation. Not much of this funding was used to finance new capital formation. It was purely financial in character – extractive, not productive.


By 2006 the United States and Europe were experiencing a financial and real estate bubble of its own. And after it burst in 2008, they did what Japan’s banks did after 1990. Seeking to help U.S. banks work their way out of negative equity, the Federal Reserve flooded the economy with credit. The aim was to provide more liquidity, in the hope that banks would lend more to domestic borrowers. The economy would “borrow its way out of debt,” re-inflating asset prices for real estate, stocks and bonds so as to deter home foreclosures and the ensuing wipeout of collateral on bank balance sheets.


Quantitative easing subsidizes U.S. capital flight, pushing up non-dollar currency exchange rates


Quantitative easing may not have set out to disrupt the global trade and financial system or start a round of currency speculation, but that is the result of the Fed’s decision in 2008 to keep unpayably high debts from defaulting by re-inflating U.S. real estate and financial markets. The aim is to pull home ownership out of negative equity, rescuing the banking system’s balance sheets and thus saving the government from having to indulge in a TARP II, which looks politically impossible given the mood of most Americans.


The announced objective is not materializing. Instead of increasing their loans against U.S. real estate, consumers or businesses, banks are still reducing their exposure. This is why the U.S. savings rate is jumping. The “saving” that is reported (up from zero to 3% of GDP) is taking the form of paying down debts taken out in t
he past, not building up liquid funds. Just as hoarding diverts revenue away from being spent on goods and services, so debt repayment shrinks spendable income. Why then would banks lend more under conditions where a third of U.S. homes already are in negative equity and the economy is shrinking as a result of debt deflation?


Mr. Bernanke proposes to solve this problem by injecting another $1 trillion of liquidity over the coming year, on top of the $2 trillion in new Federal Reserve credit already created during 2009-10. This quantitative easing has been sent abroad, mainly to the BRIC countries: Brazil, Russia, India and China. “Recent research at the International Monetary Fund has shown conclusively that G4 monetary easing has in the past transferred itself almost completely to the emerging economies … since 1995, the stance of monetary policy in Asia has been almost entirely determined by the monetary stance of the G4 – the US, eurozone, Japan and China – led by the Fed.” According to the IMF, “equity prices in Asia and Latin America generally rise when excess liquidity is transferred from the G4 to the emerging economies.” This is what has led gold prices to surge and investors to move out of the dollar since early September, prompting other nations to protect their economies.


Speculative credit from U.S., Japanese and British banks to buy bonds, stocks and currencies in the BRIC and Third World countries is a self-feeding expansion, pushing up their currencies as well as their asset prices. Their central banks end up with these dollars, whose value falls as measured in their own local currencies. U.S. officials say that this is all part of the free market. “It is not good for the world for the burden of solving this broader problem … to rest on the shoulders of the United States,” insisted Treasury Secretary Tim Geithner on Wednesday, as if the spillover from U.S. quantitative easing and deregulation was not promoting the speculative dollar glut.


So other countries are obliged to solve the problem on their own. Japan is holding down its exchange rate by selling yen and buying U.S. Treasury bonds in the face of its carry trade being unwound as arbitrageurs pay back the yen they earlier borrowed to buy higher-yielding but increasingly risky sovereign debt from countries such as Greece. These paybacks have pushed up the yen’s exchange rate by 12% against the dollar so far during 2010, prompting Bank of Japan governor Masaaki Shirakawa to announce on Tuesday, October 5, that Japan had “no choice” but to “spend 5 trillion yen ($60 billion) to buy government bonds, corporate IOUs, real-estate investment trust funds and exchange-traded funds – the latter two a departure from past practice.”


This “sterilization” of unwanted inflows is what the United States has criticized China for doing. China has tried more normal ways to recycle its trade surplus, by seeking out U.S. companies to buy. But Congress would not let CNOOC buy into U.S. oil refinery capacity a few years ago, and the Canadian government is now being urged to block China’s attempt to purchase its potash resources. Such protectionism leaves little option for China and other countries except to hold their currencies stable by purchasing U.S. and European government bonds.


The problem for all countries today is that as presently structured, the global financial system rewards speculation and makes it difficult for central banks to maintain stability without recycling dollar inflows to the U.S. Government, which enjoys a near monopoly in providing the world’s central bank reserves by running budget and balance-of-payments deficits. As noted earlier, arbitrageurs obtain a twofold gain: the margin between Brazil’s nearly 12% yield on its long-term government bonds and the cost of U.S. credit (1%), plus the foreign-exchange gain resulting from the fact that the outflow from dollars into reals has pushed up the real’s exchange rate some 30% – from R$2.50 at the start of 2009 to R$1.75 last week. Taking into account the ability to leverage $1 million of one’s own equity investment to buy $100 million of foreign securities, the rate of return is 3000% since January 2009.


Brazil has been more a victim than a beneficiary of what is euphemized as a “capital inflow.” The inflow of foreign money has pushed up the real by 4% in just over a month (from September 1 through early October), and the past year’s run-up has eroded the competitiveness of Brazilian exports. To deter the currency’s rise, the government imposed a 4% tax on foreign purchases of its bonds on October 4. “It’s not only a currency war,” Finance Minister Guido Mantega explained. “It tends to become a trade war and this is our concern.” Thailand’s central bank director Wongwatoo Potirat warned that his country was considering similar taxes and currency trade restrictions to stem the baht’s rise. Subir Gokarn, deputy governor of the Reserve Bank of India, announced that his country also was reviewing defenses against the “potential threat” of inward capital flows.”


Such inflows do not provide capital for tangible investment. They are predatory, and cause currency fluctuation that disrupts trade patterns while creating enormous trading profits for large financial institutions and their customers. Yet most discussions treat the balance of payments and exchange rates as if they were determined purely by commodity trade and “purchasing power parity,” not by the financial flows and military spending that actually dominate the balance of payments. The reality is that today’s financial interregnum – anarchic “free” markets prior to countries hurriedly putting up their own monetary defenses – provides the arbitrage opportunity of the century. This is what bank lobbyists have been pressing for. It has little to do with the welfare of workers in their own country.


The potentially largest speculative prize promises to be an upward revaluation of China’s renminbi. The House Ways and Means Committee is demanding that China raise its exchange rate by the 20 percent that the Treasury and Federal Reserve are suggesting. Revaluation of this magnitude would enable speculators to put down 1% equity – say, $1 million to borrow $99 million – and buy Chinese renminbi forward. The revaluation being demanded would produce a 2000% profit of $20 million by turning the $100 million bet (and just $1 million “serious money”) into $120 million. Banks can trade on much larger, nearly infinitely leveraged margins, much like drawing up CDO swaps and other derivative plays.


This kind of money has been made by speculating on Brazilian, Indian and Chinese securities and those of other countries whose exchange rates have been forced up by credit-flight out of the dollar, which has fallen by 7% against a basket of currencies since early September when the Federal Reserve floated the prospect of quantitative easing. During the week leading up to the IMF meetings in Washington, the Thai baht and Indian rupee soared in anticipation that the United States and Britain would block any attempts by foreign countries to change the financial system and curb disruptive currency gambling.


This capital outflow from the United States has indeed helped domestic banks rebuild their balance sheets, as the Fed intended. But in the process the international financial system has been victimized as collateral damage. This prompted Chinese officials to counter U.S. attempts to blame it for running a trade surplus by retorting that U.S. financial aggression “risked bringing mutual destruction upon the great economic power
s.”


From the gold-exchange standard to the Treasury-bill standard to “free credit” anarchy


Indeed, the standoff between the United States and other countries at the IMF meetings in Wahington this weekend thtens to cause the most serious rupture since the breakdown of the London Monetary Conference in 1933. The global financial system threatens once again to break apart, deranging the world’s trade and investment relationships – or to take a new form that will leave the United States isolated in the face of its structural long-term balance-of-payments deficit.


This crisis provides an opportunity – indeed, a need – to step back and review the longue durée of international financial evolution to see where past trends are leading and what paths need to be re-tracked. For many centuries prior to 1971, nations settled their balance of payments in gold or silver. This “money of the world,” as Sir James Steuart called gold in 1767, formed the basis of domestic currency as well. Until 1971 each U.S. Federal Reserve note was backed 25% by gold, valued at $35 an ounce. Countries had to obtain gold by running trade and payments surpluses in order to increase their money supply to facilitate general economic expansion. And when they ran trade deficits or undertook military campaigns, central banks restricted the supply of domestic credit to raise interest rates and attract foreign financial inflows.


As long as this behavioral condition remained in place, the international financial system operated fairly smoothly under checks and balances, albeit under “stop-go” policies when business expansions led to trade and payments deficits. Countries running such deficits raised their interest rates to attract foreign capital, while slashing government spending, raising taxes on consumers and slowing the domestic economy so as to reduce the purchase of imports.


What destabilized this system was war spending. War-related transactions spanning World Wars I and II enabled the United States to accumulate some 80% of the world’s monetary gold by 1950. This made the dollar a virtual proxy for gold. But after the Korean War broke out, U.S. overseas military spending accounted for the entire payments deficit during the 1950s and ’60s and early ’70s, while private-sector trade and investment were exactly in balance.


By August 1971, war spending in Vietnam and other foreign countries forced the United States to suspend gold convertibility of the dollar through sales via the London Gold Pool. But largely by inertia, central banks continued to settle their payments balances in U.S. Treasury securities. After all, there was no other asset in sufficient supply to form the basis for central bank monetary reserves. But replacing gold – a pure asset – with dollar-denominated U.S. Treasury debt transformed the global financial system. It became debt-based, not asset-based. And geopolitically, the Treasury-bill standard made the United States immune from the traditional balance-of-payments and financial constraints, enabling its capital markets to become more highly debt-leveraged and “innovative.” It also enabled the U.S. Government to wage foreign policy and military campaigns without much regard for the balance of payments.


The problem is that the supply of dollar credit has become potentially infinite. The “dollar glut” has grown in proportion to the U.S. payments deficit. Growth in central bank reserves and sovereign-country funds has taken the form of recycling of dollar inflows into new purchases of U.S. Treasury securities – thereby making foreign central banks (and taxpayers) responsible for financing most of the U.S. federal budget deficit. The fact that this deficit is largely military in nature – for purposes that many foreign voters oppose – makes this lock-in particularly galling. So it hardly is surprising that foreign countries are seeking an alternative.


Contrary to most public media posturing, the U.S. payments deficit – and hence, other countries’ payments surpluses – is not primarily a trade deficit. Foreign military spending has accelerated despite the Cold War ending with dissolution of the Soviet Union in 1991. Even more important has been rising capital outflows from the United States. Banks lent to foreign governments from Third World countries to other deficit countries to cover their national payments deficits, to private borrowers to buy the foreign infrastructure being privatized or to buy foreign stocks and bonds, and to arbitrageurs to borrow at a low interest rate to buy higher-yielding securities abroad.


The corollary is that other countries’ balance-of-payments surpluses do not stem primarily from trade relations, but from financial speculation and a spillover of U.S. global military spending. Under these conditions the maneuvering for quick returns by banks and their arbitrage customers is distorting exchange rates for international trade. U.S. “quantitative easing” is coming to be perceived as a euphemism for a predatory financial attack on the rest of the world. Trade and currency stability are part of the “collateral damage” caused by the Federal Reserve and Treasury flooding the economy with liquidity to re-inflate U.S. asset prices. Faced with this quantitative easing flooding the economy with reserves to “save the banks” from negative equity, all countries are obliged to act as “currency manipulators.” So much money is made by purely financial speculation that “real” economies are being destroyed.


The coming capital controls


The global financial system is being broken up as U.S. monetary officials change the rules they laid down half a century ago. Prior to the United States going off gold in 1971, nobody dreamed that an economy could create unlimited credit on computer keyboards and not see its currency plunge. But that is what happens under the global Treasury-bill standard. Foreign countries can prevent their currencies from rising against the dollar (which prices their labor and exports out of foreign markets) only by (1) recycling dollar inflows into U.S. Treasury securities, (2) by imposing capital controls, or (3) by avoiding use of the dollar or other currencies used by financial speculators in economies promoting “quantitative easing.”


Malaysia used capital controls during the 1997 Asian Crisis to prevent short-sellers from covering their bets. This confronted speculators with a short squeeze that George Soros says made him lose money on the attempted raid. Other countries are now reviewing how to impose capital controls to protect themselves from the tsunami of credit flowing into their currencies and buying up their assets – along with gold and other commodities that are turning into vehicles for speculation rather than actual use in production. Brazil took a modest step along this path by using tax policy rather than outright capital controls when it taxed foreign buyers of its bonds last week.


If other nations take this route, it will reverse the policy of open and unprotected capital markets adopted after World War II. This trend threatens to lead to the kind of international monetary practice found from the 1930s into the ’50s: dual exchange rates, one for financial movements and another for trade. It probably would mean replacing the IMF, World Bank and WTO with a new set of institutions, isolating U.S., British and eurozone representation.


To defend itself, the IMF is proposing to act as a “central bank” creating what was called “paper gold” in the late 1960s – artificial credit in the
form of Special Drawing Rights (SDRs). However, other countries already have complained that voting control remains dominated by the major promoters of arbitrage speculation – the United States, Britain and the eurozone. And the IMF’s Articles of Agreement prevent countries from protecting themselves, characterizing this as “interfering” with “open capital markets.” So the impasse reached this weekend appears to be permanent. As one report summarized matters: “‘There is only one obstacle, which is the agreement of the members,’ said a frustrated Mr Strauss Kahn.” He added: “The language is ineffective.”


Paul Martin, the former Canadian prime minister who helped create the G20 after the 1997-1998 Asian financial crisis, noted that “the big powers were largely immune to being named and shamed.” And in a Financial Times interview, Mohamed El-Erian, a former senior IMF official and now chief executive of Pimco, said: “You have a burst pipe behind the wall and the water is coming out. You have to fix the pipe, not just patch the wall.”


The BRIC countries are simply creating their own parallel system. In September, China supported a Russian proposal to start direct trading between the yuan and the ruble. It has brokered a similar deal with Brazil. And on the eve of the IMF meetings in Washington on Friday, October 8, Premier Wen stopped off in Istanbul to reach agreement with Turkish Prime Minister Erdogan to use their own currencies in tripling Turkish-Chinese trade to $50 billion over the next five years, effectively excluding the U.S. dollar. “We are forming an economic strategic partnership … In all of our relations, we have agreed to use the lira and yuan,” Mr. Erdogan said.


On the deepest economic plane today’s global financial breakdown is part of the price to be paid for the Federal Reserve and U.S. Treasury refusing to accept a prime axiom of banking: Debts that cannot be paid, won’t be. They tried to “save” the banking system from debt write-downs in 2008 by keeping the debt overhead in place while re-inflating asset prices. In the face of the repayment burden shrinking the U.S. economy, the Fed’s idea of helping the banks “earn their way out of negative equity” is to provide opportunities for predatory finance, leading to a flood of financial speculation. Economies targeted by global speculators understandably are seeking alternative arrangements. It does not look like these can be achieved via the IMF or other international forums in ways that U.S. financial strategists will willingly accept.



Notes

[1] Sewell Chan, “Currency Rift With China Exposes Shifting Clout,” The New York Times, October 11, 2010.
[2] Walter Brandimarte, “Fed, ECB throwing world into chaos: Stiglitz,” Reuters, Oct. 5, 2010, reporting on a talk by Prof. Stiglitz at Columbia University, http://www.reuters.com/article/idUSTRE6944M920101005. Dirk Bezemer and Geoffrey Gardiner, “Quantitative Easing is Pushing on a String” (paper prepared for the Boeckler Conference, Berlin, October 29-30, 2010), make clear that “QE provides bank customers, not banks, with loanable funds. Central Banks can supply commercial banks with liquidity that facilitates interbank payments and payments by customers and banks to the government, but what banks lend is their own debt, not that of the central bank. Whether the funds are lent for useful purposes will depend, not on the adequacy of the supply of fund, but on whether the environment is encouraging to real investment.” (p.c., G. Gardiner)
[3] Tom Lauricella, “Dollar\’s Fall Roils World: As Global Leaders Meet, Strains Rise Among Nations Competing to Save Exports,” Wall Street Journal, October 8, 2010, quoting Edwin Truman, a former U.S. Treasury official now a senior fellow at the Peterson Institute for International Economics.
[4] Alan Beattie, Chris Giles and Michiyo Nakamoto, “Currency war fears dominate IMF talks,” Financial Times, Oct. 9, 2010, and Alex Frangos, “Easy Money Churns Emerging Markets,” Wall Street Journal, Oct. 8, 2010.
[5] Gavyn Davies, “The global implications of QE2,” Financial Times, October 5, 2010.
[6] Alan Beattie, “Global economy: Going head to head,” Financial Times, October 8, 2010.
[7] Megumi Fujikawa and David Wessel, “Central Banks Open Spigot,” Wall Street Journal, October 6, 2010.
[8] Jonathan Wheatley, “Investors calm over Brazil tax rise,” Financial Times, October 6, 2010.
[9] Alan Beattie, Joshua Chaffin and Kevin Brown, “Wen warns against renminbi pressure,” Financial Times, October 7, 2010.
[10] Alan Beattie, “Global economy: Going head to head,” Financial Times, October 8, 2010.
[11] Chris Giles and Alan Beattie, “Leaders pledge cooperation on currencies,” Financial Times, October 9, 2010.
[12] Chris Giles and Alan Beattie, “Global clash over economy,” Financial Times, October 10, 2010.
[13] Alan Beattie and Chris Giles, “IMF meeting dashes hopes for co-operation,” Financial Times,

October 10, 2010.
[14] Joe Parkinson, “Turkey, China Shun the Dollar in Conducting Trade,” Wall Street Journal, October 8, 2010.


Michael Hudson is a frequent contributor to Global Research. Global Research Articles by Michael Hudson

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The Neoliberal Experiment and Europe';s anti-Austerity Strikes: Governments must Lower Wages or Suffer Financial Blackmail

Global Research, September 30, 2010
While Labor Unions celebrate Anti-Austerity Day in Europe, the European Neoliberals raise the ante:

Most of the press has described Wednesday\’s European-wide labor demonstrations and strikes across in terms of the familiar exercise by transport workers irritating travelers with work slowdowns, and large throngs letting off steam by setting fires. But the story goes much deeper than merely a reaction against unemployment and economic recession conditions. At issue are proposals to drastically change the laws and structures of how European society will function for the next generation. If the anti-labor forces succeed, they will break up Europe, destroy the internal market, and render that continent a backwater. This is how serious the financial coup d\’etat has become. And it is going to get much worse – quickly. As John Monks, head of the European Trade Union Confederation, put it: “This is the start of the fight, not the end.”

Spain has received most of the attention, thanks to its ten-million strong turnout (reportedly half the entire labor force). Holding its first general strike since 2002, Spanish labor protested against its socialist government using the bank crisis (stemming from bad real estate loans and negative mortgage equity, not high labor costs) as an opportunity to change the laws to enable companies and government bodies to fire workers at will, and to scale back their pensions and public social spending in order to pay the banks more. Portugal is doing the same, and it looks like Ireland will follow suit – all this in the countries whose banks have been the most irresponsible lenders. The bankers are demanding that they rebuild their loan reserves at labor\’s expense, just as in President Obama\’s program here in the United States but without the sanctimonious pretenses.

The problem is Europe-wide and indeed centered in the European Union capital in Brussels. This is why the major protests were staged there. On the same day that the strikers demonstrated, the neoliberal European Commission (EC) outlined a full-fledged war against labor. Fifty to a hundred thousand workers gathered to protest the proposed transformation of social rules by the most anti-labor campaign since the 1930s – even more extreme than the Third World austerity plans imposed by the IMF and World Bank in times past.

The neoliberals are fully in control of the bureaucracy, and they are reviving Margaret Thatcher\’s slogan, TINA: There Is No Alternative. But there is, of course. In the small Baltic economies, pro-labor parties have made it clear that the alternative to government shrinkage is to simply repeal the debts, withdraw from the Euro and break the banks. It is either the banks or labor – and Europe has just realized that this is truly a fight to the economic death. And the first test will come this Saturday, when Latvia holds its national parliamentary elections.

The EC is using the mortgage banking crisis – and the needless prohibition against central banks monetizing the government budget deficit – as an opportunity to fine governments and even drive them bankrupt if they do not agree roll back public-sector salaries. Governments are told to borrow at interest from the banks, rather than raising revenue by taxing them as they have done for half-a century following the end of World War II. And if governments are unable to raise the money to pay the interest, they must close down their social programs. And if this close-down shrinks the economy – and hence, government tax revenues – even more, then the government must shut down even more social spending.

From Brussels to Latvia, neoliberal planners have expressed the hope is that lower public salaries will spread to the private sector as well. The aim is to shrink their economies to roll back wage levels by 30 percent or more – depression-style levels – in the belief that this will “leave more surplus” available to pay in debt service. Governments are to tax labor – not finance, insurance or real estate (FIRE), but to impose new employment and sales taxes while cutting back public pensions and public spending. Europe is to be turned into a banana republic.

This requires dictatorship, and the European Central Bank (ECB) has assumed this power from elected government. It is “independent” of political control – celebrated as the “hallmark of democracy” by today\’s new financial oligarchy. But as Plato\’s dialogues explained it, what is oligarchy but the political stage following democracy. We can now await the new power elite making itself hereditary – by abolishing estate taxes, for starters – and turning itself into an outright aristocracy. “Join the fight against labor, or we will destroy you,” the EC is telling governments.

One can therefore forget the economics of Adam Smith, John Stuart Mill and the Progressive Era, forget Keynes and forget the early 20th-century social democratic traditions. Europe is entering an era either of totalitarian neoliberal rule. This was inevitable since the Chilean dress rehearsal after 1973. After all, one cannot have “free markets” neoliberal style without totalitarian control. This is what Wednesday\’s strikes and demonstrations were about, after all. Europe\’s class war is back in business – with a vengeance!

This is economic suicide, but the EU is sticking to its demand that Euro-zone governments keep their budget deficits below 3% of GDP – and their total debt below 60% of GDP. They must not raise taxes on the wealthy, but only on labor and what it buys (via sales taxes). Yet at the same time they must slash wages and pensions, cut back public spending and employment, and shrink the economy.

When an economic problem is as economically destructive as this, it can only be imposed by economic blackmail. On Wednesday the EU passed a law to fine governments up to 0.2% of GDP for not “fixing” their budget deficits by imposing fiscal austerity. Nations that borrow to engage in countercyclical “Keynesian-style” spending that raises their public debt level 60% of GDP will have to reduce the excess by 5% each year – or else suffer harsh punishment. And unlike central banks elsewhere in the world, Europe\’s central bank is forbidden from monetizing public-sector governments. These governments must borrow from banks, letting these institutions create their own interest-bearing debt on their own keyboards rather than having their own central bank do it without the cost. The financial privatization and monopoly in credit creation that governments have relinquished to banks is now being made to pay off – at the price of breaking up Europe.

The unelected members of the European Central Bank (ECB, independent from democratic politics, not from control by its commercial bank members) has taken over planning power from elected government. Beholden to its constituency, the financial sector, the ECB has had little trouble in convincing the EU commission to back the new oligarchic power grab. It threatens to fine euro-area states up to 0.1% of their GDP for failure to obey its neoliberal recommendations – ostensibly to “correct” these imbalances. But the reality, of course, is that every neoliberal “cure” only makes matters worse.

Rather than seeing rising wage levels and living standards as a precondition for higher labor productivity, the EU commission will “monitor” labor costs on the assumption that rising wages impair competitiveness rather than raise it. The broad spectrum of neoliberal junk economics is being brought to bear. If members of the euro cannot depreciate thei
r currencies, then they must fight labor – but not tax real estate, finance or other rentier sectors, not regulate monopolies, and not provide public services that can be privatized at much higher costs. Privatization is not deemed to impair competitiveness – only rising wages, regardless of productivity considerations.

This economically destructive policy has been tested above all in the Baltics, using countries such as Latvia as guinea pigs to see how far labor can be depressed before it reacts politically. Latvia gave free reign to neoliberal policies by imposing flat taxes of 51% on employees, while real estate is taxed at only 1%. Public-sector wages have been reduced by 30%. Labor of working age (20 to 35 year-olds) are emigrating in droves. Lifespans are shortening. Disease rates are rising. The internal market is shrinking, and so is Europe\’s population – as it did in the 1930s, when the “population problem” was a plunge in fertility and birth rates (above all in France). That is what happens in economic depressions.

Iceland\’s looting by its bankers came first, but the big news was Greece. When that nation entered its current fiscal crisis, European Union officials recommended that it emulate Latvia, which stands as the poster child for neoliberal economic devastation. The basic theory is that inasmuch as members of the euro cannot devalue their currency, they must resort to “internal devaluation”: slashing wages, pensions and social spending. So while Europe enters recession it is following precisely the opposite of Keynesian policy. It is reducing wages, ostensibly to “free” more income available to pay the enormous debts that Europeans have taken on to buy their homes, to pay for schooling (hitherto provided freely in many countries such as Latvia\’s Stockholm School of Economics), transportation and other public services that have been privatized (at sharply, drastically increased rates – which the privatizers justify by pointing to the enormously bloated financial fees they had to pay their bankers and underwriters to buy the infrastructure being sold off by governments that the neoliberals blocked from taxing the wealthy).

The result is economic shrinkage. Europe is creating economic suicide – and demographic and fiscal suicide too. Every attempt to “solve” the problem of this shrinkage, neoliberal style, only makes things worse.
Latvia\’s public-sector workers have seen their wages cut by 30 percent over the past year, and its central bankers have told me that they are seeking further cuts, in the hope that this will lower wages in the private sector as well. What these cuts are doing, hardly by surprise, is spurring emigration – and also is destroying the real estate market, leading to defaults, foreclosures and a flight of debtors from the country. The emigration is headed by younger workers seeking employment in the shrinking economy. Indeed, Latvia\’s working conditions also happen to be Europe\’s most neoliberalized, that is, dangerous, unpleasant and almost neofeudal.

For starters in yesterday\’s Action Day, there was the usual stoppage of transportation and an accompanying honk concert in Latvia\’s capital city of Riga for 10 minutes at 1 PM to let the public know that something was indeed happening. What is happening most importantly is the national parliamentary elections this Saturday (October 2), where the leading coalition, Harmony Center, is pledged to enact an alternative tax system and economic policy to the neoliberal policies that have reduced labor\’s wages and workplace standards so sharply – along with public infrastructure – over the past decade.
Altogether about 10,000 Latvians attended protest meetings, from the capital in Riga to smaller cities as part of the “Journey into the Crisis.” Six independent trade unions and the Harmony Center organized a protest meeting in Riga\’s Esplanade Park that drew 700 to 800 demonstrators, relatively large for so small a city. Another union protest saw about half that number gather at the Cabinet of Ministers where Latvia\’s austerity program has been planned and carried out.

To highlight the economic issue, a bus tour drove journalists to the victims – schools and hospitals that had been closed down, government buildings whose employees had seen their salaries slashed and the workforce downsized. Crowds were reported to gather, re-igniting the anger expressed early last year in the cold of mid-January when Latvians had demonstrated to protest the start of these cuts.
These demonstrations seem to have gained voter sympathy for the more militant unions, headed by the hundred individual unions belonging to the Independent Trade Union Association. The other union group – the Free Trade Unions (LBAS) lost face by acquiescing in June 2009 to the government\’s proposed 10% pension cuts (and indeed, 70% for working pensioners). Latvia\’s constitutional court was sufficiently independent to overrule these drastic cuts last December. And if the government does indeed change this Saturday, the conflict between the Neoliberal Revolution and the past few centuries of classical progressive reform will be made clear.

The Neoliberal Revolution seeks to achieve in Europe what has been achieved in the United States since 1979, when real wages stopped rising. The aim is to double the relative share of wealth enjoyed by the richest 1%. This involves reduce the population to poverty, breaking union power, and destroying the internal market as a precondition for blaming all this on “Mr. Market,” presumably inexorable forces beyond politics, purely “objective” rather than a political power grab.

It is not really “the market” that is promoting this destructive economic austerity, of course. Latvia\’s Harmony Center shows that there is a much easier way to cut the cost of labor in half than by reducing its wages: Simply shift the tax burden off labor onto real estate and monopolies (especially privatized infrastructure). This will leave less of the economic surplus to be capitalized into bank loans, lowering the price of housing accordingly (the major factor in labor\’s cost of living), as well as the price of public services (by having owners take their returns as a return on equity rather than factoring interest charges into their cost of doing business). The tax deductibility of interest will be repealed – there is nothing intrinsically “market dictated” by this fiscal subsidy for debt leveraging.

No doubt many post-Soviet economies will find themselves obliged to withdraw from the euro area rather than see a flight of labor

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What Problems Lie Ahead For The U.S. Dollar?

to read more go to www.gold-eagle.com, August 20, 2010

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Geopolitical Chessboard: U.S. Global Strategy: Defeating Potential Challengers In Eurasia

Global Research, August 20, 2010
“Eurasia is…the chessboard on which the struggle for global primacy continues to be played.”

In its annual report to Congress on the Chinese military this week, the U.S. Department of Defense “voiced alarm over China\’s military buildup,” with particular emphasis on what was described as the nation “investing heavily in ballistic and cruise missile capabilities that could one day pose a challenge to U.S. dominance in the western Pacific.” [1]

The report, originally to have been presented on March 1, bears the title of Military and Security Developments Involving the People’s Republic of China 2010 [2]

While commenting favorably on China\’s increased “contributions to international peacekeeping efforts, humanitarian assistance and disaster relief, and counter-piracy operations,” it focuses extensively on what was noted above: That the nation\’s military capacity may keep pace with its economic growth and pose a challenge to the domination of the western Pacific Ocean region that the U.S. gained after World War II and, as with Europe and now Africa, to an almost uncontested degree after the end of the Cold War.

Washington\’s incremental and to most of the world imperceptible subordination of Europe through NATO expansion began in the early 1990s and has been completed over the last eleven years, since the war against Yugoslavia and the incorporation of the first former Warsaw Pact nations into the American-controlled military bloc in 1999.

Troops from 20 NATO new member and candidate states from Eastern Europe, the South Caucasus and Central Asia were deployed to Iraq after the U.S. invasion of 2003, then in the last days of 2008 transferred to Afghanistan where they serve under NATO command. To date 38 nations in Europe (inclusive of the South Caucasus) have provided forces for the Afghan war. Every European nation (excluding minuscule microstates) but Cyprus, in part because of its divided status and Turkish opposition, is either a full NATO member or involved in partnership programs with the bloc. Former Soviet and Yugoslav republics Armenia, Azerbaijan, Bosnia, Macedonia, Moldova and Montenegro (the world\’s newest – universally recognized – nation) have advanced Individual Partnership Action Plans and Georgia and Ukraine specially crafted National Annual Programs for integration into the Alliance. The U.S. has subjugated Europe through NATO.

With the launching of U.S. Africa Command on October 1, 2008, the Pentagon has consolidated individual and multilateral partnerships with almost every country on the continent in an effort to, in large part, diminish Chinese and Russia influence.

The Middle East has followed the same pattern, with only Iran and Syria not drawn into the Pentagon\’s and NATO\’s (with the Mediterranean Dialogue and the Istanbul Cooperation Initiative) military network. Iraq, Kuwait and Jordan host U.S. and NATO forces and Persian Gulf states Bahrain, Oman, Qatar, Saudi Arabia and the United Arab Emirates are military partners of the U.S. and the North Atlantic military bloc. The United Arab Emirates, Bahrain, Jordan and Egypt have supplied military personnel for the Afghan war.

Developments over the last twelve years have seriously called into question Washington\’s control of the southern half of the Western Hemisphere, and in 2008 the Pentagon reactivated its Fourth Fleet (which had been disbanded in 1950) for the Caribbean Sea and Central and South America as part of the U.S. response to an increase in independent foreign policy orientation by several nations in the region.
2010 has signalled Washington\’s return to Asia and, in particular, concerted and mounting actions to challenge its main economic rival in the world: China.

The Pentagon is currently conducting large-scale war games in South Korea, the second major joint exercises since late last month, and on August 18 Defense Department spokesman Bryan Whitman announced that the U.S. will hold anti-submarine warfare maneuvers with South Korea in the Yellow Sea, which borders Chinese territory to the north and the west.

Whitman mentioned that “The latest military exercise, planned for early September, followed a visit by Gates and U.S. Secretary of State Hillary Clinton to Seoul last month.” [3]

The past few weeks have seen a series of commentaries in the Chinese press on escalating U.S. military presence in Northeast Asia and the South China Sea. [4] The tone of many of them, often by major military officials and strategists, is one not heard since the Cold War, and the beginning of it at that.

Terms that have appeared in the articles include gunboat diplomacy, brinkmanship, hegemony, unilateralism, bullying tactics, muscle-flexing, Cold War mentality, super war machine and Asian NATO.

A recent feature in Global Times entitled “Dreams of empire a trap for modern powers” asserted the now monthly U.S. war games on either side of the Korean Peninsula – the Yellow Sea and the Sea of Japan – are “definitely aimed at China,” and that Washington is attempting to reclaim its sphere of influence in East Asia after its seven-year involvement in Iraq (the same will soon be true for Latin America as well) and “sending a reminder” of its military power to the region. The piece, however, also said that “China and Russia are both unable to accept such claims. China\’s several military exercises and Russia\’s extremely large-scale military maneuvers are responses to the US\’s \’strategic reminder.\’” [5]

The same publication wrote on August 18: “The Pentagon, facing budget pressures due to the economic downturn, naturally wants to keep China as a lasting military threat.
“The US continues to flex its military muscle by surrounding China with its military bases, engaging in a war in neighboring Afghanistan, and continuing to sell weapons to Taiwan.” [6]

In the same vein, an editorial in People\’s Daily said that “By giving the aircraft carrier USS George Washington\’s free access to the Yellow Sea and South China Sea, the United States seems to tell the world that the
\’Asia-Pacific [region] and the [Pacific] ocean are still dominated by the United States.\’” [7]

China Daily reported that analysts have recently commented that “The disturbed waters around China reflect how changes in the political landscape between China and the United States are laying the foundation for a future Asian power struggle.” Shi Yinhong, senior scholar of American studies at the Beijing-based Renmin University, was quoted warning that “the US possesses long-term military advantages and sticks to its hegemonic ideals.”

The same piece said concerning the threat of the U.S. soon deploying the USS George Washington supercarrier – which has “cruised along waters surrounding China, covering nearly 2,000 nautical miles in East Asia during the past two months” including in the South China Sea – near China\’s northeast coast that “Beijing is within striking distance of the nuclear-powered aircraft carrier in the Yellow Sea.” [8]

People\’s Daily said of the pretext Washington employs for its increasing and presumably permanent military intrusion in the area, the sinking of a South Korean warship almost five months ago: “The United States made a lot out of the Cheonan incident by making use of joint exercises to re-control the situation in Northeast Asia. It also took advantage of the…attitudes of the ASEAN Regional Forum
and some ASEAN countries and greatly played up the so-called [Chinese] \’threat\’ to speed its return to Southeast Asia….[I]n light of the country\’s recent display off the South China Sea, the escalating actions appear to be more a strategic show of strength rather than just a reaction to one particular incident.” [9]

A Chinese analysis of August 18 presented the developments discussed above in a concise historical and geopolitical context:
“US intervention in the South China Sea disputes isn\’t incidental. It\’s the outcome of the Barack Obama administration\’s \’return to Asia\’ strategy. Some American analysts argue that China expanded its influence in Southeast Asia as the US was focused on the \’war on terror\’ after the 9/11 attacks. Their logic is simple: any potential challenger to Washington in Eurasia should be the target of US global strategy….By getting involved in the South China Sea disputes and fanning trouble between China and its neighbors, Washington aims to contain Beijing and re-establish its global hegemony.” [10]

What is at stake in the seas off the coasts of the Koreas and in the South China Sea is more than the March 26 sinking of the Cheonan and more than just East Asia.

The observation that the U.S. will not tolerate any competitor or future rival in Eurasia, and that the control of that vast tract of land from the eastern Atlantic to the western Pacific is the key to global domination, is not typical of language often heard in China. It is rather that most associated with Zbigniew Brzezinski in recent years. The latter has been held in high esteem in China as he was National Security Advisor in the Carter administration, running U.S. foreign policy behind the back of Secretary of State Cyrus Vance, when Washington transferred diplomatic recognition from Taiwan to the People\’s Republic of China on January 1, 1979.

In his 1998 book The Grand Chessboard: American Primacy And Its Geostrategic Imperatives, Brzezinski triumphantly gloated that “The defeat and collapse of the Soviet Union was the final step in the rapid ascendance of a Western Hemisphere power, the United States, as the sole and, indeed, the first truly global power.” [11]

The leadership of China, first courted by Richard Nixon and Henry Kissinger in 1972, saw Brzezinski as the man most responsible for weakening Beijing\’s and Washington\’s main adversary at the time, the Soviet Union, with his support of anti-Soviet forces from Afghanistan to Poland and the undermining of Moscow\’s allies in Africa, the Middle East and Southeast Asia.

With the USSR out of the way after 1991, though, it should have dawned on Chinese officials that the first sole and truly global power would sooner or later be knocking on their door as well. It has taken almost two decades, but just that is occurring.

It is not as though they were not notified, either.

The opening sentence of Brzezinski\’s introduction to The Grand Chessboard states: “Ever since the continents started interacting politically, some five hundred years ago, Eurasia has been the center of world power.”

In the book\’s introduction and in its second section, “The Eurasian Chessboard,” the self-styled geostrategist, customarily grouped among (and perhaps at the top of) what are called America\’s foreign policy realists, offers sweeping and grandiose claims symptomatic of acute individual as well as national megalomania.

His comments include:
“For America, the chief geopolitical prize is Eurasia. For half a millennium, world affairs were dominated by Eurasian powers and peoples who fought with one another for regional domination and reached out for global power. Now a non-Eurasian power is preeminent in Eurasia — and America\’s global primacy is directly dependent on how long and how effectively its preponderance on the Eurasian continent is sustained.”
“How America \’manages\’ Eurasia is critical. A power that dominates Eurasia would control two of the world\’s three most advanced and economically productive regions. A mere glance at the map also suggests that control over Eurasia would almost automatically entail Africa\’s subordination, rendering the Western Hemisphere and Oceania geopolitically peripheral to the world\’s central continent. About 75 per cent of the world\’s people live in Eurasia, and most of the world\’s physical wealth is there as well, both in its enterprises and underneath its soil. Eurasia accounts for about three-fourths of the world\’s known energy resources.”

More to the point in regards to the current situation, he brashly asserted that “America is now Eurasia\’s arbiter, with no major Eurasian issue soluble without America\’s participation or contrary to America\’s interests.”
“All of the potential political and/or economic challengers to American primacy are Eurasian. Cumulatively, Eurasia\’s power vastly overshadows America\’s. Fortunately for America, Eurasia is too big to be politically one.
“Eurasia is thus the chessboard on which the struggle for global primacy continues to be played.”

With the Russian government conceding point after point to Washington of late – including U.S. and NATO air, infantry, naval and interceptor missile deployments, exercises, bases and installations on the Baltic and Black Seas, in the South Caucasus and Central Asia – and India all but formally recruited into an Asia-Pacific version of NATO, China is Washington\’s main “potential political and/or economic challenger” in Eurasia and hence in the world.

It is not so much a matter of China choosing to play that role as being cast in it nonetheless. For no other reasons except its economic power, its size and its location.

As Brzezinski stated over twelve years ago, “How America copes with the complex Eurasian power relationships — and particularly whether it prevents the emergence of a dominant and antagonistic Eurasian power — remains central to America\’s capacity to exercise global primacy.”

The U.S. is reacting to China\’s rise by moving its unmatched military machine into the latter nation\’s neighborhood and consolidating an Asian NATO to surround it as the original North Atlantic military bloc, now global in its scope, does Russia.

To have expected anything else is to have been either inveterately naive or, as the self-proclaimed commander-in-chief of the world\’s sole military superpower Barack Obama recently branded his Chinese counterpart Hu Jintao, willfully blind. [12]

Notes
1) Wall Street Journal, August 18, 2010
2) The Military and Security Developments Involving the People’s Republic of
China 2010
http://www.defense.gov/pubs/pdfs/2010_CMPR_Final.pdf
3) Reuters, August 18, 2010
4) Part II: U.S.-China Crisis: Beyond Words To Confrontation
Stop NATO, August 17, 2010
http://rickrozoff.wordpress.com/2010/08/17/part-ii-u-s-china-crisis-beyond-words-toward-confrontation
5) Global Times, August 15, 2010
6) Global Times, August 18, 2010
7) People\’s Daily, August 17, 2010
8) China Daily, August 18, 2010
9) People\’s Daily, August 17, 2010
10) Xinhua News Agency/China Daily, August 18, 2010
11) The Grand Chessboard: American Primacy And Its Geostrategic Imperatives
http://sandiego.indymedia.org/media/2006/10/119973.pdf
12) Obama Doctrine: Eternal War For Imperfect Mankind
Stop NATO, December 10, 2009
http://rickrozoff.wordpress.
com/2009/12/11/obama-doctrine-eternal-war-for-imperfect-mankind
U.S. Risks Military Clash With China In Yellow Sea
Stop NATO, July 16, 2010
http://rickrozoff.wordpress.com/2010/07/16u-s-risks-military-clash-with-china-in-yellow-sea
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;Financial Party; on Wall Street, Like It';s 1929

Global Research, August 13, 2010
On Tuesday, the Fed announced that it will reinvest the proceeds from maturing mortgage-backed securities (MBS) into US Treasuries. The process is called Quantitative Easing. In theory, Q.E. increases inflation expectations so that consumers spend more and rev up the economy. That\’s the theory. But adding to bank reserves when the banks are already loaded to the gills, achieves nothing. It doesn\’t put money in the hands of people who will spend it, generate more economic activity or increase growth. It\’s a big zero. Oddly enough, the Fed even admits this. According to an article in Bloomberg News, “The Central Bank posted a paper co-written by Seth Carpenter, associate director of the Fed’s monetary-affairs division, finding that the “quantity of reserve balances itself is not likely to trigger a rapid increase in lending.” No “increase in lending” means no credit expansion and no rebound. Thus, QE will have no real impact.
From the FOMC Statement:
“Information received since the Federal Open Market Committee met in June indicates that the pace of recovery in output and employment has slowed in recent months. Household spending is increasing gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising; however, investment in nonresidential structures continues to be weak and employers remain reluctant to add to payrolls. Housing starts remain at a depressed level. Bank lending has continued to contract. Nonetheless, the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, although the pace of economic recovery is likely to be more modest in the near term than had been anticipated…..
The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to promote economic recovery and price stability.”
There\’s not a glimmer of light in the Fed\’s statement, and yet, “the Committee anticipates a gradual return to higher levels of resource utilization”. But how? And on what is the Fed basing its prediction? Certainly not the data. Maybe tea leaves? The truth is the economy is in very bad shape and getting worse. This is from Wednesday\’s New York Times:
“The government’s preliminary estimate for economic growth in the second quarter is likely to be revised substantially lower….”Combining the bigger-than-expected trade deficit with other weak data suggests that Q2 growth was only 1.2 percent rather than the 2.4 percent originally estimated, placing the economy on even shakier ground than it seemed,” wrote Nigel Gault, chief United States economist at IHS Global Insight.” (New York Times)
The Fed has dramatically revised its growth forecast downward since its last meeting. The fiscal stimulus is petering out and inventory restocking is nearly over. Now the economy will have to stand on its own without the support of fiscal and monetary aid. But is it strong enough? Households are still patching their balance sheets, credit is tight, and businesses have no incentive to invest due to flagging demand. So where\’s the growth going to come from? If the government does not provide more stimulus, asset prices will tumble, unemployment will rise, and the economy will contract.

This is from Wednesday\’s Wall Street Journal:
“A Wall Street Journal survey found that by a two-to-one margin Wall Street economists see deflation as a bigger threat to the U.S. economy over the next three years than inflation.
“Deflation is dangerously close,” said David Resler of Nomura Securities, one of 53 economists surveyed by the Wall Street Journal. Among economists who answered the question, nearly two-thirds said that deflation poses the bigger risk to the economy over the next three years; the remainder said inflation is the bigger threat. That compares to an April survey, when the economists were split 50/50 over whether inflation or disinflation posed the bigger risk over the next year.” (“WSJ Survey: Risks of Deflation on the Rise, Fed on Hold Longer”, Phil Izzo, Wall Street Journal)
The looming risk of deflation is what makes the future so “unusually uncertain”. (Bernanke words) But investors don\’t like uncertainty, which is why they pulling their money out of equities and moving it into bonds. That\’s also why the flight to safety has continued for more than 2 years since the crisis began. No one knows what the policy is or what the rules are. It\’s catch-as-catch-can. At the same time, falling bond yields are a referendum on Bernanke\’s performance. Historic low yields on Treasuries indicate that the Fed has been unable to restore confidence or allay investor fears. Recent surveys of small business owners (National Federation of Independent Business) and CEO\’s show that confidence continues to plunge. Consumer confidence is in the dumps, too. Bottom line: No one has faith in the Fed\’s approach.
Bernanke hoped that restarting his bond purchasing program would convince Wall Street that he was prepared to provide as much liquidity as needed. But traders saw through the ruse. The bond market cast its ballot immediately, driving yields into the ground. Investor pessimism pushed the 10-year below 3% while 2 year Treasuries slumped to historic lows. Investors are betting that the economy is headed into another vicious cycle of debt-liquidation and depression. They don\’t believe the Fed can stop the freefall, so they are shifting into risk-free liquid assets.
It took the stock market a bit longer to grasp what was going on, but 24 hours later, the rout on Wall Street began. Shares plunged throughout the session pushing down the Dow Jones 265 points by the end of the day. The other indexes were battered as well. The dollar strengthened on fears of deflation while bond yields on short-term notes fell sharply. Bernanke thinks the economy can muddle through on its own, but Wall Street isn\’t buying it. They want more monetary stimulus, and they want it now.

This is from David Rosenberg\’s “Breakfast with Dave”:
“I know this sounds a bit dire, but little has changed from where we were a year ago……we had a huge bounce off the lows, but we had a similar bounce off the lows in 1930. The equity market was up something like 50% in the opening months of 1930, and while I am sure there was euphoria at the time that the worst of the recession and the contraction in credit was over, it’s interesting to see today that nobody talks about the great run-up of 1930 even though it must have hurt not to have participated in that wonderful rally. Instead, when we talk about 1930 today, the images that are conjured up are hardly very joyous. I’m not saying that we are into something that is entirely like the 1930s. But at the same time, we’re not in Kansas any more.” (“Not in Kansas Anymore”, David Rosenberg, Gluskin Scheff)
The economy is on the rocks and another round of quantitative easing won\’t help. The Obama administration will have to toughen up and push through another fiscal stimulus program. It\’s the only way. QE, low interest loans, zero rates, consumer subsidies, tax cuts or more bank reserves will not do the trick. Private sector deleveraging is beginning to accelerate, which means that economic contraction is unavoidable unless government spending increases substantially for an extended period of time. The budget deficits are going to balloon. Get used to it. That\’s what it will take to get back on track. Obam
a\’s stimulus was never big enough. Experts like Paul Krugman, Joseph Stiglitz and Obama\’s-own Christiana Romer figured it would take roughly $1.4 trillion to suck up the excess capacity in the system and really put a dent in unemployment. $787 billion is a pittance compared to the $6 trillion in home equity and $4 trillion in retirement funds that were lost in the housing bubble flameout. When that much money vanishes from the system, it takes time to regroup. It blows a hole in personal balance sheets and forces people to cut back on spending. That\’s why the personal savings rate has skyrocketed to 6.4% in a matter of months. People are strapped and trying to pull themselves of the red. It\’s government\’s job to give them a hand.
Here\’s an excerpt from a report by Goldman Sachs:
“The economic landscape has changed significantly during the last two months. The macroeconomic data that seemed to indicate improvement in April and May deteriorated sharply in June and early July. Cutting our 2011 EPS estimate to $89 represents a reversal for us and reflects the more challenging economic environment we now face compared with the backdrop just a few months ago.”
Bernanke maintains the recovery is on track and that the economy is slowly improving, but as economist Dean Baker points out, demand has been weak throughout the crisis and is showing no signs of a rebound. Here\’s Baker:

“Growth has been boosted over the last 4 quarters by an inventory cycle as firms went from depleting to building their inventories. This cycle has now ended. Inventory growth is unlikely to accelerate further in the quarters ahead. This means that GDP growth will be close to final demand growth. Final demand growth has averaged 1.2 percent in the last four quarters and was 1.3 percent in the most recent quarter. There is no obvious reason to expect that the rate will increase in the near future.” (Dean Baker, CEPR)
Bernanke\’s no-jobs, no-growth recovery has run out of gas. Now we need a real solution, a fiscal solution; a solution that will lower unemployment, put the country back to work and restore public confidence in government. And there\’s not much time to act either. As pessimism spreads and economic atrophy sets in, the prospect of a general fall in the price level becomes more likely. That will lead to more layoffs, more excess capacity, more plummeting asset prices, more debt-liquidation, more defaults and more bankruptcies. Obama and Co. need to get this thing right before the underlying downward trend reasserts itself and we find ourselves back in the soup.

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;What Made America Great Is Now Killing Her!;

to read more do to www.gold-eagle.com

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Intel Experts Warn Obama Israel May Bomb Iran This Month [august 2010]

Deepjournal, 04.08.2010
Intel Experts Warn Obama Israel May Bomb Iran This Month [august 2010] VIPS memo says Netanyahu planning surprise attack that will make it politically untenable for U.S. to do anything other than offer full support for military campaign
Veteran Intelligence Professionals for Sanity, a group of former intelligence and military officials, warns President Obama in a memo that Israel is preparing to attack Iran this month, and that Obama needs to publicly denounce such an attack in order to prevent a wider war and the ultimate destruction of Israel.
“We write to alert you to the likelihood that Israel will attack Iran as early as this month. This would likely lead to a wider war,” states the VIPS memo, which is addressed to the President.

The letter is signed by Phil Giraldi, former CIA (20 years), Larry Johnson, former CIA; DoS, (24 years), W. Patrick Lang, Col., USA, Special Forces (ret.); Director of HUMINT Collection, Defense Intelligence Agency (30 years), Ray McGovern, US Army Intelligence Officer, CIA (30 years), Coleen Rowley, FBI (24 years), and Ann Wright, Col., US Army Reserve (ret.), (29 years); Foreign Service Officer, Department of State (16 years).

The intelligence experts explain that Israel’s tactic is to launch the war suddenly and then make it politically untenable for Obama to do anything other than offer the United States’ full military support for the campaign.

Pointing out that Israel has habitually employed surprise and deception in furthering its geopolitical aims, VIPS warns Obama that misplaced trust in Israeli Prime Minister [Benjamin] Netanyahu’s assurances that Israel would not launch a surprise attack would be foolhardy.

The memo highlights Netanyahu’s attitude to how pliable he believes the American government is to satisfying Israel’s demands, making reference to comments he made nine years ago on Israeli television.
“America is something that can be easily moved. Moved in the right direction. … They won’t get in our way … Eighty percent of the Americans support us. It’s absurd,” said Netanyahu.
“As we hope your advisers have told you, regime change, not Iranian nuclear weapons, is Israel’s primary concern,” states the memo, adding, “A strong public statement by you, personally warning Israel not to attack Iran would most probably head off such an Israeli move.”

The intelligence experts explain that Israel’s tactic is to launch the war suddenly and then make it politically untenable for Obama to do anything other than offer the United States’ full military support for the campaign.

Pointing out that Israel has habitually employed surprise and deception in furthering its geopolitical aims, VIPS warns Obama that misplaced trust in Israeli Prime Minister [Benjamin] Netanyahu’s assurances that Israel would not launch a surprise attack would be foolhardy.

The memo highlights Netanyahu’s attitude to how pliable he believes the American government is to satisfying Israel’s demands, making reference to comments he made nine years ago on Israeli television.
“America is something that can be easily moved. Moved in the right direction. … They won’t get in our way … Eighty percent of the Americans support us. It’s absurd,” said Netanyahu.
“As we hope your advisers have told you, regime change, not Iranian nuclear weapons, is Israel’s primary concern,” states the memo, adding, “A strong public statement by you, personally warning Israel not to attack Iran would most probably head off such an Israeli move.”

The VIPS members appeal to Obama that only he can now head off an attack on Iran that could take place as soon as this month. But the group’s call on Obama to denounce a planned military assault on Iran is likely to fall on deaf ears, because Washington has been almost as active as Israel in planning an attack on Iran’s nuclear enrichment facilities.

A report in Time Magazine last month confirmed that Israel had convinced Washington to put the idea of a military strike firmly at the forefront of strategic planning. The report stated that US Central Command had been finalizing a plan of targeted air strikes on Iran’s nuclear facilities and that Israel had been brought into that process.

On Sunday August 1st during an appearance on CBS’s “Face The Nation,” Admiral Mullen, the chairman of the Joint Chiefs of Staff, reiterated that the military option remained on the table.

Any such attack would come from the air and would utilize B-2 bombers and cruise missiles as part of a knockout blow against Iran’s nuclear facilities. This would be followed by a velvet revolution in which opposition groups, which are largely controlled by the CIA and its allies, would overthrow the Ahmadinejad government.

Destabilization efforts in pursuit of this overthrow have been ongoing for years, the latest of which appears to be a claim that Ahmadinejad himself was the target of an assassination attempt today, a story the Iranian state media has strongly denied.

The U.S. government has been funding and training the Sunni terrorist group Jundullah, formerly headed by the accused mastermind of 9/11 Khalid Sheikh Mohammed, to carry out bombings and other destabilization campaigns in Iran as part of a “campaign intended to destabilise, and eventually topple, the theocratic rule of the mullahs”.

As we have documented, political pressure is clearly being brought to bear on Obama in an effort to get the green light for the attack on Iran. Voices from both sides of the political spectrum are repeating the mantra that the only way to rescue Obama’s plummeting approval ratings is to rally the country behind another war in the Middle East.

Given this backdrop, it seems unlikely that the Obama administration would do anything other than vehemently support an Israeli-led attack on Iran. Perhaps the best way to try and stop such an outcome would be to appeal to current intelligence and military insiders who experienced the Iraqi weapons of mass destruction debacle at first hand and, as the November National Intelligence Estimate proved, are loathe to be hoodwinked into another staged war based on false pretenses.

The VIPS members appeal to Obama that only he can now head off an attack on Iran that could take place as soon as this month. But the group’s call on Obama to denounce a planned military assault on Iran is likely to fall on deaf ears, because Washington has been almost as active as Israel in planning an attack on Iran’s nuclear enrichment facilities.

A report in Time Magazine last month confirmed that Israel had convinced Washington to put the idea of a military strike firmly at the forefront of strategic planning. The report stated that US Central Command had been finalizing a plan of targeted air strikes on Iran’s nuclear facilities and that Israel had been brought into that process.

On Sunday August 1st during an appearance on CBS’s “Face The Nation,” Admiral Mullen, the chairman of the Joint Chiefs of Staff, reiterated that the military option remained on the table.

Any such attack would come from the air and would utilize B-2 bombers and cruise missiles as part of a knockout blow against Iran’s nuclear facilities. This would be followed by a velvet revolution in which opposition groups, which are largely controlled by the CIA and its allies, would overthrow the Ahmadinejad
government.

Destabilization efforts in pursuit of this overthrow have been ongoing for years, the latest of which appears to be a claim that Ahmadinejad himself was the target of an assassination attempt today, a story the Iranian state media has strongly denied.

The U.S. government has been funding and training the Sunni terrorist group Jundullah, formerly headed by the accused mastermind of 9/11 Khalid Sheikh Mohammed, to carry out bombings and other destabilization campaigns in Iran as part of a “campaign intended to destabilise, and eventually topple, the theocratic rule of the mullahs”.

As we have documented, political pressure is clearly being brought to bear on Obama in an effort to get the green light for the attack on Iran. Voices from both sides of the political spectrum are repeating the mantra that the only way to rescue Obama’s plummeting approval ratings is to rally the country behind another war in the Middle East.

Given this backdrop, it seems unlikely that the Obama administration would do anything other than vehemently support an Israeli-led attack on Iran. Perhaps the best way to try and stop such an outcome would be to appeal to current intelligence and military insiders who experienced the Iraqi weapons of mass destruction debacle at first hand and, as the November National Intelligence Estimate proved, are loathe to be hoodwinked into another staged war based on false pretenses.
DeepJournal

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The Political Spinning of the WikiLeaks Release: Anti-war Whistleblowing or War Propaganda?

Global Research
July 29, 2010

Since the release of classified US military papers by WikiLeaks, the material has been aggressively spun by various political factions. Meanwhile, virtually no attention has been devoted to investigating the source of this “leak”, or questioning the agenda behind it.

According to the Associated Press, a US official who spoke on condition of anonymity stated that the US government is not certain who “leaked” the 91,000 documents to the online whistle blowing web site.

Unlike a previous WikiLeak exposing the murder of Iraqi civilians in a US airstrike, , nobody has been apprehended, arrested or pressured by the Pentagon, the CIA or any US agency.

The White House has expressed no intense concern. It did not block the release or deny the material. Government officials, led by President Obama, have almost casually dismissed the expose as nothing new.

The major mainstream newspapers that had full early access to the material—The New York Times, Der Spiegel and the Guardian—also had ample time to frame and steer the discourse surrounding it, and (particularly in the case of the White House-friendly New York Times) conduct damage control.

Leak as anti-war fodder

The new material obviously adds to what is already known for years: US forces are mired in a dirty and horrific war, and committing atrocities and war crimes. Corruption is rampant, allies are despicable and untrustworthy, and there appears no end in sight.

For critics of US policy, the expose reinforces their tired call for the war to end. However, the value of these particular papers (in terms of turning public opinion against the war) is questionable. This is not a potent high-level Pentagon Papers-type leak, and today’s society is a far cry from the 1970s.

Today’s acquiescent, ignorant and grossly manipulated mass populace—one that fully embraces and supports the manufactured “war on terrorism”—wholeheartedly supports any and all means to “prevent another 9/11″. A decade of Bush-Cheney criminality and mass murder failed to trigger any interest from a general US population that has been shocked into servitude, and further brain-addled by ubiquitous corporate right-wing media. Another day, another massacre.

Leak as imperial war propaganda

Where the WikiLeaks papers gain significance is in the detail revealed about the operations of Pakistan’s Inter-Services Intelligence directorate (ISI) and, more specifically, the manner in which leading government figures and the media have interpreted these items.

The ISI is being accused of “undercutting” US operations, “conspiring with’ and aiding the “powerfully resurgent” Taliban and Al-Qaeda in Afghanistan, aiding the killing of US forces, and organizing “networks of militants” across the region. An all-out propaganda attack against Pakistan led by the White House is underway.

Essentially, Pakistan is being branded as a terrorist state and a worthy target of military attack, along with Iran, which is also fingered by the WikiLeak for backing Taliban militants within Afghanistan.

Hamid Gul, former ISI chief and major regional player, accuses the US of orchestrating the expose to shift attention away from the US government’s “own failings”, in order to “force Pakistan’s hand on policy in Afghanistan”.

According to Gul “they [the Americans] want to bash Pakistan, at this time to come up with this leak. I refuse to believe it is not on purpose.”

The Obama administration, eager for a pretext to escalate the Central Asia/Middle East (resource) war into Pakistan and Iran, has certainly found ammunition with the WikiLeak expose.

Perhaps not coincidentally, the “leak” occurred just prior to a new $33 billion/30,000 troop surge for Afghanistan was signed in the US Congress, and ahead of a possible military attack on Iran, which former CIA Director Michael Hayden says is “inexorable”.

The glaring omission

As accusations and attacks on Pakistan and its “terrorist ISI” rise in intensity, not one mainstream media report mentions the fact that the ISI is a virtual branch of the CIA, and one that operates on behalf of Anglo-American policy.

It is fact that the ISI, with full Anglo-American direction, has long been a driving force behind “Islamic militants” and “terrorists” throughout the world, including “Al-Qaeda”. The CIA and ISI have cooperatively fomented instability and tension throughout Central Asia and the Middle East, playing all sides for geostrategic gain. This “strategy of tension” is one of the hallmarks of the “war on terrorism”. The ISI was also directly involved with the false flag operation of 9/11.

According to Michel Chossudovsky:
“The ISI actively collaborates with the CIA. It continues to perform the role of a ‘go-between’ in numerous intelligence operations on behalf of the CIA. The ISI directly supports and finances a number of terrorist organizations, including Al Qaeda.”

If the ISI is responsible for terrorism, the funding and aiding of “Islamic militants”, and the killing of US forces, logic dictates that its big brethren—the CIA and officials in Washington—are also guilty and involved.

The manner in which the ISI is under fire, while omitting any mention of the ISI’s guiding superiors in Washington speaks to a deliberate anti-Pakistan/pro-US bias.

Whose political weapon?

Until the source of this WikiLeak is revealed, along with the motive for the “leak”, all that remains is a political Rohrschach Test, open to interpretation.

The ultimate beneficiary is whatever faction controls the interpretation.

In the end, only Pakistan and Iran have been politically damaged, while the Obama administration has a new pretext to escalate and intensify its continuing resource war.

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The Weimar Syndrome

to read more go to King World News, july 2010

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The Death of Paper Money

Telegraph, 25 Jul 2010
As they prepare for holiday reading in Tuscany, City bankers are buying up rare copies of an obscure book on the mechanics of Weimar inflation published in 1974.

Previous1 of 2 ImagesNext Federal Reserve chairman Ben Bernanke, himself a scholar of the Great Depression, has indicated he would consider extra stimulus for the economy.
During the inflationary crisis of Weimer Germany, grand pianos became a currency of sorts, according to an account of the period.
Ebay is offering a well-thumbed volume of “Dying of Money: Lessons of the Great German and American Inflations” at a starting bid of $699 (shipping free.. thanks a lot).

The crucial passage comes in Chapter 17 entitled “Velocity”. Each big inflation — whether the early 1920s in Germany, or the Korean and Vietnam wars in the US — starts with a passive expansion of the quantity money. This sits inert for a surprisingly long time. Asset prices may go up, but latent price inflation is disguised. The effect is much like lighter fuel on a camp fire before the match is struck.

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Swiss endure safe-haven agony from euro flight People’s willingness to hold money can change suddenly for a “psychological and spontaneous reason” , causing a spike in the velocity of money. It can occur at lightning speed, over a few weeks. The shift invariably catches economists by surprise. They wait too long to drain the excess money.
“Velocity took an almost right-angle turn upward in the summer of 1922,” said Mr O Parsson. Reichsbank officials were baffled. They could not fathom why the German people had started to behave differently almost two years after the bank had already boosted the money supply. He contends that public patience snapped abruptly once people lost trust and began to “smell a government rat”.

Some might smile at the Bank of England “surprise” at the recent the jump in Brtiish inflation. Across the Atlantic, Fed critics say the rise in the US monetary base from $871bn to $2,024bn in just two years is an incendiary pyre that will ignite as soon as US money velocity returns to normal.

Morgan Stanley expects bond carnage as this catches up with the Fed, predicting that yields on US Treasuries will rocket to 5.5pc. This has not happened so far. 10-year yields have fallen below 3pc, and M2 velocity has remained at historic lows of 1.72.

As a signed-up member of the deflation camp, I think the Bank and the Fed are right to keep their nerve and delay the withdrawal of stimulus — though that case is easier to make in the US where core inflation has dropped to the lowest since the mid 1960s. But fact that O Parsson’s book is suddenly in demand in elite banking circles is itself a sign of the sort of behavioral change that can become self-fulfilling.

As it happens, another book from the 1970s entitled “When Money Dies: the Nightmare of The Weimar Hyper-Inflation” has just been reprinted. Written by former Tory MEP Adam Fergusson — endorsed by Warren Buffett as a must-read — it is a vivid account drawn from the diaries of those who lived through the turmoil in Germany, Austria, and Hungary as the empires were broken up.

Near civil war between town and country was a pervasive feature of this break-down in social order. Large mobs of half-starved and vindictive townsmen descended on villages to seize food from farmers accused of hoarding. The diary of one young woman described the scene at her cousin’s farm.
“In the cart I saw three slaughtered pigs. The cowshed was drenched in blood. One cow had been slaughtered where it stood and the meat torn from its bones. The monsters had slit the udder of the finest milch cow, so that she had to be put out of her misery immediately. In the granary, a rag soaked with petrol was still smouldering to show what these beasts had intended,” she wrote.

Grand pianos became a currency or sorts as pauperized members of the civil service elites traded the symbols of their old status for a sack of potatoes and a side of bacon. There is a harrowing moment when each middle-class families first starts to undertand that its gilt-edged securities and War Loan will never recover. Irreversible ruin lies ahead. Elderly couples gassed themselves in their apartments.

Foreigners with dollars, pounds, Swiss francs, or Czech crowns lived in opulence. They were hated. “Times made us cynical. Everybody saw an enemy in everybody else,” said Erna von Pustau, daughter of a Hamburg fish merchant.

Great numbers of people failed to see it coming. “My relations and friends were stupid. They didn’t understand what inflation meant. Our solicitors were no better. My mother’s bank manager gave her appalling advice,” said one well-connected woman.
“You used to see the appearance of their flats gradually changing. One remembered where there used to be a picture or a carpet, or a secretaire. Eventually their rooms would be almost empty. Some of them begged — not in the streets — but by making casual visits. One knew too well what they had come for.”

Corruption became rampant. People were stripped of their coat and shoes at knife-point on the street. The winners were those who — by luck or design — had borrowed heavily from banks to buy hard assets, or industrial conglomerates that had issued debentures. There was a great transfer of wealth from saver to debtor, though the Reichstag later passed a law linking old contracts to the gold price. Creditors clawed back something.

A conspiracy theory took root that the inflation was a Jewish plot to ruin Germany. The currency became known as “Judefetzen” (Jew- confetti), hinting at the chain of events that would lead to Kristallnacht a decade later.

While the Weimar tale is a timeless study of social disintegration, it cannot shed much light on events today. The final trigger for the 1923 collapse was the French occupation of the Ruhr, which ripped a great chunk out of German industry and set off mass resistance.

Lloyd George suspected that the French were trying to precipitate the disintegration of Germany by sponsoring a break-away Rhineland state (as indeed they were). For a brief moment rebels set up a separatist government in Dusseldorf. With poetic justice, the crisis recoiled against Paris and destroyed the franc.

The Carthaginian peace of Versailles had by then poisoned everything. It was a patriotic duty not to pay taxes that would be sequestered for reparation payments to the enemy. Influenced by the Bolsheviks, Germany had become a Communist cauldron. partakists tried to take Berlin. Worker `soviets\’ proliferated. Dockers and shipworkers occupied police stations and set up barricades in Hamburg. Communist Red Centuries fought deadly street battles with right-wing militia.

Nostalgics plotted the restoration of Bavaria’s Wittelsbach monarchy and the old currency, the gold-backed thaler. The Bremen Senate issued its own notes tied to gold. Others issued currencies linked to the price of rye.

This is not a picture of America, or Britain, or Europe in 2010. But we should be careful of embracing the opposite and overly-reassuring assumption that this is a mild replay of Japan’s Lost Decade, that is to say a slow and largely benign slide into deflation as debt deleveraging exerts its discipline.

Japan was the world’s biggest external creditor when the Nikkei bubble
burst twenty years ago. It had a private savings rate of 15pc of GDP. The Japanese people have gradually cut this rate to 2pc, cushioning the effects of the long slump. The Anglo-Saxons have no such cushion.

There is a clear temptation for the West to extricate itself from the errors of the Greenspan asset bubble, the Brown credit bubble, and the EMU sovereign bubble by stealth default through inflation. But that is a danger for later years. First we have the deflation shock of lives. Then — and only then — will central banks go to far and risk losing control over their printing experiment as velocity takes off. One problem at a time please.

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China Is Manipulating The Euro Higher

To read more go to News Trading Perspective, July 16th. 2010

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SMOKING GUNS OF USTREASURY MONETIZATION

To read more go to www.gold-eagle.com, July 22, 2010.

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Renewed American Threats: Building a Pretext to Wage War on North Korea?

Global Research, July 24, 2010,
The United States has announced that it is adding a new tranche to the Himalaya of sanctions it has built up since 1950 against North Korea, sanctions I outlined in my last article Amnesty International botches blame for North Korea’s crumbling healthcare. Calling the new sanctions “measures” – perhaps to escape the disfavor, the word has fallen into after sanctions wiped out the lives of half of million Iraqi children in the 1990s — US secretary of state Hillary Clinton purred reassuringly that the new “measures are not directed at the people of North Korea.” [1] She didn’t predict, however, whether they would add to the misery the previous umpteenth round of sanctions has already visited upon the lives of North Koreans, even if she says they aren’t directed at them, but we can be pretty sure they will.


At the same time preparations were underway to launch Operation Invincible Spirit, a four day joint US-South Korea military exercise to take place in the Sea of Japan, involving 8,000 troops, 200 warplanes and an armada of warships led by the aircraft carrier USS George Washington. The point of the exercise, according to the US commander in the Pacific, Robert Willard, is to “send a strong signal to Pyongyang and Kim Jong-il regarding the provocation that Cheonan represented” [2](the Cheonan being the South Korean warship that sunk in disputed waters in May.) Inasmuch as the Cheonan’s sinking appears to be a replay of the Gulf of Tonkin incident [3] – the alleged attack on a US Navy destroyer by North Vietnamese patrol boats used by US president Lyndon Johnson as a pretext to step up war on Vietnam – the military exercises represent the second stage of what looks like a plan to increase pressure on Pyongyang, with a view to producing what US policy has been trying to produce north of the 38th parallel for the last 60 years: the collapse of the anti-imperialist governments led by Kim Il-sung and now Kim Jong-il. The first part of the plan was to blame North Korea for the Cheonan’s sinking. The second part is to launch military exercises using the pretext of the first.


China calls the exercises, scheduled to begin this Sunday, provocative. And University of Chicago historian Bruce Cumings points out that the North Koreans become agitated whenever the United States and South Korea carry out joint military exercises, because they “see them as a prelude to a possible attack.” [4] Indeed, since it is impossible to distinguish troops, warships and warplanes massing on one’s borders for the purposes of conducting war games from troops, warships and warplanes massing on one’s borders for the purposes of an invasion, it is hardly surprising that the North Koreans are agitated. And that’s the point: keep the DPRK on a continual war-footing, so that it diverts its sanctions-starved economy into military preparedness and away from productive investments and provision of healthcare, education, housing and so on. Joint US-South Korea military exercises aren’t just a sometimes thing. They happen every year, and Operation Invincible Spirit adds another provocation to the annual cycle.


Forcing its ideological opponents to spend heavily on defense — when they always start off poorer and weaker than the United States and can therefore ill-afford to do so if they’re ever going to progress — is a tactic Washington has been using for decades to contain, cripple and ultimately defeat countries that offer a humane and progressive alternative to integration into a worldwide capitalist system of imperial relations.


On top of the advantages of this tactic abroad, at home the defense spending needed to threaten target countries transfers wealth upwards, from working Americans through their taxes to the investors and businesspeople in the armaments industry who benefit in two ways: first, from the profits they reap from arms contracts and second from interest on the bonds they buy to finance US defense spending. The tab is picked up by US taxpayers with their labor and, if a war is waged against their country, by foreigners with their lives, or with crippled standards of living, if their governments are forced to skimp on civilian spending to build a credible defensive force to deter the threat of US military intervention. As the dues-payers for the US warfare economy along with its foreign victims, US citizens have more in common with the citizens of official enemy countries than they think. Who’s the real enemy?


The tactic of spending ideological opponents into bankruptcy has two dimensions: a physical one, of suffocating an alternative economy until it either breaks down or is left staggering under the weight of economic warfare and the costs of preparing to repel the unrelenting ominous threat of military intervention, and an ideological one, of attributing the break-down to the inherent characteristics of the alternative system itself. In this way a warning is sent on two levels: a surface one aimed at ordinary people, which says, while this alternative may seem like a good idea, it doesn’t work and only leads to disaster. To work, this necessitates the cover up of the real causes of the break down.



At the demilitarized zone separating the two Koreas yesterday, both Clinton and US secretary of war [5] Robert Gates, played up the message that North Korea’s dire straits are endogenous, and not the product of a systematic campaign of breaking the country’s back. Gates said: “It is stunning to see how little has changed up there (in the North) and yet how much South Korea continues to grow and prosper. The North by contrast, stagnates in isolation and deprivation.” [6] Clinton said much the same. Of course, neither mentioned that sanctions, and the continual harassment of North Korea by US forces, might have something to do with North Korea’s isolation and stagnation. On a deeper level, a warning is sent to would-be leaders of oppressed classes and peoples: try to break free from the US imperial orbit, and this will happen to you, too.


Forty years ago, Felix Greene outlined how Washington had used this tactic against China and Cuba, but his description also fits North Korea today.

“The United States imposed a 100 percent embargo on trade with these countries; she employs great pressure to prevent her allies from trading with them; she arms and finances their enemies; she harasses their shipping; she threatens them with atomic missiles which she announces are pre-targeted and pre-programmed to destroy their major cities; her spy ships prowl just beyond these countries’ legal territorial waters; her reconnaissance planes fly constantly over their territory. And having done all in their power to disrupt these countries’ efforts to rebuild their societies by means of blockades to prevent essential goods from reaching them, any temporary difficulties and setbacks these countries may encounter are magnified and exaggerated and presented as proof that a socialist revolutionary government is ‘unworkable’.” [7]

Author William Blum, who writes an Anti-Empire Report monthly, elaborates on Greene’s point:

“…every socialist experiment of any significance in the twentieth century — without exception — was either overthrown, invaded, corrupted, perverted, subverted, destabilized, or otherwise had life made impossible for it, by the United States and its allies. Not one socialist government or movement — from the Russi
an Revolution to the Sandinistas in Nicaragua, from Communist China to the FMLN in El Salvador — not one was permitted to rise or fall solely on its own merits; not one was left secure enough to drop its guard against the all-powerful enemy abroad and freely and fully relax control at home. It’s as if the Wright brothers’ first experiments with flying machines all failed because the automobile interests sabotaged each test flight. And then the good and god-fearing folk of the world looked upon these catastrophes, nodded their heads wisely, and intoned solemnly: Humankind shall never fly.” [8]

Disputed Territory


Cumings offered insight into the context surrounding the Cheonan affair in a May 27, Democracy Now interview. The incident, Cummings observed:

“happened very close to the North Korean border, we’ve had incidents like this, somewhat different ones, but with large loss of life, going back more than ten years. In 1999, a North Korean ship went down with thirty sailors lost and maybe seventy wounded. That’s a larger total of casualties than this one. And last November, a North Korean ship went down in flames. We don’t know how many people died in that. This is a no man’s land, or waters, off the west coast of Korea that both North and South claim. And the Cheonan ship was sailing in those waters…” [9]


The hypocrisy need not be pointed out. When North Korean ships are sunk, there’s no provocation, except to North Koreans, who, in the view of Western governments and the propaganda apparatus of private-sector mass media, don’t matter (in the same way Israeli soldier Gilad Shalit, who was kidnapped by Hamas, matters to Western governments and Western mass media while the countless Palestinians who have been kidnapped by Israeli soldiers in the West Bank and Gaza and have since disappeared into the bowels of Israeli prisons are invisible.) But when a South Korean ship is sunk in the same disputed waters, North Korea is immediately blamed (by the politicians of South Korea’s ruling Grand National Party, though not by the South Korean military, which for weeks, said it had no evidence of North Korean involvement.) And the sinking is used to justify more sanctions and more military exercises to ratchet up the pressure.


Cumings went on to explain that the waters in which the South Korean warship went down in May “is a no man’s land, where the US and South Korea demarcated a so-called Northern limit line unilaterally. The North has never accepted it. The North says that this area is under the joint jurisdiction of the North and South Korean militaries. So you have an incident waiting to happen.” [10] Into this cauldron of roiling waters waiting for an incident to happen will soon be tossed Operation Invincible Spirit.


The World Health Organization Weighs In


While the Western media lighted on Amnesty International’s portrayal of North Korea’s healthcare system as a horror show with the eagerness of flies on road-kill, the World Health Organization had a more sober assessment of the rights organization’s Cold War-era hatchet job. WHO spokesman Paul Garwood faulted the report for being “mainly anecdotal, with stories dating back to 2001, and not up to the UN agency’s scientific approach to evaluating healthcare.” [11]

“All the facts are from people who aren’t in the country,” Garwood said. “There’s no science in the research.” [12]

In contrast, WHO chief Margaret Chan visited North Korea in April and returned with an assessment that makes Amnesty’s report look like it was written to cater to US foreign policy propaganda requirements.


Chan noted that:

“The health system requires further strengthening in order to sustain the government policy of universal coverage and, of course, to improve the quality of services. More investments are required to upgrade infrastructure and equipment and to ensure adequate supplies of medicines and other commodities, and to address the correct skill mix of the health workforce.” [13]


All of this is consistent, in a way, with what Amnesty says. Of course, the ability of the government to invest in infrastructure, upgrade equipment, and secure adequate supplies of medicines, is severely hampered by the US-led campaign of economic warfare and by Pyongyang’s need to raid its civilian budget to secure it borders against incessant US military harassment. Lifting sanctions and removing the military sword of Damocles that dangles menacingly above North Koreans’ collective heads (I wonder whether the US nuclear missiles targeted on Pyongyang are, as Clinton claims with sanctions, not directed at the North Korean people) would go far to improving the provision of healthcare in North Korea. Which is one big reason it will never happen. The point of sanctions and unremitting military threat is to destroy what the US government calls North Korea’s Marxist-Leninist system (inaccurately) and its non-market economy, not to make life better, healthier and happier for North Koreans.


Despite these challenges, DPR Korea appears to have secured what Chan describes as “advantages over other developing countries,” including:
No shortage of doctors and nurses. No brain drain of healthcare professionals (a particularly acute problem in Africa.) An elaborate health infrastructure and a developed network of primary health care physicians. [14]

Chan also noted that “the government has done a good job in areas such as immunization coverage, effective implementation of maternal, newborn and child interventions, in providing effective tuberculosis treatment and in successfully reducing malaria cases.” [15]

Perhaps, the real story about North Korean healthcare isn’t the challenges it faces, or the systematic efforts of the United States to make it collapse, but the fact that it hasn’t collapsed despite these challenges, and has managed to earn the praise of the WHO as the envy [16] of many developing nations.

Notes
1. Justin McCurry, “US announces fresh North Korea sanctions”, The Guardian (UK), July 21, 2010.
2. Ibid.
3. Stephen Gowans, “The sinking of the Cheonan”, PSLweb.org, May 27, 2010. http://www.pslweb.org/site/News2?page=NewsArticle&id=14044&news_iv_ctrl=2801
4. “Historian Bruce Cumings: US Stance on Korea Ignores Tensions Rooted in 65-Year-Old Conflict; North Korea Sinking Could Be Response to November ’09 South Korea Attack”, Democracy Now, May 27, 2010. http://www.democracynow.org/2010/5/27/nk
5. The US military is all about offense not defense, unless defense refers to the defense of capital accumulation within a system of imperial relations. Calling Gates the secretary of defense stupidly reinforces this deception. No one, but the Japanese and its Axis allies, would have called Japan of the 1930s and 1940s the liberator of Asia from Western imperialism, even though Japan bestowed the self-serving and misleading title upon itself. Why, then, should we refer to Gates by the equally self-serving and misleading title of secretary of defense?
6. McCurry
7. Felix Greene, The Enemy: What Every American Should Know about Imperialism, Vintage, New York, 1970, p. 292.
8. William Blum, “The Anti-Empire Report,” September 2, 2009. http://killinghope.org/bblum6/aer73.html
9. Cumings: Democracy Now
10. Ibid.
11. Bradley S. Klapper{_VIR_
} “WHO criticizes Amnesty report into NKorea health”, The Associated Press, July 16, 2010.
12. Ibid.
13. Lisa Schlein, “WHO chief notes N. Koean achievements in public health care”{__} Voice of America News, April 30, 2010.
14. Ibid.
15. Ibid.
16. Klapper
s:

Stephen Gowans is a frequent contributor to Global Research. Global Research Articles by Stephen Gowans

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THE GULF OIL DISASTER IS WAR ON WE THE PEOPLE: 30 Facts Evidencing the Rothschild League of Bankers

To read more go to: Health Science Communication for People Around the World, July 8, 2010

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Cutting the Budget Deficit Undermines Social Security and Medicare, Depresses Purchasing Power

Global Research, July 22, 2010
The National Commission on Fiscal Responsibility and Reform is sounding the alarm around deficit spending. It is using exaggerated rhetoric to heighten deficit fear at a time when more spending is needed.


The commission’s rhetoric is working against the antidote for the economy – spending to restart job and economic growth. Forty leading economists, including Nobel prize winners, issued a statement calling for more spending in the short-term. They recognized debt as a long term problem, but urged immediate increased spending to avoid prolonging and deepening the economic collapse, writing:

“We recognize the necessity of a program to cut the mid- and long-term federal deficit but the imperative requirement now, and the surest course to balance the budget over time, is to restore a full measure of economic activity. As in the 1930s, the economy is suffering a sharp decline in aggregate demand and loss of business confidence. Long experience shows that monetary policy may not be enough, particularly in deep slumps, as Keynes noted.

“The urgent need is for government to replace the lost purchasing power of the unemployed and their families and to employ other tax-cut and spending programs to boost demand. Making deficit reduction the first target, without addressing the chronic underlying deficiency of demand, is exactly the error of the 1930s. It will prolong the great recession, harm the social cohesion of the country, and continue inflicting unnecessary hardship on millions of Americans.”


For list of signers and more information click here.


The Obama deficit commission is working against this urgent need. And, in pushing proposals that will weaken the middle class they risk real anger from American voters who are already unhappy with the administration’s handling of the economy. The commission is talking about cuts to Social Security, Medicare and middle class benefits like the home mortgage deduction rather then focusing on the three causes of the deficit: massive war and weapons spending, giant tax cuts for the wealthy and the faltering economy.


The time is now to build opposition to these recommendations and urge Congress and the administration to cut programs that will not make the economy worse for most Americans. When I testified before the commission I urged:


Cuts in military spending as this makes up half of U.S. discretionary spending and is filled with waste and bloat.



Cuts to corporate welfare, especially to the oil and gas industry which is scheduled to received billions in tax breaks despite massive profits.


Taxes on the purchase of stocks, bonds and derivatives where even a tiny micro tax could raise tens of billions annually.


Taxes on the estates of the wealthiest 97.5% of Americans which could raise more than $10 billion annually.


Click here to read my full testimony.


These are just a few of the areas where cuts in spending and taxes on wealth could balance the budget and avoid the need to cut Social Security and Medicare or tax the middle class.


In fact, Social Security is in good financial shape for upcoming decades and merely raising the cap on Social Security taxes will make the program secure for the 21st Century. In the long run the economy needs a stronger elderly economic class. The loss of pensions, stock market collapse and savings transformed to debt leaves too many Americans dependent on the measly $14,030 annual average benefits Social Security provides.


Medicare’s challenge is not the Medicare program but the cost of health care. Cuts to Medicare will make health problems and the cost of health care more expensive. Unfortunately, the new Obama health law does not control costs and the president did not even consider the real solution for health care: ending the waste of the private insurance industry by making improved Medicare available to all Americans.


The commission is preparing its report for after the mid-term elections this November. But, it is before the elections when voters have the most power. We need to demand elected officials protect Social Security and Medicare by cutting spending for weapons and war, and raising tax dollars from the wealthy – who profited from a decade of deficit spending, first. We also need to urge them to consider taxes on wealth before considering taxes on workers. We need to let them know that our votes are dependent on them taking these actions.


You can begin to respond to the deficit commission now by writing President Obama and your representatives in Congress. You can do so by clicking here. And, to begin to build opposition to the deficit commission and urge real solutions to the economy send this article to everyone you know and urge them to take action.


Tell elected officials that to solve the deficit problem, they should focus on the causes of the deficit: nearly the entire deficit for this year and projected into the foreseeable future are the result of three things: the ongoing wars in Afghanistan and Iraq, the Bush tax cuts for the wealthy and the recession. The solutions are: end the wars, allow the tax cuts toxpire and restore robust growth.


Stopping the deficit commission from making things worse is only a first step. Americans need to organize to re-make the economy. To end the wealth divide which has allowed the top 1% to hoard the nation’s wealth, end concentration of corporate power which not only adds to the wealth divide but stifles entrepreneurship and weakens democracy and stop crony capitalism which uses tax dollars to enrich a few. Much work is needed to democratize the U.S. economy so it is transparent and benefits all Americans not the economic elite. But the immediate task at hand is to stop the deficit hawks from making things worse as they are poised to do. An outcry from Americans can stop their worst proposals before they gain momentum.
Kevin Zeese is executive director of Prosperity Agenda.

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Confronting both China and Russia: U.S. Risks Military Clash With China In Yellow Sea

Global Research, July 16, 2010
Delayed until after the United States achieved a United Nations Security Council statement on July 9 condemning the sinking of a South Korean warship in March, Washington’s plans for naval maneuvers in the Yellow Sea near Chinese territorial waters are forging ahead.

The joint exercises with South Korea, as news sources from the latter nation have recently disclosed, will be conducted on both sides of the Korean Peninsula, not only in the Yellow Sea as previously planned but also in the Sea of Japan. (Referred to in the Korean press as the West and East Seas, respectively.) Confirmation that the U.S. nuclear-powered aircraft carrier USS George Washington will participate has further exacerbated concerns in Northeast Asia and raised alarms over American intentions not only vis-a-vis North Korea but China as well.

An exact date for the war games has not yet been announced, but is expected to be formalized no later than when U.S. Secretary of State Hillary Clinton and Secretary of Defense Robert Gates arrive in the South Korean capital of Seoul on July 21.

For weeks now leading Chinese foreign ministry and military officials have condemned the U.S.-led naval exercises, branding them a threat to Chinese national sovereignty and to peace and stability in the region.

China’s influential Global Times wrote on July 12 that “The eventuality that Beijing has to prepare for is close at hand. The delayed US-South Korean naval exercise in the Yellow Sea is now slated for mid-July. According to media reports, a nuclear-powered US aircraft carrier has left its Japanese base and is headed for the drill area.” [1]

Permanently based in Yokosuka, Japan, the USS George Washington is an almost 100,000-ton supercarrier: “The nuclear carrier, commissioned in 1992, is the sixth Nimitz-class vessel, carrying some 6,250 crew and about 80 aircraft, including FA-18 fighter jets and E-2C Hawkeye airborne early warning aircraft.” [2]

The F/A-18 Hornet is a supersonic, multirole jet fighter (F/A is for Fighter/Attack) and one of its primary roles is destroying an adversary’s air defenses. The E-2C Hawkeye has been described as the “eyes and ears” of American carrier strike groups, being equipped with long-range surveillance radar.

In addition to the nuclear aircraft carrier, “an Aegis-equipped destroyer, an amphibious assault ship, about four 4,500-ton KDX-II-class destroyers, the 1,800-ton Son Won-il-class submarine and F-15K fighter jets are expected to join the exercise.” [3] U.S. Aegis class warships (destroyers and cruisers) are equipped for Standard Missile-3 anti-ballistic interceptor missiles, part of a U.S.-led Asia-Pacific (to date, along with the U.S., Japan, South Korea, Taiwan and Australia) and ultimately international interceptor missile system.

The F-15K (“Slam Eagle”) is a state-of-the-art multirole (used for both aerial combat and ground attack) jet fighter supplied to South Korea by the U.S.

The presence of a U.S. nuclear aircraft carrier and scores of advanced American and South Korean warplanes off the coast of China in the Yellow Sea – and near Russia’s shore in the Sea of Japan if the Washington is deployed there – qualitatively and precariously raises the level of brinkmanship in Northeast Asia.

The drumbeat of confrontation has been steadily increasing in volume and tempo since the sinking of a South Korean corvette, the Cheonan, on March 26 with the resultant death of 46 crew members.

An investigation into the incident was organized by the U.S. and included experts from the U.S., South Korea, Britain, Australia and Sweden, but not from China and Russia which both border the Korean Peninsula. On May 20 the five-nation team released a report blaming a North Korean torpedo for the sinking of the Cheonan. North Korea denied the accusation and neither Russia nor China, excluded from the investigation, have concurred with the U.S. accusation.

American provocations escalated dramatically at the Group of 20 (G20) summit in Toronto on June 27 when U.S. President Barack Obama (in his own words) held a “blunt” conversation with China’s President Hu Jintao, accusing him and his nation of “willful blindness” in relation to North Korea’s “belligerent behavior.” Upbraiding his Chinese counterpart, Obama stated, “I think there’s a difference between restraint and willful blindness to consistent problems.” (On the same occasion Obama praised South Korea’s President Lee Myung-bak for his “extraordinary restraint.”)
“My hope is that president Hu will recognise as well that this is an example of Pyongyang going over the line.”

President Hu and the Chinese government as a whole would be fully justified in suspecting that mounting U.S. threats are aimed not only (and perhaps not so much) against North Korea as against China itself.

Beijing is not alone in entertaining suspicions that Washington is employing the sinking of the Cheonan as the pretext for achieving broader geopolitical objectives. On July 14 Russia’s Foreign Minister Sergei Lavrov, in speaking of the Cheonan incident and its aftermath, pleaded: “I believe that the most important [concern] at the present time is to ease the situation, avoid agitation, escalation of emotions and start preparing conditions for the resumption of the six-party [North Korea, South Korea, China, Russia, the U.S. and Japan] talks.” [4]

Portraying the UN Security Council statement on the matter last week (which was not the harsh condemnation of North Korea Washington had pushed for) as being a balanced one, he also said, “It is important that nobody tries to distort the evaluations given.”

In addition, referring to North Korea’s latest reaffirmation of its willingness to jointly investigate the Cheonan’s sinking with South Korea, Lavrov said: “This statement is not new. From the very beginning the DPRK confirmed it wanted to participate in the investigation.
“I hear, the sides were to agree on some format of interaction.” [5]

When on June 27 President Obama stated “our main focus right now is in the U.N. Security Council making sure that there is a crystal-clear acknowledgement that North Korea engaged in belligerent behavior that is unacceptable to the international community” [6], his characterization of the latter entity excluded not only North Korea but China and Russia as well.

The severity and urgency of mounting U.S. threats is illustrated in a recent column by Shen Dingli, executive dean of the Institute of International Studies and director of the Center for American Studies at Fudan University in Shanghai. His comments end with a frightening parallel and a dire warning:
“The US and South Korea are implementing joint military exercises this month in the Yellow Sea, with the possibility of deploying the US aircraft carrier George Washington.
“The running of such exercises so close to China’s waters has left China strongly, and rightfully, dissatisfied.
“The US and South Korea may argue that the exercise is not in China’s territorial waters, so China has no right to comment.
“However, even if the joint exercises are not in Chinese sovereign waters, they may take place in the waters of China’s interests as the international waters [in the] Yellow Sea near China’s exclusive economic zone are extremely important to China’s interests.
“Given the sophisticated equipment it carries, the George
Washington poses a real potential threat to Chinese territory.
“Even if the US-South Korea military exercises are outside China’s territory, the striking power of the US nuclear-powered aircraft carrier also poses a serious threat to neighboring countries.
“The US and South Korea have said the military exercises are being held in order to deter North Korea because of the sinking of the South Korean Cheonan corvette and the death of 46 South Korean sailors.
“But the case for the possible North Korean sinking of the Cheonan has not been thoroughly established.
“South Korea refused to let North Korean officials present their case against the evidence for their supposed complicity in the sinking.
“When South Korea launched the so-called international survey, it refused the participation of China and other countries, which did not increase the credibility of the so-called findings.
“These exercises are needlessly provocative, and will eventually backfire on the US and South Korea.
“During the Cuban Missile Crisis in 1962, when the Soviet Union established nuclear missile bases on the island, the US objected to the close proximity of the Soviet weaponry even though they traveled only through international waters to reach Cuba, and the US set up a blockade to stop them being deployed.
“When the US ponders the idea of deploying its nuclear aircraft carrier in the Yellow Sea, very close to China, shouldn’t China have the same feeling as the US did when the Soviet Union deployed missiles in Cuba?
“China may not have the military strength to forcibly prevent such exercises now, but it may do so in response to such provocative actions in the future.” [7]

The only surviving head of state of the nations involved in the Cuban Missile Crisis, former Cuban president Fidel Castro, has issued several warnings lately that a U.S. and allied attack on North Korea (and Iran) could result in regional conflagration and even nuclear war.

A Chinese commentary last week provided more details of the threat that a U.S. nuclear aircraft carrier off its shore will pose to the nation and also contained a blunt warning, stating “the anxiety on the Chinese side will be huge if a US aircraft carrier enters the sea connecting the Korean Peninsula and China – it would mean that major cities like Dalian, Qingdao, Tianjin and even Beijing are within US attack range.
“At this stage, China may not react through a show of force to the US fleet cruising into the international waters of the Yellow Sea. But it does not mean that the Chinese people will tolerate it. Whatever harm the US military maneuver may inflict upon the mind of the Chinese, the United States will have to pay for it, sooner or later.” [8]

Washington’s recent deployment of two nuclear-powered guided missile submarines to China’s neighborhood – the USS Michigan to South Korea and the USS Ohio to the Philippines [9] – only add to China’s concerns.

As do the ongoing U.S.-led Angkor Sentinel exercises in Cambodia with over 1,000 troops from 26 nations, including American and NATO and Asian NATO partners like Britain, France, Germany and Italy (along with the U.S., the NATO Quint) and Australia, India, Indonesia, Japan and Mongolia. The last country, wedged between China and Russia, is being integrated into the American global military network, even supplying troops to serve under NATO in Afghanistan. [10]
“This is the first time in the history of the Cambodian military that we are hosting [exercises] with the participation of many countries…which encompasses such a multi-national military basis,” a Cambodian general said of the training. [11]
“Addressing the ceremony, US Ambassador Carol Rodley said Washington remained committed to enhancing its military relationship with Cambodia. She added that Angkor Sentinel provided a ‘unique opportunity’ to deepen the two countries’ friendship.” [12]

Cambodia is only once removed from China, the two nations connected by both Laos and Vietnam.

An Agence France-Presse dispatch reported “The United States and Laos pledged to step up cooperation after their highest-level talks since the Vietnam War, the latest country in a renewed US effort to engage Southeast Asia,” after Secretary of State Hillary Clinton met with Laotian Foreign Minister Thongloun Sisoulith in Washington, D.C. on July 13.

Sisoulith, also his country’s deputy prime minister, is the first major Laotian official to visit the U.S. since before 1975.

State Department spokesman Philip Crowley told reporters “The United States is committed to building our relationship with Laos as part of our broader efforts to expand engagement with Southeast Asia,” and Agence France-Presse added “President Barack Obama’s administration has put a new focus on Southeast Asia, saying the region was overlooked as George W. Bush’s former administration became preoccupied with wars in Iraq and Afghanistan.” [13]

Next week Clinton will visit Afghanistan, Pakistan, Vietnam and South Korea. The first three countries border China and South Korea faces it across the Yellow Sea. The Pentagon and NATO have ensconced themselves in Afghanistan, Pakistan and the Central Asian nations of Kazakhstan, Kyrgyzstan and Tajikistan, all five of which border western China. [14]

Clinton will visit Vietnam to attend meetings of the Association of Southeast Asian Nations (ASEAN) and the Lower Mekong Initiative (consisting of Cambodia, Laos, Thailand and Vietnam).

The State Department’s Vietnam hand, Joe Yun, said that it will be part of “Secretary Clinton’s fourth trip to East Asia in the past year.
“Her engagement in this region demonstrates the vital importance of the Asia-Pacific region, and especially Southeast Asia, to the future of the United States.”

Fellow Southeast Asian nation Malaysia has just announced the deployment of its first military contingent to assist NATO’s war in Afghanistan, “as ties with the United States deepen.”
“In an April meeting between Malaysian Prime Minister Najib Razak and US President Barack Obama, the two leaders agreed to cooperate on key security issues to create a stronger relationship.” [15]

Singapore’s Prime Minister Lee Hsien Loong recently toured the Mountain Home Air Base in the American state of Idaho where 400 of his country’s pilots and other service members and their families are now stationed. “The Singapore military personnel will be at the US base for the next 20 years or so.” [16] Singapore troops have been assigned to NATO in Afghanistan and are facing a long stay there also.

Malaysia and Singapore are currently participating for the first time in the mammoth U.S.-led Rim of the Pacific (RIMPAC) war games in the Pacific which will continue into August.

To indicate to what purpose the U.S. is “expanding engagement” with Vietnam in particular and Southeast Asia in general, the aforementioned Yun revealed that “we also look to Vietnam as ASEAN’s Chair to exercise leadership, including in sensitive areas such as North Korea’s attack on the South Korean naval vessel, the Cheonan. We would like to see Vietnam exercise its influence to press for a genuine dialogue so that the people of Burma can work with the existing government to move forward, and to press Burma on the need to fully implement UN Security Council Resolutions 1718 and 1874. Burma ought to be transparent with the international community in its dealings with North Korea.” [17]

North Korea and Burma (Myanmar
) are, like Vietnam, southern neighbors of China’s and along with the seclusive kingdom of Bhutan are the only nations near China with which the U.S. is not cultivating closer military ties.

Also to China’s south, its giant neighbor India has been pulled deeper into the Pentaon’s orbit since the New Frameworkr The U.S.-India Defense Relationship was signed in June of 2005, including hosting U.S. warships, warplanes and troops for annual Malabar war games off its coasts. Last December U.S. Pacific Command chief Admiral Robert Willard stated that the Pentagon and India “are in talks to convert their bilateral Malabar series of naval exercises into a joint services war game involving their navies, air forces and marine commandos.” [18) This year\'s Malabar 2010 included a U.S. guided missile cruiser and frigate and two destroyers as well as a fast attack submarine.

Last October over 1,000 U.S. and Indian troops participated in the Yudh Abhyas 2009 military exercises in India, which was the first time the Pentagon deployed a Stryker armored combat brigade outside the Iraqi and Afghan war theaters. "The size and scope of this combined exercise is unparalleled" [19], stated an American commander present for the war games.

President Obama is scheduled to visit India in November and his trip there will “result in some 5 billion dollars worth of American arms sales to India….Observers point out that the role of India’s biggest arms supplier is shifting from Russia to the United States.” [20]

The arms transactions are reported to include Patriot interceptor missiles, thus complementing comparable missile shield arrangements the U.S. has with Japan, Taiwan, South Korea and Australia in the Asia-Pacific area.

The projected deal also includes Washington supplying Delhi with 10 Boeing C-17 military transport planes: “Once India gets the C-17 transport aircraft, the mobility of its forces stationed along the border with China will be improved….[The] arms sales will improve ties between Washington and New Delhi, and, intentionally or not, will have the effect of containing China’s influence in the region.” [21]

The U.S. has also lately led joint military exercises in Bangladesh and East Timor, and the annual U.S.-organized Khaan Quest military exercises in Mongolia are to start next month.

A recent article in the China Times by an unidentified researcher with the Chinese navy’s military academy observed that “the US has seemingly become less restrained in its move to push forward an Asian version of the North Atlantic Treaty Organization with its allies in the region.
“In so doing, Washington has harbored the obvious strategic intention of containing China – whose economic and strategic influence has kept increasing in the international arena….” [22]

It is against that backdrop, in the context of Washington putting the finishing touches to the consolidation of an Asian analogue of the North Atlantic Treaty Organization, that China is being challenged in the Yellow Sea.

The last-cited source detailed the Pentagon’s encroachment near China’s borders:
“The radius of the US military operation has expanded to more than 1,000 kilometers, which means a US military mission in the waters off the ROK [South Korea] can still constitute a huge deterrence to China and other countries along the nearby coastline and strike at strategic targets deep inside their territories.
“With unchallenged armed forces, the US has never relented in its efforts towards long-planned strategic adjustment in the Asia-Pacific region. Under this strategy, the US has gradually increased the presence and activity of its warships and airplanes in China’s surrounding maritime area.” [23]

Regarding the naval exercise with the U.S., South Korean Foreign Ministry spokesman Won Tae-jae recently affirmed that “We can say that it will take place sometime this month. This month, there are a variety of schedules concerning bilateral security and diplomatic issues, and the decision on the exercise will be made in consideration of those schedules.” [24]

China, which conducted a live-fire naval exercise in the East China Sea from June 30-July 5 “in an apparent show of…force ahead of the [U.S.-South Korean] exercise…appears unnerved as the 97,000-ton [USS George Washington] carrier has an operational range of some 1,000 kilometers and can glean intelligence on military facilities and installments along China’s eastern coastal regions once it is deployed in the West [Yellow] Sea.” [25]

The U.S. armed forces newspaper Stars and Stripes disclosed on July 14 that “In what the Pentagon says is a direct response to North Korea’s sinking of the South Korean naval vessel Cheonan, the U.S. and South Korea likely will agree to a series of new naval and air exercises next week, when Defense Secretary Robert Gates and Secretary of State Hillary Clinton make a joint visit to Seoul.” [26]

Pentagon spokesman Geoff Morrell was cited asserting that “The announcement is the result of direct instruction from President Barack Obama to find new ways to collaborate with…Korean counterparts following the attack….He would not offer specifics other than they would occur in the Sea of Japan and the Yellow Sea.”

In his own words, Morrell said “We are not yet ready to announce the precise details of those exercises but they will involve a wide range of assets and are expected to be initiated in the near future.” [27]

Gates and Clinton are to meet for the first bilateral talks with their South Korean counterparts Minister of National Defense Kim Tae-young and Foreign Minister Yu Myung-hwan on July 21 and, according to the Pentagon spokesman, will “discuss and likely approve a proposed series of US/ROK combined military exercises.” [28]

Regarding concerns voiced by China about the U.S. advancing its military so near its coast, Morrell said that “Those determinations are made by us, and us alone….Where we exercise, when we exercise, with whom and how, using what assets and so forth, are determinations that are made by the United States Navy, by the Department of Defense, by the United States government.” [29]

There is no way that such confrontational, arrogant and vulgar language was not understood at its proper value in Beijing. Nor is the prospect, as noted by Lee Su-seok, analyst at South Korea’s Institute for National Security Strategy, of “the involvement of a U.S. aircraft carrier in the Yellow Sea as having a possible link to plans by the U.S. to defend Taiwan” [30] likely to go unnoticed.

What the response to the U.S.’s increasingly more brash and adventurist policy might be was indicated in a recent Chinese editorial, which stated in part:
“In their recent responses, several high-ranking Chinese navy officials have made it plain that China will not stay in ‘hands-off’ mode as the drill gets underway. For that will make the US believe that China’s defense circle on the sea is small, and, therefore, US fleets will be able to freely cruise over the Yellow Sea, East China Sea and South China Sea in the future.
“Military experts have warned that if the joint drill really takes place off the western coast of South Korea, Chinese airplanes and warships will very likely go all the way out to closely watch the war game maneuvers. Within such proximity on not-so-clearly-marked international waters, any move that is considered hostile to the other side can willy-nilly trigger a rash reaction, which might escalate into the un
expected or the unforeseen.
“One false move, one wrong interpretation, is all it would take for the best-planned exercises to go awry….The impact of a crisis on that scale would be tremendous, making any dispute over trade or the yuan’s value between the two in recent years pale in comparison….Tension is mounting over the US-South Korean joint exercise. Beijing and Washington still have time, and leeway, to desist from moving toward a possible conflict on the Yellow Sea.” [31]

A similar warning was sounded in another major Chinese daily:
“If the US and ROK continue to act willfully by holding the controversial military drill, it would pose a challenge to China’s safety and would inevitably provoke a huge backlash from Chinese citizens.
“Today’s China is no longer the China of a century ago that had no choice but to bend to imperialist aggression. After decades of development, especially since the adoption of the reform and opening-up policies, China has become the world’s third largest economy and possesses a modern military capable of any self-defense missions.” [32]

When Robert Gates and Hillary Clinton arrive in Seoul on July 21 it will formally be to mark the 60th anniversary of the beginning of the Korean War, which within three months drew China into the fighting.

When the two American secretaries meet with South Korea’s defense and foreign ministers and, as State Department spokesman Philip Crowley recently claimed, “likely approve a proposed series of U.S. and Korea combined military exercises, including new naval and air exercises in both the Sea of Japan and the Yellow Sea” [33], the world should prepare for the threat of a second Korean war, a second U.S.-China armed conflict.

Notes
1) Global Times, July 12, 2010
2) Korea Herald, July 13, 2010
3) Ibid
4) Russian Information Agency Novosti, July 14, 2010
5) Itar-Tass, July 14, 2010
6) White House, June 27, 2010
ttp://www.whitehouse.gov/the-press-office/remarks-president-obama-g-20-press-conference-toronto-canada
7) Global Times, July 14, 2010
8) Global Times, July 6, 2010
9) Pentagon Provokes New Crisis With China
Stop NATO, July 10, 2010
ttp://rickrozoff.wordpress.com/2010/07/10/2061
10) Mongolia: Pentagon Trojan Horse Wedged Between China And Russia
Stop NATO, March 31, 2010
ttp://rickrozoff.wordpress.com/2010/03/31/mongolia-pentagon-trojan-horse-wedged-between-china-and-russia
11) Xinhua News Agency, July 12, 2010
12) Phnom Penh Post, July 13, 2010
13) Agence France-Presse, July 14, 2010
14) Afghan War: Petraeus Expands U.S. Military Presence Throughout Eurasia
Stop NATO, July 4, 2010
ttp://rickrozoff.wordpress.com/2010/07/05/afghan-war-petraeus-expands-u-s-military-presence-throughout-eurasia
15) Radio Netherlands, July 15, 2010
16) Channel News Asia, July 12, 2010
17) VietNamNet, July 15, 2010
18) Press Trust of India, December 4, 2009
19) Embassy of the United States in India, October 19, 2009
20) Voice of Russia, July 11, 2010
21) Economic Times via Global Times, July 13, 2010
22) China Daily, July 12, 2010
23) Ibid
24) Korea Herald, July 13, 2010
25) Ibid
26) Stars and Stripes, July 14, 2010
27) Ibid
28) Agence France-Presse, July 14, 2010
29) Ibid
30) JoongAng Daily, July 12, 2010
31) Global Times, July 12, 2010
32) China Daily, July 12, 2010
33) Yonhap News Agency, July 15, 2010


Rick Rozoff is a frequent contributor to Global Research. Global Research Articles by Rick Rozoff

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The EU Banking System Is In Big Trouble

Global Research, July 10, 2010
The EU banking system is in big trouble. Many of the Union\’s largest banks are sitting on hundreds of billions of euros in dodgy sovereign bonds and non performing real estate loans. But writing down their losses will deplete their capital and force them to restructure their debt. So the banks are concealing their losses through accounting sleight-of-hand and by borrowing money from the European Central Bank. This has helped to hide the rot at the heart of the system.

Presently, 170 banks are having difficulty accessing the wholesale markets where they get their funding,. Financial institutions are wary of lending to each other because they\’re not sure who is solvent or not. It\’s a question of trust.

ECB chief Jean-Claude Trichet has tried to keep the problems under wraps, but markets aren\’t easily fooled. Stress gauges, like euribor, have been rising for the last two months. Investors smell a rat. They know the banks are playing hide-n-seek with downgraded assets and they know that Trichet is helping them out.

A week ago, stocks rallied on news that EU banks would repay most of the €442bn one-year emergency loan from the ECB. The news was mainly a publicity stunt designed to hide what was really going on. Yes, the banks borrowed significantly less that analysts had predicted (another €132bn), but just two days later, 78 banks borrowed another €111bn. The additional loans makes it look like Trichet cooked up the whole thing to trick investors.
EU banks were engaged in the same high-risk activities as their counterparts in the US. They were playing fast and loose on speculative trades that were ramped up with maximum leverage. Bankers raked in hundreds of billions in salaries and bonuses before the bubble burst. Now the securities and bonds they purchased have plunged in value, so they\’ve turned to the ECB for a bailout. Sound familiar?

Trichet is a banking industry rep, much like Geithner and Bernanke. His job is to maintain the political and economic power of the banks and to dump the losses onto the public. Presently, the ECB provides “limitless” loans to underwater banks so they can maintain the appearance of solvency. Trichet has lowered rates to 1 percent, provided a safe haven for overnight deposits, and begun an aggressive bond purchasing program (Quantitative Easing) which keeps prices of sovereign bonds artificially high. Valuations on bank assets are supported by a central authority and do not reflect true market pricing.

The wholesale-funding market (repo) has not shut down. Banks can still exchange their sovereign bonds and real estate securities for short-term loans. It merely requires that they take a haircut on the value of their collateral, which would then have to be recorded as a loss leaving them capital impaired. This is how markets work, but the banks are not required to play by the rules.

From Bloomberg News: “European lenders had $2.29 trillion at risk in Greece, Italy, Portugal and Spain at the end of 2009, including loans to governments, according to the Bank for International Settlements…German banks’ writedowns on loans and securities will probably reach $314 billion by the end of 2010, with state-owned lenders and savings banks facing the bulk of the losses, the International Monetary Fund said in a report in April.”

See? The ECB is not buying Greek bonds because of a “sovereign debt crisis”. They are buying them so the banks won\’t lose money. The “sovereign debt crisis” meme is all public relations hype. If it becomes too expensive to fund government operations, Greece can leave the EU and return to the drachma which would give it greater flexibility to settle its debts. That would increase demand for Greek exports and improve tourism. This is the best solution for Greece. So, where\’s the crisis?

If Greece, Portugal and Spain, leave the EU and restructure their debt, banks in Germany and France will default and bondholders will lose their shirts. In other words, the investors, who took a risk, will lose money—which is how the system is supposed to work.

Bloomberg again: “The region’s banks have written down a proportionately lower percentage of their assets than their U.S. counterparts. U.S. banks will have written down 7 percent of their assets by the end of 2010 and euro-area banks 3 percent, according to the IMF. European banks still haven’t shown analysts they have completed their writedowns.” (Bloomberg)

So, the banks are underwater, but nothing has been done to fix the problem. Where are the regulators?

On Tuesday, euribor hit a 10-month high. The pressure is building despite Trichet\’s emergency programs. ECB bank lending is nearly €800bn while overnight deposits are roughly €240bn. Trichet is willing to drag the EU through 10 or 15 years of subpar growth and high unemployment (like Japan) to keep a handful of bankers and bondholders from accepting their losses. If things get bad enough, Trichet might invoke the “nuclear option”, that is, allow a major bank to implode “Lehman-style” so he can extort hundreds of billions of euros from the EU member states. It\’s been done before; just ask Bernanke or Paulson.

The “Stress Test” Fraud

The bank stress tests in the US were organized by the Treasury as a “confidence-building” measure. They allowed the banks to use their own internal-models to determine the value of complex securities. The same rule will apply to EU banks. The Daily Telegraph reports that some of the banks will actually test themselves. As least that removes any doubt about the results.

From Bloomberg News — “European stress tests on 91 of the region’s biggest banks drew criticism from analysts who said regulators are underestimating probable losses on Greek and Spanish government bonds. The tests are designed to assess how banks will be able to absorb losses on loans and government bonds, the Committee of European Banking Supervisors said yesterday. Regulators have told lenders the tests may assume a loss of about 17 percent on Greek government debt, 3 percent on Spanish bonds and none on German debt, said two people briefed on the talks who declined to be identified because the details are private.

Credit markets are pricing in losses of about 60 percent on Greek bonds should the government default, more than three times the level said to be assumed by CEBS. Derivatives known as recovery swaps are trading at rates that imply investors would get back about 40 percent in a Greek default or restructuring.” (Bloomberg)

The tests are a joke. The banks will continue to use accounting-rule changes and other gimmickry to obfuscate their losses. Trichet will use the tests to step up his bond purchasing program (QE) which will transfer the banks losses onto the member states. Many of the banks are insolvent and need restructuring. But they are in no real danger, because they still have a stranglehold on the process.


Mike Whitney is a frequent contributor to Global Research. Global Research Articles by Mike Whitney

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US-South Korea Military Exercise, An Act of Provocation directed against China

Global Research, July 12, 2010
BEIJING — Negotiation, rather than flexing military muscle, is the best way to resolve disputes between key global powers.

A joint navy drill by the US and the Republic of Korea (ROK) in the Yellow Sea has aggravated concern among East Asian nations, especially China, over regional peace and stability.

The participation of the 97,000-ton US aircraft carrier George Washington in the exercise has attracted widespread media coverage and its involvement is a move that is hostile to China.

The spate of recent activity by US aircraft carriers is fresh reminder of a series of unfriendly moves by its navy in the waters of the Yellow Sea since the 1990s.

In 1994, a fleet led by the US Kitty Hawk intruded into the waters along China\’s maritime boundary line on a so-called cruise mission. The US formation of naval warships trespassed into China\’s territorial waters and went even farther to closely trail a Chinese nuclear submarine, which had just finished a long-distance cruise mission.

This ill-advised move plunged the two countries into confrontation mode for a time.

Recently, the US\’ “Victorious” surveillance vessel conducted an unauthorized mission in China\’s exclusive economic zone and even used water cannons to expel two Chinese fishing boats in the vicinity.

The current US-ROK drill, which was repeatedly put off since June, is by no means a purely military move aimed at the Democratic People\’s Republic of Korea (DPRK) for its alleged torpedoing of the ROK naval vessel Cheonan.

The US navy had for a long time avoided any provocative military moves in the Yellow Sea although Washington possessed several military bases in the ROK and Japan

In fact, many of its naval fleets, including the George Washington-led Seventh Fleet, are deployed in Japan\’s Yokosuka port.


The Cheonan incident, however, has provided a rare opportunity and excuse for the US naval force stationed in the ROK and Japan to actively intervene in regional matters.

A joint drill with the ROK in the key waters off its Asian military bases will help the US realize multiple strategic goals in the Asia-Pacific region.

First, the drill will help the US maintain high-pressure against what it calls a restive DPRK regime. It is also believed to be an explicit indication of the US stance that the world\’s sole superpower would stand firmly behind the ROK and Japan in case of a military conflict between Pyongyang and Washington\’s two traditional Asian allies.

In addition, a well-deliberated military exercise in the Yellow Sea will also help the US collect geographic and military information about some Asian countries bordering the vast waters.

General Ma Xiaotian, deputy chief of general staff of the People\’s Liberation Army, has expressed “firm opposition” to the scheduled US-ROK military maneuver.

Ma\’s unequivocal position reflects the country\’s determination and unwavering will to safeguard its maritime rights and interests. It is also an indication of China\’s increasing confidence in its military in the context of its growing national strength and military build-up.

The Yellow Sea is pivotal to China\’s core interests given that it is related not only to the extension of the country\’s maritime rights and interests but also with its maritime security.

If the US and ROK continue to act willfully by holding the controversial military drill, it would pose a challenge to China\’s safety and would inevitably provoke a huge backlash from Chinese citizens.

Today\’s China is no longer the China of a century ago that had no choice but to bend to imperialist aggression. After decades of development, especially since the adoption of the reform and opening-up policies, China has become the world\’s third largest economy and possesses a modern military capable of any self-defense missions.

Nevertheless, the US military force, especially the fighting ability of its aircraft carriers formations, has also become far stronger than what it was a century ago.

The radius of the US military operation has expanded to more than 1,000 kilometers, which means a US military mission in the waters off the ROK can still constitute a huge deterrence to China and other countries along the nearby coastline and strike at strategic targets deep inside their territories.

With an unchallenged armed force, the US has never relented in its efforts towards long-planned strategic adjustment in the Asia-Pacific region. Under this strategy, the US has gradually increased the presence and activity of its warships and airplanes in China\’s surrounding maritime area.

More worrisome, the US has seemingly become less restrained in its move to push forward an Asian version of the North Atlantic Treaty Organization with its allies in the region.

In so doing, Washington has harbored the obvious strategic intention of containing China – whose economic and strategic influence has kept increasing in the international arena – in a bid to preempt possible troubles that the fast-growing nation may cause to the US.

In the 21st century, all countries should focus efforts on negotiations, rather than the use of force or show of military muscle, to resolve disputes.

The author is a researcher with the Chinese navy\’s military academy.

Global Research Articles by Li Jie

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Pipeline Geopolitics: The Russia German Nord Stream Strategic Gas Pipeline



Global Research, July 9, 2010 he postwar history of the Federal Republic, German Chancellors tend to disappear once they pursue political goals that deviate from the Washington global agenda too much. In the case of Gerhard Schroeder, it involved two unforgiveable “sins.” The first was his open opposition to the 2003 US invasion of Iraq. The second, far more serious strategically, was his negotiations with Russia’;s Putin to bring a major new natural gas pipeline directly from Russia, bypassing then-hostile Poland, to Germany. Today the first section of that Nord Stream gas pipeline has reached the Mecklenburg-Vorpommern coastal town of Lubmin on the Baltic Sea, making Lubmin into a geopolitical pivot for Europe and Russia.




Gerhard Schroeder in effect owed his job to the quiet but influential backing of US President Bill Clinton who, according to our German SPD sources, demanded that a Schroeder Red-Green coalition, if elected, support a US-NATO war against Serbia in 1999. Washington wanted to end the era of Helmut Kohl. By 2005, however, Schroeder was far too “German” for Washington, and, reportedly, the Bush Administration turned its considerable attention to backing a successor.


His last act as Chancellor was to approve a giant gas pipeline from Russia’;s port of Vyborg near the Finnish border to Lubmin, called Nord Stream. On leaving office, Schroeder became chairman of Nord Stream AG, a joint venture between Russia’;s state-owned Gazprom and German companies E.ON-Ruhrgas and BASF-Wintershall. He also increased his public critique of US foreign policies, accusing US-client state Georgia of initiating the 2008 war against South Ossetia.


In 2006 Poland’;s neo-conservative Foreign Minister, Radoslaw Sikorski, a close Washington ally, compared the Nord Stream consortium to the 1939 Nazi-Soviet Pact. Since the collapse of the Soviet Union Washington policy has been to cultivate Poland as a wedge to block closer Russian-German economic and political cooperation, including the decision to station US missile defense and now Patriot missiles in Poland, aimed at Russia.


This month, despite ferocious political opposition from Poland and other countries, Schroeder’;s Nord Stream project completed its first major goal when the first of two pipeline strings reached land at Lubmin, exactly on schedule. When the second string is landed later this month and the pipeline begins operation in late 2011, it will be the world’;s biggest subsea gas pipeline, carrying 55 billion cubic metres of gas throughout Europe each year. The subsea route goes through the territorial waters and exclusive economic zones of Finland, Sweden, Denmark and Germany, avoiding Poland and the Baltic States of Estonia, Latvia and Lithuania.


From Lubmin, which will be a transfer station, the OPAL pipeline will go 470 kilometers through Saxony to the Czech border. Other western pipeline routes will deliver Russian gas via existing pipe to Holland, France and to the UK, significantly increasing the energy links between the EU and Russia, a development not greeted in Washington. France’;s GDF Suez, formerly Gaz de France, just bought a 9% share in Nord Stream AG and Holland’;s gas infrastructure company N.V. Nederlandse Gasunie has 9%, giving the project broad EU participation, a major geopolitical accomplishment for the Putin-Medvedev government in face of strong US opposition. Nord Stream now has long-term gas supply agreements to supply gas to Denmark, the UK, France, Netherlands and Belgium as well as Germany.


North and South Energy Streams


Gazprom is also advancing a second major gas pipeline project, South Stream, to bring gas from Russia’;s south coast under the Black Sea to Bulgaria, eventually ending up in Italy. On July 7, the Bulgarian government agreed after long negotiations to participate in the South Stream Gazprom project.


South Stream gas pipeline will transport Russian gas to western Europe, bypassing Ukraine, where Washington in recent years has expended considerable effort to push the country into an anti-Russian pro-NATO position. As a remnant from the Soviet era when the economies of the two countries operated as an integrated entity, most Russian gas pipelines transited Ukraine to the west, leaving Moscow highly vulnerable when a US-backed “Orange Revolution” in January 2005 brought Washington’;s candidate, Viktor Yushchenko to power on a pro-NATO anti-Moscow platform. Recent elections there have eased tensions between Moscow and Kiev considerably as the new President,Viktor Yanukovych, has moved Ukraine to a more neutral stance between Moscow and NATO, keeping ties to both. The offshore part of the South Stream gas pipeline, jointly operated by Russia\’s Gazprom and Italy\’s ENI, will run from Russia\’s mainland under the Black Sea to the Bulgarian coast. Under the new agreement with Bulgaria, pre-existing gas pipelines through Bulgaria will be used for the transit.


Washington has put major pressure on EU countries as well as Turkey to build an alternative to Russia’;s South Stream gas line, called Nabucco, that would eliminate Russia. To date Nabucco has little backing in the EU and insufficient sources of gas to fill the pipeline.


Completion of South Stream would weld a major geopolitical bond between the countries of the EU, Central Europe and Russia, something that would represent for Washington a geopolitical nightmare. US policy since World War II has been to dominate western Europe first by fanning the Cold War with the Soviet Union, and after 1990, by extending NATO eastwards to the borders of Russia. An increasingly independent western Europe turning east rather than across the Atlantic, could spell a major defeat for continued US “sole Superpower” domination.


So, unwittingly, the lovely seaside resort town of Lubmin in northeastern Germany de facto has become a major pivot of the geopolitical drama between Washington and Eurasia whether its citizens realize or not.

German Russian

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The Drums of War? Pentagon Provokes New Crisis With China

Global Research, July 10, 2010
Three news features appearing earlier this week highlight tensions between the United States and the People\’s Republic of China that, at least in relation to the language used to describe them, would have seemed unimaginable even a few months ago and are evocative more of the Korean War era than of any time since the entente cordiale initiated by the Richard Nixon-Mao Zedong meeting in Beijing in 1972.

To indicate the seriousness of the matter, the stories are from Global Times, a daily newspaper published in conjunction with the People\’s Daily, official press organ of the ruling Communist Party of China, and Time, preeminent American weekly news magazine. Both accounts use as their point of departure and source of key information a July 4 report in Hong Kong\’s major English-language daily.

On July 6 writer Li Jing penned a news article for Global Times called “US subs reach Asian ports: report,” which detailed the following recent developments:
“Three of the largest submarines of the US Seventh Fleet surfaced in Asia-Pacific ports last week, the South China Morning Post reported Monday [July 5]. The appearance of the USS Michigan in Pusan, South Korea, the USS Ohio in Subic Bay, the Philippines, and the USS Florida in the strategic Indian Ocean outpost of Diego Garcia was a show of force not seen since the end of the Cold War, the paper said, adding that the position of those three ports looks like a siege of China.” [1]

The piece from the Hong Kong newspaper cited was entitled “US submarines emerge in show of military might: Message unlikely to be lost on Beijing as 3 vessels turn up in Asian ports,” and was in fact dated July 4.

The author, South China Morning Post Asia correspondent Greg Torode, described the simultaneous arrival of three “Ohio-class submarines” equipped with “a vast quantity of Tomahawk cruise missiles” as a reflection of “the trend of escalating submarine activity in East Asia….” [2]

He further added this noteworthy data: “Between them, the three submarines can carry 462 Tomahawks, boosting by an estimated 60 per cent-plus the potential Tomahawk strike force of the entire Japanese-based Seventh Fleet – the core projection of US military power in East Asia.”

The author quotes without identifying his name or nation a veteran Asian military attache with reported close ties to both Chinese and U.S. military officials: “460-odd Tomahawks is a huge amount of potential firepower in anybody\’s language.
“It is another sign that the US is determined to not just maintain its military dominance in Asia, but to be seen doing so…that is a message for Beijing and for everybody else, whether you are a US ally or a nation sitting on the fence.” [3]

On July 8 Time magazine\’s Mark Thompson elaborated on the earlier report with language, including that of his title, “U.S. Missiles Deployed Near China Send a Message,” derived from the South China Morning Post piece, which Thompson claims contained information planted by “U.S. officials…on July 4, no less” [4] in a clear signal to the government in mainland China.

The Time journalist added details, though, not in the original story, replete with a good deal of editorializing that perhaps serves the same source he attributes the contents of the Hong Kong article to and for the same reason: As a shot across the bow to China.

His account of last week\’s deployments included: “A new class of U.S. superweapon had suddenly surfaced nearby. It was an Ohio-class submarine, which for decades carried only nuclear missiles targeted against the Soviet Union, and then Russia.”

The U.S. has eighteen nuclear-powered Ohio class ballistic missile submarines, fourteen still armed with nuclear warhead-tipped Trident missiles and four which “hold up to 154 Tomahawk cruise missiles each, capable of hitting anything within 1,000 miles with non-nuclear warheads.”
“The 14 Trident-carrying subs are useful in the unlikely event of a nuclear Armageddon, and Russia remains their prime target. But the Tomahawk-outfitted quartet carries a weapon that the U.S. military has used repeatedly against targets in Afghanistan, Bosnia, Iraq and Sudan.” [5]

With the arrival of the USS Ohio in the Philippines, the USS Michigan in South Korea and the USS Florida “in the strategic Indian Ocean outpost of Diego Garcia” [6] on the same day, “the Chinese military awoke to find as many as 462 new Tomahawks deployed by the U.S. in its neighborhood.” [7]

The Time report also revealed that all four Ohio class Tomahawk-armed submarines were operationally deployed away from their home ports for the first time.

Thompson wrote that the coordinated actions were “part of a policy by the U.S. government to shift firepower from the Atlantic to the Pacific theater, which Washington sees as the military focus of the 21st century.”

Regarding the submarines still carrying Trident missiles, he rhetorically added, “Why 14 subs, as well as bombers and land-based missiles carrying nuclear weapons, are still required to deal with the Russian threat is a topic for another day.” [8]

All three journalists cited – Jing, Torode and Thompson – place the U.S. submarine deployments within a broader and also a more pressing context.

The South China Morning Post writer stated: “In policies drafted under then-president George W. Bush, a Republican, and continued by the administration of his successor, Democrat Barack Obama, the Pentagon is shifting 60 per cent of its 53 fast-attack [as distinct from ballistic and guided missile] submarines to the Pacific – a process that is now virtually complete.
“But the presence of the larger cruise-missile submarines shows that, at times, the US forward posture will be significantly larger.”

The USS Ohio, for example, “has been operating out of Guam for most of the last year, taking advantage of the island\’s expanding facilities to extend its operations in the western Pacific.
“It is due to return soon, but the Florida and the Michigan are likely to remain in the region for many months yet, using Guam and possibly Diego Garcia for essential maintenance and crew changes.”

Additionally, “The presence of the Florida, based on the US east coast, appears to confirm the US is still routinely bringing submarines under the arctic ice cap to East Asia.” [9]

Just as the Pentagon is moving nuclear submarines under the northern polar ice cap to the Indian Ocean, so it has recently reached an “agreement [that] will allow troops to fly directly from the United States over the North Pole” to Afghanistan and “the region” by way of Kazakhstan, which borders China as well as Russia. [10]

The U.S. military “siege of China” is proceeding on several fronts, on land as well as under water and in Central as well as South and East Asia. But what primarily had been a policy of surveillance and probing China\’s perimeter is now entering a new phase.

That the U.S. currently has over 60 per cent of the Tomahawk cruise missiles assigned to its Japan-based Seventh Fleet near China emphasizes the qualitative escalation of Washington\’s show of strength vis-a-vis Beijing. One related to, as was seen above, a strategic shift of attack submarines nearer China and also to the crisis on the Korean Peninsula that was exacerbated by the sinking of a South Korean
warship, the Cheonan, in March.

There has even been speculation that U.S. submarine deployments and other “messages” delivered to China of late were designed to pressure Beijing into taking a tougher stance toward North Korea over the Cheonan incident. What journalists have been referring to as messages would in an earlier age have been called saber-rattling and gunboat diplomacy.

U.S.-China relations sharply deteriorated this January when the Obama administration finalized an almost $6.5 billion arms sales package for Taiwan which includes 200 Patriot missiles. [11] An article on the subject in the New York Times on January 31 was titled, revealing enough, “U.S. Arms for Taiwan Send Beijing a Message.”

China suspended military ties with the U.S., and bad blood has persisted throughout the year, resulting in Secretary of Defense Robert Gates scrapping plans to visit Beijing early last month when he was effectively disinvited by Chinese officialdom on the prompting of the military.

The White House and the Pentagon have been sending a number of unequivocal – and increasingly provocative – messages to China this year.

The new U.S. administration signalled a confrontational approach early on. In May of 2009 Secretary of State Hillary Clinton, barely three months in her post, stated, “The Obama administration is working to improve deteriorating U.S. relations with a number of Latin American nations to counter growing Iranian, Chinese and Russian influence in the Western Hemisphere….” [12]

Later in the year then Director of National Intelligence (and retired admiral and former commander-in-chief of the Pacific Command) Dennis Blair released the latest quadrennial National Intelligence Strategy report which said “Russia, China, Iran, and North Korea pose the greatest challenges to the United States’ national interests. [13]

While Blair headed up the Pacific Command (PACOM) from 1999-2002, his role included overseeing a vast area of the planet that includes China (since the Ronald Reagan administration assigned it to that military command in 1983).

Arrogating the right to divide the entire world into military zones, areas of operation, has never been attempted by any other nation, any group of nations, not even all the nations of the world collectively (in the United Nations or otherwise). But the U.S. has and does do just that. It has even added two new Unified Combatant Commands – Northern Command and Africa Command – in recent years, in 2002 and 2007 respectively.

The Pacific Command is the oldest and largest of the six current regional commands (the others being the Africa, Northern, European, Central and Southern Commands), and was formed during the dawning of the Cold War in 1947. Its area of responsibility takes in over 50 per cent of the world – 105 million square miles – 36 nations and almost 60 per cent of the world\’s population.
300,000 troops from all major branches of the U.S. armed forces – the Air Force, Army, Marine Corps and Navy – are assigned to it, 20 per cent of all active duty American service members.

Pacific Command is in charge of military defense treaties with Australia, Japan, New Zealand, the Philippines and South Korea.

The U.S. is also alone in assigning the world\’s oceans and seas to naval commands. Washington has six naval fleets – the Fourth Fleet (the Caribbean, Central and South America) was reactivated in 2008 after being disbanded in 1950) – and just as Pacific Command is the largest unified, multi-service command, so the Seventh is the largest forward-deployed fleet, with 50-60 warships, 350 aircraft and as many as 60,000 Sailors and Marines at any given time. It is based in Japan and its area of responsibility includes over 50 million square miles of the (largely western) Pacific and Indian Oceans.

The U.S. also has eleven aircraft carriers, ten of them nuclear-powered and all eleven part of strike groups. [14] (China has no and Russia one carrier.)

The Time magazine article quoted from earlier mentioned that the deployment of four U.S. guided missile submarines to East Asia and the Indian Ocean is not the only development that China needs to be concerned about. The U.S. is simultaneously presiding over six-week biennial Rim of the Pacific (RIMPAC) military exercises in Hawaii with over 20,000 troops, 36 warships and submarines (25 American) and 180 planes and helicopters.

This year\’s RIMPAC, which began on June 23 and is to be completed by the end of July, includes for the first time the participation of France, Colombia – with which the U.S. has recently concluded an agreement for the use of seven of its military bases [15] – and the Southeast Asia nations of Malaysia and Singapore. The other countries involved are Australia, Canada, Chile, Indonesia, Japan, the Netherlands, Peru, South Korea and Thailand. The five-week war games involve “missile exercises and the sinking of three abandoned vessels playing the role of enemy ships.” [16]

The combined task force commander for RIMPAC 2010 is commander of the U.S. Third Fleet, whose area of responsibility is approximately 50 million square miles of the eastern Pacific, Vice Admiral Richard Hunt, who stated, “This is the largest RIMPAC that we\’ve had,” and one which “clearly focuses on maritime domain awareness dealing with expanded military operations across the complete spectrum of warfare.” [17]

Time\’s Mark Thompson also wrote: “Closer to China, CARAT 2010 – for Cooperation Afloat Readiness and Training – just got underway [July 5] off Singapore. The operation involves 17,000 personnel and 73 ships from the U.S., Singapore, Bangladesh, Brunei, Cambodia, Indonesia, Malaysia, the Philippines and Thailand.
“China is absent from both exercises, and that\’s no oversight.” [18]

This February Cobra Gold 2010, “the largest multinational military exercise in the world,” [19}, was launched in Thailand (separated from China by only one nation, either Laos or Myanmar) and as with all previous Cobra Gold war games was run by U.S. Pacific Command and the Royal Thai Supreme Command. Joining the U.S. and Thailand in this year\'s exercises, designed "to build interoperability between the United States and its Asia-Pacific regional partners," [20] were the armed forces of Japan, Indonesia, Singapore and, for the first time, South Korea.

From June 8-25 the latest U.S. Air Force-led Red Flag Alaska air maneuvers were held near the eastern Pacific. “The Red Flag exercises, conducted in four-to-six cycles a year by the 414th Combat Training Squadron of the 57th Wing, are very realistic aerial war games. The purpose is to train pilots from the U.S., NATO and other allied countries for real combat situations.” [21]

Over a thousand airmen from five nations – the U.S., Japan, South Korea, Romania and Belgium – assembled at Alaska\’s Elmendorf and Eielson Air Force Bases for air combat training which “unites forces from all over the world.”
“South Korea, a country already accustomed to working with U.S. troops, is also in Alaska to strengthen the two nations\’ ties after the sinking of a South Korean warship by a North Korean submarine.
“\’We have the American Air Force in Korea, and the coalition and the combined working environment is very important,\’ said Lt. Hoon Min Kim, a member of South Ko
rea\’s air force. \’And being able to perform under a combined environment is therefore essential as well.\’” [22]

The incorporation of progressively more Asia-Pacific nations into what has been referred to as an Asian NATO is by no means directed solely at North Korea nor s it understood as suchofficials in Beijing.

Participants in that arrangement, among them Australia, New Zealand, Singapore, South Korea and Mongolia, have troops serving under NATO in Afghanistan. Recently 140 new South Korean forces arrived at the Bagram Air Base in Afghanistan to reinforce a base in Parwan province recently subjected to repeated rocket attacks. Seoul\’s troop strength in the war zone is now at 230.

This month the government of Singapore announced it will increase its soldiers in the NATO-led International Security Assistance Force to “a record 162, from 97 last year.”
“Next month, the Singapore Armed Forces (SAF) will send a 52-man unmanned aerial vehicle (UAV) team – its biggest deployment to Afghanistan – to Oruzgan [Uruzgan], one of two provinces where Singapore has troops.” [23]

Earlier this year NATO announced that Mongolia and South Korea have become the 45th and 46th nations to provide it with troops for the war in Afghanistan. Mongolia borders both China and Russia and is the object of intense efforts by the U.S. to increase military cooperation and integration. [24] On July 6 NATO\’s Assistant Secretary General for Political Affairs and Security Policy Dirk Brengelmann paid a two-day visit to South Korea, where he stated, “Our security interests and security interests of countries like Korea coincide today more than ever.”

A news report of his visit paraphrased his comments as asserting that “The world\’s biggest military alliance, NATO, is looking to increase cooperation with South Korea and other partners beyond Europe and North America,” and added that “Speaking of cooperation, Brengelmann noted NATO\’s show of support for South Korea in light of the sinking of its warship Cheonan….The diplomat said some NATO members also serve on the U.N. Security Council and that the NATO members will try to ensure any Security Council action on the Cheonan sinking will represent their views expressed in the NATO statement.” [25]

Another country that shares borders with China and Russia, Kazakhstan, has allowed the U.S. and NATO transit and overflight rights for the Afghan war and last week the nation\’s president, Nursultan Nazarbayev, signed a law permitting the Pentagon to ship “special cargo” – armored vehicles – through his country.

The U.S. and NATO have transited hundreds of thousands of troops through the Manas Air Base (now Transit Center at Manas) in Kyrgyzstan, which also borders China, since 2001 and in recent months troops have passed in and out from Afghanistan at the rate of 55,000 a month, 660,000 a year. [26] Washington has announced plans to open new training bases in Kyrgyzstan and Tajikistan, the second nation also adjoining China.

With Afghanistan and Pakistan, which also have borders with China, the U.S. and NATO have a military presence in five nations on China\’s western flank and a foothold in Mongolia. The U.S. and NATO war in South Asia will enter its tenth year this autumn with no sign of Western military presence departing from China\’s backyard.

The U.S. military remains ensconced in Japan and South Korea, has returned to the Philippines (including camps in Mindanao), is solidifying bilateral and multilateral military relations with practically all nations in Southeast Asia, and for the past five years has cultivated India as a military partner. [India is currently an observer at the RIMPAC exercises.) Japan, Taiwan and Australia are being integrated into a U.S.-designed regional and broader global interceptor missile system.

The U.S. is conducting regular military exercises, building military partnerships, stationing troops and opening bases around China\'s periphery, in addition to the positioning of warships, submarines and aircraft carriers in the waters off its coasts.

What alarms China most at the moment, though, is a proposed joint U.S.-South Korean military exercise in the Yellow Sea, enclosed by both Koreas to the east and China to the north and west.

China\'s Global Times recently quoted Xu Guangqian, military strategist at the People\'s Liberation Army\'s Academy of Military Sciences, issuing this warning: "China\'s position on the Yellow Sea issue demonstrates its resolution to safeguard national rights and interests. It also reflects that China is increasingly aware of the fact that its strategic space has confronted threats from other countries." [27]

China, which just concluded six days of naval drills of its own in the East China Sea, had more reason to be concerned when it was disclosed earlier this month that a U.S. aircraft carrier would join the maneuvers off its Yellow Sea coast.

On July 8 China renewed its opposition to the planned U.S.-South Korean war games, with Foreign Ministry spokesman Qin Gang telling reporters, “China has expressed its serious concerns with relevant parties. We are firmly opposed to foreign military vessels engaging in activities that undermine China\’s security interests in the Yellow Sea or waters close to China.” [28]

An unsigned editorial in the Chinese Global Times of July 8 stated, “Beijing sees the joint exercise not only as being aimed at Pyongyang, but also as a direct threat to its territorial waters and coastline,” and blamed South Korean President Lee Myung-bak for worsening relations between the two nations:
“It is not known whether Lee had thought of China\’s reaction when he announced in May the drill with the US.
“Did he foresee Chinese people\’s anger? Or, did he intend to provoke the country on the other side of the Yellow Sea?
“It is a shame and a provocation on China\’s doorstep.
“If a US aircraft carrier enters the Yellow Sea, it will mean a major setback to Seoul\’s diplomacy, as hostility between the peoples of China and South Korea will probably escalate, which Beijing and Seoul have been working for years to avoid.” [29]

President Lee met with his American counterpart, Barack Obama, on the sidelines of the Group of Eight summit in Toronto late last month, during which a previous arrangement to transfer wartime command of South Korean forces to the nation in 2012 were postponed if not abandoned. In Obama\’s words, “One of the topics that we discussed is that we have arrived at an agreement that the transition of operational control for alliance activities in the Korean peninsula will take place in 2015.” In the five-year interim “if war were to break out on the Korean peninsula the United States would assume operational command of South Korean forces.” [30]

If Washington is planning direct intervention on the Korean Peninsula as its military buildup in the region, including off China\’s shores, might indicate, the words of former South Korean president Kim Young-Sam a decade ago are worth recalling. Two years after stepping down as head of state, Kim revealed to one of his nation\’s main newspapers that he had intervened to prevent a second Korean war, that his government “stopped US President Bill Clinton from launching an air strike against North Korea\’s nuclear facilities in June 1994.”

He initiated a last-minute phone conversation with the U.S. president which “saved the Korean peninsula from an imminent war,” as ”
The Clinton government was preparing a war” by deploying an aircraft carrier off the eastern coast of North Korea “close enough for its war planes to hit the North\’s nuclear facilities in Yongbyon.”

Furthermore, Kim warned the U.S. ambassador in Seoul that “another war on the Korean peninsula would turn all of Korea into a bloodbath, killing between 10 and 20 million people and destroying South Korea\’s prosperous economy.” [31]

Any catastrophic event on the Korean Peninsula, and war is the ultimate cataclysm, could lead to hundreds of thousands of North Korean refugees fleeing to Russia and millions to China.

The nearly nine-year war in Afghanistan being waged by the U.S. and NATO has led to an explosion of violence and destabilization in three nations flanking China: Afghanistan itself, Pakistan and Kyrgyzstan.

Also, since 2001 Afghanistan has become the world\’s largest producer of opium and hashish, flooding the European and other drug markets. A forum entitled “Afghan Drug Production – A Challenge to the International Community” was held in Moscow a month ago.

A Russian report on the meeting stated “The situation around drug production in Afghanistan has gained a catastrophic character. Some 100,000 people died globally from Afghan drugs in 2009 alone. In all, Afghan-made opiates have claimed one million human lives in the past decade, and 16 million more ruined their health.” [32] 30,000 of the drug-related deaths occurred in Russia. The United Nations estimates that Afghanistan currently accounts for 92 per cent of world opium cultivation.

China and Russia are viewed as, if not challengers to U.S. global dominance, impediments to its further consolidation. And not in the military sphere but in the fields of economics, trade, energy and transportation. Destabilization of their neighborhoods and frontiers is one manner of limiting competition.

All means fair and foul are employed to eliminate obstacles to uncontested supremacy, and what the world\’s sole military superpower (the term is President Obama\’s from his Nobel Peace Prize acceptance speech) truly excels at is expanding its international military machine with an unflinching willingness to use it.

Notes
1) Global Times, July 8, 2010
2) South China Morning Post, July 4, 2010 ttp://www.scmp.com/portal/site/SCMP/menuitem.2c913216495213d5df646910cba0a0a0/?vgnextoid=6c48dbee25999210VgnVCM100000360a0a0aRCRD&vgnextfmt=teaser&ss=Asia+%26+World&s=News (Subscribers only)
3) Ibid
4) Time, July 8, 2010
http://www.time.com/time/nation/article/0,8599,2002378,00.html?xid=rss-topstories
5) Ibid
6) South China Morning Post, July 4, 2010
7) Time, July 8, 2010
8) Ibid
9) South China Morning Post, July 4, 2010
10) Kazakhstan: U.S., NATO Seek Military Outpost Between Russia And China
Stop NATO, April 14, 2010
http://rickrozoff.wordpress.com/2010/04/15/kazakhstan-u-s-nato-seek-military-outpost-between-russia-and-china
11) U.S.-China Military Tensions Grow
Stop NATO, January 19, 2010
http://rickrozoff.wordpress.com/2010/01/20/u-s-china-military-tensions-grow
12) Associated Press, May 1, 2009
13) Radio Free Europe/Radio Liberty, September 16, 2009
14) U.S. Consolidates Military Network In Asia-Pacific Region
April 28, 2010
http://rickrozoff.wordpress.com/2010/04/28/s-consolidates-military-network-in-asia-pacific-region
15) Colombia: U.S. Escalates War Plans In Latin America
Stop NATO, July 22, 2009
http://rickrozoff.wordpress.com/2009/09/01/colombia-u-s-escalates-war-plans-in-latin-america
16) Time, July 8, 2010
17) Navy Times, July 6, 2010
18) Ibid
19) American Forces Press Service, January 13, 2010
20) Ibid
21) http://en.wikipedia.org/wiki/Red_Flag_(USAF)
22) KTUU TV, June 24, 2010
23) AsiaOne, July 1, 2010
24) Mongolia: Pentagon Trojan Horse Wedged Between China And Russia
Stop NATO, March 31, 2010
http://rickrozoff.wordpress.com/2010/03/31/mongolia-pentagon-trojan-horse-wedged-between-china-and-russia
25) Yonhap News Agency, July 6, 2010
26) Kyrgyzstan And The Battle For Central Asia
Stop NATO, April 7, 2010
http://rickrozoff.wordpress.com/2010/04/08/kyrgyzstan-and-the-battle-for-central-asia
27) Global Times, July 6, 2010
28) Agence France-Presse, July 8, 2010
29) Global Times, July 8, 2010
30) Agence France-Presse, July 27, 2010
31) Agence France-Presse, May 24, 2000
32) Itar-Tass, June 9, 2010


Rick Rozoff is a frequent contributor to Global Research. Global Research Articles by Rick Rozoff

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US military pressure increasing in the Persian Gulf

Some 12 US warships transited through the Suez Canal a few days ago. Three naval squadrons are currently in the region. Forces appear to be in position for a possible attack against Iran’s nuclear sites. Late July and early August could provide a window of opportunity for action. Iran threatens chaos in Saudi Arabia if it is attacked. Economic factors are determining the timing of the crisis.

Milan (AsiaNews) – After 387 bunker buster bombs were shipped to the US base in Diego Garcia, in the Indian Ocean, whose great potential AsiaNews had already revealed last April (see Maurizio d’Orlando, “Winds of war and economic crisis behind the attacks on the Pope,” in AsiaNews, 14 April 2010), 12 US warships, as well as one Israeli corvette, have crossed the Suez Canal, this according to Arabic-language newspaper Al-Quds-al-Arabi, confirmed by the newspapers Jerusalem Post and Haaretz.

The Debka online news agency, usually well connected with Israel’s secret services Mossad, also confirmed increased activity in the Persian Gulf. According to Debka, three Israeli nuclear-armed subs are believed to be currently operating off the coast of Iran. The German-built submarines are considered technologically top of their class.

Coming from the Mediterranean, the USS Harry S Truman aircraft carrier also transited through the Suez Canal, this according to an article published in Zerohedge (Tyler Durden, “12 American Warships, Including One Aircraft Carrier, And One Israeli Corvette, Cross Suez Canal On Way To Red Sea And Beyond,” in Zerohedge, 19 June 2010).

Thus, three naval squadrons with fighter planes are in position in the region, plus planes deployed at the US airbase at Diego Garcia. Preparations thus are complete for a possible attack against sites where, according to the United States and Israel, Iran is building its first nuclear bomb. If war does break out, the best period would be the end of July and early August.

Iran has always claimed that its uranium enrichment installations are for the civilian production of energy. Over the years, Tehran has allowed inspectors from the International Atomic Energy Agency (IAEA) of the United Nations to visit those installations to verify that they are not being used for military purposes.

Recently, on 16 May, Iran agreed to a plan put forward by Brazil and Turkey (see “Tehran accepts an agreement on enriched uranium with Turkey and Brazil,” in AsiaNews, 17 May 2010) for uranium to be enriched outside Iran, in Turkey, to guarantee that the material would not be used for military purpose, a move not welcomed by Israel.

Every threat leads to a counter threat

For its part, Iran’s PressTV news network published an article in English that quotes from a letter written by a member of the Saudi royal family, Prince Turki bin Abdul Aziz Al Saud (see “Prince warns S. Arabia of apocalypse,” in PressTV, 9 June 2010), that was published by Cairo-based Arabic-language Wagze news agency.

The prince, who has lived in Egypt for years after falling out with Saudi Arabia’s reining family, warns the dynasty and its members that they are at risk because they are hated by the population. A coup could remove them from power, putting their lives in great danger. He urges them to leave and, in a somewhat dramatic tone, find refuge abroad before people “cut off our heads in streets.”

Most people living in the kingdom’s oil-rich regions are Shia, like in Iran. Shia Islam and the Wahhabi-oriented Sunni Islam backed by the Saudi dynasty are not exactly on friendly terms.

The publication of the story based on the prince’s letter shows what strategy Iran might adopt in case of an attack. It suggests that Tehran might try to cause havoc in its neighbour, Saudi Arabia, and thus put at risk the latter’s oil exports. In that case, the effects on oil prices would be huge since the desert kingdom is the world’s largest oil producer. Even so, it is still unclear how serious Iran’s threat to the Saudi royal family really is.

However, the letter also contains another element. “Do not fool yourself by relying on the United States or Britain or Israel,” the prince tells his family, “because they will not survive the loss”. What this actually means is unclear. Does he mean economic loss, military loss? Perhaps this obscure passage is a warning the Iranian network attributes to the prince in order to hint that Tehran might call for a ‘Jihad’, a holy war to urge the masses to rise up in Muslim countries and for Islamist cells to launch terrorist attacks.

Here too it is unclear how a hypothetical Iranian appeal to Islamic solidarity might unfold in the case of an attack and a terrorist counterattack.

Based on our evaluation of the threats and counter threats, the danger of a conflict is likely to be at its highest in late July and early August and this for various reasons.

First, the deployment of the US-Israeli military forces will be done by that time.

Second, leaders at the G8-G20 summits in late June in Toronto will have a venue where they conduct high-level consultations, a necessary preliminary step before any political-military action is taken.

For its part, Iran has to wait for the necessary provocation that can raise tensions, i.e. the arrival of a flotilla to break the naval blockade of Gaza to bring “humanitarian” aid.

The weight of US debt

The main factors behind the timing of this political-military crisis are economic in nature.

The first one is that US budget estimates for 2010 should be released in mid-September. Usually, rumours about them already abound by August. This year, this will not be necessary because it is already clear that Obama’s “economic stimulus”, as advised by Keynesian economists like Paul Krugman, has not only failed to increase employment, but that it has, through higher government spending, punched a huge hole in the US federal deficit, certainly more than 10 per cent of the GDP.

In order to hide the economic and social fiasco (with real unemployment at 22 per cent of the active workforce), a foreign threat and a military and political emergency are needed, but they must come before tax and employment data are released in order to achieve a minimum degree of credibility and be picked up by big information media.

A second factor that is often left out of the equation is that the United States (and others) not only has a huge public debt crisis but that it also has a huge private debt, affecting families and companies.

US private debt stands at US$ 50 trillion or 330 per cent the US GDP. On the long run, this cannot be sustained; it has to come down in real terms through deflation or hyperinflation.

Financial leverage must be cut and properties bought wholly or partially on debt must be liquidated. We might expect a repeat of the subprime crisis of September 2007. The difference this time will be that, instead of insolvent subprime debtors, the crisis is more likely to hit the more solvent private debt holders.

Mid-September will also see a mass of commercial mortgages and quality debts come due, but quite a few holders will have a hard time getting them renewed. A foreign threat will come in handy if it occurs right before the collapse in the real value of property, stocks and b
onds, which would otherwise pose a threat to the traditional two-party system of the United States.

Iran’s governing regime also needs an external threat to hold onto power. Increasingly, a new generation of Iranians is putting pressure on the system, unable and unwilling to tolerate the regime’s corruption and technological backwardness. The inability to find a job and the isolation from the rest of the world are particularly heavy burdens to bear.

Unlike their parents, young Iranians did not participate in the Islamic revolution against the Shah, an event remembered also and perhaps especially as an uprising against US economic and cultural imperialism. They do not really know what anti-Americanism is and thus view the struggle against the “Great Satan” as tired old rhetoric used for domestic consumption. For the regime, it therefore becomes imperative not to lower its guard, but rather keep the threat level high through concrete steps.

Indeed, both sides appear to follow the rationale that led to the Falklands War when Argentinian generals were in charge of a country on the brink of economic bankruptcy and the British establishment was still facing tough domestic choices in order to restructure the country’s economy in the wake of Britain’s long movement away from empire.

A foreign threat or a war overseas are one of the oldest and most tested political tools to close ranks at home. However, today’s social, political and economic instability are global in scope. It is hard to imagine how an intervention could be surgically limited to a specific context, especially if that context is the Persian Gulf. Lighting a match and throwing it in to start a fire could quickly get out of hand and blow up the world’s powder keg.

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The Total Collapse, World War III guaranteed

TheTotalCollapse.com on June 26, 2010
Dear readers, the summer is here. Sun is shining and the weather is warm. What’s also status quo is the US military buildup around Iran. As of June 22nd, 2010, American forces are practically present in every country that surrounds Iran.

A recent article by Christian A. DeHaemer on EnergyAndCapital.com reveals the following:
- Israeli Air Force have made use of military bases in Saudi Arabia, landing choppers and unloading military gear.
- US forces build up in Azerbaijan.
- Iran’s Revolutionary Guard has mobilized forces to the Northern border including tanks and anti-aircraft units.
- US warships together with one Israeli warship as well as unspecified number of nuclear submarines passed through the Suez Canal heading for the Persian Gulf.

From a recent article on the Debka file:

In a rare move, Iran has declared a state of war on its northwestern border, DEBKAfile’s military and Iranian sources report. Iranian Revolutionary Guards Corps men and equipment units are being massed in the Caspian Sea region against what Tehran claims are US and Israeli forces concentrated on army and air bases in Azerbaijan ready to strike Iran’s nuclear facilities.

The announcement came on Tuesday, June 22 from Brig.-Gen Mehdi Moini of the Revolutionary Guards (IRGC), commander of the forces tasked with “repelling” this American-Israeli offensive. He said: “The mobilization is due to the presence of American and Israeli forces on the western border,” adding, “Reinforcements are being dispatched to West Azerbaijan Province because some western countries are fueling ethnic conflicts to destabilize the situation in the region.”

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The US Treasury and the Federal Reserve are Manipulating the Gold Market

Global Research, July 8, 2010

Recently we were again witness to three gold market takedowns. The first was engineered just prior to and into gold and silver options expiration. Then prior to the ETF GLD gold option expiry and the last manipulative attack commenced just prior to the dreadful unemployment housing and inventory statistics. This sort of action began in 1988 with the signing of the Executive Order by President Ronald Reagan entitled the President’s Working Group on Financial Markets,” ostensibly created to neutralize events such as the October 1987 collapse of the US stock market. Needless to say, that was not the real intention of the creation of such an order. As it has turned out the Treasury and the N.Y. Fed manipulates markets 24/7 worldwide, and they have a particular interest in the suppression of gold and silver prices; they being the antitheist of the US dollar. It should be noted that there were several times that the US Treasury and the privately owned Fed manipulated gold and silver prior to August 1988. We have found in 50 plus years of tracing this manipulative activity by the US government that it happens over and over again. There is no doubt in our minds that a great deal of what is done by government in gold and silver is done by the commercials, who privy to inside information go along for the ride. In the options operation prices are driven down for Comex options as well as GLD options, so that they expire out of the money and as well the perpetrators can cover some of their short positions. This is not difficult to execute, because other traders see what is going on and they get involved as well making the tasks easier.


This spring Andrew Maguire went public with a scam being pulled by JPMorgan Chase in the rigging of silver futures on the LBMA, an exchange similar to Comex in London. This caper was explained to the CFTC, Commodity Futures Trading Commission, months ahead of it occurring and they chose to do nothing about it. Making matters worse, when confronted with the evidence in public hearings, the CFTC didn’t want to hear about it. Maguire broke the story to others who confronted the CFTC who received lip service. The CFTC was forced to conduct a civil investigation and the Justice Department as well is conducting a criminal investigation, which we believe will go nowhere. Realizing that the CFTC, Justice, Morgan and the government are working together against the public in this matter, we are told by our sources that class action suits are being prepared and that the first one should be filed soon. It is a sad day for Americans when justice has to be forced from a corrupt government. In the end we will win but it will be a painful process.


We have found it interesting that the IMF prohibits members from tying their currencies to gold. All of you out there who believe the IMF’s, SDRs, Special Drawing Rights, will be gold backed are mistaken. This historical operating position was further proven when on August 15, 1971 the US closed the gold window. This was the advice Mr. Nixon received from Paul Volcker, who was an early member of the Trilateral Commission and is an Illuminist. Volcker has also been a leader against the US using gold in its monetary policy. Since 8/15/71 there has been an official war against gold by the elitists behind the curtain. It was that seminal event that essentially changed the future of America and the world. At that time US debt was just short of $500 billion. Today short-term debt is $14 trillion and long-term debt is $105 trillion. The engineer of the failure of the US banking system and the failure of the dollar and the rejection of it is at the feet of Mr. Volcker. What he has done to America at the behest of his Illuminist masters is reprehensible. That was eventually followed by the elimination of Glass Steagall and the looting and the collapse of our financial system. This is the result of the corruption of our system.


The result of this treachery is the coming with the complete collapse of the stock market and the end of real estate as an investment. The powers that be have destroyed a once great nation. Everywhere you look, budgets of towns, cities, counties, states and governments are in a shambles. The entire world is becoming their world. You have no doubt seen the elitists’ answer, which is we all switch to the SDR, another fiat currency, devalue all currencies versus the SDR and allow defaults among nations, just as we predicted would happen, although not in this particular way. The solutions being proffered are not solutions at all, only different methods of paying back the bankers and keeping them in business.


That keeps the leaders of the system solvent and throws the debt on the citizen. Mind you, these same bankers were the ones who destroyed our system – or better yet their system – in order to bring about world government. It should not be surprising that gold has been the investment leader.


The Illuminist bankers believe this time they are capable of shutting down the entire system and replacing it with S.D.R.s, so that they can control everything financial worldwide. This is what we have been telling the public for over 50 years and no one wanted to listen. We were called conspiracy theorists. We were dead on correct. The SDR is a stepping-stone to a world currency that can never work. Just look at the horrible results of the unnatural euro. The hunger for power, time after time, makes the rich and powerful become even more insane than they already are. G-8 is now G-20, part of the formation of amalgamation and the recognition of the failure of the euro and the EU as well. We find it ludicrous that the elitists want a broke IMF to fix the monetary system with an SDR. The same IMF that said they would never sell gold into the open market, yet that is what they are doing every day. Their plan is to back the SDR with taxes obtained from world citizens and a carbon tax. That is what the BP oil episode is all about. Don’t expect a gold or silver based currency, because that inhibits the bankers’ ability to own and run the system that has made them so rich and powerful. Sound money is something they never want to see again.


The idea of a Northern euro we believe is undoable. If the big debtors have to pay back their debt they’ll be in depression for 30 years. If they default they can return to their cheap domestic currencies, which would make their exports competitive. That Northern Union creditor group would be stuck with $2 trillion in bad paper. In addition we are very skeptical as to whether they have any gold left and if they do how much to back a new currency. The ECB probably sold off enough gold to suppress the gold price leaving the central bank with probably only 7% of the 15% they originally had. The ECB has the same situation that the Fed has, they are enveloped in debt – much of it sovereign debt. England and others have the same problem. The ECB continues to buy junk bonds because it has no choice but to do so.


These financial and economic matters are very perplexing and social and political issues complicate them. The theory of corporatist fascism, that is so prevalent in America today, has spawned an economic policy of centralism, debt and monopoly driven by the privately owned Federal Reserve, banking and Wall Street. The tune is borrow and go deeper into debt to the bankers until America is bankrupt. This last chapter will be kicked off with more taxes and more fiscal debt. This will be accompanie4d by massive unemployment and eventually a deflationary depression. The unemployment problem is being deliberately allow
ed to worsen both by the administration and Congress, which won’t address the real reasons our nation is in such a state of failure. What else can you call the loss of 5 million jobs from free trade, globalization, offshoring and outsourcing, which is still going on and the loss of 8.4 million via recession/depression. That is 13.4 million jobs supposedly being filled by a birth/death model and service and retail jobs with little remuneration. Those who control our government, politicians and our economy are about to kick Americans when they are down. Those who control government and their emissaries loathe capitalism and love collectivism. The average American so disgusts our controllers that, if they could they would remove 80% from society.



Bob Chapman is a frequent contributor to Global Research. Global Research Articles by Bob Chapman

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Tehran declares State of Alert on its Western Border: Iran-US-Israel Drama goes into Act II

Two weeks ago, the UN Security Council, in a divided vote adopted Resolution 1929 imposing fresh sanctions on Iran.

Turkey and Brazil voted against while Lebanon abstained in the 15 member Council. The US and its allies lobbied hard for the sanctions, making concessions in order to bring Russia and China on board.

The move followed months of futile efforts to reach a negotiated settlement between Iran and the P5 plus Germany over the nuclear issue. The last minute agreement brokered by Turkey and Brazil for Iran to hand over 1200 kg of low enriched uranium failed to satisfy the US.

As expected, Iran has dismissed the Security Council resolution as illegal, and declared its intention to continue with its nuclear programme. Meanwhile, the US Congress has drafted a tougher sanctions package, which would affect third country companies supplying petrol or engaging in financial transactions with Iran. President Obama seems to have little choice but to approve it. The EU has adopted its own version of tighter sanctions against Iran. On the military front, Israel on June 22 launched a sixth spy satellite Ofek-9 specifically to focus of Iran. It has a more advanced camera with a resolution of 0.5 metres.

A major military exercise took place off the Mediterranean coast on June 6-10, involving US aircraft carrier Truman and associated strike group and German and Israeli ships. The exercise Juniper Stallion 10 involved practice bombing runs by US and Israeli aircraft, as well as Israeli anti missile defences is significant in relation to speculation about a possible military strike against Iran.

The USS Truman battle group has since transited Suez on 18 June, headed for the Arabian Gulf to join the USS Eisenhower battle group already there.

Iran has declared a state of alert on June 22, on its northwestern borders alleging that US and Israeli forces have concentrated in Azerbaijan ready to strike at Iran’s nuclear facilities. Iranian sources claim that Israel has secretly transferred a large number of bomber jets to bases in Azerbaijan, via Georgia, and that American Special Forces are also concentrated in Azerbaijan in preparation for a strike.

Dr. Uri Arad, a top adviser to Prime Minister Netanyahu said on June 22 that a pre-emptive military strike against Iran may “eventually” be necessary. On June 17, US Defence Secretary Robert gates told US Senators that Iran could fire salvoes of hundreds of missiles against targets in Europe, and argued in favour of stronger missile defence systems in Europe, despite Russian objections. Israeli commentators have pointed out that this could mean a far larger threat to Israel, taking into account the presence of large numbers of shorter range missiles with Syria and the Hezbollah in Lebanon.

US sources indicated that senior Al Qaeda operatives such as Saif al-Adel, living in Iran had been allowed to leave the country through Syria to orchestrate terrorist attacks on American targets. These reports seem aimed at further tarnishing the Iranian regime and portraying it as a supporter of international terrorism.

All these developments point to a situation of increasing tension in the region. A small incident could trigger off a larger conflagration. It is likely that Iran may resort to buying its needs of petrol through companies in third countries having no business operation involving the US.
Global Research, June 25, 2010
It would be legally difficult to for third countries to apply restrictions on companies that wish to supply petrol to Iran, in the absence of any UNSC ban on such trade. However, the US government is likely to put pressure on countries to try and stop such indirect trade. As the Iran-US-Israel drama moves into its second Act, countries in the region should be ready to face unpleasant consequences of heightened tensions and conflict.

Dr Bhaskar Balakrishnan is a former Indian ambassador to Cuba and also served as representative at the ILO in Geneva

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Liquidity Forecast for the World Economies

To read more, go to www.deepjournal.com 26 May 2010

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Financial Terrorists Want Global Currency, Global Central Bank

To read more go to www.deepjournal.com

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Bilderberg: The Open Conspiracy

To read more go to www.deepjournal.com

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Desperate Financial Situation, Biggest Debt Bubble in World History: Fifty Statistics About The U.S. Economy

Global Research, June 4, 2010

Most Americans know that the U.S. economy is in bad shape, but what most Americans don\’t know is how truly desperate the financial situation of the United States really is. The truth is that what we are experiencing is not simply a “downturn” or a “recession”. What we are witnessing is the beginning of the end for the greatest economic machine that the world has ever seen. Our greed and our debt are literally eating our economy alive. Total government, corporate and personal debt has now reached 360 percent of GDP, which is far higher than it ever reached during the Great Depression era. We have nearly totally dismantled our once colossal manufacturing base, we have shipped millions upon millions of middle class jobs overseas, we have lived far beyond our means for decades and we have created the biggest debt bubble in the history of the world. A great day of financial reckoning is fast approaching, and the vast majority of Americans are totally oblivious.

But the truth is that you cannot defy the financial laws of the universe forever. What goes up must come down. The borrower is the servant of the lender. Cutting corners always catches up with you in the end.


Sometimes it takes cold, hard numbers for many of us to fully realize the situation that we are facing.


So, the following are 50 very revealing statistics about the U.S. economy that are almost too crazy to believe….

#50) In 2010 the U.S. government is projected to issue almost as much new debt as the rest of the governments of the world combined.

#49) It is being projected that the U.S. government will have a budget deficit of approximately 1.6 trillion dollars in 2010.

#48) If you went out and spent one dollar every single second, it would take you more than 31,000 yearsto spend a trillion dollars.

#47) In fact, if you spent one million dollars every single day since the birth of Christ, you still would not have spent one trillion dollars by now.

#46) Total U.S. government debt is now up to 90 percent of gross domestic product.

#45) Total credit market debt in the United States, including government, corporate and personal debt, has reached 360 percent of GDP.

#44) U.S. corporate income tax receipts were down 55% (to $138 billion) for the year ending September 30th, 2009.

#43) There are now 8 counties in the state of California that have unemployment rates of over 20 percent.

#42) In the area around Sacramento, California there is one closed business for every six that are still open.

#41) In February, there were 5.5 unemployed Americans for every job opening.

#40) According to a Pew Research Center study, approximately 37% of all Americans between the ages of 18 and 29 have either been unemployed or underemployed at some point during the recession.

#39) More than 40% of those employed in the United States are now working in low-wage service jobs.

#38) According to one new survey, 24% of American workers say that they have postponed their planned retirement age in the past year.

#37) Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 percent increase over 2008. Not only that, more Americans filed for bankruptcy in March 2010 than during any month since U.S. bankruptcy law was tightened in October 2005.

#36) Mortgage purchase applications in the United States are down nearly 40 percent from a month ago to their lowest level since April of 1997.

#35) RealtyTrac has announced that foreclosure filings in the U.S. established an all time record for the second consecutive year in 2009.

#34) According to RealtyTrac, foreclosure filings were reported on 367,056 properties in March 2010, an increase of nearly 19 percent from February, an increase of nearly 8 percent from March 2009 and the highest monthly total since RealtyTrac began issuing its report in January 2005.

#33) In Pinellas and Pasco counties, which include St. Petersburg, Florida and the suburbs to the north,there are 34,000 open foreclosure cases. Ten years ago, there were only about 4,000.

#32) In California\’s Central Valley, 1 out of every 16 homes is in some phase of foreclosure.

#31) The Mortgage Bankers Association recently announced that more than 10 percent of all U.S. homeowners with a mortgage had missed at least one payment during the January to March time period. That was a record high and up from 9.1 percent a year ago.

#30) U.S. banks repossessed nearly 258,000 homes nationwide in the first quarter of 2010, a 35 percent jump from the first quarter of 2009.

#29) For the first time in U.S. history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together.

#28) More than 24% of all homes with mortgages in the United States were underwater as of the end of 2009.

#27) U.S. commercial property values are down approximately 40 percent since 2007 and currently 18 percent of all office space in the United States is sitting vacant.

#26) Defaults on apartment building mortgages held by U.S. banks climbed to a record 4.6 percent in the first quarter of 2010. That was almost twice the level of a year earlier.

#25) In 2009, U.S. banks posted their sharpest decline in private lending since 1942.

#24) New York state has delayed paying bills totalling $2.5 billion as a short-term way of staying solvent but officials are warning that its cash crunch could soon get even worse.

#23) To make up for a projected 2010 budget shortfall of $280 million, Detroit issued $250 million of 20-year municipal notes in March. The bond issuance followed on the heels of a warning from Detroit officials that if its financial state didn\’t improve, it could be forced to declare bankruptcy.

#22) The National League of Cities says that municipal governments will probably come up between $56 billion and $83 billion short between now and 2012.

#21) Half a dozen cash-poor U.S. states have announced that they are delaying their tax refund checks.

#20) Two university professors recently calculated that the combined unfunded pension liability for all 50 U.S. states is 3.2 trillion dollars.

#19) According to EconomicPolicyJournal.com, 32 U.S. states have already run out of funds to make unemployment benefit payments and so the federal government has been supplying these states with funds so that they can make their payments to the unemployed.

#18) This most recession has erased 8 million private sector jobs in the United States.

#17) Paychecks from private business shrank to their smallest share of personal income in U.S. history during the first quarter of 2010.

#16) U.S. government-provided benefits (including Social Security, unemployment insurance, food stamps and other programs) rose to a record high during the first three months of 2010.

#15) 39.68 million Americans are now on food stamps, which represents a new all-time record. But things look like they are going to get even worse. The U.S. Department of Agriculture is forecasting that enrollment in the food stamp program will exceed 43 million Americans in 2
011.

#14) Phoenix, Arizona features an astounding annual car theft rate of 57,000 vehicles and has become the new “Car Theft Capital of the World”.

#13) U.S. law enforcement authorities claim that there are now over 1 million members of criminal gangs inside the country. These 1 million gang members are responsible for up to 80% of the crimes committed in the United States each year.

#12) The U.S. health care system was already facing a shortage of approximately 150,000 doctors in the next decade or so, but thanks to the health care “reform” bill passed by Congress, that number could swellby several hundred thousand more.

#11) According to an analysis by the Congressional Joint Committee on Taxation the health care “reform” bill will generate $409.2 billion in additional taxes on the American people by 2019.

#10) The Dow Jones Industrial Average just experienced the worst May it has seen since 1940.

#9) In 1950, the ratio of the average executive\’s paycheck to the average worker\’s paycheck was about 30 to 1. Since the year 2000, that ratio has exploded to between 300 to 500 to one.

#8) Approximately 40% of all retail spending currently comes from the 20% of American households that have the highest incomes.

#7) According to economists Thomas Piketty and Emmanuel Saez, two-thirds of income increases in the U.S. between 2002 and 2007 went to the wealthiest 1% of all Americans.

#6) The bottom 40 percent of income earners in the United States now collectively own less than 1 percent of the nation’s wealth.

#5) If you only make the minimum payment each and every time, a $6,000 credit card bill can end up costing you over $30,000 (depending on the interest rate).

#4) According to a new report based on U.S. Census Bureau data, only 26 percent of American teens between the ages of 16 and 19 had jobs in late 2009 which represents a record low since statistics began to be kept back in 1948.

#3) According to a National Foundation for Credit Counseling survey, only 58% of those in “Generation Y” pay their monthly bills on time.

#2) During the first quarter of 2010, the total number of loans that are at least three months past due in the United States increased for the 16th consecutive quarter.

#1) According to the Tax Foundation’s Microsimulation Model, to erase the 2010 U.S. budget deficit, the U.S. Congress would have to multiply each tax rate by 2.4. Thus, the 10 percent rate would be 24 percent, the 15 percent rate would be 36 percent, and the 35 percent rate would have to be 85 percent.

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Plunged in Chaos: Europe on the Eve of the Bilderberg Conference

Global Research, June 3, 2010
The Bilderberg group will convene in Sitges, Spain, a resort community 30 km from Barcelona, on June 4-7. As usual, the information is supplied by James Tucker and Daniel Estulin who revealed that this year the issues topping the agenda of the club\’s meeting will be the global recession and the approaches to provoking such economic breakdowns that can help justify the establishment of a full-scale world economic governance.


Intending to prolong the global economic downturn for at least another year, the Bilderberg group hopes to take advantage of the situation to set up a “global ministry of finance” as a part of the UN. Though the decision was actually made at the group\’s meeting in Greece last year, according to Tucker the plan was torpedoed by US and European “nationalists” (for the Bilderberg group, “nationalists” is a generic term for all nationally-oriented forces espousing national sovereignty and statehood).


All year since the last meeting, representatives of the global executive management have been convincing the public across the world to embrace a “new financial order”. The idea recurred in the statements made by N. Sarkozy, G. Brown, and the freshly elected European Council President H. Van Rompuy, but – against the backdrop of a relatively harmless phase of the crisis – the activity remained limited to psychological conditioning and no practical steps have been taken. As Jacques Attali wrote quite reasonably in his After the Crisis, Europe has no right to demand a reform of the global financial architecture as long as it can\’t organize the institutions that would meet its own needs.


The debt crisis in Greece that currently puts in jeopardy the entire European financial system provides a pretext for drastic measures, and both the crisis and the measures are vivid illustrations of the strategy that employs chaos to reorder the existing arrangements. The deliberately generated chaos is tightly controlled by financial institutions, major banks, and hedge funds and serves as an efficient mechanism of governance and social restructuring.


The financial attack against Greece promptly evolved into onslaught on Euro and – as it became clear – the developments correlated marginally with the structural shortcomings of the Greek economy. The intensity of the crisis that momentarily posed a threat to the economic and even political integrity of the EU cannot be explained solely by the appetites of faceless financial players. There had to be more serious reasons behind the situation, and to an extent the objectives pursued by those who shaped it can be understood from the statements made by G. Soros. He maintains that the EU owes its current difficulties to the European (especially German) politicians\’ reluctance to move on, that huge problems await Europe unless it starts developing, and that a kind of a European Monetary Fund helping fight budget deficit must be created. In other words, Europeans are forced to choose between the collapse of the Eurozone and governance centralization.


Jacques Attali laid out a specific centralization plan. It is suggested that the EU countries create their own institutions to monitor the activities of financial operators. It is also proposed that they should set up a European creditor of a new formation that – while not being linked to Europe\’s central and investment banks or governments – would guarantee assistance to viable local financial institutions, buy into their assets, and extend loans under specific terms. Attali further advocates the formation of a European ministry of finance that would immediately be empowered to hand out loans from the name of the EU, and the creation of a European Budget Fund with a mandate to oversee the budgets of the countries whose cumulative dept totals over 85% of the GDP. He warns that an even severer crisis should be expected otherwise.


Under the US pressure, A. Merkel finally consented to tough measures (purportedly, Sarkozy even threatened that France would revert to national currency in case she held her own), and early last May EU finance and economy ministers signed an agreement on the mechanisms of budgetary stabilization in the Euro zone, which envisaged the establishment of a Euro 60b safety pillow fund to urgently rescue countries battling with their public finances and the allocation of Euro 440b in guaranteed loans. The IMF also pledged Euro 250b in the case of need. The money is meant for sovereign debt bailouts in the Eurozone, a mission which – for the first time in its entire history – the European central bank will also undertake. Steps facilitating financial transactions were announced by central banks across the world including the US Federal Reserve which will urgently inject US dollars into the European Central Bank as well as into British and Swiss banks.


The above can be regarded as the first phase of progress towards centralized European monetary administration. It is unclear so far how exactly the “grand architects” see the world financial governance and what role they plan to give to existing financial institutions like the IMF. The options on the table range from building totally new institutions to – as, for example, suggested by Attali – using the IMF as an authorized supranational regulation center run by a G-24 board.


Importantly, once again we are witnessing the creation of mechanisms of centralized supranational control over national economies, and the crisis acts as a catalyst for a guided fast transition to tighter integration within the EU, which is necessary to build a close-knit Western bloc.


The plan imposed on Europe by elite financial circles implies countering the indebtedness problem with the help of new borrowings, which will exacerbate rather than remedy the budget problem. According to Eurostat data, in 2010 the Eurozone sovereign debt will grow from 77.7% to 83.6% of the GDP. Moreover, it is widely held in the expert community that the indebtedness figures for Greece, Portugal, and a number of other EU countries are unrealistically low and do not reflect the actual proportions of the problem.


Experts from Lombard Odier, a Swiss bank, estimate the bulk of Greek bad debt at 875% of its GDP, which means that to meet its obligations the country would have to invest – without any foreseeable returns – an amount exceeding its GDP by a factor of 8.75. The situations in Poland and Slovenia are even more alarming – in their cases the debt to GDP ratio is 15 and 11 respectively. The corresponding average over the Eurozone is 4.34, and in the US – 5.


Leaving structural problems untouched, the mitigation measures are paving the way for the supranational institutions advocated by mondialist Attali. On May 21, the EU finance ministers adopted at a meeting chaired by European Central Bank president Jean-Claude Trichet and European Council President H. Van Rompuy the German plan of much greater budgetary coordination including penalties for states that break the EU budgetary rules. The sanctions will include suspending the voting rights of repeat offenders, withholding the funding for infrastructural development, etc. It was also proposed to subject national budgets to EU screening prior to their being debated in national legislatures. A report will be prepared by June 17 – notably, the date of the EU summit – outlining a common Eurozone policy. Other, yet more ambitious projects like full control over Eurozone national budgets by a
triumvirate comprising the European Commission, the European central bank, and the Euro Group are also discussed.


The downsides of the rescue packages are the worst part of the problem. Invoking the threat of financial collapse, the EU countries serially introduced extremely unpopular austerity regimes with salary and pension freezes for state employees, welfare cuts, increased retirement ages, etc. Greece was the first but not the only country affected.


The German government plans to cut spending by Euro 10b annually in 2011-2016. France abolished the annual pension for low-income families. Under the IMF pressure, Spain is launching a comprehensive reform including pension indexing freeze, pay reductions and employment cuts in the state sector, the abolition of payments to support families with recently born children, etc. Great Britain, Italy, and others are following the lead.


The consequences of the measures are hard to gauge considering that Europe is already facing serious poverty and unemployment problems (the unemployment has reached 10% of the economically active population and continues to grow, and at least 80 mln people are currently below the poverty line).


Most likely, the shadow world government – the Bilderberg group – will administer to the public the doze of social problems carefully calculated to enable the elites “to offload troubled assets”, retain control over the situation, and divert protests from the actual sources of problems that trigger them.


From Russia\’s perspective, the conclusion is obvious: any deepening of its integration into the “free” Europe strengthens the financial and informational control over Russia exercised by the global elites seeking to strip it of the status of an independent geopolitical player.



Olga Chetverikova, Ph.D. in History, is Assistant Professor at Moscow State Institute of Intentional Relations of the Foreign Ministry of the Russian Federation.

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THE CENTRAL BANKER';S DILEMMA, HOW TO RIDE A DYING ELEPHANT

To read more go to www.gold-eagle.com

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Euro-zone Credit Crunch & Shanghai Shakeout

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Euro Crisis; The Hidden Agenda

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The Pope, Pedophilia and the Class Struggle

Global Research, April 26, 2010
A fierce struggle has gripped the Catholic Church for the past 25 years as some of the most oppressed survivors of childhood sexual abuse have increasingly demanded an accounting against individual priests and ultimately against the powerful church hierarchy, including bishops and cardinals who consistently protected the abusers.

This demand for justice erupting from below has now done the unthinkable. It has exposed the role of the present pope, Pope Benedict XVI, in a monstrous international criminal cover-up.

Marxism is a science for understanding the class issues that underlie social developments which can seem obscure and far from the immediate workers’ struggle. The present controversy, although hidden in clerical garb, is in every way a class struggle within the Catholic Church. It is one small part of a global class struggle for full equality, rights and empowerment.

What was once accepted, because there seemed to be no recourse, has become intolerable. Thousands of the survivors raising the charges of pedophilia were loyal working class believers who were utterly powerless until years later to resist or even tell their own families of the crimes being committed. They were abused as children in orphanages, reform schools, schools for Deaf and disabled, local parish schools and churches.

This challenge from below against secrecy and repression was a sharp break from the past. Abuse had been unchallenged because religious authority was unchallenged. In many parish schools, although sexual abuse was hidden, physical and psychological abuse and humiliation were so routine that they seemed part of the curriculum.

As survivors began to speak out, any priests who sided with the abused were silenced and removed from teaching or positions of authority. But the church hierarchy, a small grouping that holds absolute religious authority, has not been able to silence or stop this movement.

Almost every exposé has come not from the outside or from secular authorities, who were fearful of offending such a powerful institution, but from presumably powerless Catholics within the church who refused to remain silent. They filed grievances, depositions and finally lawsuit after lawsuit. They called press conferences, set up websites, organized demonstrations and support groups, and leafleted Sunday services. Whether they see themselves as part of the larger struggle for rights and dignity or not, they have used many of the same tactics that countless other struggles have used.

The church hierarchy, in fighting to defend its undisputed authority, wealth and privilege, has demanded absolute silence, threatened excommunication of those raising the charges and demanded that secular officials comply. This effort to maintain the absolute authority of the priesthood is part of a larger internal struggle over whose interests this powerful religious institution should serve.

This international scandal rocking the Catholic Church now involves detailed evidence of tens of thousands of cases of child rape and sexual abuse, committed by thousands of priests. The charges span decades. The struggle erupted in its fiercest form in cities that previously had the strongest religious believers in the U.S. Next it broke out in Ireland, followed by Italy and then parts of Germany with large Catholic populations.

What is new and now receives almost daily media coverage is the evidence seeping out from every side showing the personal responsibility of the present Pope Benedict XVI in decades of suppression, cover-up and quiet reassigning of sexual predators. The strongest condemnations are coming from those who still consider themselves part of the Catholic Church.

Liberal Catholic theologian Hans Keung described Pope Benedict XVI’s role in allowing the abuse to flourish, covering it up and ordering silence: “There was not a single man in the whole Catholic Church who knew more about the sex-abuse cases than him, because it was ex officio (part of his official role). … He can’t wag his finger at the bishops and say, you didn’t do enough. He gave the instruction himself, as head of the Congregation for the Doctrine of the Faith, and repeated it as Pope.”

The National Catholic Reporter editorialized on March 26: “The Holy Father needs to directly answer questions, in a credible forum, about his role — as archbishop of Munich (1977-82), as prefect of the Congregation for the Doctrine of the Faith (1982-2005), and as pope (2005-present) — in the mismanagement of the clergy sex abuse crisis.”

Before his elevation to the top of the Catholic hierarchy in April 2005, Pope Benedict XVI was known as Cardinal Joseph Ratzinger. His opponents referred to him as a pit bull and as “God’s rottweiler.” Ratzinger was an extremely right-wing political appointee of Pope John Paul II, who was determined to enforce discipline, conformity and church authority in an institution in the midst of a profound upheaval.

For 24 years Ratzinger headed the most powerful and historically repressive institution in the Catholic Church, the Congregation for the Doctrine of the Faith. This body was known for centuries as the Holy Office of the Inquisition. It was the church institution responsible for establishing religious courts for the charging and torture of tens of thousands of people accused of witchcraft and heresy. It led the pogroms and mass expropriations of Jews and Muslims. Through this office within the church Pope John Paul II tried to install a modern-day Inquisition.

Documents expose vast cover-up

The scale of the criminal international conspiracy of silence to protect serial molesters and to put church interests ahead of child safety and well-being was fully revealed over the past year in the handling of sexual abuse in Ireland, an overwhelmingly Catholic country.

After years of demands by abuse survivors for church action and government prosecution, and a series of exposes in the Irish news media, the Irish government commissioned a study that took nine years to complete. On May 20, 2009, the commission released a 2,600-page report.

The report drew on testimony from thousands of former inmates and officials from more than 250 church-run institutions. The commission found that Catholic priests and nuns had terrorized thousands of boys and girls for decades and that government inspectors had failed to stop the chronic beatings, rapes and humiliation. The report characterized rape and molestation as “endemic” in Irish Catholic church-run industrial schools and orphanages. (www.childabusecommission.com/rpt/)

The scale of the abuse in Ireland and the force of the movement demanding an accounting forced Pope Benedict to issue a weak apology on behalf of the Catholic Church that blamed local Irish bishops. This abdication of all responsibility for his own well-known senior role that had insisted on silence enraged millions of sincere and believing Catholics and further inflamed an opposition that has grown inside the church for decades.

Preaching in Springfield, Mass., a long-time critic of the church cover-up, Rev. James J. Scahill, responded to the weak apology by describing some in the clergy as “felons” and calling for the resignation of Pope Benedict.
“We must personally and collectively declare that we very much doubt the veracity of the pope and those of church authority who are defending him or even falling on the sword on his behal
f. It is beginning to become evident that for decades, if not centuries, church leadership covered up the abuse of children and minors to protect its institutional image and the image of priesthood,” said Scahill. (New York Times, April 12)

Scahill said he began to speak up after his own parishioners came to him in 2002 during the exposure of decades of sexual abuse in Boston and told him that something had to be done.

Cardinal Bernard Law of the Boston Archdiocese clearly played a role in protecting child-molesting priests from punishment by religious or secular authority and quietly transferring them. This became a national scandal in 2002 when a judge in Massachusetts permitted the release of thousands of pages of documents, memos and legal depositions. The documents showed a clear pattern of cover-up, protecting perpetrators and marginalizing victims, revealing that more than 1,000 children had been abused by 250 priests and church workers in the Archdiocese since 1940. Cardinal Law was forced to resign his post in disgrace and the Boston Archdiocese was ordered to pay a settlement of between $85 million and $100 million to settle 552 cases.

This multi-million-dollar settlement, growing scandals in other cities and the media coverage forced the U.S. bishops to issue a “Charter for the Protection of Children and the Young People” that declared a “zero tolerance, one strike and you are out” policy for offending priests. It did not propose any action against bishops who covered up the crimes.

Even this modest effort to develop a clean-up policy by U.S. bishops was opposed by then-Cardinal Ratzinger at the Vatican. He demanded that all abuse charges be referred to the office he headed — the Congregation for the Doctrine of the Faith — before priests could be expelled from the priesthood. One of his first acts as Pope was to elevate Cardinal Law of Boston to a prestigious Vatican post.

In an often quoted, infamous letter sent to bishops in 2001, Cardinal Ratzinger used his position to order that sexual abuse allegations be kept secret under threat of excommunication. Priests accused of sex crimes and their victims were ordered to “observe the strictest secret” and be “restrained by perpetual silence.”

Former Vatican lawyer Father Tom Doyle denounced this top Vatican policy by saying: “What you have here is an explicit written policy to cover up cases of child sexual abuse by the clergy and to punish those who would call attention to these crimes by the churchmen. When abusive priests are discovered, the response has been not to investigate and prosecute but to move them from one place to another.”

Negligence or criminal complicity?

How extensive are the sex abuse crimes committed against youth? Are the church hierarchy guilty of ignoring the problem — meaning criminal negligence? Or are they guilty of criminal complicity by refusing to take action even when crimes were brought to their direct attention?

A memo personally signed by Cardinal Ratzinger, now Pope Benedict XVI, when he headed the powerful Vatican office where all charges of abuse were centralized, was exposed this April and has aroused a new outcry. Ratzinger overrode and stopped any action against the predator priest Rev. Lawrence C. Murphy.

Reverend Murphy was accused of sexually abusing more than 200 boys at a Milwaukee School for the Deaf, despite appeals for his expulsion even from his bishop. For decades the former students had used sign language and written affidavits in meetings with bishops and secular officials to demand that Father Murphy be charged and prosecuted.

At the same time, the story broke in Italy that 67 former pupils of another school for the Deaf in Verona had accused 24 priests, brothers and religious laymen of sexually abusing them from the age of 7 years.

In Germany, more than 250 suppressed cases of abuse have surfaced in the last two months, including in districts directly overseen by Pope Benedict when he had been the bishop.

International publicity surrounding the Boston suit over sexual abuse of children and the multi-million-dollar settlement gave many other victims of abuse the courage to also speak out and seek justice. More than 4,000 priests have been accused of molesting minors in the U.S. since 1950 and the Catholic Church here has paid out more than $2 billion in settlements to victims of abuse. In 2007 the Los Angeles Archdiocese announced a $600-million settlement to about 500 plaintiffs. Six dioceses have been forced into bankruptcy and many dioceses have been forced to sell substantial church assets to pay settlements.

Many of these cases are detailed by an organization called SNAP, the Survivors Network of those Abused by Priests. SNAP describes itself as the oldest and largest support group for clergy abuse victims.

Not only children have been the victims of abuse. According to the St. Louis Post-Dispatch of Jan. 4, 2003, a national survey conducted by researchers at St. Louis University was paid for, in part, by several orders of Catholic nuns. It estimated that a “minimum” of 34,000 Catholic nuns, or about 40 percent of all nuns in the United States, have suffered some form of sexual trauma.

It is important to take note that overwhelmingly the testimony, lawsuits, inquiries and exposés of sexual abuse have come from within the Catholic Church itself, from survivors of abuse. Many other ordinary, but outraged, Catholics have joined in demanding an accounting from a privileged, clerical hierarchy bent on protecting their position, authority and wealth and not on protecting children.

Throughout Europe there is a growing call to criminally prosecute Pope Benedict at the International Criminal Court (ICC) on the grounds that protecting the church, not its victims, is a criminal offense. Geoffrey Robertson, U.N. Justice Council member and president of the Special Court in Sierra Leone, says he believes it is time to challenge the pope’s immunity.

In an article in the London Guardian of April 2 headlined, “Put the pope in the dock,” Robertson wrote: “Legal immunity cannot hold. The Vatican should feel the full weight of international law. Pedophilia is a crime against humanity. The anomalous claim of the Vatican to be a state — and of the pope to be a head of state and hence immune from legal action — cannot stand up to scrutiny.”

Of course, it is important to remember that the International Criminal Court has to date brought charges only against four African countries that are targeted by imperialism.

U.S. war crimes in Iraq and Afghanistan as well as Israeli crimes against Palestinian and Lebanese civilians have been ignored by the ICC. A bulwark of U.S. imperialism on a global scale, it is unlikely that the Vatican will face charges any time soon.

War on global movement for justice

What role does the Vatican play in class society that is of particular value to U.S. imperialism?

While absolving, covering up and transferring thousands of priests who were guilty of child abuse, Pope Benedict XVI used his position for 25 years as head of the most powerful church institution, the Congregation for the Doctrine of the Faith, to remove from parishes, schools and all positions of authority thousands of priests, bishops and religious persons who were in any way progressive or concerned with advocating for the rights and dignity of poor and oppressed people.

Dissident Catholic theologians, te
achers, writers and intellectuals were prevented from writing, publishing and teaching in church institutions. Bishops who attempted to use their authority for social change were investigated for loyalty and forced to resign. They were replaced by the most politically reactionary clergy who were concerned mainly with preserving religious authority and dogma.

This was a right-wing effort to stamp out progressive religious current known as “liberation theology,” which sought to align the church with the liberation movements and anti-colonial and revolutionary struggles sweeping Africa, Asia and Latin America and the civil rights movement in the U.S.

Priests such as Father Camilo Torres in Colombia, who wrote, spoke and organized around the effort to unite revolutionary Marxism and Catholicism, were considered a direct threat to capitalist exploitation. Father Torres joined the armed struggle against the U.S.-supported dictatorship and died in combat.

Activist nuns who led the sanctuary movement to provide assistance and safe transit to Salvadoran immigrants fleeing death squads were targeted. So were Philip and Tom Berrigan, priests who continually risked arrest and served jail time with a militant Catholic grouping opposed to the Vietnam War.

Liberation theologians, such as the charismatic Leonardo Boff of Brazil, were prohibited by the Church from speaking or writing. Priests who sought to serve the poor, like Father Jean-Bertrand Aristide of Haiti, were expelled from their religious order and forced to resign for the crime of “glorification of class struggle.” Bishop Samuel Ruiz of Chiapas, Mexico, was ordered to refrain from “Marxist interpretations.”

It was a witch-hunt and a purge that targeted anti-racist and social justice activists. Yet the reactionary breakaway Bishop Richard Williamson, who publicly denied the Holocaust, was welcomed back into the church.

Faced with growing opposition on every level, this powerful institution that has for centuries protected the property and privilege of the Western ruling classes increasingly chose to elevate the most fanatically reactionary forces to do battle with those urging change, opening, equality and attention to the needs of the poor and oppressed.

Under Pope John Paul II and then Pope Benedict XVI, the Catholic Church was a staunch ally of U.S. imperialism opposing socialist construction in Eastern Europe. In turn the powerful U.S. media played an active role in promoting and giving favorable coverage to the church while demonizing Muslims and other religions of oppressed people.

In 2006 Pope Benedict gave Catholic support to the anti-Muslim propaganda that Washington had consciously enflamed in order to justify war and occupation in Iraq and Afghanistan. In a major papal address he quoted a 14th-century Byzantine emperor who said that the Prophet Muhammad had brought the world only “evil and inhuman things.”

The alliance with U.S. imperialism forced the Catholic Church to revive the most reactionary excesses of its own dark past. Members of groupings tied to death squads and military dictatorship throughout Latin America and to fascism and extreme reaction in Europe, such as the secretive Opus Dei and Legionnaires of Christ, were promoted to top offices in the Vatican and around the world.

Two fascist clerics, Josemaria Escrivá, who sided with Hitler during World War II and organized fascist gangs to hunt down communists and revolutionary trade unionists in Franco’s Spain, and Cardinal Aloysius Stepinac of Croatia, who helped establish extermination camps for Jews, Serbs and Roma people, were proposed for sainthood.

It is not a contradiction that priests who abused children were protected and hidden while those religious forces who sought to defend the rights of the oppressed and ally with their movements were forced to resign. Leniency to criminal thugs and harsh repression of progressives are two sides of the same class policy of defending the authority of the established hierarchy. The same approach played out on every social issue.

Repressive view of all sexuality

From the Roman slave state to European feudal society and then as a major instrument of imperialist conquest, this is a religious institution rooted in class society and patriarchy. This patriarchal heritage is the basis of its repressive views toward all forms of human sexual expression. Gay or straight, married or unmarried, the Catholic Church asserted the right to legislate to society as a whole all forms of human sexual expression.

While taking no action against sexual predators because this threatened the authority and sanctity of the priesthood, Ratzinger was the leading enforcer of archaic religious doctrines on sexuality and the subordinate role of women in the church and in society as a whole. No liberalization on issues of birth control, abortion, divorce or recognition of homosexuality was allowed. Within the church these rules were enforced through focus on sin and guilt. Gay Catholics, Catholics who remarried, practiced birth control or had an abortion were denied the sacraments, barred from the church or excommunicated.

The full weight of Church institutions with large amounts of funding and political leverage were aggressively used in secular society to oppose liberalization of divorce laws and a woman’s right to birth control and to abortion. The Catholic Church organized and funded political campaigns against same-sex marriage and adoption of children by gay couples. But while proclaiming their religious duty to protect the “unborn child,” they refused to protect children directly under their control.

As the storm of protest over the attacks on children under their care grew, this reactionary grouping tried to turn its criminal cover-up into a struggle against gay people by linking pedophilia, meaning sexual abuse of young children, with homosexuality between consenting adults.

On April 14, Pope Benedict’s top appointee, Vatican Secretary of State Cardinal Tarcisio Bertone, blamed pedophilia on homosexuality, which he called “a pathology.” Pope Benedict in a well-known letter to bishops in 1986 described homosexuality as an “intrinsic moral evil.” He went so far as to justify and even encourage violent attacks on gay people by stating that “neither the church or society should be surprised if irrational and violent reactions increase” when gay people demand civil rights.

These crimes against all movements of oppressed peoples must be included in the anger directed at the church hierarchy.

The years of repression, witch-hunts and organized bigotry have given the Catholic hierarchy less and less a basis of support. They are more out of touch with their own congregation and totally out of touch with the values of society as a whole.

Despite every effort, they cannot go back to their absolute hold of 500 or even 100 years ago, when priests and bishops did not have to account for crimes against women or against slaves, serfs, peasants or illiterate workers.

Carefully crafted apologies that accept no blame and scripted public relations meetings with a few selected abuse survivors will not solve the crisis facing the reactionary leadership of the church.

Today those who have suffered abuse have found their voice and have found allies.

The writer attended/survived 14 years in Catholic schools.


Sara Flounders is a frequent contributor to Global Research. Global Research Articles by S
ara Flounders

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Europe';s Sovereign Debt Crisis: Further collapse of Britain';s pound sterling?

Global Research, April 18, 2010
Just as LEAP/E2020 anticipated many months ago, and in contrast to the reports coming out of the media and the « experts » during these past few weeks, Greece really has the Eurozone behind it to give support and credibility (especially concerning good management in the future, the only guarantee of an escape from a damnable cycle of growing public deficits (1)). There will not be, then, any Greek default of payment even if the commotion over the Greek situation really is an indication of a growing awareness that money to finance the huge Western public debt is becoming increasingly difficult to find: a situation now « untenable » as a recent report of the Bank of International Settlements underlined.

The fuss made over Greece by the English and US media in particular tried to hide from the majority of the economic, financial and political players the fact that the Greek problem wasn’t a sign of an upcoming Eurozone crisis (2) but, in fact, an early warning of the next big shock of the global systemic crisis, that is to say a collision between, on the one hand, the virtual British and US economies founded on untenable levels of public and private debt and, on the other hand, the double wall of borrowing, maturing from 2011 onwards, combined with a global shortage of available funds for refinancing at low rates.

As we have explained since February 2006, at the time of our anticipation of its imminent arrival, one mustn’t forget that the current crisis has its origin in the collapse of the world order created after 1945, of which the United States was the support, assisted by the United Kingdom. Also, in order to understand the real effect of events caused by the crisis (the Greek case, for example), it is useful to relate their significance to the structural weaknesses which characterise the heart of the world in full meltdown: so, for our team, the « Greek finger » doesn’t cite the Eurozone as much as the explosive dangers of the exponential financing needs of the United Kingdom and the United States (3).


2010 projected sovereign debt issuance (Total: 4.5 trillion USD) – Sources: IMF / Hayman Advisors / Comcast, 03/2010

Subscribers should be aware that during a period when financing requirements exceed available funds, as is the case today, the sheer amount as regards sovereign debt issuance is more important than the ratios (amounts in relative value). This is shown by a very simple example: if you have 100 Euros and you have two friends, one « poor », A, who needs 30 Euros and the other « rich », B, 200 Euros. Even if B can pledge his expensive watch, worth 1,000 Euros, to you, whilst A only has a 20 Euro watch, you can’t help B since you haven’t sufficient funds available to fulfill his financing requirements; however, in discussing a pledge and interest, you can decide to help A. Putting it in this perspective thus invalidates all the arguments based on the debt ratio: in fact, according to their logic, you would obviously help B, because his debt ratio is clearly more favourable (20%) than A’s (150%). But in the world of the crisis, where money is not available in unlimited quantities (4), the theory hits the wall of reality: wanting to do something is one thing, being able to do it is another.

So then, LEAP/E2020 asks two simple questions:
. who will be able/want to help the United Kingdom after the 6th May when its political chaos will inevitably expose the advanced meltdown of all its budget, economic and financial parameters?

The financial situation is so serious that the technocrats running the country have devised a plan, submitted to the parties contesting the next General Election, in order to avoid risking a power vacuum which could lead to a collapse in Sterling (which is already very weak) and British treasuries (Gilts) (the Bank of England having bought 70% of those issued over the last few months): Gordon Brown would remain Prime Minister even if he loses the election, unless the Conservatives were able to garner sufficient votes for outright victory (5). In effect, with an economic and political crisis as a backdrop, the polls lead one to think that the country is turning to a « Hung Parliament », without a clear majority. The last time that happened, in 1974, was a kind of political preliminary to IMF intervention eighteen months later (6).

For the rest the Government puts a positive spin on the statistics to try and create the conditions for a victory (or a managed defeat). However the reality is depressing. British real estate is trapped in a depression which will prevent prices reaching their 2007 levels for many generations (in other words, never) according to Lombard Street Research (7). The three parties are preparing to face up to a catastrophic post-electoral situation (8). According to LEAP/E2020 the United Kingdom could well suffer a « Greek (9) » event with British leaders announcing that the country’s situation is substantially worse than that disclosed before the election. The numerous meetings, at the end of 2009, between the Chancellor of the Exchequer, Alistair Darling, and Goldman Sachs is a very reliable indicator of sovereign debt manipulation. As we wrote in the last GEAB issue, all one needs to do is follow Goldman Sachs to know where the next risk of sovereign debt payment default lies.


US Federal Government financing requirements (2010-2014) (10) (in trillions USD) – Dark: the federal deficit / Light: maturing debt (future short term borrowing not included) – Sources: Moodys / S&Ps / Treasury Dpt / New York Times, 03/15/2010

. who will be able/want to back the United States once the British fuse (11) has started burning, causing panic in the sovereign debt market in which the United States is, by far, the largest issuer?

Especially since the size of sovereign debt needed corresponds with the start of the expiry, beginning this year, of a mountain of US private debt (commercial real estate and LBO due for refinancing, amounting to 4.2 trillion USD of private debt expiring in the United States between now and 2014 (averaging one trillion USD a year (12)). Purely by chance, it is the same amount as new global sovereign debt issuance for 2010 alone, of which almost half is by the US Federal Government. Adding to that the financing needs of the other economic players (households, businesses, local authorities), the United States must find nearly 5 trillion USD in 2010 to avoid « running dry ».

Our team anticipates two replies just as stark:
. as regards the United Kingdom, the IMF and the EU, perhaps (13); and we’ll be watching, from this summer, the « Bank of England battle (14) » to try and avoid a simultaneous collapse in Sterling and UK public finances. In all cases Sterling will not come out undamaged and the crisis in public finances will engender an austerity plan of unprecedented size.
. as regards the United States, no one; because the size of its financing requirements exceeds the capacity of other players (including the IMF (15)) and, in winter 2010/2011, this event will lead to the explosion in the US Treasury Bond bubble founded on a huge increase in interest rates to finance sovereign debt and private debt refinancing needs, causing a new wave of financial institution bankruptcies. But it isn’t only countries that can default on paymen
t. A Central Bank can also go bankrupt when its balance sheet consists of « ghost assets (16) » and the Fed will have to face up to a real risk of bankruptcy, as analysed in this GEAB issue.

Winter 2010 will, equally, be the stage for another destabilised event in the United States: the first major elections since the beginning of the crisis (17) when millions of Americans will probably express their feelings that they have had a « belly-full » of a continuing crisis (18), which doesn’t affect Washington and Wall Street (19), and which creates US public debt which is now counter-productive: a borrowed Dollar now causes a loss of 40 cents (see chart below).


Diminishing marginal productivity of debt in the US economy (in USD) (GDP/Debt ratio 1966-2010) – Sources: EconomicEdge, 03/2010

One may not be in agreement with the answers given by our team to the two questions asked above. However, we are convinced that these questions cannot be ignored: no analysis, no theory on world developments over the next three quarters is credible if it doesn’t provide clear replies to these two questions: « who will be able/want to? ». From our side, we think the same as Zhu Min, the Deputy Governor of the Chinese Central Bank, that « the world hasn’t enough money to buy any more US Treasury bonds (20) ».

In this issue our team has, therefore, decided to make a progress report on the major risks weighing on the United Kingdom and the United States, and anticipate developments over the next few months in the growing context of a “velvet war” between Western powers (financial, monetary and trade war). We will also disclose a series of recommendations for facing the double shock of British and US financing needs.


Notes
(1) The United Kingdom must impose this type of restrictions itself after the next General Election or certainly via direct IMF intervention; whilst the United States is unable to do the former without a major crisis affecting its public debt.
(2) Not only was the fear disseminated by experts throughout the interviews given by them without foundation but, in addition, the Greek case has duly served to push the Eurozone into equipping itself with the instruments and procedures which it was missing in the field of governance. We will not even mention the clear frustration of numerous commentators and experts who dreamt of seeing Germany refuse its support and/or who made the Greek case the living proof of their economic theories on monetary zones. On this topic, the LEAP/E2020 team wants to give a reminder of its own view: economic theories, whether about monetary zones or other subjects, are as much use as horoscopes. They make no mention of reality, but say all on the thoughts of their writers and about those they « target » with their analyses. A monetary zone only exists and lasts for so long as there is a strong and lasting political will to share a common destiny, as is the Eurozone’s case. To understand, one should study history, not the economy. So, in order to avoid constantly repeating his biased babyboomer and dogmatic theories, a Nobel prizewinner for economics, like Paul Krugman, would be better studying history. That would allow the readers of the New York Times and numerous other publications which duplicate his work throughout the world to stop mistakenly focusing on the few trees which hide the forest.
(3) As we have often reminded subscribers for more than a year now, it is quite clear that some Eurozone countries face substantial financing needs and, precisely, that helps to create a difficult environment for all large-scale public debt refinancing, knowing that the United States and the United Kingdom are the two « champions » in all categories of financing/refinancing needs.
(4) We emphasize this fundamental fact: state bailouts of the banks then, and, from hereinon, the risk of bankruptcy of the same states, illustrate the fact that contrary to the soothing articles which populate the media, money is not available in unlimited quantities. When everyone needs it, it\’s the moment when one becomes aware of the fact.
(5) Source: Guardian, 03/30/2010
(6) Source: BBC / National Archives, 12/29/2005
(7) Source: Telegraph, 04/06/2010
(8) Source: The Independent, 04/06/2010
(9) The new Greek leaders announced after their election victory that the country’s budget situation was much worse than previously stated.
(10) These estimates are based on official Federal Government forecasts which, according to LEAP/E2020, are way too optimistic not only as regards tax receipts (which are no longer reliable) but also as regards the costs of stimulating the US economy (which are higher).
(11) In numerous GEAB issues since 2006 we have extensively recounted the structural ties between the City and Wall Street and the role of a « float » that the United Kingdom plays in relation to the US ship. On this occasion, the distrust over London’s debt will irrevocably cause mistrust over Washington’s.
(12) Source: Brisbane Times, 12/15/2009
(13) Perhaps, because there isn’t any mechanism in the EU requiring financial support to be provided, especially for a country which has, for decades, refused to take on any restrictive obligation with its European partners. The « splendid isolation » can become a terrible trap when the wind changes. So, that leaves the IMF… whose coffers Gordon Brown was mysteriously keen to fill last year!
(14) Contrary to the Battle of Britain (06/1940 – 10/1940), in which RAF pilots, helped by radar, prevented the Nazi invasion of the British Isles, the « pilots » of the City financial institutions, helped by the Internet, will help to aggravate the problem by fleeing to Asia or the Eurozone.
(15) LEAP/E2020 pointed out at the beginning of 2009 that, after summer 2009, it would be impossible to channel the crisis. Last year, an IMF, recapitalised at 500 billion USD (following the London G20 meeting) could still have covered US financing needs. In addition to the fact that this total amount is no longer available because the IMF was obliged to pay out more than 100 billion USD in aid to the countries most affected by the crisis, this year making available a similar sum would only represent 10% of the US’ short term requirements; in other works a drop in the ocean.
(16) As demonstrated by the information eventually supplied by the Fed on the condition of its balance sheet. Sources: Huffington Post, 03/22/2010; Le Monde, 06/04/2010
(17) The 2008 Presidential election had been synchronous with the perception of the beginning of a crisis. In November 2010, electors will express their views after two full years of crisis. A big difference.
(18) Different to Wall Street’s and Washington’s utterances, the crisis is still here and US small businesses are more and more pessimistic. A very useful detail for understanding US statistics: they generally don’t take small businesses into account in assembling their various numbers. When one knows that, in the United States as well, small businesses constitute the bedrock of the economy, that puts the value of these statistics (even if not falsified) into perspective. Source: MarketWatch, 04/13/2010
(19) To evaluate the size of the US socio-political problem, it isn’t as much the relationship in the Democrat/Republican struggle that will be interesting to follow, but the progress made by extremists at the heart of, and the unfolding of events outside of, the two parties.
(20) Source: Shanghai Daily{
_VIR_} 12/18/2009

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Emergency Bailout Plan for Greece: A New Stage in the World Economic Crisis

Global Research, April 13, 2010
The economic crisis precipitated by the crash of Lehman Brothers in 2008 is entering a new stage, as European states hastily organise their first-ever bailout of a member of the European Union. The frantic efforts at the weekend to cobble together a European rescue package for Greece in collaboration with the International Monetary Fund came after intense pressure from rating agencies and intensified speculation by traders betting that the Greek government would default on its debt obligations.


The European emergency plan for Greece represents a substantial reversal of the deal agreed at the EU summit just two weeks ago. At their meeting in Brussels at the end of March, European heads of state agreed to a proposal pushed by the German government aimed at avoiding a bailout of the Greek economy. At the summit, the German delegation, led by Chancellor Angela Merkel, offered a guarantee to the Greek government on condition that it pay punitive rates of interest for the repayment of its debt, while making clear that any assistance would be given only as a “last resort.”


The position imposed by Germany was tantamount to declaring that Europe would not offer Greece terms any more favourable than those currently available on the international financial markets.


The object of the harsh conditions demanded by Germany was to maximise pressure on the Greek government to continue its program of severe spending cuts and austerity measures, aimed at convincing the banks to offer Athens credit at a more favourable rate. Germany also wanted to send a clear signal to other highly indebted European countries—Spain, Ireland, Portugal, Italy—that there would be no easy money from Brussels.


These calculations have been blown apart in the space of two weeks by the intensification of the crisis, which has forced European finance ministers to come up with an emergency package designed to appease the international banks and hedge funds. Faced with the collapse of the Greek economy and the potential breakup of the European currency, the German government has reluctantly signalled its acquiescence to the European plan.


Last week, Greek financial officials travelled to Washington to urge US banks to buy Greek bonds. The social democratic government of Prime Minister George Papandreou appealed for help as an “emerging market,” stressing that it could rely on the country’s trade unions to suppress working class resistance and help impose the austerity measures.


It got a cold shoulder from Wall Street. Papandreou then held a series of meetings with European officials aimed at developing a safety net for the Greek economy.


Following an explosive rise in interest rates on Greek government bonds, peaking at well over 7 percent on April 8, the Greek stock exchange suffered a panic selloff, with Greek bank stocks falling precipitously. One Greek newspaper spoke of the Athens market’s “Black Thursday,” while theIndependent newspaper declared that the Greek financial crisis had gone “nuclear.”


Thursday’s selloff extended to most European stock markets. Fearing a full-scale financial panic and a concerted attack on the euro currency, European Central Bank President Jean-Claude Trichet declared that the EU would not allow Greece to default.


The stock market decline was accompanied by an emerging run on Greek banks by worried depositors. This was on top of a growing movement of funds out of Greece by the country’s wealthiest layers.


At the same time, the Fitch rating agency cut Greece’s long-term foreign and local currency ratings to BBB- from BBB+. It also slashed its credit rating for five banks, including the National Bank of Greece. According to one commentator, the downgrading of Greece on international money markets now puts it on a par with Iraq.


France and Italy issued a call for an emergency package to head off a Greek default. After talks with Italian Prime Minister Silvio Berlusconi on Friday, French President Nicolas Sarkozy announced that the EU was ready to implement an aid plan for Greece.


In a manner reminiscent of the flurry of meetings that occurred on the eve of the Lehman collapse in September of 2008, government heads, finance ministers and bankers worked frantically to come up with something that could be announced prior to the opening of global markets Monday morning.


The main details of the plan as reported to date involve a loan of €30 billion by the EU at interest rates of around 5 percent. Such a rate is below the 7 percent currently being demanded by banks for long-term Greek bonds, but much more than the rate paid by Europe’s biggest economy, Germany (3 percent).


Pointing out that the future of the euro was at stake, billionaire investor George Soros told Bloomberg Radio on April 9 that the Greeks “have to be given some help from Europe or the IMF at concessional rates.… It is a make or break time for the euro and it’s a question whether the political will to hold Europe together is there or not.”


The decision to bail out Greece has far-reaching economic and political implications. First, it sets a precedent for other European economies in a similar situation to appeal for financial assistance from Europe’s stronger economies.


The fact is, however, that all European nations, including the biggest economies, Germany and France, are saddled with huge state debts and are seeking to impose their own harsh austerity programs in order to recoup the huge sums spent bailing out their respective banking systems. The banks, which received trillions in public funds, are now dictating the terms by which the European working class is to pay for the crisis.


The emergency plan for Greece will bring no relief to the working population. A similar EU-IMF plan has already been imposed on the small EU member state of Latvia. The Latvian government has imposed the harshest austerity program in Europe, consisting of cuts amounting to ten percent of the country’s gross domestic product. The state has slashed the wages of public servants by up to 45 percent, raised taxes, cut pensions and child allowances, and now has the highest level of unemployment in Europe at over 20 percent.


The ruling elite throughout Europe are united in their determination to ensure that the entire burden of the crisis is shifted onto the backs of the working class, but as the economic crisis increasingly spirals out of control, national state interests and rivalries are increasingly coming to the fore. Commenting on the growing divisions between Germany and its European neighbours,Financial Times columnist Martin Wolf commented recently: “Is there a satisfactory way out of the dilemma? Not as far as I can see. That is really frightening.”


Two things, in particular, have become clear from the developments in Europe of the past two weeks. First, the talk of a global recovery from the crisis that erupted in 2007-2008 is without serious foundation. The world economy remains poised on the knife-edge of a new financial panic and even deeper recession.


Nothing has been resolved. Instead, the insolvency of major banks has been offloaded onto national governments, producing an unprecedented sovereign debt crisis that can easily spread from so-called peripheral co
untries such as Greece to major powers, including France, Britain and the US.


Second, there is no prospect for a coherent internationally agreed strategy to manage the crisis in a non-disruptive and peaceful manner. Instead, the fundamental contradiction between world economy and the nation-state system—a contradiction intrinsic to capitalism—is asserting itself with increasing virulence. Germany’s aggressive stance and the growing divisions within Europe are among the most acute expressions of this global development.


These developments underline the urgency for the progressive unification of Europe through the united, revolutionary mobilization of the working class, based on a socialist program for the nationalisation of the banks and major industries under the democratic control of the working class.


Stefan Steinberg is a frequent contributor to Global Research. Global Research Articles by Stefan Steinberg

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So what's the real story behind the coup in Kyrgyzstan ?

Global Research, April 13, 2010
The pretense that a president of a modest country like Kyrgyzstan can play in big league politics is shed with the ouster of the tulip revolutionary president Kurmanbek Bakiyev, after last week’s riots in the capital Bishkek that left 81 dead and government buildings and Bakiyev’s various houses trashed.

Bakiyev tried to have the best of both big power worlds, last year brashly threatening to close the US airbase, vital to the war in Afghanistan, after signing a cushy aid deal with Russia, and then reversed himself when the US agreed to more than triple the rent to $60 million a year and kick in another $100m in aid. As a result he lost the trust of both, and found himself bereft when the going got tough last week, as riots exactly like those that swept him to power erupted.

It was the US that was there in 2005 to help him usher in a new era of democracy and freedom, the “Tulip Revolution”, but this time, it was Russia who was there to help the interim government coalition headed by opposition leader and former foreign minister Roza Otunbayeva pick up the pieces. As Otunbayeva looks to Kyrgyzstan’s traditional support for help extricating itself from a potential failed-state situation, cowed and frightened US strategists are already advocating trying to convince the Russians that the US has no long-term plans for the region, and that they can work together. Recognising the obvious, writes Eric McGlinchey in the New York Times, ” Kyrgyzstan is in Russia’s backyard, and the fact that we depend on our airbase there for our Afghan war doesn’t change that. Presenting a united front with Russia, however, would help Washington keep its air base and avoid another bidding war.”

This coup follows the same logic as the more dignified rejection of the Orange Revolution in Ukraine in February, and has given a new lease on life to Georgian opposition politicians, who vow they will follow the Kyrgyz example if their rose revolutionary president continues to persecute them and spout his anti-Russian venom. Indeed, the whole US strategy in ex-Sovietistan seems to be unraveling, with Uzbekistan still out in the cold for its extreme human rights abuses, and the recent inauguration in February of Turkmenistan’s new gas pipeline to China.

Reversing Bakiyev’s flip-flop, Otunbayeva first indicated the US base would remain open, then hours later, sent shock waves through the US political establishment by reversing herself and saying it would be closed “for security reasons”. The agreement was renewed last June and is due for renewal in July this year. Secretary of State Hillary Clinton immediately telephoned Otunbayeva and sent Assistant Secretary of State Robert Blake to Bishkek, who announced with relief that the base would remain open after all.

But, unlike Bakiyev, Otunbayeva is no crafty politician out to fill her and her family’s pockets. While the former put his son Maxim in charge of negotiating the lucrative rental deal with the Americans last year (just where did the $160m go?) and set him up as head of the new national Central Agency for Development, Investment, and Innovation, Otunbayeva is above the corrupt clan-based politics of her predecessors. A graduate of Moscow State University and former head of Kyrgyz State National University philosophy faculty, she was foreign minister under both Askar Akayev and Bakiyev. She served as the first Kyrgyz ambassador to the US and Canada, and later the UK, and in 2007, was elected to parliament on the candidate list of the Social Democratic Party, becoming head of the opposition SDP in October 2009.

She visited Moscow twice this year, in January and March, and has forged close links with the United Russia Party. Her first formal talks as interim president were with Putin. Her flop-flip rather reflects the serious strain that the pushy US has put on Kyrgyz society, which until 9/11 was a sleep backwater which admired and was grateful to Russia for its security and economic well-being. There can be no doubt that the Kyrgyz people would much prefer good relations with Russia than the US. The base has provided nothing to the surrounding community except for the transitting soldiers’ purchase of alcohol and their soliciting of prostitutes.

For all his antidemocratic behaviour, Bakiyev’s threat to close the base last year was in response to public pressure. Locals were furious that a US solider killed an unarmed Kyrgyz outside the base and was whisked back to the US without any repercussions, much like the recently exposed case of US soldiers in a helicopter who gunning down two unarmed Reuters news staff in Baghdad, but who were cleared by a military investigation. This resentment and the instability it encourages are what Otunbayeva was alluding to in her terse phrase “security reasons”.

So, the question on everyone’s lips: did Russia pull the strings this time, tit for tat? True, there was little love lost between Putin and Bakiyev after the latter reneged on his promise to close the American base last year. Bakiyev’s erratic behaviour in the past two years certainly irritated the Russians. Apart from the issue of the US base, ties between the Kremlin and Bakiyev’s government had deteriorated sharply in recent months, in part because of the government’s increasingly anti-Russian stance, including the blocking of Russian-language websites and increased discrimination facing Russian businessmen. Coincidentally, Russia imposed duties on energy exports to Kyrgyzstan on 1 April.

When Otunbayeva suggested the base would be closed, there were cries that the Kremlin was behind the coup. But this speculation was nixed by Obama himself. “The people that are allegedly running Kyrgyzstan … these are all people we’ve had contact with for many years. This is not some anti-American coup, that we know for sure,” assured Michael McFaul, Obama’s senior director for Russian affairs, as Obama and Medvedev were smiling for the cameras in Prague in their nuclear disarmament moment. He also dismissed the immediate assumption that it was “some sponsored-by-the-Russians coup,” claiming — appropriately for the occasion — that cooperation over Kyrgyzstan was another sign of improved US-Russia relations.

Diligence LLC analyst Nick Day, “Russia is going to dominate Kyrgyzstan and that means problems for the US.” Yes, and so what? Russia is just a heart-beat away from events throughout the ex-Soviet Union by definition. Russians and Russian-sympathisers come with the territory. In early March, a member of the Council of Elders and head of the Pensioners’ Party, Omurbek Umetaliev, said, “We believe it is unacceptable to allow the existence on this limited territory of military bases from two leading world powers, which have conflicting positions on many issues of international politics. Although the presence of a Russian military base in Kyrgyzstan is historically justified, the military presence of the US and NATO countries is a threat to our national interests.”

True, even the threat to close the base is a blow to US imperial strategy in Eurasia, especially its surge in Afghanistan, which would be seriously jeopardised without its Manas air base. The US resupplies 40 per cent of forward operating bases in Afghanistan by air because the Taliban control the main roads. 1,500 US troops transit Manas each day — 50,000 in the past month, with 1,200 permanently stationed there. Because of attacks on its supply convoys travelling through Pakistan{_VIR
_} the Pentagon wants to shift much of its resupply effort to its new Northern Distribution Network, which runs through Kyrgyzstan, Tajikistan and Uzbekistan.

Paul Quinn-Judge, Central Asia director of the International Crisis Group — reporting from Manas — said the fear was that such stepped-up US shipping will lead to attacks by the Islamic Movement of Uzbekistan (IMU) and the Islamic Jihad Union, groups which have a loyal following in the restive Ferghana valley, which is divided among those very Kyrgyzstan, Tajikistan and Uzbekistan, and has witnessed more than one uprising in the recent past. “The problem with the Northern Distribution Network is obvious,” Quinn-Judge says. “It turns Central Asia into a part of the theatre of war.”

Confusion over the status of the US base will be top on United States President Barack Obama’s crammed agenda now and he would do well to look further than the next wilted flower coup. “In Kyrgyzstan there should be only one base — Russian,” a senior Russian official told reporters icily in Prague. “Russia will use this as a lever in negotiations with America,” frets Day.

But another way to look at this is that this is a golden opportunity for Obama to definitively reverse the cowboy politics of Bush and the neocons, to build some real bridges with Russia, the country which will remain vital to Kyrgyzstan whatever geopolitical phantasms Washington has in mind. The delicious irony in the Kyrgyz coup is that as Medvedev and Obama were posing in Prague, where Russia basically acceded to US missile defence diktat, geopolitical inertia in Kyrgyzstan was doing Russia’s work for it, scuttling US Eurasian plans, and putting the cards back in Russia’s hands.

And what is this nonsense about how “vital” this base is to the US? It’s been there ten years. Just how long does it expect to stay? Could the answer be “For ever”? The current Kyrgyz line is that the agreement will be reviewed to make sure it isn\’t “against the interests of the people or for bribes”, government spokesman Almazbek Atambayev said after a visit to Moscow. “The United States plans to withdraw troops from Afghanistan next year. We will approach the transit centre issue in a civilised way and resolve it with the US leadership.” So the US probably has another year there with grudging Russian approval.

Voluntarily leaving next summer would be the best advertisement to the world, and Russia in particular, that Obama represents a new, less belligerent US. The writing is on the wall: it is only a matter of months, a year at most, till Manas becomes a Russian base, and the sooner the US accepts the obvious, the better. Both Moscow and Washington have a common goal to preserve stability in the region, and given Moscow’s acquiesence to US-NATO transit of its territory to service the war in Afghanistan, this would automatically extend to a now-respectful US’s use of the soon-to-be Russian base in Manas.

Already the echoes of post-Vietnam realism in US politics, detente with the “enemy”, can be detected in McFaul’s words. This was the last period when a subdued US pursued sensible, even peaceful, foreign policies, having accepted defeat in its criminal war against Vietnam, culminating in the push by Carter to force the Israelis to withdraw from Sinai and make peace, however grudging, with at least one neighbour. The world could do with more Kyrgyz coups.

Eric Walberg writes for Al-Ahram Weekly http://weekly.ahram.org.eg/ You can reach him athttp://ericwalberg.com/




Eric Walberg is a frequent contributor to Global Research. Global Research Articles by Eric Walberg

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America';s Imperial Design. Prompt Global Strike: World Military Superiority Without Nuclear Weapons

Global Research, April 11, 2010
A war can be won without being waged. Victory can be attained when an adversary knows it is vulnerable to an instantaneous and undetectable, overwhelming and devastating attack without the ability to defend itself or retaliate.

What applies to an individual country does also to all potential adversaries and indeed to every other nation in the world.

There is only one country that has the military and scientific capacity and has openly proclaimed its intention to achieve that ability. That nation is what its current head of state defined last December as the world\’s sole military superpower. [1] One which aspires to remain the only state in history to wield full spectrum military dominance on land, in the air, on the seas and in space.

To maintain and extend military bases and troops, aircraft carrier battle groups and strategic bombers on and to most every latitude and longitude. To do so with a post-World War II record war budget of $708 billion for next year.

Having gained that status in large part through being the first country to develop and use nuclear weapons, it is now in a position to strengthen its global supremacy by superseding the nuclear option.

The U.S. led three major wars in less than four years against Yugoslavia, Afghanistan and Iraq from 1999-2003 and in all three cases deployed from tens to hundreds of thousands of “boots on the ground” after air strikes and missile attacks. The Pentagon established military bases in all three war zones and, although depleted uranium contamination and cluster bombs are still spread across all three lands, American troops have not had to contend with an irradiated landscape. Launching a nuclear attack when a conventional one serves the same purpose would be superfluous and too costly in a variety of ways.

On April 8 American and Russian presidents Barack Obama and Dmitry Medvedev signed a new Strategic Arms Reduction Treaty (START) agreement in the Czech capital of Prague to reduce their respective nation\’s nuclear arsenals and delivery systems (subject to ratification by the U.S. Senate and the Russian Duma). Earlier in the same week the U.S. released its new Nuclear Posture Review (NPR) which for the first time appeared to abandon the first use of nuclear arms.

The dark nuclear cloud that has hung over humanity\’s head for the past 65 years appears to be dissipating.

However, the U.S. retains 1,550 deployed nuclear warheads and 2,200 (by some counts 3,500) more in storage and a triad of land, air and submarine delivery vehicles.

More ominously, though, Washington is forging ahead with a replacement for the nuclear sword and shield – for blackmail and for deterrence – with a non-nuclear model that could upset the previous “balance of terror” arrangement that has been a criminal nightmare for six decades, but for sixty years without a massive missile war.

The new sword, or spear, entails plans for conventional first strike weapon systems employing the same triad of land, air and sea components – with space added – and the shield is a worldwide network of interceptor missile deployments, also in all four areas. The Pentagon intends to be able to strike first and with impunity.

The non-nuclear arsenal used for disabling and destroying the air defenses and strategic, potentially all major, military forces of other nations will consist of intercontinental ballistic missiles, adapted submarine-launched ballistic missiles, hypersonic cruise missiles and bombers, and super stealthy strategic bombers able to avoid detection by radar and thus evade ground- and air-based defenses.

Any short-range, intermediate-range and long-range missiles remaining in the targeted country will in theory be destroyed after launching by kinetic, “hit-to-kill” interceptor missiles. Should the missiles so neutralized contain nuclear warheads, the fallout will occur over the country that launches them or over an adjoining body of water or other nation of the U.S.\’s choosing.

A Russian commentary of three years ago described the interaction between first strike and interceptor missile systems as follows:
“One can invest in the development of a really effective ABM [Anti-Ballistic Missile] system and first-strike weapons, for example, in conventional high-accuracy systems. The final goal is to create a capability for a disarming first strike (nuclear, non-nuclear or mixed) at the enemy\’s strategic nuclear potential. ABM will finish off whatever survives the first blow.” [2]

The long-delayed Nuclear Posture Review Report of earlier this month asserts the Pentagon\’s plans for “maintaining a credible nuclear deterrent and reinforcing regional security architectures with missile defenses….” [3]

It also confirms that the addition of “non-nuclear systems to U.S. regional deterrence and reassurance goals will be preserved by avoiding limitations on missile defenses and preserving options for using heavy bombers and long-range missile systems in conventional roles.”

At an April 6 press conference on the Nuclear Posture Review with Secretary of Defense Robert Gates, Joint Chiefs of Staff Chairman Navy Admiral Michael Mullen, Secretary of State Hillary Clinton and Secretary of Energy Steven Chu, Gates said “we will maintain the nuclear triad of ICBMs [Intercontinental Ballistic Missiles], nuclear-capable aircraft and ballistic-missile submarines” and “we will continue to develop and improve non-nuclear capabilities, including regional missile defenses.” Mullen spoke of “defend[ing] the vital interests of the United States and those of our partners and allies with a more balanced mix of nuclear and non-nuclear means than we have at our disposal today.” [4]

The Pentagon\’s Ballistic Missile Defense Review Report of February 1 stated “The United States will pursue a phased adaptive approach to missile defense” and “develop capabilities that are mobile and relocatable.”

Furthermore, “the Administration is committed to implementing the new European Phased Adaptive Approach within a NATO context. In East Asia, the United States is working to improve missile defenses through a series of bilateral relationships. The United States is also pursuing strengthened cooperation with a number of partners in the Middle East.” [5]

The Quadrennial Defense Review Report of February spoke of similar plans.

The Review “advances two clear objectives. First, to further rebalance the capabilities of America’s Armed Forces to prevail in today’s wars, while building the capabilities needed to deal with future threats.”

It states “The United States remains the only nation able to project and sustain large-scale operations over extended distances” with “400,000 U.S. military personnel…forward-stationed or rotationally deployed around the world,” and which is “enabled by cyber and space capabilities and enhanced by U.S. capabilities to deny adversaries’ objectives through ballistic missile defense….”

One of its key goals is to “Expand future long-range strike capabilities” and promote the “rapid growth in sea- and land-based ballistic missile defense capabilities.” [6]

The U.S. is also intensifying space and cyber warfare programs with the potential to completely shut down other nations\’ military surveillance and command, control, communications, computer and intelligence systems, rendering them defenseless on any but the most basic tactical level.

T
he program under which Washington is developing its conventional weapons capacity to supplement its previous nuclear strategy is called Prompt Global Strike (PGS), alternately referred to as Conventional Prompt Global Strike (CPGS).

Global Security Newswire recently wrote of the proposed START II that “Members of Russia\’s political elite are worried about what the agreement says or does not say about U.S. ballistic missile defense and \’prompt global strike\’ systems….” [7]

In fact the successor to START I says nothing about American interceptor missile or first strike conventional attack policies, and as such says everything about them. That is, the new treaty will not limit or affect them in any manner.

After the signing ceremony in Prague on April 8 the U.S. State Department issued a fact sheet on Prompt Global Strike which stated:
“Key Point: The New START Treaty does not contain any constraints on current or planned U.S. conventional prompt global strike capability.”

By way of background information and to provide a framework for current U.S. military strategy it added:
“The growth of unrivaled U.S. conventional military capabilities has contributed to our ability to reduce the role of nuclear weapons in deterring non-nuclear attacks….The Department of Defense (DoD) is currently exploring the full range of technologies and systems for a Conventional Prompt Global Strike (CPGS) capability that could provide the President more credible and technically suitable options for dealing with new and evolving threats.” [8]

Describing the constituent parts of PGS, the State Department press release also revealed:
“Current efforts are examining three concepts: Hypersonic Technology Vehicle, Conventional Strike Missile, and Advanced Hypersonic Weapon. These projects are managed by the Defense Advanced Research Projects Agency (DARPA), the U.S. Air Force Space and Missile Center, and Army Space and Missile Defense Command respectively….[The START II] warhead ceiling would accommodate any plans the United States might develop during the life of this Treaty to deploy conventional warheads on ballistic missiles.”

In language as unequivocal as the State Department has been known to employ, the statement added:
“New START protects the U.S. ability to develop and deploy a CPGS capability. The Treaty in no way prohibits the United States from building or deploying conventionally-armed ballistic missiles.”

The Department of Defense “is studying CPGS within the context of its portfolio of all non-nuclear long-range strike capabilities including land-based and sea-based systems, as well as standoff and/or penetrating bombers….” [9]

The non-nuclear missiles referred to are designed to strike any spot on earth within sixty minutes, but as the main proponent of PGS, Vice Chairman of the Joint Chiefs of Staff Marine General James Cartwright, recently boasted, “At the high end,” strikes could be delivered in “300 milliseconds.” [10]

Speaking of the air force third of the GPS triad – nuclear-armed cruise missiles fired from B-52 bombers, X-51 unmanned aircraft that can fly at 5,000 miles per hour, the Blackswift “spaceplane” – Cartwright has also said that current conventionally armed bombers are “too slow and too intrusive” for many “global strike missions.” [11]

On January 21 Deputy Secretary of Defense William Lynn called for placing the Pentagon “on a permanent footing to fight both low-intensity conflicts to maintaining air dominance and the ability to strike any target on Earth at any time….The next air warfare priority for the Pentagon is developing a next-generation, deep-penetrating strike capability that can overcome advanced air defenses….” [12]

In a Global Security Network analysis titled “Cost to Test U.S. Global-Strike Missile Could Reach $500 Million,” Elaine Grossman wrote:
“The Obama administration has requested $239.9 million for prompt global strike research and development across the military services in fiscal 2011….If funding levels remain as anticipated into the coming years, the Pentagon will have spent some $2 billion on prompt global strike by the end of fiscal 2015, according to budget documents submitted last month to Capitol Hill.” [13]

The land-based component of PGS, Minuteman intercontinental ballistic missiles with a conventional payload, will “initially boost into space like a ballistic missile, dispatch a \’hypersonic test vehicle\’ to glide and maneuver into a programmed destination, which could be updated or altered remotely during flight.” [14]

Last month Defense News featured an article with the title “U.S. Targets Precision Arms for 21st-Century Wars,” which included this excerpt:
“To counter…air defenses, the Pentagon wants to build a host of precisioneapons that can hit any target from thousands of miles away. Known as a family of systems, these weapons could include whatever the Air Force chooses as its next bomber, a new set of cruise missiles and even, someday, hypersonic weapons developed under the Pentagon\’s Prompt Global Strike program that would give the speed and range of an ICBM to a conventional warhead.” [15]

A recent Washington Post report on PGS quoted Russian Foreign Minister Sergei Lavrov warning that “World states will hardly accept a situation in which nuclear weapons disappear, but weapons that are no less destabilizing emerge in the hands of certain members of the international community.” [16]

The same source added “the Obama administration…sees the missiles as one cog in an array of defensive and offensive weapons that could ultimately replace nuclear arms,” and quoted the Pentagon\’s Cartwright as affirming: “Deterrence can no longer just be nuclear weapons. It has to be broader.” [17]

The following day Britain\’s Independent ran a story the following quotes from which should disabuse anyone hoping that Washington\’s “post-nuclear world” will be any safer a one.

Referring to PGS intercontinental ballistic missiles with (at least in theory) conventional warheads, the newspaper warned that:
“Once they are launched, there could be difficulty in distinguishing their conventional payloads from nuclear ones. That in turn could accidentally trigger a nuclear retaliation by Russia or another similarly-armed power.
“Another danger is that if nuclear weapons are no longer at issue, there would be a bigger temptation for American military commanders to become more cavalier about ordering strikes. And unless intelligence can be fully relied upon, the chances of striking mistaken targets are high.” [18]

U.S. officials have discussed the prospect of launching such missiles at a lower altitude than nuclear ICBMs would travel, but it would take an almost limitless degree of trust – or gullibility – on behalf of Russian or Chinese military officials to depend upon the assurance that ICBMs heading toward or near their territory were in fact not carrying nuclear weapons at whatever distance from the earth\’s surface they were flying.

In 2007, the year after the Pentagon first announced its Prompt Global Strike plans, a Russian analyst wrote that “the Americans are not particularly worried about their nuclear arsenal” and “have been thoroughly calculating the real threats to their security to be ready to go to war, if need be, in real earnest,” adding “The 20th century saw two world wars and a third one is looming large.”
“Despite the obvious threat to civilization the United States may soon acquire orbital weap
ons under the Prompt Global Strike plan. They will give it the capacity to deal a conventional strike virtually anywhere in the world within an hour.” [19]

Elaine Grossman wrote last year:
“Once it is built, the Conventional Strike Missile is expected to pair rocket boosters with a fast ying \’payload delivery vehicle\’ capable of dispensing a kinetic energy projectile against a target. Upon nearing its endpoint, the projectile would split into dozens of lethal fragments potentially capable against humans, vehicles and structures, according to defense officials….” [20]

A comparably horrifying scenario of the effects of a PGS attack, this one from the sea-based version, appeared in Popular Mechanics three years ago:
“In the Pacific, a nuclear-powered Ohio class submarine surfaces, ready for the president\’s command to launch. When the order comes, the sub shoots a 65-ton Trident II ballistic missile into the sky. Within 2 minutes, the missile is traveling at more than 20,000 ft. per second. Up and over the oceans and out of the atmosphere it soars for thousands of miles.
“At the top of its parabola, hanging in space, the Trident\’s four warheads separate and begin their screaming descent down toward the planet.
“Traveling as fast as 13,000 mph, the warheads are filled with scored tungsten rods with twice the strength of steel.
“Just above the target, the warheads detonate, showering the area with thousands of rods – each one up to 12 times as destructive as a .50-caliber bullet. Anything within 3000 sq. ft. of this whirling, metallic storm is obliterated.” [21]

This April 7 former Joint Chief of Staff of the Russian Armed Forces General Leonid Ivashov penned a column called “Obama\’s Nuclear Surprise.”

Referring to the U.S. president\’s speech in Prague a year ago – “The existence of thousands of nuclear weapons is the most dangerous legacy of the Cold War” – and his signing of the START II agreement in the same city this April 8, the author said:
“No examples of sacrificial service of the US elites to mankind or the peoples of other countries can be discovered in US history over the past century. Would it be realistic to expect the advent of an African-American president to the White House to change the country\’s political philosophy traditionally aimed at achieving global dominance? Those believing that something like that is possible should try to realize why the US – the country with a military budget already greater than those of all other countries of the world combined – continues spending enormous sums of money on preparations for war.” [22]

Specifically in reference to PGS, he detailed that “The Prompt Global Strike concept envisages a concentrated strike using several thousand precision conventional weapons in 2-4 hours that would completely destroy the critical infrastructures of the target country and thus force it to capitulate.
“The Prompt Global Strike concept is meant to sustain the US monopoly in the military sphere and to widen the gap between it and the rest of the world. Combined with the deployment of missile defense supposed to keep the US immune to retaliatory strikes from Russia and China, the Prompt Global Strike initiative is going to turn Washington into a modern era global dictator.
“In essence, the new US nuclear doctrine is an element of the novel US security strategy that would be more adequately described as the strategy of total impunity. The US is boosting its military budget, unleashing NATO as a global gendarme, and planning real-life exercises in Iran to test the efficiency of the Prompt Global Strike initiative in practice. At the same time, Washington is talking about a completely nuclear-free world.” [23]

Notes
1) Obama Doctrine: Eternal War For Imperfect Mankind
Stop NATO, December 10, 2009
http://rickrozoff.wordpress.com/2009/12/11/obama-doctrine-eternal-war-for-imperfect-mankind
2) Alexander Khramchikhin, The MAD situation is no longer there
Russian Information Agency Novosti, May 29, 2007
3) Nuclear Posture Review Report
United States Department of Defense
April 2010
http://www.defense.gov/npr/docs/2010%20Nuclear%20Posture%20Review%20Report.pdf
4) United States Department of Defense
American Forces Press Service
April 6, 2010
5) United States Department of Defense, February 1, 2010
http://www.comw.org/qdr/fulltext/1002BMDR.pdf
6) United States Department of Defense, February 2010
Quadrennial Defense Review Report, February 2010
http://www.defense.gov/qdr/QDR%20as%20of%2026JAN10%200700.pdf
7) Global Security Newswire, April 2, 2010
8) U.S. Department of State, April 9, 2010
9) Ibid
10) Defense News, June 4, 2009
11) Ibid
12) Defense News, January 22, 2010
U.S. Extends Missile Buildup From Poland And Taiwan To Persian Gulf
Stop NATO, February 3, 2010
http://rickrozoff.wordpress.com/2010/02/03/u-s-extends-missile-buildup-from-poland-and-taiwan-to-persian-gulf
13) Global Security Network, March 15, 2010
14) Ibid
15) Defense News, March 22, 2010
16) Washington Post, April 8, 2010
17) Ibid
18) The Independent, April 9, 2010
19) Andrei Kislyakov, Defense budget: nuclear or conventional?
Russian Information Agency Novosti, November 20, 2007
20) Global Security Newswire, July 1, 2009
21) Noah Shachtman, Hypersonic Cruise Missile: America\’s New Global Strike
Weapon
Popular Mechanics, January 2007
22) Strategic Culture Foundation, April 7, 2010
23) Ibid

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Is America 'Yearning for Fascism'?

Global Research, April 11, 2010
The language of violence always presages violence. I watched it in war after war from Latin America to the Balkans. The impoverishment of a working class and the snuffing out of hope and opportunity always produce angry mobs ready to kill and be killed. A bankrupt, liberal elite, which proves ineffectual against the rich and the criminal, always gets swept aside, in times of economic collapse, before thugs and demagogues emerge to play to the passions of the crowd. I have seen this drama. I know each act. I know how it ends. I have heard it in other tongues in other lands. I recognize the same stock characters, the buffoons, charlatans and fools, the same confused crowds and the same impotent and despised liberal class that deserves the hatred it engenders.

“We are ruled not by two parties but one party,” Cynthia McKinney, who ran for president on the Green Party ticket, told me. “It is the party of money and war. Our country has been hijacked. And we have to take the country away from those who have hijacked it. The only question now is whose revolution gets funded.”


The Democrats and their liberal apologists are so oblivious to the profound personal and economic despair sweeping through this country that they think offering unemployed people the right to keep their unemployed children on their nonexistent health care policies is a step forward. They think that passing a jobs bill that will give tax credits to corporations is a rational response to an unemployment rate that is, in real terms, close to 20 percent. They think that making ordinary Americans, one in eight of whom depends on food stamps to eat, fork over trillions in taxpayer dollars to pay for the crimes of Wall Street and war is acceptable. They think that the refusal to save the estimated 2.4 million people who will be forced out of their homes by foreclosure this year is justified by the bloodless language of fiscal austerity. The message is clear. Laws do not apply to the power elite. Our government does not work. And the longer we stand by and do nothing, the longer we refuse to embrace and recognize the legitimate rage of the working class, the faster we will see our anemic democracy die.


The unraveling of America mirrors the unraveling of Yugoslavia. The Balkan war was not caused by ancient ethnic hatreds. It was caused by the economic collapse of Yugoslavia. The petty criminals and goons who took power harnessed the anger and despair of the unemployed and the desperate. They singled out convenient scapegoats from ethnic Croats to Muslims to Albanians to Gypsies. They set in motion movements that unleashed a feeding frenzy leading to war and self-immolation. There is little difference between the ludicrous would-be poet Radovan Karadzic, who was a figure of ridicule in Sarajevo before the war, and the moronic Glenn Beck or Sarah Palin. There is little difference between the Oath Keepers and the Serbian militias. We can laugh at these people, but they are not the fools. We are.


The longer we appeal to the Democrats, who are servants of corporate interests, the more stupid and ineffectual we become. Sixty-one percent of Americans believe the country is in decline, according to a recent NBC News/Wall Street Journal poll, and they are right. Only 25 percent of those polled said the government can be trusted to protect the interests of the American people. If we do not embrace this outrage and distrust as our own it will be expressed through a terrifying right-wing backlash.

“It is time for us to stop talking about right and left,” McKinney told me. “The old political paradigm that serves the interests of the people who put us in this predicament will not be the paradigm that gets us out of this. I am a child of the South. Janet Napolitano tells me I need to be afraid of people who are labeled white supremacists but I was raised around white supremacists. I am not afraid of white supremacists. I am concerned about my own government. The Patriot Act did not come from the white supremacists, it came from the White House and Congress. Citizens Uniteddid not come from white supremacists, it came from the Supreme Court. Our problem is a problem of governance. I am willing to reach across traditional barriers that have been skillfully constructed by people who benefit from the way the system is organized.”


We are bound to a party that has betrayed every principle we claim to espouse, from universal health care to an end to our permanent war economy, to a demand for quality and affordable public education, to a concern for the jobs of the working class. And the hatred expressed within right-wing movements for the college-educated elite, who created or at least did nothing to halt the financial debacle, is not misplaced. Our educated elite, wallowing in self-righteousness, wasted its time in the boutique activism of political correctness as tens of millions of workers lost their jobs. The shouting of racist and bigoted words at black and gay members of Congress, the spitting on a black member of the House, the tossing of bricks through the windows of legislators’ offices, are part of the language of rebellion. It is as much a revolt against the educated elite as it is against the government. The blame lies with us. We created the monster.


When someone like Palin posts a map with cross hairs on the districts of Democrats, when she says “Don’t Retreat, Instead—RELOAD!” there are desperate people cleaning their weapons who listen. When Christian fascists stand in the pulpits of megachurches and denounce Barack Obama as the Antichrist, there are messianic believers who listen. When a Republican lawmaker shouts “baby killer” at Michigan Democrat Bart Stupak, there are violent extremists who see the mission of saving the unborn as a sacred duty. They have little left to lose. We made sure of that. And the violence they inflict is an expression of the violence they endure.


These movements are not yet full-blown fascist movements. They do not openly call for the extermination of ethnic or religious groups. They do not openly advocate violence. But, as I was told by Fritz Stern, a scholar of fascism who has written about the origins of Nazism, “In Germany there was a yearning for fascism before fascism was invented.” It is the yearning that we now see, and it is dangerous. If we do not immediately reincorporate the unemployed and the poor back into the economy, giving them jobs and relief from crippling debt, then the nascent racism and violence that are leaping up around the edges of American society will become a full-blown conflagration.


Left unchecked, the hatred for radical Islam will transform itself into a hatred for Muslims. The hatred for undocumented workers will become a hatred for Mexicans and Central Americans. The hatred for those not defined by this largely white movement as American patriots will become a hatred for African-Americans. The hatred for liberals will morph into a hatred for all democratic institutions, from universities to government agencies to the press. Our continued impotence and cowardice, our refusal to articulate this anger and stand up in open defiance to the Democrats and the Republicans, will see us swept aside for an age of terror and blood.


Chris Hedges is a frequent contributor to Global Research. Global Research Articles by Chris Hedges

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At the Geopolitical Crossroads of China and Russia: Kyrgyzstan And The Battle For Central Asia

Global Research, April 8, 2010
Kyrgyz President Kurmanbek Bakiyev was deposed five years after and in the same manner as he came to power, in a bloody uprising.

Elected president two months after the so-called Tulip Revolution of 2005 he helped engineer, he was since then head of state of the main transit nation for the U.S. and NATO war in Afghanistan.

The Pentagon secured the Manas Air Base (as of last year known as the Transit Center at Manas) in Kyrgyzstan shortly after its invasion of Afghanistan in October of 2001 and in the interim, according to a U.S. armed forces publication last June, “More than 170,000 coalition personnel passed through the base on their way in or out of Afghanistan, and Manas was the transit point for 5,000 tons of cargo, including spare parts and equipment, uniforms and various items to support personnel and mission needs.
“Currently, around 1,000 U.S. troops, along with a few hundred from Spain and France, are assigned to the base.” [1]


The White House\’s Special Representative for Afghanistan and Pakistan Richard Holbrooke paid his first visit in his current position to Kyrgyzstan – and the three other former Soviet Central Asian republics which border it, Kazakhstan, Tajikistan and Uzbekistan – in February and said “35,000 US troops were transiting each month on their way in and out of Afghanistan.” [2] At the rate he mentioned, 420,000 troops annually.

The U.S. and NATO also established military bases in Tajikistan and Uzbekistan for the war in South Asia, but on a smaller scale. (U.S. military forces were ordered out of the second country following what the government claimed was a Tulip Revolution-type armed uprising in its province of Andijan less than two months after the Kyrgyz precedent. Germany maintains a base near the Uzbek city of Termez to transit troops and military equipment to Afghanistan\’s Kunduz province where the bulk of its 4,300 forces is concentrated.)

In February of 2009 the Kyrgyz government announced that it was also evicting U.S. and NATO forces from its country, but relented in June when Washington offered it $60 million to reverse its decision.

Kyrgyzstan borders China.

It not only borders China, Kazakhstan, Tajikistan and Uzbekistan, but is only separated from Russia by a single nation, Kazakhstan. To gain an appreciation of Russian and Chinese concerns over hundreds of thousands of U.S. and NATO troops passing through Kyrgyzstan, imagine a comparable amount of Chinese and Russian soldiers regularly passing through Mexico and Guatemala, respectively. For almost nine years and at an accelerating rate.

It is not only a military “hard power” but also a “soft power” threat that the Western role in Kyrgyzstan poses to Russia and China.

The nation is a member of the post-Soviet Collective Security Treaty Organization (CSTO) along with Russia, Armenia, Belarus, Kazakhstan, Tajikistan and Uzbekistan – seen by many as the only counterpart to NATO on former Soviet space – and of the Shanghai Cooperation Organization (SCO) with China, Russia and the three above-mentioned Central Asian nations.

According to U.S. officials, during and after the Tulip Revolution of 2005 not a single U.S. or NATO flight into the Manas Air Base was cancelled or even delayed. But a six-nation CSTO exercise scheduled for days afterward was cancelled.

The uprising and the deposing of standing president Askar Akayev in March of 2005 was the third self-styled “color revolution” in the former Soviet Union in sixteen months, following the Rose Revolution in Georgia in late 2003 and the Orange Revolution in Ukraine in late 2004 and early 2005.

As the Kyrgyz version was underway Western news media were asking the question “Who\’s next?” Candidates included other former Soviet states like Armenia, Azerbaijan, Belarus, Kazakhstan, Moldova and Uzbekistan. And Russia. Along with Georgia, Ukraine and Kyrgyzstan those nations accounted for ten of the twelve members of the post-Soviet Commonwealth of Independent States (CIS).

As Agence France-Presse detailed in early April of 2005: “The CIS was founded in December 1991 on the very day the Soviet Union disappeared….But over the past year and a half, three faithful Kremlin allies were toppled in…revolutions: Eduard Shevardnadze in Georgia, Leonid Kuchma in Ukraine, and, last week, Askar Akayev in Kyrgyzstan….Even though Kyrgyzstan’s new interim leaders have vowed to continue their deposed predecessor’s Moscow-friendly policies, the lightning toppling of the government there has spawned speculation that the CIS would soon collapse.” [3]

The leader of the “color revolution” prototype, Georgia\’s Mikheil Saakashvili, gloated over the Kyrgyz “regime change,” attributing the “brave” actions of the opposition in Ukraine and Kyrgyzstan “to the Georgia factor,” and added, “We are not waiting for the development of events, but are doing our best to destroy the empire in the CIS.” [4]

Shortly after the uprising former Indian diplomat and political analyst M.K. Bhadrakumar wrote of the then seemingly inexorable momentum of “color” revolts in the former Soviet Union:
“[A]ll the three countries [Georgia, Ukraine, Kyrgyzstan] are strategically placed in the post-Soviet space. They comprise Russia\’s \’near abroad.\’
“Washington has been expanding its influence in the arc of former Soviet republics — in the Baltics…the Caucasus, and Central Asia — in recent years with a tenacity that worries Moscow.
“Ever since 2003 when Mr. Akayev decided on allowing Russia to establish a full-fledged military base in Kant he knew he was on the American \’watch list.\’ The political temperature within Kyrgyzstan began to rise.
“The Americans made it clear in many ways that they desired a regime change in Bishkek….The \’revolution\’ in the Central Asian state of Kyrgyzstan has already thrown up surprises. A comparison with the two earlier \’colour revolutions\’ in Georgia and Ukraine will be a good starting point.
“First, the striking similarities between the three \’revolutions\’ must be duly noted. All three are meant to signify the unstoppable spread of the fire of liberty lit by the United States in Afghanistan and Iraq in the aftermath of 9/11.
“But behind the rhetoric, the truth is that the U.S. wanted regime change in Georgia, Ukraine and Kyrgyzstan because of difficulties with the incumbent leadership. The leaders of all the three countries — Eduard Shevardnadze in Georgia, Leonid Kuchma in Ukraine, and Askar Akayev in Kyrgyzstan — had enjoyed the support of the U.S. during most of their rule.
“Washington had cited them repeatedly as the beacons of hope for democracy and globalisation in the territories of the former Soviet Union.
“Their trouble began when they incrementally began to edge towards a resurgent Russia under Vladimir Putin.” [5]

Seven weeks after Bhadrakumar\’s column appeared his analysis would be confirmed by no less an authority on the matter than U.S. President George W. Bush.

Visiting the capital of Georgia a year and a half after its “Rose Revolution,” he was hosted by his counterpart Mikheil Saakashvili, former State Department fellowship recipient and U.S. resident, who seized power in what can only be described as a putsch but nevertheless said:
“Georgia will become the main partner of the United States in spreading democracy and freedom in the
post-Soviet space. This is our proposal. We will always be with you in protecting freedom and democracy.”

Bush reflected Saakashvili\’s inflated estimate of himself: “You are making many important contributions to freedom’s cause, but your most important contribution is your example. Hopeful changes are taking places from Baghdad to Beirut and Bishkek [Kyrgyzstan]. But before there was a Purple Revolution in Iraq or Orange Revolution in Ukraine or a Cedar Revolution in Lebanon, there was a Rose Revolution in Georgia.” [6]

A few days after the Kyrgyz coup Bush welcomed Ukraine\’s “orange” president Viktor Yushchenko – who this January only received 5.45 per cent of the vote in his reelection bid – and applauded his U.S.-assisted ascent to power, saying it “may have looked like it was only a part of the history of Ukraine, but the Orange Revolution represented revolutions elsewhere as well….We share a goal to spread freedom to other nations.” [7]

Beyond the threat of the dissolution of the CIS and of the CSTO, in April of 2005 Der Spiegel featured a report with the title “Revolutions Speed Russia\’s Disintegration.”

In part it revealed the prime movers behind the events in Kyrgyzstan. According to Der Spiegel, (April 4, 2005):
“As early as February,” Roza Otunbayeva – now the apparent head of the provisional government – “pledged allegiance to a small group of partners and sponsors of the Kyrgyz revolution, to \’our American friends\’ at Freedom House (who donated a printing press in Bishkek to the opposition). …
“Trying to help the democratic process, the Americans poured some $12 million into Kyrgyzstan in the form of scholarships and donations – and that was last year alone. Washington\’s State Department even funded TV station equipment in the rebellious southern province town of Osh.” [8] [9]

This process of geostrategic transformation, from the Balkans to the former Soviet Union and the Middle East was also supported by Freedom House, the National Endowment for Democracy, the National Democratic Institute, the International Republican Institute and other non-governmental organizations.

A week after the “tulip” takeover the project director for Freedom House, Mike Stone, summed up the role of his organization with two words: “Mission accomplished.” [10]

A British newspaper that interviewed him added, “US involvement in the small, mountainous country is higher proportionally than it was for Georgia\’s \’rose\’ revolution or Ukraine\’s \’orange\’ uprising. [11]

Assistance also was provided by Western-funded and -trained “youth activists” modeled after and trained by those organized in Yugoslavia to topple the government of Slobodan Milosevic in 2000:

Compare the names:

Yugoslavia: Otpor! (Resistance!)
Ukraine: Pora! (It\’s Time!)
Georgia: Kmara (Enough)
Kyrgyzstan: KelKel (Stand Up and Go)

Behind them all, deposed Kyrgyz president Askar Akayev identified the true architects of his ouster. On April 2 he stated “There were international organisations who supported and financed the Tulip Revolution in Kyrgyzstan.
“A week before these events I saw a letter on the internet signed by the US ambassador to Kyrgyzstan. It contained a detailed plan for the revolution.” [12]

The Kyrgyz Tulip (formerly Lemon, Pink and Daffodil) Revolution was as unconstitutional and as disruptive to the nation as its Georgian and Ukrainian predecessors were, but far more violent. Deaths and injuries occurred in the southern cities of Osh and Jalal Abad (Jalalabad, Jalal-Abad) and in the capital of Bishkek.

It was also the first “color” revolt in a nation bordering China. Not only did Russia and China voice grave concerns over the developments in Kyrgyzstan, Iran did also, seeing where the trajectory of “regime change” campaigns was headed.

In the four decades of the Cold War political changes through elections or otherwise in any nation in the world – no matter how small, impoverished, isolated and seemingly insignificant – assumed importance far exceeding their domestic effects. World political analysts and policy makers asked the key question: Which way would the new government align itself, with the U.S. or the Soviet Union?

In the post-Cold War period the question is no longer one of political philosophy or socio-economic orientation, but this: How will the new administration support or oppose U.S. plans for regional and global dominance?

With Roza Otunbayeva as chief spokesperson if not head of a new Kyrgyz “people\’s government,” there is reason to believe that Washington will not be dissatisfied with the overthrow of her former “tulip” partner Bakiyev. She has already confirmed that the American base at Manas will not be closed.

Less than two months after the 2005 coup Otunbayeva, then acting foreign minister, met with her U.S. counterpart Condoleezza Rice in Washington during which the latter assured her that “the U.S. administration will continue to help the Kyrgyz government promote democratic processes in the country.” [13]

Shortly after the March “democratic transformation,” its patron saint, Georgia\’s Mikheil Saakashvili, boasted that “Roza Otunbayeva worked in Tbilisi in recent years and was the head of UN office in Abkhazia. During the Rose Revolution she was in Georgia and knew everything that was happening…the Georgian factor was a catalyst of many things going on there [in Kyrgyzstan].”[14]

From the U.S. perspective she appears to have reliable bona fides.

Russia has put its air base in Kyrgyzstan on high alert, though comments from leading Russian government officials – Prime Minister Vladimir Putin in particular – indicate an acceptance of the uprising which has already caused 65 deaths and hundreds of injuries.

But Russia attempted to put the best face on the revolt five years ago also.

Which direction the next Kyrgyz government takes will have repercussions far beyond the nation\’s small size and population (slightly over five million).

It could affect U.S. and NATO plans for the largest military offensive of the Afghan war scheduled to begin in two months in Kandahar province.

It could determine the future of the Collective Security Treaty Organization and the Shanghai Cooperation Organization, the two major potential barriers to Western military penetration of vast tracts of Eurasia.

The stakes could hardly be higher.

Notes
1) Stars and Stripes, June 16, 2009
2) Agence France-Presse, March 4, 2010
3) Agence France-Presse, April 3, 2005
4) The Messenger, March 31, 2005
5) The Hindu, March 28, 2005
6) Civil Georgia, May 10, 2005
7) Associated Press, April 4, 2005
8) Der Spiegel, April 4, 2005
9) Russian Information Agency Novosti, June 16, 2005
10) The Telegraph, April 2, 2005
11) Ibid
12) Associated Press, April 2, 2005
13) Interfax, June 15, 2005
14) Civil Georgia, March 30, 2005

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The Coming European Debt Wars

Global Research, April 9, 2010
Government debt in Greece is just the first in a series of European debt bombs that are set to explode. The mortgage debts in post-Soviet economies and Iceland are more explosive. Although these countries are not in the Eurozone, most of their debts are denominated in euros. Some 87% of Latvia’s debts are in euros or other foreign currencies, and are owed mainly to Swedish banks, while Hungary and Romania owe euro-debts mainly to Austrian banks. So their government borrowing by non-euro members has been to support exchange rates to pay these private-sector debts to foreign banks, not to finance a domestic budget deficit as in Greece.


All these debts are unpayably high because most of these countries are running deepening trade deficits and are sinking into depression. Now that real estate prices are plunging, trade deficits are no longer financed by an inflow of foreign-currency mortgage lending and property buyouts. There is no visible means of support to stabilize currencies (e.g., healthy economies). For the past year these countries have supported their exchange rates by borrowing from the EU and IMF. The terms of this borrowing are politically unsustainable: sharp public sector budget cuts, higher tax rates on already over-taxed labor, and austerity plans that shrink economies and drive more labor to emigrate.


Bankers in Sweden and Austria, Germany and Britain are about to discover that extending credit to nations that can’t (or won’t) pay may be their problem, not that of their debtors. No one wants to accept the fact that debts that can’t be paid, won’t be. Someone must bear the cost as debts go into default or are written down, to be paid in sharply depreciated currencies, but many legal experts find debt agreements calling for repayment in euros unenforceable. Every sovereign nation has the right to legislate its own debt terms, and the coming currency re-alignments and debt write-downs will be much more than mere “haircuts.”


There is no point in devaluing, unless “to excess” – that is, by enough to actually change trade and production patterns. That is why Franklin Roosevelt devalued the US dollar by 75% against gold in 1933, raising its official price from $20 to $35 an ounce. And to avoid raising the U.S. debt burden proportionally, he annulled the “gold clause” indexing payment of bank loans to the price of gold. This is where the political fight will occur today – over the payment of debt in currencies that are devalued.


Another byproduct of the Great Depression in the United States and Canada was to free mortgage debtors from personal liability, making it possible to recover from bankruptcy. Foreclosing banks can take possession of collateral real estate, but do not have any further claim on the mortgagees. This practice – grounded in common law – shows how North America has freed itself from the legacy of feudal-style creditor power and the debtors’ prisons that made earlier European debt laws so harsh.


The question is, who will bear the loss? Keeping debts denominated in euros would bankrupt much local business and real estate. Conversely, re-denominating these debts in local depreciated currency will wipe out the capital of many euro-based banks. But these banks are foreigners, after all – and in the end, governments must represent their own home electorates. Foreign banks do not vote.


Foreign dollar holders have lost 29/30th of the gold value of their holdings since the United States stopped settling its balance-of-payments deficits in gold in 1971. They now receive less than a thirtieth of this, as the price has risen to $1,100 an ounce. If the world can take that, why shouldn’t it take the coming European debt write-downs in stride?


There is growing recognition that the post-Soviet economies were structured from the start to benefit foreign interests, not local economies. For example, Latvian labor is taxed at over 50% (labor, employer, and social tax) – so high as to make it noncompetitive, while property taxes are less than 1%, providing an incentive toward rampant speculation. This skewed tax philosophy made the “Baltic Tigers” and central Europe prime loan markets for Swedish and Austrian banks, but their labor could not find well-paying work at home. Nothing like this (or their abysmal workplace protection laws) is found in the Western European, North American or Asian economies.


It seems unreasonable and unrealistic to expect that large sectors of the New European population can be made subject to salary garnishment throughout their lives, reducing them to a lifetime of debt peonage. Future relations between Old and New Europe will depend on the Eurozone’s willingness to re-design the post-Soviet economies on more solvent lines – with more productive credit and a less rentier-biased tax system that promotes employment rather than asset-price inflation that drives labor to emigrate. In addition to currency realignments to deal with unaffordable debt, the indicated line of solution for these countries is a major shift of taxes off labor onto land, making them more like Western Europe. There is no just alternative. Otherwise, the age-old conflict-of-interest between creditors and debtors threatens to split Europe into opposing political camps, with Iceland the dress rehearsal.


Until this debt problem is resolved – and the only way to resolve it is to negotiate a debt write-off – European expansion (the absorption of New Europe into Old Europe) seems over. But the transition to this future solution will not be easy. Financial interests still wield dominant power over the EU, and will resist the inevitable. Gordon Brown already has shown his colors in his threats against Iceland to illegally and improperly use the IMF as a collection agent for debts that Iceland doesn’t legally owe, and to blackball Icelandic membership in the EU.


Confronted with Mr. Brown’s bullying – and that of Britain’s Dutch poodles – 97% of Icelandic voters opposed the debt settlement that Britain and the Netherlands sought to force down the throat of Allthing members last month. This high a vote has not been seen in the world since the old Stalinist era.


It is only a foretaste. The choice that Europe ends up making will likely drive millions into the streets. Political and economic alliances will shift, currencies will crumble and governments will fall. The European Union and indeed, the international financial system will change in ways yet to be seen. This will be especially the case if nations adopt the Argentina model and refuse to make payment until steep discounts are made.


Paying in euros – for real estate and personal income streams in negative equity, where the debts exceed the current value of income flows available to pay mortgages or for that matter, personal debts – is impossible for nations that hope to maintain a modicum of civil society. “Austerity plans” IMF and EU style is an antiseptic, technocratic jargon for life-shortening and killing impact of gutting income, social services, spending on health on hospitals, education and other basic needs, and selling off public infrastructure for buyers to turn nations into “tollbooth economies” where everyone is obliged to pay access prices for roads, education, medical care and other costs of living and doing business that have long been subsidized by progressive taxation in North America and Western Europe.
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The battle lines are being drawn regarding how private and public debts are to be repaid. For nations that balk at repayment in euros, the creditor nations have their “muscle” waiting in the wings: the credit rating agencies. At the first sign a nation is balking in paying in hard currency, or even at the first hint of it questioning a foreign debt as improper, the agencies will move in to reduce a nation’s credit rating. This will increase the cost of borrowing and threaten to paralyze the economy by starving it for credit.


The most recent shot was fired n April 6 when Moody’s downgraded Iceland’s debt from stable to negative. “Moody’s acknowledged that Iceland might still achieve a better deal in renewed negotiations, but said the current uncertainty was hurting the country’s short-term economic and financial prospects.”[1]


The fight is on. It should be an interesting decade.


Prof. Micheal Hudson is Chief Economic Advisor to the Reform Task Force Latvia (RTFL). His website is michael-hudson.com.

[1] THE ASSOCIATED PRESS, “Moody\’s Downgrades Iceland Outlook,” The New York Times, April 7, 2010.


Michael Hudson is a frequent contributor to Global Research. Global Research Articles by Michael Hudson

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The Disintegration of Fractured Democracies: In America, the Fracturing results from the Economic System

Global Research, April 1, 2010

Consider this paraphrased account of a famous nation\’s demise:

The death of the nation was both violent and natural. The fatal agents were the organic disorders of the system. The government had proven incapable of solving problems: it failed to preserve domestic order or an effective defense; it discovered no way of reconciling local autonomy with national stability and power; and its love of liberty failed to interfere with its passion for empire and war. The class struggle had become bitter beyond control and had turned democracy into a contest in legislative looting. The legislature degenerated into a mob, rejecting all restraint, voting itself every favor, and crushing initiative, industry, and thrift.


Education spread, but thinly; it stressed knowledge more than character and produced masses of half-educated people. The old problem of ethics and morals found no solution in religion, statesmanship, or philosophy. Religious superstition spread even while science reached its apogee. The growth of knowledge secularized morals, marriage, parentage, and law, and the pursuit of pleasure prevailed. Public games degenerated into professional contests; the people, who had once been athletic, now became spectators, content to witness rather than to do. Sexual morality was relaxed, and human life was portrayed as a round of triviality, seduction, and adultery. . . . The nation had destroyed itself; it died of its own tyrannous anarchy.

What nation do these paragraphs describe? It could be the United States of America, but it is not. These paragraphs come almost word for word from Will Durant\’s The Life of Greece where he describes the demise of Athenian democracy.


Madison, in The Federalist, No. 10, writes,

The friend of popular governments never finds himself so much alarmed for their character and fate, as when he contemplates their propensity to [factions]. . . . Complaints are everywhere heard . . . that our governments are too unstable, that the public good is disregarded in the conflicts of rival parties, and that measures are too often decided, not according to the rules of justice and . . . rights. . . .


The latent causes of faction are . . . sown in the nature of man. . . . A zeal for different opinions concerning religion, concerning government, and many other points, as well . . . an attachment to different leaders ambitiously contending for pre-eminence and power; or to persons of other descriptions whose fortunes have been interesting to the human passions, have, in turn, divided mankind into parties, inflamed them with mutual animosity, and rendered them much more disposed to vex and oppress each other than to co-operate for their common good. . . . But the most common and durable source of factions has been the various and unequal distribution of property. . . .


It is in vain to say that enlightened statesmen will be able to adjust these clashing interests, and render them all subservient to the public good. Enlightened statesmen will not always be at the helm. . . .


The inference to which we are brought is, that the CAUSES of faction cannot be removed, and that relief is only to be sought in the means of controlling its EFFECTS. . . .


By what means is this object attainable? . . .

Madison believed that “[A]s each representative will be chosen by a greater number of citizens . . . it will be more difficult for unworthy candidates to practice with success the vicious arts by which elections are too often carried; and the suffrages of the people being more free, will be more likely to centre in men who possess the most attractive merit and the most diffusive and established characters.” Unfortunately he was wrong, but he was right in writing that “Men of factious tempers, of local prejudices, or of sinister designs, may, by intrigue, by corruption, or by other means, first obtain the suffrages, and then betray the interests, of the people. . . .”


When the number of contentious factions in a society becomes large, society becomes ungovernable; it literally implodes. All appearances indicate that the United States has reached this point. A recent poll found that only 21% of Americans believe that the government functions with the people\’s consent, and nearly six in ten Americans say they are dissatisfied with the way democracy works in the United States.


Aside from the government\’s being paralyzed, violence is ubiquitous and uncontrollable and the incarcerated are routinely freed to make space for others. Worse, the judicial system often convicts the innocent. Many laws are routinely ignored by even those who are generally law abiding citizens. Religious and racial intolerance is prevalent and often justified by untrue historical claims often taught to students in “history” classes.


Primitive societies are unified by common ancestries and beliefs, but current “advanced” societies lack both. The claim is often made, however, that there are fundamental beliefs that underlie even “advanced” societies. Unfortunately, these claims are always made on some level of generality. For instance, some claim that America was founded on “Christian” principles, but \’Christian\’ today is an abstract noun. It specifies nothing concrete. Yes, many of those who colonized America did so for religious reasons, but not all did, and those who did did not exhibit much “Christian” charity in dealing with others, even other Christians. The Constitution would never have been ratified by this disparate group had no assurance been given that the federal government would not attempt to impose a “state” religion upon the new nation, and even that did not placate all: Clifton Olmstead, in his History of Religion in United States quotes a Congregationalist minister about the separation: “It was as dark a day as ever I saw. The odium thrown upon the ministry was inconceivable. The injury done to the cause of Christ, as we then supposed, was irreparable,” and many today hold similar views. So, if someone had asked the colonists what “Christian” principles they all agreed to, I suspect that “None!” Would have been the answer.


But the same is true of what are called “American values” or, as it is often put, “what America stands for.” No one ever specifies what those values are or attempts to verify that Americans really hold them. Sen. David Vitter said, “I\’m on the side of conservatives getting back to core conservative values,” but no one ever provides a specific list of them. As a matter of fact, the Pew Social and Demographic Trends Project found that “American adults from young to old disagree increasingly today on . . . values ranging from religion to relationships, creating the largest generation gap since divisions 40 years ago over Vietnam, civil rights and women\’s liberation.” So appeals to America\’s core values are appeals to nothing real. No group of traditional beliefs exists to unite America\’s disparate groups. America is a fractured society.


But how did this fracture come about? Many causes can be cited, but the ultimate cause is clear. The fracturing results from the economic system. Madison had that right, too: “the most common and durable source of factions ha
s been the various and unequal distribution of property. . . .”


Think about it. Virginia was planned as a commercial venture by businessmen, operating through a joint-stock company, who wanted to get rich. Southern colonies were founded on the distinctly medieval concept of landed estates populated by masters and slaves, and Pennsylvania attracted an influx of immigrants with its policy of freehold ownership which meant that farmers owned their land free and clear of leases. This disparity of colonial economic systems brought about the Civil War.


American society is fractured by differing religious groups, racial groups, groups based on national origin, political groups, and economic groups. Waves of immigration were and still are being fostered to provide needed labor for America\’s industrial enterprises, and although these waves of immigration are encouraged, the immigrants in each wave suffer racial and cultural discrimination. Assimilation, if it takes place at all, is slow and painful. So, economic motives have a role in every aspect of creating what passes for American “society.”


Some Americans have a silly-putty view of human nature. They believe that persons who come to America from other cultures can be squeezed here and there and molded into Uncle Sams. They are to be assimilated by learning English and adopting American customs and “values.” But what the Americans who hold this belief don\’t realize is that if immigrants can be so squeezed to become model Americans, Americans can be squeezed to become as “un-American” as the others.


Americans often reject ideas because they are termed “foreign.” For instance, socialism to Americans is a foreign ideology, but, although it goes unacknowledged, so is capitalism. Adam Smith and David Ricardo, the grandfathers of America\’s capitalist economic system, were not Americans. In fact, hardly any ideologies that have taken root in American have American origins. Certainly not Christianity, democracy, or hegemony. And the one American idea often boasted of has been totally ineffective—the melting pot. It never got hot enough to melt anything. Fractious groups created by the needs of the economic system make up America\’s uncivil society. Andrew Arena, head of the FBI\’s field office in Detroit, has said “radical and extremist fringe groups . . . can be found throughout our society.” But the factions prevalent in American society are not limited to the “radical and extremist fringe.”


The fractiousness of these groups is fostered by America\’s elite. The strategy is one of divide and conquer. Politicians prey on hot-button issues to generate antagonism between groups: women\’s righters against pro-lifers, environmentalists against developers, social liberals against social conservatives, labor against management, union organizers against right-to-work advocates, the poor against the wealthy, Republicans against Democrats and both against anyone else, hegemonists against pacifists, believers against atheists and often against each other, heterosexuals against homosexuals, whites against other races, Tea Parties against Coffee Cuppers, state\’s rightists against federalists, and on and on. These group disparities are promoted to the point that they are not just ideological disputes. Many in these groups genuinely dislike those in other groups, and although overt display of this dislike is often disparaged, it is nevertheless quietly accommodated. These antagonisms make unity unattainable. Divide and conquer has become divided we fall.


In the days immediately following September 11, 2001, the mainstream press touted America\’s “coming together” in response to the attacks on the Pentagon and the World Trade Center. But that coming together was quickly sundered. The Port Authority and the Lower Manhattan Development Corporation were soon at odds over how to redevelop the site. With much fanfare, a cornerstone was laid and secretly removed. Legal disputes over the attendant costs of illnesses related to the attacks are still in the court system. On the day of the attacks, New York City mayor Rudy Giuliani proclaimed, “We will rebuild. We\’re going to come out of this stronger than before, politically stronger, economically stronger. The skyline will be made whole again.” But it hasn\’t. Any many now doubt that Americans have been told the truth about what really happened on nine/eleven. Not only is America a society at war with itself, there is little that Americans can even agree on.


Madison claims “that the causes of faction cannot be removed.” Perhaps! But factionalism can be minimized, and the way to do it is not difficult to discern. All that needs to be done is for governments to enact legislation that enhances the well being of people rather than institutions and special interests. Promoting an economic system that exploits the people and impoverishes them at fairly regular intervals, restrictions on freedom, and corruption of the political system are not effective ways of making friends and influencing people. They are, however, effective ways of promoting anger, sometimes to the point of hatred. Any government anywhere, regardless of its form, democratic or authoritarian, that governs for the few rather than all generates factions. Such governments sooner or later lose their legitimacies and their societies implode.


During the Revolutionary War, John Dickinson composed the Liberty Song. Its last stanza reads, “Then join hand in hand, brave Americans all, by uniting we stand, by dividing we fall; in so righteous a cause let us hope to succeed, for heaven approves of each generous deed.” Nations and the institutions they support fall unless governments, like decent men and women, exhibit compassion, generosity, and a concern for the welfare of real, living people. That\’s all that saving America requires.



John Kozy is a retired professor of philosophy and logic who blogs on social, political, and economic issues. After serving in the U.S. Army during the Korean War, he spent 20 years as a university professor and another 20 years working as a writer. He has published a textbook in formal logic commercially, in academic journals and a small number of commercial magazines, and has written a number of guest editorials for newspapers. His on-line pieces can be found on http://www.jkozy.com/ and he can be emailed from that site\’s homepage.


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Mongolia: The Pentagon';s Trojan Horse. US-NATO Partner Wedged Between China And Russia

Global Research, April 1, 2010
Because of its history, its location and the nations which surround it, Mongolia would seem the last country in the world to host annual Pentagon-led military exercises and to be the third Asian nation to offer NATO troops for the war in Afghanistan.

From the early 1920s until the breakup of the Soviet Union in 1991 Mongolia was the latter nation’s longest-standing and in many ways closest political and military ally, its armed forces fighting alongside those of the USSR against the Japanese in World War II. It was not a member of the Warsaw Pact as that alliance was formed in Europe six years after and in response to the creation of NATO in 1949, but Mongolia was a military buffer between the Soviet Union and the Japanese army in China in the Second World War and between it and China during the decades of the Sino-Soviet conflict.

Mongolia is also buried deep within the Asian continent and is the world’s second-largest landlocked nation next to Kazakhstan, which is only 21 miles from its western border. Those two countries along with North Korea, impenetrable in most every sense of the word, are the only three that border both China and Russia.

Russia abuts Mongolia along its entire northern frontier and China along its eastern, southern and western borders. There is no way to enter the country except by passing through or over Russia and China.

As such Mongolia would have appeared to be a refuge of non-alignment in a world of rapidly expanding U.S. and NATO penetration of increasingly vast tracts of the earth’s surface.

But in the post-Cold War period no country is beyond the Pentagon’s reach, either inside or on its borders.

In the last decade alone the U.S. has acquired bases and other military installations and stationed its armed forces throughout parts of the world that it had never penetrated during the Cold War era, including:

Africa: Approximately 2,000 troops and the Pentagon’s Combined Joint Task Force-Horn of Africa at Camp Lemonnier in Djibouti in the Horn of Africa.

Black Sea: Seven new air and training bases in Bulgaria and Romania and the de facto control of air, navy, infantry and surveillance bases in Georgia.

Baltic Sea: The activation in April of a Patriot Advanced Capability-3 theater interceptor missile battery in Eastern Poland with an initial contingent of 100 troops to run it.

Middle East: Air bases, forward operating bases, base camps, weapons storage facilities and troops transit centers in Iraq, Jordan and Kuwait and a long-range (2,900-mile) interceptor missile radar facility in Israel staffed by 120 U.S. military personnel.

Central Asia: An air base in Kyrgyzstan through which 35,000 U.S. and NATO troops transit each month for the war in Afghanistan and plans for a new special forces “anti-terrorist” training center in the nation.

South Asia: A proliferation of infantry and air bases in Afghanistan, including the mammoth Bagram Air Field with 25,000 military personnel and contractors. The Bagram military complex has been more than tripled in size since the 2001 invasion and is currently undergoing yet further large-scale expansion.

East Asia: The return of the U.S. military to the Philippines after being ordered to leave by the country’s Senate in 1991 with at least 600 troops and two permanent structures in Camp Navarro in Mindanao where the U.S. Joint Special Operations Task Force-Philippines (JSOTF-P) is based.

South America: Seven new military, including air and naval, bases in Colombia agreed upon last summer.

Central America: In addition to the U.S. retaining the use of the Soto Cano Air Base in Honduras for its 550-troop Joint Task Force-Bravo after the military coup d’etat of last June 28, a report surfaced in September of 2009 that U.S. Secretary of State Hillary Clinton had reached an agreement with new Panamanian President Ricardo Martinelli for the opening of two new American naval bases, one each on the Caribbean and Pacific coasts.

Indian Ocean: U.S. Africa Command deployed lethal Reaper “hunter-killer” drones, spy planes and over a hundred service members to Seychelles late last year.

South Pacific: A secretive military satellite base in Western Australia was approved in 2007. The massive expansion of the Andersen Air Force Base and construction of barracks for 8,000 Marines on Guam is underway.

New bases on every inhabited continent outside the Pentagon’s own.

Mongolia, however remote it is and previously inaccessible it may have been, is no exception to the wave of worldwide U.S. military expansion.

On March 29 NATO announced that the nation had become the 45th country to contribute troops for the North Atlantic military bloc’s International Security Assistance Force (ISAF) in Afghanistan. The 44th nation to be formally dragooned into NATO’s first ground and first Asian war was Montenegro, the world’s newest (universally recognized) state.

There are in fact more than 45 countries with troops subordinated to NATO in the Afghan war zone in addition to those from all but six European nations, two South Pacific ones (Australia and New Zealand), a Persian Gulf state (the United Arab Emirates), all three South Caucasus nations (Armenia, Azerbaijan and Georgia), Asia’s Singapore and South Korea and the U.S. and Canada.

Last November the Financial Times confirmed that Colombia was deploying infantry forces to Afghanistan under NATO command, in December the ISAF website divulged that Egyptian military personnel are operating in the east of the country [1], and this January the U.S. armed forces newspaper Stars and Stripes revealed that troops from Bahrain and Jordan were already in the war zone.

The inclusion of Colombia and Egypt is particularly significant as now troops from all six populated continents are among those of fifty-some-odd nations serving under NATO – soon to number 150,000, with almost all U.S. forces placed under NATO command – in not only a single war theater but in one country. The world has never before witnessed such a widespread military network concentrated on and in one small land.

Mongolia’s Defense Minister Luvsanvandan Bold was at NATO headquarters in Brussels on March 29 to formalize his nation’s deployment of an estimated 250 more troops for the Afghan war. He was accompanied by his country’s chief of the general staff and secretary of the National Security Council.

The delegation met with NATO’s Deputy Secretary General Claudio Bisogniero and the “meeting marked the formal recognition of the Mongolian contribution to the International Security Assistance Force (ISAF).”

NATO’s number two civilian leader said on the occasion that “These are important agreements, not just from a legal perspective, but chiefly to mark Mongolia’s full recognition as a member of ISAF and a key contributor to the international mission.” [2]

The military bloc announced that as Mongolia is now an official Troop Contributing Nation, it will be invited to the 56-nation NATO foreign ministers meeting to begin on April 23 in Estonia.

The Mongolian entourage also visited Supreme Headquarters Allied Powers Europe, NATO’s main military command, outside Mons, Belgium, where it was accorded an honor guard reception and met with the Deputy Supreme Allied Commander Europe, General Sir John McColl.

NATO now has a military partn
er squeezed between Russia and China.

A report from last year placed matters in historical perspective. Deployment to Afghanistan will assist “The Mongolian army, which has not seen major combat since assisting the Soviet invasion of Manchuria in 1945,” to “acquire vital, on-the-ground experience.” The mission “will mark its largest military presence in Afghanistan since the age of Genghis Khan.” [3]

However, the U.S. first secured Mongolian troops for the war in Afghanistan much earlier, in 2003, and Genghis Khan was invoked for the occasion, which should cast in doubt the references to peacekeeping used in subsequent citations. The latest development signals the transition from a bilateral U.S.-Mongolian military partnership to the broadening of NATO’s role in Asia and the further consolidation of an Asian NATO.
“The landlocked nation has previously operated artillery training teams in Afghanistan and sent troops to serve with the U.S.-led occupation of Iraq,” and in the course of doing so “Mongolia’s involvement in Iraq and Afghanistan has helped cement its alliance with the United States and secure grants and aid.” [4]

U.S. Marines were deployed to the capital of Mongolia, Ulan Bator (Ulaanbaatar), “for the first time in the history of the Marine Corps, Aug. 18, 2003 in support of Khaan Quest ’03.” [5]

The live-fire military exercise, which has been held every year since, is named after Genghis Khan. The announced purpose of the training exercises, run by the Pentagon’s Pacific Command, has been to upgrade Mongolian soldiers to United Nations peacekeeping standards. Having little else in the way of exports, the nation’s troops are paid comparatively handsomely for missions abroad.

As to the nature of the peacekeeping missions the Pentagon has been training Mongolia’s armed forces to conduct, after the first Khaan Quest exercises – in which they were instructed by U.S. Marines in “peacekeeping operations such as check point, patrolling, immediate action drills, riot control and more” [6] – in August of 2003, the U.S. deployed troops they had instructed to Iraq in September and to Afghanistan in October.

The second rotation of Mongolian troops to Iraq occurred in early 2004 and the second Khaan Quest U.S.-led military exercises were staged in Mongolia the same year.

Mongolia was invited to participate in the Cobra Gold exercises in Thailand, Asia’s largest war games, in 2004 for the first time. The roster also included the U.S., Thailand, the Philippines and Singapore.

The following year U.S. Marines returned to the nation for Khaan Quest 2005 and almost two weeks of joint training with the Mongolian Armed Forces.

The Marines and 130 local troops engaged in what was described as a mock battle 65 miles west of the capital, a repeat of similar engagements in 2003 and 2004. [7]

Five months after the April exercises Mongolia’s President Nambariin Enkhbayar visited Hawaii on his way home from the United Nations to meet with the top commander of the U.S. Pacific Command, whose “vast area of responsibility [consists of] half the surface of the globe that includes half its population spread across 36 countries,” [8], Admiral William Fallon.

After the meeting the Mongolian head of state was quoted as saying “We have been discussing how to cooperate to expand and develop the capacity of the Mongolian armed forces and peacekeeping operations,” and that he and Fallon “found complete understanding” about collaboration between the Pentagon’s Pacific Command and the Mongolian armed forces. [9]

The following month Donald Rumsfeld became the first U.S. secretary of defense to visit Mongolia and addressed soldiers from the nation who had served in Iraq and Afghanistan. Until the last moment he also was to have visited China’s and Russia’s other joint neighbor, Kazakhstan, to “discuss increasing U.S. help in their [Kazakhstan\'s and Mongolia\'s] military modernization programs” on his way to a NATO meeting in Lithuania to meet “with Ukraine’s defense minister about that country’s effort to join the organization.” [10]

Speaking of Mongolian officials’ military cooperation with the U.S., he said “Located between Russia and China, they decided that their democracy, stability and future was mostly tied to the relationships they could create.” [11]

It was confirmed at the time that six U.S. Marine and one Army officer were assigned to the nation’s military and that “With US funding and training, the Mongolian government built a peacekeeping force of 5,000 troops from its current force of 11,000 troops.” [12] Almost half its men under arms are available for deployments abroad.

On November 21st of 2005 President George W. Bush followed in Rumsfeld’s footsteps, arriving for a one-day visit to Ulan Bator with his secretary of state Condoleezza Rice. As Rumsfeld was the first Pentagon chief, so Bush was the first standing U.S. head of state to visit Mongolia. Both were on recruitment missions, and not just for the wars in Iraq and Afghanistan. A report on the U.S. defense chief’s trip included the observation that “In Mongolia, Rumsfeld tried to nurture a relationship that may be a hedge against a shift in China’s current path.” [13]

Bush’s comments while there didn’t spare his hosts an ex post facto swipe at the nation’s political past (until last May the ruling party’s name was still that of the communist period) and an evocation of the Genghis Khan mythos (and ethos): “Free people did not falter in the Cold War, and free people will not falter in the war on terror. The Mongolian armed forces are serving the cause of freedom, and U.S. forces are proud to serve beside such fearless warriors.” [14]

Months afterward it was revealed that Rumsfeld had promised impoverished Mongolia (with a population roughly equal to that of Chicago) $11 million worth of U.S. military equipment. [15]

In January of 2006 Mongolia announced that, despite a transition in the nation’s cabinet underway at the time, it would keep its U.S.-trained troops in Iraq and Afghanistan.

In the middle of the year the U.S. State Department disclosed that “Rumsfeld said the United States plans to join Mongolia in an upcoming multinational exercise that is intended to strengthen regional cooperation in peacekeeping.
“The exercise, called ‘Conquest,’ is scheduled for late summer.” [16] Once again the alleged peacekeeping nature of America’s military role in Mongolia was belied by the name of the operation.

During the summer the Pentagon conducted the Khaan Quest 2006 exercises in which “300 American military personnel [trained] 600 Mongolian troops, as well as 200 others from Bangladesh, Fiji, South Korea, Thailand and Tonga,” at what by that time was a permanent training base at Tavan Tolgoi (Five Hills).

It was announced before the August war games that “The training is part of the millions of dollars that President Bush promised during his visit to Mongolia last year.” [17]

During Khaan Quest 2006 “Admiral William J. Fallon, head of the U.S. Pacific Command, greeted media and soldiers, praising the peacekeeping exercises and stressing the importance of Tavan Tolgoi as an international training site.” [18] The next year Fallon took over Central Command whose area of responsibility includes both Iraq and Afghanistan.

The two-week military exercises were held “on the windswept steppe of Mongolia, a key American ally strategicall
y placed between Russia and China.”

To demonstrate its appreciation of the role that Mongolia plays in U.S. geostrategic plans for Eurasia, three months earlier “The U.S. Congress passed a resolution…commending Mongolia on marking 800 years since Genghis Khan forged a nation out of the vast territory inhabited by disparate tribes, and praising its ‘commitment to democracy, freedom and economic reform.’”[19]

In late July and early August Mongolian air force ficials were invited to Operation Cooperative Cope Thunder in Alaska, “the largest multilateral air combat exercise in the northern Pacific, with about 1,300 personnel participating” from the United States, NATO, Australia, Canada, Germany, Japan, South Korea and Sweden. [20]

In October the seventh rotation of Mongolian troops “left for Iraq on board a special flight” to “join U.S. soldiers on patrol missions and maintaining order in the Iraqi capital [of] Baghdad.” [21]

By 2007 the Pentagon’s military integration of Mongolia had progressed beyond the point of the latter merely sending observers to U.S. war games and in July Mongolian airmen joined colleagues from the U.S., Spain, Thailand and Turkey for the two-week Red Flag-Alaska exercises in which “80 aircraft and 1,500 service members from the six countries [flew] together in this multinational exercise that provides realistic combat training….” [22]

The same month, at a time when almost 1,000 of its troops had served in the Iraq war zone, The Times of London in a feature called “War earns Mongolia rich peace dividend” summed up the results of four years of direct U.S.-Mongolian military cooperation:
“[Mongolian] soldiers are fed, given new uniforms, battle armour and night-vision equipment when they arrive in Iraq and President Bush has promised Mongolia $14.5 million to renovate its Armed Forces.
“The country’s readiness to fight in Iraq was also key to winning it a highly sought-after first-round place in Washington’s $5 billion Millennium Challenge Account.” [23]

Khaan Quest 2007 expanded to include over 1,000 troops from the U.S., Mongolia and seven other Asian and Asia-Pacific nations – Bangladesh, Tonga, South Korea, Brunei, Sri Lanka, Indonesia and Cambodia – to “improve their interoperability” and the “multinational speed of response, mission effectiveness…and unity of effort. [24]

The 2008 Khaan Quest exercises added troops from France, India, Nepal and Thailand to the U.S. Pacific Command-run operation.

The BBC reported at the time:
“As exercises go, these ones are relatively small – but they are symbolic.
“They represent part of Mongolia’s ongoing efforts to build ties that extend beyond its two super-power neighbours.” [25]

In July of 2008 Mongolia was invited to participate in the 20-nation Pacific Rim Airpower Symposium held in the capital of Malaysia. Mongolia doesn’t border the Pacific or even have a navy. It is separated from that ocean by hundreds of miles of Chinese and Russian territory.

The four-day event was hosted by the Royal Malaysian Air Force and U.S. Pacific Air Forces’ 13th Air Force, and included participants from the U.S., Malaysia, Mongolia, Australia, Bangladesh, Brunei, Cambodia, Canada, Chile, India, Indonesia, Japan, Nepal, New Zealand, the Philippines, Singapore, South Korea, Sri Lanka, Thailand and Vietnam. The commander of the 13th Air Force, Lieutenant General Loyd Utterback, remarked at the time: “Through this symposium, we have a great opportunity to share and understand what each nation brings to the battlefield.” [26]

Mongolian forces were also part of a U.S.-led military exercise on the order of Khaan Quest in Bangladesh in April of 2008 along with troops from the U.S. and the host nation, Brunei, Cambodia, India, Indonesia, Malaysia, Nepal, South Korea, Sri Lanka and Tonga.

Following by three years what appeared like an attempt at a “color revolution” scenario in Mongolia in March and April of 2005 ahead of a presidential election (on the heels of successful equivalents in Georgia, Ukraine and Kyrgyzstan), riots broke out in Ulan Bator after parliamentary elections in the summer of 2008. The standard “color revolution” technique. Molotov cocktails were hurled into the offices of the ruling Mongolian People’s Revolutionary Party and at least five people were killed and 300 injured, leading to a four-day state of emergency being declared. (The protests were led by supporters of the Democratic Party of Tsakhiagiin Elbegdorj, about whom more later.)

Five months afterward, in early November, Mongolia and Russia held a joint peacekeeping training exercise in the first country, the only joint maneuvers of any sort since the breakup of the Soviet Union seventeen years earlier. In the interim the Pentagon had led six comparable exercises in Mongolia from 2003-2008.

Mongolia was granted observer status in the Shanghai Cooperation Organization (whose members are China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan) in 2004, but in the succeeding six years has made no efforts to gain full membership.

In July of 2009 the nation’s military announced that it would expand upon previous deployments to Afghanistan, limited to artillery training units, by sending a full contingent of troops as part of “cooperation that stems from its ‘third neighbor’ policy to reach out to allies other than China and Russia,” meaning the U.S. and NATO. [27]

On August 15 the twelve-day Khaan Quest 2009 exercises were launched under U.S. leadership. In addition to American and Mongolian forces, troops from Cambodia, India, Japan and South Korea participated.
“The exercise is the most visible form of US-Mongolian military cooperation,” which “grew out of Mongolia’s participation in the US-led war in Iraq, the first combat action that Mongolian troops had seen since World War II.”
“In addition to the Khaan Quest exercise, US military cooperation with Mongolia includes the Marine Leadership Development Exchange Program, an initiative unique to Mongolia in which a small group of US Marines ‘embeds’ with Mongolian forces full time to help train them in western military methods.” [28]

Developing out of the annual Khaan Quest exercises, a Mongolian Expeditionary Force consisting of “elite soldiers selected by Mongolian Armed Forces Maj. Javkhlanbayar Dondogdorj specifically” for Afghanistan are to be deployed to the war front in that country. [29]

The exercises in Mongolia were preceded by a United Nations Staff Officers Course run under the U.S. State Department’s Global Peace Operations Initiative with officers from the U.S., Mongolia, Germany, Bangladesh, India, Malaysia, the Philippines, Singapore and Thailand.

Khaan Quest 2009 closed with a ceremony which featured “a parade by the graduating platoons and speeches by the chief of staff of US Pacific Command (which sponsored the exercise), as well as Mongolia’s defense minister and chief of armed forces.” [30]

This year’s Khaan Quest 2010 “is scheduled to begin August 2010 and event officials are expecting a larger participating force” than in 2009. [31]

Earlier in the year, on May 24, the candidate of the Democratic Party, Tsakhiagiin Elbegdorj, won the
nation’s presidential election, becoming the first president never to have been a member of the Mongolian People’s Revolutionary Party and the first to have been educated in the West. In fact he received a diploma from the University of Colorado at Boulder’s Economic Institute in 2001 and a Master of Public Administration degree from Harvard University’s John F. Kennedy School of Government the following year.

The nation’s military ties with Washington and with NATO can be expected to grow even firmer and more extensive under the Elbegdorj administration.

With its vast expanse (over 600,000 square miles) and its sparse population (less than 3 million people with almost 40 percent living in the capital), Mongolia is the optimal location for U.S. military surveillance (ground, air and satellite) to monitor China and Russia simultaneously. The nation’s new U.S.-educated head of state is not likely to deny Washington’s requests in that regard.

Notes

1) International Security Assistance Force
American Forces Press Service
December 16, 2009
2) North Atlantic Treaty Organization, March 29, 2010
3) Reuters, July 22, 2009
4) Ibid
5) Marine Corps News, August 28, 2003
6) Ibid
7) Xinhua News Agency, April 17, 2005
8) U.S. Department of Defense, May 18, 2009
9) Associated Press, September 20, 2005
10) Voice of America News, October 16, 2005
11) United News of India, October 22, 2005
12) Ibid
13) Associated Press, October 25, 2005
14) USA Today, November 21, 2010
15) Regnum (Russia), March 13, 2006
16) U.S. Department of State, June 5, 2006
17) Mongolia Web, July 30, 2006
18) Mongolia Web, August 21, 2006
19) Reuters, August 11, 2006
20) United Press International, July 28, 2006
21) Xinhua News Agency, October 4, 2006
22) Air Force Link, July 26, 2007
23) The Times, July 16, 2007
24) Ulan Bator Post, August 2, 2007
25) BBC News, September 10, 2008
26) Air Force Link, July 23, 2008
27) Reuters, July 22, 2009
28) EurasiaNet, August 25, 2010
29) Khaan Quest 2009, August 21, 2009
30) EurasiaNet, August 25, 2010
31) Khaan Quest 2009, August 25, 2009


Rick Rozoff is a frequent contributor to Global Research. Global Research Articles by Rick Rozoff

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Obama and the age of permanent war

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America And The Next Major War

For more information go to: www.gold-eagle.com March 28, 2010

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Ukraine Geopolitics and the US-NATO Military Agenda: Tectonic Shift in Heartland Power I

Global Research, March 16, 2010
A decisive vote against NATO
On February 14 Ukraine\’s Election Commission declared Viktor Yanukovych the winner in that embattled country\’s Presidential runoff vote, defeating former Prime Minister and Orange Revolution instigator Yulia Tymoshenko. Contrary to the positive spin Washington is trying to put on the events, they mark the definitive death of Ukraine\’s much-touted “Orange Revolution.”


The relevant question at this juncture is what the defeat of Ukraine\’s Orange Revolution signifies for the future of the Eurasian Heartland, as British geopolitician Halford Mackinder termed the region? Even more significantly, what does it imply for a two-decade long Pentagon attempt to weaken and ultimately cripple Russia as a military power in Washington\’s awesome and overly-ambitious agenda of Full Spectrum Dominance?


To understand the long-term significance of the Ukraine vote for the future global geopolitical balance of power we should go back to the original Orange Revolution of 2004. Viktor Yushchenko was the hand-picked candidate of Washington, and especially the neo-conservatives around the Bush Administration, in their attempt to split Ukraine from its historic and economic ties to Russia and bring the country, along with neighbor Georgia, into NATO.


Ukrainian economic and political geography


A look at the map will indicate just how strategic Ukraine is for both NATO and for Russia. Not only does the country directly border Russia to its east, but it also provides the transit route for most Russian natural gas pipelines to western Europe — some 80% of all Russian gas exports from which the country earns dollars, a vital economic lifeline for Russia.


Perhaps equally vital for Russia, in terms of her ability to maintain a credible defense against ever-growing NATO encirclement of its land area, is the Russian leasing rights to Ukraine\’s Black Sea port of Stevastapol, home to Russia\’s Black Sea Naval Fleet. The Fleet leases an additional home port in Odessa, in an agreement between Russia and Ukraine. This politically sensitive bilateral treaty for the Black Sea Fleet basing is not due to expire until 2017, if not renewed. Following the Russia-Georgia conflict in August 2008, Ukraine’s President Yushchenko began making noises about prematurely terminating that treaty, thereby depriving Moscow of its strategically most important naval base. Russian navy ships have used Stevastopol since Russia annexed the region in 1783.


The eastern part of Ukraine bordering Russia is home to more than 15 million ethnic Russians and remains literally the bread basket of eastern Europe, with some of the richest soil on earth. In 2009 Ukraine was the world\’s third largest grain exporter after the USA and EU, and ahead of Russia and Canada.[1] Ukraine\’s famous black soil, chornozem, is considered the most fertile in the world, and covers two-thirds of Ukraine.[2] The area around the rivers Dnieper and Dniester is the only place in the world where the width of the so-called ‘sweet’ black soil reaches 500 km. This soil is exceptional in providing very high quality harvests and belongs to the national wealth. Western agribusiness companies such as Monsanto, Cargill, ADM and Kraft Foods are reportedly salivating over the prospect of an end to the internal Ukrainian political stalemate in hopes of exploiting these resources. [3]


The Ukrainian Donetsk region in the eastern Donets Basin or Donbas is the political base of newly elected President Yanukovych. It is the most populous region of Ukraine and the center of its coal, steel and metallurgy industries, science centers and universities. Ukraine\’s Donbas contains an estimated 109 billion tons of coal as well as oil and gas.


Overall, Ukraine is one of the richest regions in all Europe for natural resources including granite, graphite, and salts. It provides a rich source for metallurgical, porcelain, chemical industries, for production of ceramics and building materials. [4]


In short, capture of the Ukraine in 2004 was a prize of strategic geopolitical importance for Washington in its bid for what the Pentagon terms ‘Full Spectrum Dominance’—control of the entire planet: land, air, oceans, space and outerspace. As the British father of geopolitics, Sir Halford Mackinder wrote in his seminal 1919 book, Democratic Ideals and Reality,


Who rules East Europe commands the Heartland:

Who rules the Heartland commands the World-Island:

Who rules the World-Island commands the World.[5]


For Mackinder, the Heartland integrally included Ukraine and Russia. By chopping off Ukraine from Russia in a de facto US-led coup called the Orange Revolution, Washington came a giant step nearer to a complete domination not only of Russia and the Heartland, but also of all Eurasia, including what would then become an encircled China. No wonder that the Bush-Cheney administration invested so much energy to install their man, Yushchenko, as President and de facto dictator. His task was to bring Ukraine into NATO. What he did for his countrymen was clearly of no concern to the Bush planners.


Yushchenko almost succeeded but for the ill-conceived adventure of Georgia\’s hand-picked Rose Revolution President, Mikhail Saakashvili in August 2008, sending troops to reclaim the seccessionist region of South Ossetia and Abkhazia for Georgia just weeks before NATO ministers would vote on Ukrainian and Georgian NATO membership. The swift Russian military response in stopping the Georgian attack and routing Saakashvili\’s rag-tag forces also stopped dead any chance that Germany or other NATO countries would OK NATO membership, and with it the pledge to come to the defense of either Georgia or Ukraine in a war against Russia. [6]


Significance of the Orange Revolution


The “revolution” that swept Viktor Yushchenko into power on a wave of US dollars and support from US-backed NGO\’s, was initially conceived at the Washington-financed RAND corporation. RAND had studied the swarming pattern of bees and similar phenomena, and applied these to modern mobile communication, text messaging and civil protest as tactics for regime change and covert warfare. [7]


As I describe in some detail in my book, Full Spectrum Dominance: Totalitarian Democracy in the New World Order, the transformation of Ukraine from independent former Russian republic to a pro-NATO US satellite was accomplished by the so-called ‘Orange Revolution’ in 2004. It was overseen by John Herbst, appointed US Ambassador to Ukraine in May 2003, just months before the events were set off. As the US State Department euphemistically described his activities:

During his tenure, he worked to enhance US-Ukrainian relations and to help ensure the conduct of a fair Ukrainian presidential election. In Kiev, he witnessed the Orange Revolution. Prior to that, Ambassador John Herbst was the US Ambassador to Uzbekistan, where he played a critical role in the establishment of an American base to help conduct Operation Enduring Freedom in Afghanistan.[8]


The man Washington decided to back in its orchestrated regime change in Ukraine was Viktor Yushchenko, a fifty-year old former Governor of Ukraine’s Central Bank who had been the
point man in Ukraine for the savage IMF “shock therapy” deindustrialization of the country during the 1990\’s. Yushchenko\’s IMF program had devastating consequences for his countrymen. Under his 1994 IMF program, Ukraine was forced to abandon exchange controls and let the currency fall. He oversaw the currency demands as head of the central bank, which within days saw the price of bread increase by 300%, electricity prices by 600%, public transportation by 900%. By 1998 Ukrainian real wages had fallen by 75% compared with 1991 when the country declared independence. He was clearly Washington\’s man for what they wanted to do in Ukraine. [9]


Yushchenko’s wife Kateryna, an American citizen born in Chicago, had been an official in both the Reagan and George H.W. Bush administrations, and in the US State Department. She had come to Ukraine as a representative of the US-Ukraine Foundation whose Board of Directors included Grover Norquist, one of the most influential conservative Republicans in Washington. Norquist had been called ‘the managing director of the hard-core right,and was a key political figure behind the consolidation of right-wing organizations in support of the George W. Bush Presidency. [10]

The central focus of Yushchenko’s slick campaign for President was to advocate membership for Ukraine in NATO and the European Union. His campaign used huge quantities of orange colored banners, flags, posters, balloons and other props, leading the media inevitably to dub it the ‘Orange Revolution.’ Washington funded ‘pro-democracy’ youth groups to play a particularly significant role organizing huge street demonstrations that helped him win the re-run of a disputed election.

In Ukraine the pro-Yushchenko movement worked under the slogan Pora (‘It\’s Time’) and they brought in people who had helped organize the ‘Rose Revolution’ in Georgia: Chair of Georgia’s Parliamentary Committee on Defense and Security, Givi Targamadze; former member of the Georgian Liberty Institute; and Georgia’s youth group, Kmara. The Ukrainian opposition leaders consulted the Georgians on techniques of non-violent struggle. Georgian rock bands Zumba, Soft Eject and Green Room, which had supported the ‘Rose Revolution,’ now organized a solidarity concert in Kiev to support Yushchenko’s 2004 campaign.[11]

A Washington-based PR firm called Rock Creek Creative also played a significant role in branding the Orange Revolution by developing a pro-Yushchenko website around the orange logo and its carefully-staged color theme. [12]

When Yushchenko lost the 2004 election to Viktor Yanukovych, several elements worked in concert to create an aura of fraud around the results, and to mobilize popular support for a new run-off. Using the Pora and other youth groups, especially election monitors, in coordination with key western media such as CNN and BBC, a second election was organized that allowed Yushchenko to squeak out a narrow margin of victory in January 2005 and declare himself President. The US State Department reportedly spent some $20 million to secure a US-friendly outcome in the Ukraine Presidency. [13]

The same US Government-backed NGOs that had been in Georgia produced the results in Ukraine: the George Soros’ Open Society Institute, Freedom House (whose head at the time was former CIA Director James Woolsey), the National Endowment for Democracy and its subsidiaries, the National Republican Institute and the National Democratic Institute. According to Ukrainian reports, the US-based NGOs, along with the conservative US-Ukraine Foundation, were active across Ukraine, feeding the protest movement of Pora and Znayu, and training the crucial poll watchers.[14]

President Viktor Yushchenko, Washington\’s man in Kiev, moved immediately to disrupt economic links to Russia, including shutting off Russian natural gas into western Europe via Ukrainian transit pipelines. This move was used by Washington to try to convince EU countries, especially Germany, that Russia was an “unreliable partner.” Some 80% of Russia\’s gas was exported via Ukrainian pipelines that had been built during the Soviet Union era when the two countries were one economic and political entity.[15] Yushchenko also worked closely with US-backed President Mikhail Saakashvili, Washington\’s man in neighboring Georgia.

The final result of the 2010 Ukrainian elections was an overwhelming rejection by voters of Yushchenko, the “hero” of the Orange Revolution, who received barely 5% of the vote. After five years of economic and political chaos, Ukrainians clearly want some kind of stability. Opinion polls in Ukraine show a majority opposed to joining NATO.

Western media depictions of incoming Ukrainian President Viktor Yanukovych as some kind of Moscow puppet, however, appear wide of the mark; his major industrial backers want harmonious economic relations with the European Union as well as with Russia.

Yanukovych announced that his first official trip abroad will not be to Moscow but rather to Brussels to meet with leading EU officials. After that, he will immediately fly to Moscow, where President Medvedev has signalled anticipation of improved cooperation by re-instating Russia’s Ambassador to Kiev after months of political tensions between Yushchenko and Moscow had put the appointment on hold.

Most significantly, however, and contrary to his predecessor’s relentless attempts to pull Ukraine into NATO on Washington’s urgings, Yanukovych announced he would not meet with NATO officials in Brussels. In interviews with Ukrainian media, Yanukovych has clearly stated that he will not try to bring Ukraine into either the EU or, most importantly for Moscow, into NATO.

Yanukovych has pledged to focus instead on Ukraine’s economic crisis and political corruption. Regarding Moscow, he has added that he will welcome Russia into a consortium that would jointly operate Ukraine\’s natural gas pipeline network, restoring influence that Yushchenko and his highly ambitious Prime Minister Yulia Tymoshenko tried to cancel. Another important signal not welcomed in NATO circles was his announcement that he would extend Russia\’s strategically vital lease on the naval base at the Ukrainian port of Sevastopol due to expire in 2017. [16]

Russia’s new Geopolitical Calculus

It’s clear that Yanukovych’s bitter election opponent, Orange Revolution veteran and former Prime Minister Yulia Tymoshenko, has bitterly opposed Yanukovych’s policy, at the very least because she is fighting for her political ambitions and is known to be a sore loser. After her challenge to the February election results failed in Ukrainian courts, she announced she would use her parliamentary coalition to block Yanukovych. Under normal procedures, she should have resigned as Prime Minister after the Yanukovych victory (by a margin of one million votes) was certified, as President-elect Yanukovych asked on February 10. She refused. She was supported as the preferred Presidential candidate by Germany’s Angela Merkel and other EU leaders. [17]

The Yanukovych victory was backed by some of the country’s most powerful business oligarchs including Ukraine’s richest man, steel and football billionaire, Rinat Akhmetov. Like Yanukovych, he comes from the east steel region of Ukraine. Also backing Yanukovych was Dmitry Firtash, a gas trading billionaire, who owns Rosukrenergo jointly with Gazprom of Russia, and whose trading bus
iness was cut last year by Prime Minister Tymoshenko.

The Ukrainian Parliament delivered a vote of no confidence on March 3 against the sitting government of Prime Minister Tymoshenko, by a majority of 243 out of 450. This was the death knell for Tymoshenko’s faction of the 2004 Orange Revolution and opens up the possibility of finally breaking a political stalemate among Ukraine’s political factions that has existed since shortly after the 2004 Orange Revolution. The ball is now clearly in Yanukovych’s court. [18]

In the late 1990′s before she co-led the Orange Revolution, Yulia Tymoshenko was president of Ukraine’s United Energy Systems, a privately-owned importer of Russian natural gas into Ukraine. She was accused by Moscow of illegally reselling enormous quantities of stolen Russian gas and avoiding tax on the sales during the late 1990s, whence she got the nickname in Ukraine as “gas princess.”

She was also accused of having given her political patron, former Prime Minister Pavlo Lazarenko, kickbacks in exchange for her company\’s stranglehold on the country\’s gas supplies.[19] Lazarenko was sentenced to prison in California for extortion, money laundering, fraud and conspiracy and was accused of murder in the Ukraine. [20]

Assuming that Yanukovych is now able to proceed with stabilizing the country along the neutral lines noted following the defeat of the Tymoshenko government, Moscow gains a major shift in the political tectonic plates that comprise the Eurasian Heartland, even with a strictly neutral Ukraine.

First, the strategic military encirclement of Russia — via NATO’s attempted recruitment of Ukraine and Georgia — is now clearly blocked and off the table. Russia’s access to the Black Sea via Ukraine’s Crimea appears assured as well.

In effect, the neutralization of Ukraine knocks a huge hole in Washington’s strategy of total encirclement of Russia. It breaks a geographic crescent of NATO or prospective NATO states stretching from Poland to Ukraine to Georgia on the periphery of Russia and her closely allied Belarus. Belarus President Alexander Lukashenko successfully resisted a similar Ukraine-style Rose Revolution, warding off strong US State Department funding of anti-Lukashenko NGO’s in the country. Belarus remains a centrally planned economy to a large extent, to the irritation of the free market Western governments, especially Washington. Belarus is economically tied to Russia, which accounts for half of its trade and it has no plans to enter NATO or the EU.[21]

This altered geopolitical configuration in central Eurasia after the defeat of the Orange Revolution gives a strong boost now to Russia’s long-term energy strategy—a strategy that we might call Russia’s North-South-East-West Strategy.




F. William Engdahl is the author of Full Spectrum Dominance: Totalitarian Democracy in the New World Order



Notes

[1] Press Trust of India, 2009: Ukraine Becomes World\’s Third Largest Grain Exporter, accessed in http://blog.kievukraine.info/2009_12_01_archive.html.
[2] Stepan P. Poznyak, Ukrainian Chornozem: past, Present, Future, paper of 18th World Congress of Soil Science, July 9-15, 2006, Philadelphia, Pennsylvania, accessed in http://www.ldd.go.th/18wcss/techprogram/P12419.HTM
[3] The American Chamber of Commerce in Ukraine, Chamber Members, accessed in http://www.chamber.ua/
[4] KosivArt, Ukraine Natural Resources, accessed in http://www.kosivart.com/eng/index.cfm/do/ukraine.natural-resources
[5] Halford J. Mackinder, Democratic Ideals and Reality, 1919, reprint 1942, Henry Holt and Company, New York, p. 150.
[6] F. William Engdahl, Ukraine and Georgia: Entry into NATO Put Off Indefinitely, December 4, 2008, in http://www.globalresearch.ca/index.php?context=va&aid=11277
[7] John Arquilla, David Ronfeldt, Swarming and the Future of Conflict, Santa Monica: RAND, 2000.
[8] US Department of State, John E. Herbst Biography, accessed in http://www.state.gov/r/pa/ei/biog/67065.htm.
[9] Michel Chossudovsky, IMF Sponsored “Democracy” in The Ukraine, 28 November 2004, accessed in http://globalresearch.ca/articles/CHO411D.html
[10] Kateryna Yushchenko, Biography, on My Ukraine: Personal Website of Viktor Yushchenko, 31 March 2005, accessed in http://www.yuschenko.com.ua/eng/Private/Family/2822/.
[11] Wikipedia, Orange Revolution, accessed in http://en.wikipedia.org/wiki/Orange_Revolution.
[12] Andrew Osborn, We Treated Poisoned Yushchenko, Admit Americans, The Independent U.K., March 12, 2005, accessed in http://www.truthout.org/article/us-played-big-role-ukraines-orange-revolution.
[13] Dmitry Sudakov, USA Assigns $20 million for Elections in Ukraine, Moldova, Pravda.ru, 11 March 2005.
[14]‘Nicholas,’ Forces Behind the Orange Revolution, Kiev Ukraine News Blog , January 10, 2005 accessed in http://blog.kievukraine.info/2005/01/forces-behind-orange-revolution.html.
[15] Jim Nichol et al, Russia’s Cutoff of Natural Gas to Ukraine: Context and Implications, US Congressional Research Service Report for Congress, Washington, D. C. February 15, 2006.
[16] Yuras Karmanau, Half-empty chamber greets Ukraine\’s new president, Associated Press, February 25, 2010, accessed in http://news.yahoo.com/s/ap/20100225/ap_on_re_eu/eu_ukraine_president
[17] Inform: Bloc of Yulia Tymoshenko Release # 134, EPP Throws Weight Behind Tymoshenko, 16 December, 2009, accessed in http://www.ibyut.com/index_files/792.html
[18] Stefan Wagstyl and Roman Oleachyk, Ukraine Election Divides Oligarchs, London Financial Times, January 15, 2010.
[19] TraCCC, Pavlo Lazarenko: Is the Former Ukrainian Prime Minister a Political Refugee or a Financial Criminal?, Organized Crime and Corruption Watch, Vol. 2, No. 2, Summer 2000, Washington D.C., American University Transnational Crime and Corruption Center.
[20] Ian Traynor, Ukrainian Leader Appoints Billionaire as his PM, The Guardian, 24 January, 2005.
[21] United States Embassy in Minsk, US Government Assistance FY 97 Annual Report, United States Embassy in Minsk, Belarus, 1998, http://belarus.usembassy.gov/assistance1997.html


F. William Engdahl is a frequent contributor to Global Research. Global Research Articles by F. William Engdahl

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The Road to Armageddon: The Insane Drive for American Hegemony Threatens Life on Earth

http://globalresearch.ca/index.php?context=va&aid=17821

The Road to Armageddon: The Insane Drive for American Hegemony Threatens Life on Earth
y Paul Craig Roberts


Global Research, February 26, 2010


The Washington Times is a newspaper that looks with favor upon the Bush/Cheney/Obama/neocon wars of aggression in the Middle East and favors making terrorists pay for 9/11. Therefore, I was surprised to learn on February 24 that the most popular story on the paper’s website for the past three days was the “Inside the Beltway” report, “Explosive News,” about the 31 press conferences in cities in the US and abroad on February 19 held by Architects and Engineers for 9/11 Truth, an organization of professionals which now has 1,000 members.


I was even more surprised that the news report treated the press conference seriously.


How did three World Trade Center skyscrapers suddenly disintegrate into fine dust? How did massive steel beams in three skyscrapers suddenly fail as a result of short-lived, isolated, and low temperature fires? “A thousand architects and engineers want to know, and are calling on Congress to order a new investigation into the destruction of the Twin Towers and Building 7,” reports the Washington Times.


The paper reports that the architects and engineers have concluded that the Federal Emergency Management Agency and the National Institute of Standards and Technology provided “insufficient, contradictory and fraudulent accounts of the circumstances of the towers’ destruction” and are “calling for a grand jury investigation of NIST officials.”


The newspaper reports that Richard Gage, the spokesperson for the architects and engineers said: “Government officials will be notified that ‘Misprision of Treason,’ U.S. Code 18 (Sec. 2382) is a serious federal offense, which requires those with evidence of treason to act. The implications are enormous and may have profound impact on the forthcoming Khalid Sheik Mohammed trial.”


There is now an organization, Firefighters for 9/11 Truth. At the main press conference in San Francisco, Eric Lawyer,the head of that organization, announced the firefighters’ support for the architects and engineers’ demands. He reported that no forensic investigation was made of the fires that are alleged to have destroyed the three buildings and that this failure constitutes a crime.


Mandated procedures were not followed, and instead of being preserved and investigated, the crime scene was destroyed. He also reported that there are more than one hundred first responders who heard and experienced explosions and that there is radio, audio and video evidence of explosions.


Also at the press conference, physicist Steven Jones presented the evidence of nano-thermite in the residue of the WTC buildings found by an international panel of scientists led by University of Copenhagen nano-chemist Professor Niels Harrit. Nano-thermite is a high-tech explosive/pyrotechnic capable of instantly melting steel girders.


Before we yell “conspiracy theory,” we should be aware that the architects, engineers, firefighters, and scientists offer no theory. They provide evidence that challenges the official theory. This evidence is not going to go away.


If expressing doubts or reservations about the official story in the 9/11 Commission Report makes a person a conspiracy theory kook, then we have to include both co-chairmen of the 9/11 Commission and the Commission’s legal counsel, all of whom have written books in which they clearly state that they were lied to by government officials when they conducted their investigation, or, rather, when they presided over the investigation conducted by executive director Philip Zelikow, a member of President George W. Bush’s transition team and Foreign Intelligence Advisory Board and a co-author of Bush Secretary of State Condi “Mushroom Cloud” Rice.


There will always be Americans who will believe whatever the government tells them no matter how many times they know the government has lied to them. Despite expensive wars that threaten Social Security and Medicare, wars based on non-existent Iraqi weapons of mass destruction, non-existent Saddam Hussein connections to al Qaida, non-existent Afghan participation in the 9/11 attacks, and the non-existent Iranian nukes that are being hyped as the reason for the next American war of aggression in the Middle East, more than half of the U.S. population still believes the fantastic story that the government has told them about 9/11, a Muslim conspiracy that outwitted the entire Western world.


Moreover, it doesn’t matter to these Americans how often the government changes its story. For example, Americans first heard of Osama bin Laden because the Bush regime pinned the 9/11 attacks on him. Over the years video after video was served up to the gullible American public of bin Laden’s pronouncements. Experts dismissed the videos as fakes, but Americans remained their gullible selves. Then suddenly last year a new 9/11 “mastermind” emerged to take bin Laden’s place, the captive Khalid Sheik Mohammed, the detainee waterboarded 183 times until he confessed to mastermining the 9/11 attack.


In the Middle Ages confessions extracted by torture constituted evidence, but self-incrimination has been a no-no in the U.S. legal system since our founding. But with the Bush regime and the Republican federal judges, whom we were assured would defend the U.S. Constitution, the self-incrimination of Sheik Mohammed stands today as the only evidence the U.S. government has that Muslim terrorists pulled off 9/11.


If a person considers the feats attributed to Khalid Sheik Mohammed, they are simply unbelievable. Sheik Mohammed is a more brilliant, capable superhero than V in the fantasy movie, “V for Vendetta.” Sheik Mohammed outwitted all 16 U.S. intelligence agencies along with those of all U.S. allies or puppets, including Israel’s Mossad. No intelligence service on earth or all of them combined was a match for Sheik Mohammed.


Sheik Mohammed outwitted the U.S. National Security Council, Dick Cheney, the Pentagon, the State Department, NORAD, the U.S. Air Force, and Air Traffic Control.

He caused Airport Security to fail four times in one morning. He caused the state-of-the-art air defenses of the Pentagon to fail, allowing a hijacked airliner, which was off course all morning while the U.S. Air Force, for the first time in history, was unable to get aloft intercepter aircraft, to crash into the Pentagon.


Sheik Mohammed was able to perform these feats with unqualified pilots.


Sheik Mohammed, even as a waterboarded detainee, has managed to prevent the FBI from releasing the many confiscated videos that would show, according to the official story, the hijacked airliner hitting the Penagon.


How naive do you have to be to believe that any human, or for that matter Hollywood fantasy character, is this powerful and capable?


If Sheik Mohammed has these superhuman capabilities, how did the incompetent Americans catch him? This guy is a patsy tortured into confession in order to keep the American naifs believing the government’s conspiracy th
eory.


What is going on here is that the U.S. government has to bring the 9/11 mystery to an end. The government must put on trial and convict a culprit so that it can close the case before it explodes. Anyone waterboarded 183 times would confess to anything.


The U.S. government has responded to the evidence being arrayed against its outlandish 9/11 conspiracy theory by redefining the war on terror from external to internal enemies. Homeland Security Secretary Janet Napolitano said on February 21 that American extremists are now as big a concern as international terrorists. Extremists, of course, are people who get in the way of the government’s agenda, such as the 1,000 Architects and Engineers for 9/11 Truth. The group used to be 100, now it is 1,000. What if it becomes 10,000?


Cass Sunstein, an Obama regime official, has a solution for the 9/11 skeptics: Infiltrate them and provoke them into statements and actions that can be used to discredit or to arrest them. But get rid of them at all cost.


Why employ such extreme measures against alleged kooks if they only provide entertainment and laughs? Is the government worried that they are on to something?


Instead, why doesn’t the U.S. government simply confront the evidence that is presented and answer it?


If the architects, engineers, firefighters, and scientists are merely kooks, it would be a simple matter to acknowledge their evidence and refute it. Why is it necessary to infiltrate them with police agents and to set them up?


Many Americans would reply that “their” government would never even dream of killing Americans by hijacking airliners and destroying buildings in order to advance a government agenda. But on February 3, National Intelligence Director Dennis Blair told the House Intelligence Committee that the U.S. government can assassinate its own citizens when they are overseas. No arrest, trial, or conviction of a capital crime is necessary. Just straight out murder.


Obviously, if the U.S. government can murder its citizens abroad it can murder them at home, and has done so. For example, 100 Branch Davidians were murdered in Waco, Texas, by the Clinton administration for no legitimate reason. The government just decided to use its power knowing that it could get away with it, which it did.


Americans who think “their” government is some kind of morally pure operation would do well to familiarize themselves with Operation Northwoods. Operation Northwoods was a plot drawn up by the U.S. Joint Chiefs of Staff for the CIA to commit acts of terrorism in American cities and fabricate evidence blaming Castro so that the U.S. could gain domestic and international support for regime change in Cuba. The secret plan was nixed by President John F. Kennedy and was declassified by the John F. Kennedy Assassination Records Review Board. It is available online in the National Security Archive. There are numerous online accounts available, including Wikipedia. James Bamford’s book, Body of Secrets, also summarizes the plot:
“Operation Northwoods, which had the written approval of the Chairman [Gen. Lemnitzer] and every member of the Joint Chiefs of Staff, called for innocent people to be shot on American streets; for boats carrying refugees fleeing Cuba to be sunk on the high seas; for a wave of violent terrorism to be launched in Washington, D.C., Miami, and elsewhere. People would be framed for bombings they did not commit; planes would be hijacked. Using phony evidence, all of it would be blamed on Castro, thus giving Lemnitzer and his cabal the excuse, as well as the public and international backing, they needed to launch their war.”

Prior to 9/11 the American neoconservatives were explicit that the wars of aggression that they intended to launch in the Middle East required “a new Pearl Harbor.”


For their own good and that of the wider world, Americans need to pay attention to the growing body of experts who are telling them that the government’s account of 9/11 fails their investigation. 9/11 launched the neoconservative plan for U.S. world hegemony. As I write the U.S. government is purchasing the agreement of foreign governments that border Russia to accept U.S. missile interceptor bases. The U.S. intends to ring Russia with U.S. missile bases from Poland through central Europe and Kosovo to Georgia, Azerbaijan and central Asia. [see www.globalresearch.ca/index.php?context=va&aid=17709 ] U.S. envoy Richard Holbrooke declared on February 20 that al Qaida is moving into former central Asian constituent parts of the Soviet Union, such as Tajikistan, Kyrgyzstan, Uzbekistan, Turkmenistan, and Kazakhstan. Holbrooke is soliciting U.S. bases in these former Soviet republics under the guise of the ever-expanding “war on terror.”


The U.S. has already encircled Iran with military bases. The U.S. government intends to neutralize China by seizing control over the Middle East and cutting China off from oil.


This plan assumes that Russia and China, nuclear armed states, will be intimidated by U.S. anti-missile defenses and acquiesce to U.S. hegemony and that China will lack oil for its industries and military.


The U.S. government is delusional. Russian military and political leaders have responded to the obvious threat by declaring NATO a direct threat to the security of Russia and by announcing a change in Russian war doctrine to the pre-emptive launch of nuclear weapons. The Chinese are too confident to be bullied by a washed up American “superpower.”


The morons in Washington are pushing the envelop of nuclear war. The insane drive for American hegemony threatens life on earth. The American people, by accepting the lies and deceptions of “their” government, are facilitating this outcome.

Paul Craig Roberts is a frequent contributor to Global Research. Global Research Articles by Paul Craig Roberts

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China Could Build Up Nuclear Capability to Counter U.S. Missile Shield


Global Research, February 25, 2010

MOSCOW — China could strengthen its nuclear capability in response to U.S. global missile defense plans, a Russian military expert said on Wednesday.
“At present, China has a very limited nuclear potential, but my recent contacts with Chinese military representatives indicate that if the United States deploys a global missile defense system, in particular in the Far East, China will build up its offensive capability,” said Lt. Gen. Yevgeny Buzhinsky, former department deputy head in the Russian Defense Ministry.
He did not elaborate on how a potential missile shield could be countered with nuclear weapons or why it would threaten China.
So far Washington has been mostly preoccupied with a missile shield in Central Europe and says it is needed to counter potential Iranian strikes.

In a move to ease Moscow\’s concerns, Obama last year scrapped plans to deploy interceptor missiles in Poland and a radar system in the Czech Republic.
Earlier this month, however, Romania and Bulgaria said they were in talks with Obama\’s administration to deploy elements of the U.S. missile shield on their territories from 2015.

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Russia Threatens to React to NATO Expansion

Global Research, February 25, 2010

MOSCOW — Russia will have to respond as it is concerned by NATO\’s active eastward expansion and the U.S. plans to deploy elements of a missile defense system in Europe, Russia\’s top military officer said on Wednesday.

“If we say that we should tackle possible threats together, we should respect each other and trust each other instead of strengthening military blocs near the Russian border,” Gen. Nikolai Makarov, the chief of the General Staff of Russia\’s armed forces, said on the Russia Today TV channel.

“This means we have to take appropriate measures in response,” Makarov said.


As for Poland\’s repeated call for demilitarization of Russia\’s western region, Makarov said no nuclear weapons had been deployed in the Baltic exclave of Kaliningrad.

“Last year we withdrew more than 600 tanks, about 600 armored vehicles and about 600 pieces of artillery from the Kaliningrad region. In return we\’re getting a buildup of the missile defense system. Double standards alarm us,” he said.


The general said the missile shield was designed to defend illusory air strikes from Russia. “There are concerns that this missile defense system is directed against Russia.”


A new Russian military doctrine approved by President Dmitry Medvedev earlier this month defines NATO enlargement and the deployment of missile defense systems as main external threats of war Russia is facing.

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Towards a Global Systemic Crisis of the World Economy

Global Research, February 18, 2010
LEAP/E2020 is of the view that the effect of States’ spending trillions to « counteract the crisis » will have fizzled out. These vast sums had the effect of slowing down the development of the systemic global crisis for several months but, as anticipated in previous GEAB reports, this strategy will only have ultimately served to clearly drag States into the crisis caused by the financial institutions.

Therefore our team anticipates, in this 42nd issue of the GEAB, a sudden intensification of the crisis in the second half of 2010, caused by a double effect of a catching up of events which were temporarily « frozen » in the second half of 2009 and the impossibility of maintaining the palliative remedies of past years.

As a matter of fact, in February 2010, a year after us stating that the end of 2009 would mark the beginning of the phase of global geopolitical dislocation, anyone can see that this process is well established: states on the edge of bankruptcy, remorseless rise in unemployment, millions of people coming to the end of their social security benefits, falling wages and salaries, limiting of public services and disintegration of the global governance system (failure of the Copenhagen summit, growing Chinese/US confrontation, return of the risk of an Iran/Israel/USA conflict, wars worldwide… (1)). However, we are only at the start of this phase for which LEAP/E2020 will supply a likely timeframe in the next GEAB issue.

The sudden intensification of the global systemic crisis will be characterised by the acceleration and/or strengthening of five fundamental negative trends:
. the explosion of the bubble in public deficits and a corresponding increase in state defaults
. the fatal impact of the Western banking system with mounting debt defaults and the wall of debt coming to maturity
. the inescapable rise in interest rates
. the increase in issues causing international tension
. a growing social insecurity.

In this GEAB issue our team expands on the first three trends of these developments including an anticipation on Russia’s position in the face of the crisis, as well as, of course, our monthly suggestions.

In this public announcement, we have chosen to analyse the « Greek case », on the one hand because it seems indicative of what 2010 has in store for us, and on the other because it is a perfect illustration of the way in which news and information on the world crisis is moving towards « make-believe news » between blocs and interests which are increasingly in conflict. Clearly it is a « must » to learn how to decipher worldwide news and information in the months and years to come which will be a growing means of manipulatory activity.



Progression of the percentage of net new U.S. debt bought by China, net new U.S. government borrowing, percentage of outstanding U.S. Treasuries owned by China (2002-2009) – Sources: US Treasury, Haver Analytics, New York Times

The five characteristics which make up the « Greek case » into the tree with which one tries to hide the forest

Let’s take a look at the « Greek case » which has concerned the media and experts for several weeks now. Before entering into the detail of what is happening, there are five key points to our anticipation on the subject:
1. As we stated in our anticipations for 2010, which appeared in the last GEAB issue (GEAB N°41, the Greek problem will have disappeared from the international media’s radar several weeks from now. It is the tree used to hide both a forest of much more dangerous sovereign debt (to be precise that of Washington and London) and the beginning of a further fall in the world economy, led by the United States (2).
2. The Greek problem is an internal issue for the Eurozone and the EU, and the current situation provides, at last, a unique occasion for the Eurozone leaders to require Greece (a case of « failed enlargement » since 1982) to leave its feudal political and economic system behind. The other Eurozone countries, led by Germany, will do the necessary to make Greek leaders bring their country into the XXIst century in exchange for their help, at the same time making use of the fact that Greece only represents 2.5% of Eurozone GDP (3) to test the stabilisation mechanisms that the Eurozone needs in times of crisis (4).
3. Ango-Saxon leaders and media are using the current situation (just like last year with the so-called banking tsunami coming from Eastern Europe which was going to carry the Eurozone away with it (5)) to hide the catastrophic progression of their economies and public debt and attempt to weaken the attractiveness of the Eurozone at a time when the USA and the United Kingdom have increasing difficulty in attracting the capital which they so desperately need. At the same time Washington and London (which, since the coming into effect of the Lisbon Treaty is completely excluded from any management of the Euro) would be overjoyed to see the IMF, which they control completely (6), brought into Eurozone management.
4. Eurozone leaders are very happy to see the Euro fall to 1.35 against the Dollar. They well know that it won’t last because the current problem is the fall in the value of the Dollar (and the Pound Sterling), but they appreciate this « whiff of oxygen » for their exporters.
5. The speculators (hedge funds and others) and banks heavily involved with Greece (7), have a common interest in trying to bring about rapid Eurozone financial support for Greece, since otherwise the rating agencies will, unintentionally, pull a fast one on them if the Europeans refuse to dig into their pockets (like the scandalous actions of Paulson and Geithner over AIG and Wall Street in 2008/2009): indeed a lowering of Greece’s rating will plunge this small world into the throes of serious financial losses if, for the banks, their Greek loans are similarly devalued, or if their bets against the Euro don’t work out in due course (8).


2008 comparison of the deficits and Eurozone GDP of Portugal, Ireland, Greece, Spain, France and Germany – Source: Der Spiegel / European Commission, 02/2010

Goldman Sachs’ role in this Greek tragedy… and the next sovereign defaults

In the « Greek case », just like in every suspense story, a « bad guy » is needed (or, following the logic of an old-style tragedy, a « deus ex machina »). In this phase of the global systemic crisis, the role of the « bad guy » is usually played by one of Wall Street’s big investment banks, in particular by the leader of the gang, Goldman Sachs. The « Greek case » is no different as indeed this New York investment bank is directly implicated in the budgetary conjuring tricks which allowed Greece to qualify for Euro entry, whilst its actual budget deficits would have disqualified it. In reality it was Goldman Sachs who, in 2002, created one of its cunning financial models of which it holds the secret (9) and which, almost systematically resurfaces several years later, to blow up the client. But what does it matter, since GS (Goldman Sachs) profits were the beneficiary!

In the Greek case what the investment bank proposed was very simple: raise a loan which didn’t appear in the budget (a swap agreement which enabled a ficticious reduction in the size of the Greek public deficit (10). The Greek leaders at the time were, of course, 100% liable and
should, in LEAP/E2020′s opinion, be subjected to Greek and European political and legal process for having cheated the EU and their own citizens within the framework of a major historic event, the creation of the single European currency.

But, let’s be clear, the liability of the New York investment bank (as an accomplice) is just as great, especially when one is aware of the fact that Goldman Sachs’ vice-president for Europe was, at the time, a certain Mario Draghi (11), currently President of the Italian Central Bank and a candidate (12) to succeed Jean-Claude Trichet at the head of the European Central Bank (13).

Without wishing to pre-judge Mr. Draghi’s role in the affair of the loan manipulating Greece’s statistics (14), one should ask oneself if it wouldn’t be worthwhile to question his involvement in the affair (15). In a democracy, the press (16), like parliaments (in this case Greek and European), are expected to take on this task themselves. Considering the importance of GS in world financial affairs these last few years, nothing that this bank does should leave governments and legislators indifferent. It is Paul Volcker, current head of Barack Obama’s financial advisors, who has become one of the strongest critics of Goldman Sachs’ activities (17). We already had the occasion to write, at the time of the election of the current US President, that he is the only person in his entourage having the experience and skills to push through tough measures (18) and who, at this moment, knows what, or rather whom, he is talking about.

With this same logic, on the issue of transparency in financial activities and state budgets and using the ill-fated role of Goldman Sachs and of the large investment banks in general as an illustration, LEAP/E2020 takes the view that it would be beneficial for the European Union and its five hundred million citizens, to exclude former managers of these investment banks (19) from any post of financial, budgetary and economic control (ECB, European Commission, National Central Banks). The mixing of these relationships can only lead to even greater confusion between public and private interests, which can only be to the detriment of European public interests. To begin with, the Eurozone should immediately require the Greek government to stop calling on the services of Goldman Sachs which, according to the Financial Times of 01/28/2010, it still uses.

If the head of Goldman Sachs believes he is « God » as he described himself in a recent interview (20), it would be prudent to consider that his bank, and its lookalikes, can seriously behave like devils, and it is therefore wise to draw all the consequences. This piece of advice, according to our team, is valid for the whole of Europe, as well as every other continent. There are « private services » which clash with « public interests »: just ask Greek citizens and American real estate owners whose houses have been repossessed by the banks!

To conclude, our team suggests a game to convince those who seek where the next sovereign debt crisis will surface: simply look for those states which have called upon Goldman Sachs’ services in the last few years and you will have a serious lead (21)!

Read More

Notes
(1) The recent statements of G. W. Bush’s Secretary to the Treasury, Hank Paulson, about the fact that Russia and China plotted to bring down Wall Street in the autumn of 2008 show the extent of the big global players’ paranoia. Source: Daily Mail, 01/29/2010
(2) During the last four years our team has regularly exposed the anomalies in calculating US GDP. We will make no further comment here on this very « Greek » aspect of American statistics. As to the development of the American economy over the next few months, it is sufficient to note that the Truck Tonnage Index went into freefall in January 2010, just as it did at the end of the first half of 2008. Source: USAToday, 02/11/2010
(3) See the chart below which puts the « Greek problem » into proportion against Eurozone GNP.
(4) For which GEAB has emphasized the necessity for four years, as well as the wide public support (an average of more than 90% according to GlobalEurometre monthly polls) a Eurozone economic governance could count on.
(5) As a reminder here, GEAB N°33 was one of the rare media sources which, in Spring 2008, revealed the dishonest and manipulative aspects of the big fear of a « banking tsunami » coming from Eastern Europe which was supposed to carry away the Eurozone banking system. At the time, the Euro had fallen to much lower levels than those seen today…only to rise again several weeks later. For those who wish to understand the current media position, we suggest a re-read of the GEAB N°33 public communiqué.
(6) The fact that a Frenchman is its head changes nothing.
(7) Source: Le Figaro, 02/12/2010
(8) That said, media manipulation in this area is remarkable. These last few days one has seen/read/heard almost everywhere that huge sums have been bet on a fall in the Euro, some eight billion US Dollars. In fact this « huge sum » is only a drop in the ocean of the world currency markets which turn over several hundred billion USD a day. Source: Financial Times, 02/08/2010
(9) With the same highly constructive regard for the countries where it operates as that which led it, in the United States in 2006/2007, to provoke a fall, for its own benefit, in the value real estate based financial products which it had sold to its own clients.
(10) Sources: Spiegel, 08/02/2010; Le Temps, 13/02/2010; Reuters, 09/02/2010
(11) During Italy’s preparation for Euro entry, he was Director General of the Italian Treasury. Sources: Bank of Italy; Wikipedia; Goldman Sachs.
(12) Very strongly supported by the London and American financial milieux, to which we have already alluded several months ago in one of our reports… and, of course, by Silvio Berlusconi. Source: Sharenet/Reuters, 02/10/2010
(13) His strongest adversary is Axel Weber, current head of the Bundesbank.
(14) What would be surprising is that the European head of the bank making a loan intended to hide a portion of a country’s public deficit, and himself the former Treasury head of a neighbouring country, should not be aware of such an undertaking.
(15) And, considering his past positions, one can only appreciate his sense of humour when he calls for a reinforcement of Eurozone economic management. Source: Les Echos, 02/13/2010.
(16) Which, for the present, satisfies itself by copying articles from the Anglo-Saxon press casting the Greek case in the role of « wrecker of world markets » repeating at length that the Euro will fall… whilst it trades at a level which the same media thought it impossible to achieve only four years ago.
(17) Source: Reuters, 02/12/2010
(18) He belongs to that generation of Americans who built the « post-war US empire », who know its weak points and exactly how it works, contrary to Summers, Geithner and others like Rubin. Our team rarely compliments Barack Obama, but if he continues to listen to the likes of Paul Volcker, he is definitely moving in the right direction.
(19) Our team knows, from first-hand knowledge, that there once was a time, thirty years or so ago, when investment bankers would take action having the long term interests of their
clients at heart. This period is long gone and now they only act in their own short-term interests. From this, we should draw the inevitable conclusions and exclude them access to key posts in the public service, rather than try and orm their behavior. If there were child investment bankers (as there are child soldiers) one could, perhaps, hope to save a number of them from their addiction to short-term profits, but for adult investment bankers, it’s far too late.
(20) Source: Times, 11/08/2009
(21) For the private sector, ask Lehman Brothers, AIG…they will confirm its accuracy.
Global Research Articles by LEAP

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The Future of the Dollar

Global Research, February 18, 2010
The World is concerned that the dollar cannot play the role of the main reserve currency any longer after the financial crisis sparked by the collapse of the U.S. mortgage market led to the worst global recession since the 1930s. The Government’s stimulus packages, financial bailouts, the need to support liquidity in Treasuries, keeping interest rates at the lowest level under the circumstances of low economic growth, high unemployment and low tax collection make it print more dollars. This leads to a high risk of substantial inflation, or hyperinflation in a long-run.

With a $12.3 trillion national debt and $55 trillion in unfunded obligations for programs such as Social Security, Medicare and Medicaid, with total Federal Reserve and Treasury bailout commitments now at $11.8 trillion, of which $3.6 trillion has already been spent the U.S. need to take steps immediately to protect themselves from the potential loss of the purchasing power of their U.S. Dollars, inflation.us warns.

Although there is still no significant inflation data in the United States international stock and commodity markets grew abnormally within the last eleven months. Analysts called it the “flight from the dollar” or “diversifying risks.”

There are many factors evidencing against the future of the dollar as a global reserve currency. In the present article futureofdollar.com pays attention to the crucial points of analysis after conducting an extensive research on the topic.

Part I

Weak Fundamentals of the U.S. Economy

Nobel Prize winner Paul Krugman states that “a country whose fundamentals are persistently and predictably deteriorating will necessarily have a [currency] crisis at some point.” (1)
1. National Debt

In the middle of February 2010, President Obama signed into law the bill increasing the public debt ceiling from $12.394 trillion to $14.294 trillion. This is a second increase in the upper limit on the national debt in less than two months.

Last time, in December, House Majority Leader Steny Hoyer commented that the Congress simply had no other choice: otherwise the United States would have to default on their debt obligations what would be another catastrophe for financial markets. (2)

The Peterson-Pew Commission on Budget Reform stated that “the United States would almost certainly experience a debt driven crisis,” that “could unfold gradually or it could happen suddenly, but with great costs either way.” “The excessive debt would. . . affect citizens in their everyday lives by harming the American standard of living through slower economic growth and dampening wages, and shrinking the government’s ability to reduce taxes, invest, or provide a safety net.” (3)
2. Unemployment

This past January, the economy lost 20,000 jobs after loosing 150,000 jobs in December, and the unemployment rate was 9.7 percent. (4)

The unemployment rate fell from 10.0 to 9.7 percent in January. According to Reuters “a sharp increase in the number of people giving up looking for work helped to depress the jobless rate. The number of \’discouraged job seekers\’ rose to 1.1 million in January from 734,000 a year ago.”
3. Budget deficit

IMF’s Managing Director Dominique Strauss-Kahn noted at the 10th Annual Herzliya Conference in Tel Aviv that the global crisis had created a problem of fiscal sustainability for many countries that could take decades to fix because of the huge debts built up during the crisis, especially in developed countries. (5)

The United States reached a record budget deficit of $1.415 trillion in fiscal year 2009 that ended in September. (6) The deficit will probably again exceed one trillion dollars in the current fiscal year as it is already over $400 billion.

The excess of spending over revenue in the United States rose to $91.9 billion in December 2009, as opposed to a deficit of $51.8 billion in December 2008, the Treasury Department announced in its monthly budget statement. The U.S. has posted a record 15 straight monthly deficits. (7)

In the beginning of February 2010 Obama transmitted a $3.8 trillion budget for 2011 to the Congress with a record $1.6 trillion deficit. (8)

During the debate on the national debt the Senate “rejected a proposed bipartisan commission to recommend ways to reduce the U.S. budget deficit,” Bloomberg reported. “The legislation would have required that the panel’s recommendations be voted on by Congress without being amended.” (9)
4. Financial sector

Recent Bank of America’s and Citigroup’s losses for the fourth quarter of 2009 and inability to repay the bailout funds without additional stock offering, Morgan Stanley’s low profits, and J.P. Morgan Chase\’s retail division loss confirm a suspicion that the U.S. banks’ economic conditions are not very strong putting in doubt health of the financial sector as a whole.
“Loan demand continued to decline or remained weak in most Districts.” (10)
“A number of Districts reported that credit quality continued to deteriorate.” (11)
5. Home Sales
Existing-home sales fell 16.7 percent in December 2009 “after first-time buyers rushed to complete sales before the original November deadline for the tax credit,” the National Association of Realtors reported. (12)
According to the U.S. Bureau of the Census sales of new single-family houses declined 7.6 percent in December 2009, following a drop of 9.3 percent in November. Bloomberg noted that for all of 2009, sales declined 23 percent to 374,000, the lowest level since records began in 1963. (13)
6. Economic impact of U.S. international military operations

The cost of conducting wars in Iraq and Afghanistan pushed the budget into the red during the presidency of George W. Bush. The situation deteriorated after the beginning of the financial crisis when the government adopted measures such as stimulus packages, financial bailouts, the need to support liquidity in Treasuries, etc. Moreover, early in December 2009 it has increased its nonproductive expenses by approving 30,000 troops to be sent to fight in Afghanistan.

All economists agree that one of the basic nonmonetary reasons of inflation is the existence of significant nonproductive government expenses such as military expenses.

Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, said Obama may have too much on his plate. “You can’t fight a war, a financial crisis, a recession, and add health-care coverage to the uninsured at the same time,” he said. “It is simply the recipe for disaster.” (14)

However important goals of the war could be, military operations are, undoubtedly, very costly for U.S. citizens especially at the time of the financial crisis and growing deficits. Moreover, the situation is not getting better considering that around 40 percent of the war financing has been borrowed from abroad, Joseph Stiglitz, the Nobel Prize Winner, shows in his research “The Three Trillion Dollar War: The Real Cost of the Iraq Conflict.”

Explaining why wars are expensive he points out that military expenditures are not only limited to direct operation costs but also include (the bigger part) human casualties, future disability costs, loss of income, increased oil prices, opportunity costs, veterans’ social welfare, nonproductive spending, lo
ss of confidence in the future economic situation, increase in the national debt, and so on.
“If we try to stay the course, we are going to spend more and more money,” Stiglitz stresses. “The fact that we financed the war totally by deficits means that when 10 years from now we decide we want to repay that, which I don’t know if we will, the amount that we will have to raise our taxes will be that much larger because the debt will be that much larger.”
7. China’s peg to the dollar

So far China is enjoying low yuan rate giving its exports competitive advantage in relation to those countries with appreciating currencies against the U.S. dollar.

As the result China is actually “stealing” jobs from many countries since with appreciating currencies their companies are not able to compete with Chinese producers.

In relation to the United States this means that the country should not count on sooner recovery. China’s peg to the dollar makes imports into the U.S. cheaper. This supports high level of unemployment in America. Unemployment prevents the growth of GDP and reduces revenues.

Part II

Lack of Coincidence

Defining major reasons of currency crises Paul Krugman states that the most important is a lack of confidence. The “investor lack of confidence – is a defining feature of a currency crisis,” he argues. (15)

Below are opinions of a number of people from different parts of the world whom many of us know quite well. Their opinions concern the U.S. dollar and the U.S. economy.

Nouriel Roubini, the New York University professor who predicted the financial crisis, said that the greenback may weaken for the next three years. (16)

Warren Buffett, a successful international investor: “There is the likelihood of significant inflation down the road.” (17)

Robert B. Zoellick, the World Bank President: “There is little the United States can do about the sinking value of the dollar except restore growth in its economy.” (18)

George Soros, a successful international investor: “Irrespective of the situation in the stock markets or condition of the economy we shall see further shift from the dollar into real assets in a long run.” (19)

Jim Rogers, a successful international investor: “Printing money to help the U.S. economy will weaken the greenback and Treasuries in a long run.” (20)

Joseph Stiglitz, Nobel Laureate in Economics: The greenback will continue to head downward for the time being, given the huge U.S. trade deficit and global trade imbalance. (21)

Fan Gang, a prominent economist and adviser to China\’s central bank: “This crisis is a U.S. dollar crisis, which takes a relatively long time to clear up. The problem involves the U.S. currency and U.S. debt; eventually it has to be solved through U.S. dollar depreciation.” (22)

Yuri Luzhkov, City of Moscow Mayor, Russia: The world is on the brink of a radical devaluation of the American currency. Therefore, Russia has to abandon its dependency on the dollar as soon as possible. American currency reserves are supported by nothing and industrial production in this country is very low. (23)

The list of well-known people with similar thinking is endless. In its research futureofdollar.com faced a difficulty of finding successful investors, economists or foreign politicians with the opposite thinking. There are just a few of them. Most of them are the U.S. government officials whose job is to restore the confidence in the U.S. economy with a part of this job being speaking in ‘positive’ terms.

People in this group either believe that:
*the recession is over and the U.S. economy will have a sharp rebound, or
*that the dollar will remain the primary reserve currency for a long time because during this last financial crisis investors found the dollar a safe haven, or
*that there is no inflation threat relying on the U.S. government data, or
*simply stating that “we will sink or swim with the dollar.”

For instance, Barack Obama is confident that the dollar is “extraordinarily strong” because investors are confident in the ability of the U.S. to lead a worldwide recovery. (24)

The Chairman of the U.S. Federal Reserve Ben Bernanke believes that U.S. asset prices aren’t out of line with underlying values, and central bank policy will ensure that the “dollar is strong.” (25)

The U.S. Treasury Secretary Timothy Geithner forecasts that the dollar will remain the world\’s “dominant reserve currency.” (26)

Therefore, we came to a conclusion that, unfortunately, the U.S. economy and the dollar are losing confidence. The U.S. government must work even harder now to restore it.

Part III

Diversification Out of the Dollar

It is hard to argue that the future of the dollar nowadays significantly depends on such developing countries as China, India, Brazil, Russia, and others. These countries accumulate very large dollar reserves and the U.S. debt.

Let’s explore their recent positions regarding the U.S. dollar with an attempt to predict its future.
1. China

Already for an extended period of time China was quite aggressive in diversifying its reserves and protecting from weakening dollar, recommending its private sector to do the same.

The Chinese Ministry of Finance said in the beginning of September 2009 that it would issue 6 billion yuan worth of government bonds in Hong Kong, a major step to internationalize its currency at a time of concern about the dollar. (27)

Same month China bought the equivalent of $50 billion of the first bond sale by the International Monetary Fund, a purchase that might raise Beijing’s standing in the fund and help the government’s quiet campaign to expand the reach of its currency. China took the unusual step of paying for the IMF bonds with 341.2 billion yuan — which is not traded on global markets — rather than dollars. (28)

The country signed currency agreement with Argentina and agreed to credit South Korea, Malaysia, Indonesia and Belarus with its own currency. (29)

In the mid-September 2009, the International Monetary Fund announced that it was going to sell 403 tons of gold. Chinese central bank showed its willingness to buy the whole offer. (30)

The People’s Bank of China showed its intention to decrease its dollar reserves. Chinese authorities will increase their euro and yen reserves. (31)

China and Brazil established international payments in national currency of the Republic of China. Zhuhai Geli corporation received a transfer of several million yuan from San Paolo in the fall of 2009. (32)

Foreign investments of Chinese companies rose in the 3d quarter of 2009 reaching $20,5 billion. The number is almost three times higher as opposed to the last year statistics for the same period of time, as data of the Chinese Ministry of Trade showed. (33)

The country was seeking to expand its African oil reserves by bidding for up to a sixth of Nigeria\’s crude reserves constituting approximately 6 billon barrels. Valuing near $30-50 billion Chinese offer is higher than that of the current owners. China has been buying oil resources around the World for the second year already. (34)

Chinese companies may invest about $ 4,4 billion into Peru’s mining sector within the next three years, said Bloomberg referring to the statement made by the Prime Minister o
f Peru Javier Velasquez. (35)

Nearly 44% ($14,3 billion) of the total volume of China’s investments within the first nine months of 2009 were coming into mining and production sector. Representative of the Asian Development Bank noted that investing in the mining sector by purchasing stocks corresponded to a long-term strategy of the country to achieve resource security. (36)

China Investment Corporation (CIC), a sovereign wealth fund responsible for managing part of Chinese foreign exchange reserves IR_} “has been quietly accumulating stakes in resource firms including Canada\’s Kinross Gold Corp. and Potash Corp. of Saskatchewan according to a filing with securities regulators.” (37)

CIC chairman Lou Jiwei “recently said that CIC would focus on investing in emerging markets in 2010. In October, the CIC chairman said the fund had allocated $110-billion for foreign investments and had already deployed about half of that.” (38)
“In addition to its $3.5-billion interest in Teck, CIC has a $652-million stake in Brazilian iron ore and nickel giant Vale SA, a $4.7-million interest in copper miner Freeport-McMoRan, and a $9.1-million holding in steel producer ArcelorMittal.” CIC has also acquired stakes in a number of high-profile brand name companies in North America such as Research In Motion Ltd., Apple Inc., News Corp., and AIG Inc. (39)
2. India

IMF sold 200 metric tons of gold to India in the beginning of November 2009. The $6.7 billion sale is “the biggest single central-bank purchase that we know about for at least 30 years in such a short period,” said Timothy Green, author of “The Ages of Gold.” “The only comparable event was the U.S.’s steady purchases in the 1930s and 1940s.” (40)
3. Brazil

Brazilian Central Bank president Henrique Meirelles said the country is considering the gradual elimination of the U.S .dollar in trade with China, Russia and India. (41)

In October 2009, the Brazilian Central bank announced that an agreement was reached with Uruguayan economic authorities to apply the so called SML system in bilateral trade operations. (42)

Brazilian Finance Minister Guido Mantega said that Brazil would spend 10 billion US dollars on buying International Monetary Fund bonds to boost the fund\’s resources. This “radical change” will help Brazil to diversify its resources, he added. (43)
4. Russia

The Central Bank of Russia increased the share of Japanese yen and Swiss franc in reserves in the middle of 2008. Japanese yen currently accounts for around 2 percent of Russia\’s reserves. The franc’s share is smaller because of the limited liquidity.

Russian reserves consist now mainly of the U.S. dollar and the euro. However, it is quite possible that Russia will add Chinese yuan in there, said Alexei Kudrin, Russian Finance Minister. The lack of convertibility of the China’s currency and of the free movement of capital was the main current obstacle. (44)

Brazil and India are interested in settling bilateral trade with Russia in national currencies, said Alexander Potemkin, an advisor to the Russian central bank chairman, echoing Moscow\’s drive for more use of national currencies and less of the U.S. dollar. “There was an initiative within the framework of the BRIC. These countries intend to create the conditions for direct payment for trade in national currencies,” he said. He also said that Russia had a reach experience of reciprocal payments in national currencies with China. He estimated that settlements in yuan and rouble already account for around 2 percent of Russia\’s trade with China. (45)

Moscow also discusses trade in national currencies with other countries including Turkey and Vietnam. (46)

Russian central bank first deputy chairman Alexei Ulyukayev said in November 2009 that Russia was going to add the Canadian dollar to its gold and forex reserves in the next few months, but its share would be insignificant. (47)
5. Other countries

In April 2009 the Latin American leaders signed into effect a new South American currency, to be called the ‘sucre’. ALBA leaders (representing Venezuela, Cuba, Bolivia, Honduras, Nicaragua, and Dominica) say the sucre is necessary to help defray the regional effects of the world economic crisis by substituting their trade in dollars with a new alternative currency. The ALBA countries and their allies plan to use the virtual sucre by early 2010. (48)

In the second quarter ending in June 2009, central banks around the world invested 63 percent of their new cash reserves into euro and yen, and put only 37 percent into dollars. (49)

Kuwait, Saudi Arabia, Qatar and Bahrain signed in June 2009 an accord to create a joint monetary union council, a prelude to establishing a Gulf central bank and launching a monetary union and single currency. The remaining two members of the Gulf Cooperation Council (GCC), the UAE and Oman, did not sign after deciding to withdraw from the project. The GCC states have set 2010 as the target to launch the monetary union and single currency, but many experts believe that target is too ambitious and unrealistic. (50)

The International Monetary Fund sold 10 metric tons of gold to the central bank of Sri Lanka for about $375 million. The purchase is part of Sri Lanka’s plan to diversify its reserves and it has been gradually accumulating the metal in the past nine months. “Gold is a good anchor and hedge to have in these volatile circumstances,” said Nivard Cabraal, the bank’s governor. “We think it’s a good time to buy.” (51)

In the beginning of January 2010 Canada announced that it might sell about 1 billion euros of 10-year bonds, its first issue of debt in the European currency in more than a decade. This strategy will help attracting new investors, while debt denominated in U.S. dollars is becoming less popular among the creditors given the declining value of the U.S. currency. (52)

It is obvious that the trend of the diversification out of the dollar persisted through the whole year of 2009.

Part IV

Way Out

Peterson-Pew Commission on Budget Reform suggests that “the United States must show its creditors that it is serious about stabilizing the federal debt over a reasonable timeframe. Both spending cuts and tax increases will be necessary.”

Most of the economists would suggest that the anti-inflation strategy of the United States should include:
* suppression of inflation expectations and stimulation of savings;
* reaching balance between budget receipts and expenditures;
* increasing the mass of commodities; and
* strengthening national currency by establishing an unconditional priority of inflation targeting over other government programs (such as military expenses, unemployment rate regulation, influencing the national currency market, etc.).

Will the U.S. assume such a pain by reducing spending and fighting the deficits? Probably not, taking into consideration the words of Sir John Templeton, the John Templeton Foundation, who said in 2005: “The psychology all over the world is that people will not re-elect leaders who want them to be thrifty. The voters will elect the government that spends more money.” (53)

Many analysts are pretty sure that the weak dollar policy is beneficial to the U.S. Therefore, whatever the authorities say, there will be no resistance to dollar depreciation on their part.

Most experts already doubt that the solution of the probl
em depends much on the U.S. and call for global measures. “We must reform the international monetary system,” Yu Yongding, a former Chinese central bank adviser, stated in mid-November 2009. “A good monetary system should make us confident. But we don’t have confidence in the U.S. dollar now,” he added. (54)

George Soros, a global financier, is convinced that we “need a new currency system and actually the Special Drawing Rights do give you the makings of a system,” he told the Financial Times.

The Future of the Dollar

The future of the dollar is in jeopardy now as it is evident from the article.

This subject is the primary focus of futureofdollar.com. We follow latest developments in this area and provide our readers information from reliable sources.

This analysis is prepared by http://www.futureofdollar.com

Notes
(1) Paul Krugman, Currency Crises, 1997;
(2) Reuters, December 17, 2009;
(3) budgetreform.org, December 14, 2009;
(4) U.S. Department of Labor, February 5, 2010;
(5) IMF, January 31, 2010;
(6) The Department of the Treasury;
(7) Merco Press, January 13, 2010;
(8) Bloomberg, February 1, 2010;
(9) Bloomberg, January 26, 2010;
(10) Jan 2010 Beige Book;
(11) Ibid.;
(12) NAR, January 25, 2010;
(13) Bloomberg, January 27, 2010;
(14) Bloomberg, January 8, 2010;
(15) Paul Krugman, Currency Crises, 1997;
(16) Bloomberg, February 4, 2010;
(17) FOX Business Network, June 24, 2009;
(18) The Economic Times, November 13, 2009;
(19) Reuters, October 26, 2009;
(20) Bloomberg, October 28, 2009;
(21) The Korea Times, October 28, 2009;
(22) Reuters, December, 2009;
(23) RB.ru Russian Business, September 1, 2009;
(24) Bloomberg, March 24, 2009;
(25) Bloomberg, November 17, 2009;
(26) USA Today, March 25, 2009;
(27) DealBook, September 7, 2009;
(28) The Associated Press, September 3, 2009;
(29) The New York Times, September 4, 2009;
(30) CommodityOnline.com, September 21, 2009;
(31) RosBusinessConsulting, November 6, 2009;
(32) NEWSru.com, October 28, 2009;
(33) Bloomberg, 26 October 2009;
(34) Vedomosti, 28 September, 2009;
(35) Bloomberg, 25 November, 2009;
(36) ChinaPro.ru / Vedomosti, 25 November 2009;
(37) The Globe and Mail, February 8, 2010;
(38) Ibid.;
(39) Ibid.;
(40) Bloomberg, November 3, 2009;
(41) Merco Press, October 29, 2009;
(42) Ibid.;
(43) Bloomberg, October 4, 2009;
(44) Bloomberg, October 24, 2009;
(45) Reuters, November 25, 2009;
(46) Ibid.;
(47) Reuters, November 2009;
(48) Venezuelanalysis.com, April 17, 2009;
(49) CNBC, October 14, 2009;
(50) ArabianBusiness.com, October 11, 2009;
(51) Bloomberg, November 25, 2009;
(52) Bloomberg, January 5, 2010;
(53) NewsMas;
(54) Bloomberg, November 17, 2009.

Global Research Articles by futureofdollar.com

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The Real Reason for Sanctions Against Iran: America';s Quest for Global Miliitary Dominance

Global Research, February 17, 2010
The U.S.-sponsored drive to impose new economic sanctions on Iran has nothing to do with the noble cause of limiting proliferation of nuclear weapons on the planet. It is directly linked to the U.S. military doctrine of establishing \’full spectrum dominance\’ – i.e., military dominance on land, sea, air, and outer space over all other countries in the world. The logical extension of this doctrine is that only countries firmly allied to the U.S. government should be allowed to acquire nuclear weapons or to even develop the capacity to do so.


Israel , for example, is widely-believed to hold secret Nuclear weapons. Yet there is no call for sanctions or investigations of them. The reason is simple: They are a U.S. ally. India and Pakistan have declined to sign the nuclear non-proliferation treaty and have developed nuclear weapons. Yet there is no call for sanctions or investigations of them. The reason is simple: They are U.S. allies.

Iran and North Korea are being subjected to economic sanctions, calls for more sanctions, and even threats of military aggression against them The reason is again simple: They are not U.S. allies.

The principal of national sovereignty includes non-interference in a nations internal affairs by outside powers. It is an important cornerstone of real international peace and security, and among other things is related to accepting and respecting the cultural, political, and economic diversity of the world.

A key element of national sovereignty is that wars of aggression against other nations which have not attacked ones\’ own nation are prohibited under international law. Wars of aggression were declared illegal at the Nuremberg trials after World War II, which established the invasion of other nations by Germany as the type-case.

Subsequently, the United Nations General Assembly has enacted resolutions prohibiting military aggression, invasions, and occupations of one country by another – except in self-defence when the target nation had attacked first.

Iran , at this point, is only known to be developing nuclear power plants and materials. And it has never attacked the U.S. Yet Iran is being subjected to sanctions, calls for more sanctions, and threats of possible military aggression against them.

The Truth About the Non-Proliferation Treaty

As a signatory of the U.N. Nuclear non-proliferation treaty, Iran must not develop nuclear weapons.

However – and this is a crucial point – the non-proliferation treaty gives every signatory the sovereign right to voluntarily withdraw from the treaty on three months notice. After doing so, that country has the absolute right under international law to develop nuclear weapons on its own territory.


North Korea , which originally signed the treaty and later withdrew, has now the legal right to develop nuclear weapons. India, Pakistan, and Israel never signed the treaty and therefore also have had the legal right to develop nuclear weapons.


Instead of acknowledging these realities, western politicians and media have systematically concealed them from the public. In place of the truth they have repeated vague mantras like \’defying the international community\’ (i.e., not bending to the will of the U.S.).

In a typical example of this deceptive rhetoric, U.S. President Obama said a few days ago: “Despite the posturing that its nuclear power is only for civilian use … they in fact continue to pursue a course that would lead to weaponization, and that is not acceptable to the international community.”

The absence of any legal argument in this statement reflects the fact that there is no legal argument against Iran\’s nuclear energy program, and that even development of weapons would be legal if Iraq withdraws from the Nuclear Non-Proliferation treaty. Of course, Obama invoking the \’non-acceptance by the \’international community\’ does not mean the nations of the world; it\’s code for \’the U.S. and its allies\’.

U.S. Sanctions are part of Imperialism

To fully understand U.S. policy towards Iran and North Korea, we need to situate it in the wider attempt to extend its military machine across the world, and to remove any obstacles to its dominance.

There are currently 700 U.S. military bases outside the U.S., and it is engaged in a vast project to extend the reach of Nato by incorporating as many as possible of the former East European socialist states and former parts of the Soviet Union.

The U.S. is also seeking to militarily encircle both Russia and China with sea-based missile carrying ships, bases in neighboring states, hi-tech weapons on Taiwan, and the arming of small client anti-Russian states like Georgia. U.S. bases are also being built in the South American country of Columbia, right next door to Venezuela, a country which has sought to develop a socialist alternative to U.S. domination of the region.

U.S. opposition to Iran\’s nuclear program is intended to help ensure that the U.S. – and its nuclear armed major allies such as Britain, France, India, and Pakistan – can continue to dominate the world. It is also intended to weaken the ability of middle eastern countries to resist U.S. domination in their region.


Eric Sommer is a frequent contributor to Global Research. Global Research Articles by Eric Sommer

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;Economic Terrorism;: The Consequences are Poverty and Mass Unemployment


Before exposing exactly who the Economic Elite are, and discussing common sense ways in which we can defeat them, let’s take a look at how much damage they have already caused.

I: “Economic Terrorism”: Surveying the Damage

America is the richest nation in history, yet we now have the highest poverty rate in the industrialized world with an unprecedented amount of Americans living in dire straights and over 50 million citizens already living in poverty.

The government has come up with clever ways to down play all of these numbers, but we have over 50 million people who need to use food stamps to eat, and a stunning 50% of US children will use a food stamp to eat at some point in their childhood. Approximately 20,000 people are added to this total every day. In 2009, one out of five US households didn’t have enough money to buy food. In households with children, this number rose to 24%, as the hunger rate among US citizens has now reached an all time high.

We also currently have over 50 million US citizens without healthcare. 1.4 million Americans filed for bankruptcy in 2009, a 32% increase from 2008. As bankruptcies continue to skyrocket, medical bankruptcies are responsible for over 60% of them, and over 75% of the medical bankruptcies filed are from people who have healthcare insurance. We have the most expensive healthcare system in the world, we are forced to pay twice as much as other countries and the overall care we get in return ranks 37th in the world.

In total, Americans have lost $5 trillion from their pensions and savings since the economic crisis began and $13 trillion in the value of their homes. During the first full year of the crisis, workers between the age of 55 – 60, who have worked for 20 – 29 years, have lost an average of 25% off their 401k. “Personal debt has risen from 65% of income in 1980 to 125% today.” Over five million US families have already lost their homes, in total 13 million US families are expected to lose their home by 2014, with 25% of current mortgages underwater. Deutsche Bank has an even grimmer prediction: “The percentage of ‘underwater’ loans may rise to 48 percent, or 25 million homes.” Every day 10,000 US homes enter foreclosure. Statistics show that an increasing number of these people are not finding shelter elsewhere, there are now over 3 million homeless Americans, the fastest growing segment of the homeless population is single parents with children.

One place more and more Americans are finding a home is in prison. With a prison population of 2.3 million people, we now have more people incarcerated than any other nation in the world – the per capita statistics are 700 per 100,000 citizens. In comparison, China has 110 per 100,000, France has 80 per 100,000, Saudi Arabia has 45 per 100,000. The prison industry is thriving and expecting major growth over the next few years. A recent report from the Hartford Advocate titled “Incarceration Nation” revealed that “a new prison opens every week somewhere in America.”


Mass Unemployment

The government unemployment rate is deceptive on several levels. It doesn’t count people who are “involuntary part-time workers,” meaning workers who are working part-time but want to find full-time work. It also doesn’t count “discouraged workers,” meaning long-term unemployed people who lost hope and don’t consistently look for work. As time goes by, more and more people stop consistently looking for work and are discounted from the unemployment figure. For instance, in January, 1.1 million workers were eliminated from the unemployment total because they were “officially” labeled “discouraged workers.” So instead of the number rising, we will hear deceptive reports about unemployment leveling off.

On top of this, the Bureau of Labor Statistics recently discovered that 824,000 job losses were never accounted for due to a “modeling error” in their data. Even in their initial January data there appears to be a huge understating, with the newest report saying the economy lost 20,000 jobs. TrimTabs employment analysis, which has consistently provided more accurate data, “estimated that the U.S. economy shed 104,000 jobs in January.”

When you factor in all these uncounted workers — “involuntary part-time” and “discouraged workers” — the unemployment rate rises from 9.7% to over 20%. In total, we now have over 30 million US citizens who are unemployed or underemployed. The rarely cited “employment-participation” rate, which reveals the percentage of the population that is currently in the workforce, has now fallen to 64%.

Even based on the “official” unemployment rate, just to get back to the unemployment level of 4.6% that we had in 2007, we need to create over 10 million new jobs, and most every serious economist will tell you that these jobs are not coming back. In fact, we are still consistently shedding jobs, on just one day, January 27th, several companies announced new cuts of more than 60,000 jobs.

Due to the length of this crisis already, millions of Americans are reaching a point where the unemployment benefits that they have been surviving off of are coming to an end. More workers have already been out of work longer than at any point since statistics have been recorded, with over six million now unemployed for over six months. A record 20 million Americans qualified for unemployment insurance benefits last year, causing 27 states to run out of funds, with seven more also expected to go into the red within the next few months. In total, 40 state programs are expected to go broke.

Most economists believe that the unemployment rate will remain high for the foreseeable future. What will happen when we have millions of laid-off workers without any unemployment benefits to save them?

Working More for Less

The millions struggling to find work are just part of the story. Due to the fact that we now have a record high six people for every one job opening, companies have been able to further increase the workload on their remaining employees. They have been able to increase the amount of hours Americans are working, reduce wages and drastically cut back on benefits. Even though Americans were already the most productive workers in the world before the economic crisis, in the third quarter of 2009, average worker productivity increased by an annualized rate of 9.5%, at the same time unit labor cost decreased by 5.2%. This has led to record profits for many companies. Of the 220 companies in the S&P 500 who have reported fourth-quarter results thus far, 78% of them had “better-than-expected profits” with earnings 17% above expectations, “the highest for any quarter since Thomson Reuters began tracking data.”

According to the Bureau of Labor Statistics, the national median wage was only $32,390 per year in 2008, and median household income fell by 3.6% while the unemployment rate was 5.8%. With the unemployment rate now at 10%, median income has been falling at a 5% rate and is expected to continue its decline. Not surprisingly, Americans’ job satisfaction level is now at an all time low.

There are also a growing number of employed people who, despite having a job, are still living in poverty. There are at least 15 million workers who now fall into this rapidly growing category. $32,390 a year is not going to get you far in today’s economy, and half of th
e country is making less than that. This is why many Americans are now forced to work two jobs to provide for their family to hopefully make ends meet.

A Crime Against Humanity

The mainstream news media will numb us to this horrifying reality by endlessly talking about the latest numbers, but they never piece them together to show you the whole devastating picture, and they rarely show you all the immense individual suffering behind them. This is how they “normalize the unthinkable” and make us become passive in the face of such a high causality count.

Behind each of these numbers, is a tremendous amount of misery, the physical toll is only outdone by the severe psychological toll. Anyone who has had to put off medical care, or who couldn’t get medical care for one of their family members due to financial circumstances, can tell you about the psychological toll that is on top of the physical suffering. Anyone who has felt the stress of wondering how they were going to get their child’s next meal or their own, or the stress of not knowing how you are going to pay the mortgage, rent, electricity or heat bill, let alone the car payment, gas, phone, cable or internet bill.

There are now well over 150 million Americans who feel stress over these things on a consistent basis. Over 60% of Americans now live paycheck to paycheck.
Global Research, February 16, 2010
These are all basic things that every person should be able to easily afford in a technologically advanced society such as ours. The reason why we struggle with these things is because the Economic Elite have robbed us all. This amount of suffering in the United States of America is literally a crime against humanity.


David DeGraw is a frequent contributor to Global Research. Global Research Articles by David DeGraw

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Socialism or Barbarism: the Choice is Ours

Global Research, February 12, 2010
Time is of the essence. Given the descent into barbarism that the world is witnessing as a result of the breakdown in capitalism, there is a very real danger that US-led militarism could escalate even further from its existing criminal wars in Iraq and Afghanistan/Pakistan into an all-out conflagration with any number of countries designated to be geopolitical rivals or miscreants: China, Russia, Iran, North Korea, Venezuela, Cuba. History proves that this is always the brutal outcome when the profit system is threatened with total collapse.

For those committed to creating a world of social justice and peace, it is vital to communicate as widely as possible as to the precise cause of the present economic failure, with its consequent social misery and violence. Let’s not be under any illusions about the root of barbarism today: it is, as Rosa Luxemburg and others have pointed out, the failure of capitalism as a system of production and distribution to meet human needs in an equitable, democratic and sustainable way.

Equally vital in this hour is the need to put forward an alternative to barbarism in order to mobilise the majority of ordinary people ravaged by the capitalist kleptocracy; to provide a clear set of social, economic and political objectives. Otherwise, the kleptocrats – the corporate leaders, banks, financial gamblers and their political and military servants – will attempt purging the crisis through escalated war (and all the chaos and disinformation that will ensue).

What also needs to be communicated widely is that the objective of democratic control of the economy cannot be achieved within the two-party system of the US and most other western states. These parties have shown themselves to be willing partners-in-crime with the oligarchy, which also includes the leaders of labour unions who have served to emasculate workers and their rights.

To that end, the case must be made more than ever that socialism is a viable alternative to this barbarism. To save time and space here, readers can avail of several existing statements for practical, socialist change (for example, see www.wsws.org and www.workerscompass.org). In brief, the objective is to bring production under democratic control so that basic human needs for food and accommodation, meaningful work, health and education become the determinants of the economy – not the private profit of an elite that has evidently brought whole societies to their knees. As a first step, the major, vital industries (manufacturers, energy, communications and banks) must be properly nationalised, that is, brought under democratic control to meet needs democratically. A half-baked form of nationalism is already underway with taxpayer bailouts of automakers and banks. The trouble is that the kleptocrats are still receiving the lion’s share of financial rewards. So, any baulking by the oligarchy and their media mouthpieces over “public ownership” should be laughed at with derision.

In communicating the viability of socialism, the use of language needs to be precise in order to debunk myths and disinformation so as to help the constituency for change – the majority of citizens – retain their focus on the required direction for democratic change. Here are some myths and disinformation:

Myth 1: Capitalism runs on the supply and demand of free individuals exercising choices in a free market. This is a powerful myth because it deceptively conflates a deeply held democratic principle of freedom with economic workings. Whatever about early capitalism of two centuries ago and more, the present period of late capitalism is largely bereft of free markets and choices. Think of Boeing and Raytheon. These “emblems of American capitalism” would not survive without massive taxpayer subventions from the $710 billion that the US government lavishes on the Pentagon every year. President Obama recently congratulated top Wall Street bankers on receiving multi-million-dollar bonuses, saying that it was the manifestation of the American “free market” system. Given the monopoly of these banks, the ruin that they have plunged societies into, and the taxpayer bailouts to shore up the unseemly wealth of a financial elite, the espousal of such a myth by Obama is ludicrous. Also, just what is so free about the millions of workers who were compelled to take on reckless mortgage debts in order to make ends meet because their wages and livelihoods had been bled dry over decades by the oligarchy?

Myth 2: Centrally planned economies don’t work. Try telling that to the world’s top transnational corporations, all of whom plan their production and distribution operations rationally with massive government (taxpayer) intervention to facilitate their operations. Oil companies are a classic example. The biggest oil company in the world, Saudi Aramco, is estimated to be worth $7 trillion and dwarfs the likes of Exxon and Royal Dutch Shell. Aramco is rated as one of the most efficient international enterprises in terms of production, technological innovation and business. It is 100 per cent state-owned and bankrolls Saudi Arabia’s social development. In the real world, that kind of industrial success is more akin to socialism than notional free market capitalism. There is no reason why similar control could not be applied to all major industries, especially given recent developments in information technology (another centrally planned success!) which would ensure production and supply is geared to meet real social needs.

Myth 3: Socialism has been tried and doesn’t work, degenerating into despotic barbarism. References to the Soviet Union are a red herring. The Stalinist-type dictatorship came into being under specific historical circumstances, for example, the immediate attack on the Russian Revolution by the West, creating an inward-looking bureaucratic state run by a reactionary elite. Note also the deformities of the Second World War and the ensuing Cold War (see Jacques Pauwels, www.globalresearch.ca). Many supporters of socialism were among the most trenchant critics of the Soviet Union long before its collapse. And anyway, what if a crude attempt at creating socialism failed? Capitalist economies fail all the time throughout history, degenerating into despotic barbarism, as in the present.

Myth 4: Socialism is un-American. While the Stalinist caricature of socialism is contrary to the values of US citizens – and other democratic people – the principles of solidarity, equality, and opposition to elite power are not. The many accounts of socialist movements throughout American history, as documented by the late Howard Zinn, are testimony to that.

Myth 5: Socialism already exists in the form of the US oligarchy. This is a particularly wrong-headed myth. Some commentators have referred to the White House-Wall Street complex as Obama’s “Marxist/socialist entourage”. Paul Krugman, writing in the New York Times, describes the cozy relationship between government and financiers as “a kind of socialism”. Make no mistake: the deformed, dysfunctional economies of the US and Europe are the outcome of decades of capitalist misrule. To label the crisis wrongly with lazy terminology, as Krugman and others do, only serves to disinform the wider public as to the true cause of the problem and what can be a viable change of course.

Myth 6: The crisis is caused by “unfettered capitalism”. In other words, capitalism can be
controlled. It can’t. The entire history of the US – the unravelling of legislation and the bending of courts and the constitution by corporate lobbyists – is a classic case study in itself of how capitalism inexorably subverts democratic control and concentrates power and wealth for a minority, leaving the majority dispossessed and disenfranchised.

Myth 7: Class politics and class war is an anachronism. Ironically, just the opposite. The living standards of workers, their families and communities are being brutally savaged by a tiny class – the oligarchy. The constituency for radical political change in the US, Europe and elsewhere has probably never been bigger. And of those workers – whether blue or white collar – lucky enough to still have a job, just ask how many of them feel as if they are one pay cheque away from poverty. That amounts to a serious class of people with abundantly more common interest than the wealthy elite; a serious class of people who increasingly have “got nothing to lose except their chains”.

All the above is only a sketch of what kind of society and economy is achievable. More details can be added as people come together to work out, through the consensus of the “common good”, what they need to achieve. The point for now is to encourage the majority of people to work together; to think and act independently from the misrulers, with all their myths and self-serving disinformation; to be confident in the conviction that real democracy is achievable; that basic human needs can be met equitably; and that countries can co-exist in a true spirit of peaceful internationalism free from the barbarism of capitalist rivalry and war. Socialism is the way for this to be achieved, not just because it is morally right, but also because it is arguably a superior form of society and economy.

The emperor has no clothes…
inian.cunningham@gmail.com


Finian Cunningham is a frequent contributor to Global Research. Global Research Articles by Finian Cunningham

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Descent Into Barbarism: The US and NATO Wage War on the World

Global Research, February 9, 2010
The argument is won: capitalism as an effective system to organise society and provide for human needs has expired. The evidence is conclusive. Trillions of dollars to kickstart the economy in the US and Europe may have given an ephemeral lease of life to the financial class to spin the casino wheel once again, but it is more apparent by the day that the tentative “recovery” has spluttered to a standstill. Gridlocked by unprecedented levels of personal and national debts, the engine of production – the real economy – is in a state of rigor mortis.

This collapse has been a long time in the making. Decades of easy credit was up to now a way for the ruling class – government, corporations, financial institutions – to let the majority of workers subsidise the chronic loss in their livelihoods, which have been drained since the mid-1970s by the oligarchy’s self-aggrandisement from wage cutting, regressive taxation and public spending cuts. The political class – whether liberal or conservative, right or left – have facilitated this giant wealth-siphoning process.

However, the point is that the economic system is now objectively shown to be moribound. And it is impossible for so-called mainstream politicians to think of any other way of doing business. They are ideologically blind. Recall former British Prime Minister Margaret Thatcher’s arrogant assertion: “There is no alternative”. Likewise, US President Barack Obama insists on throwing billions more dollars at the banks and financiers on Wall Street. But that won’t kickstart an economy in which millions of workers are without jobs and homes or who are on crumby wages and up to their necks in debt. The profit system has hit an historic dead-end and this gridlock is a result of deep trends to do with the decline in capitalism as a mode of social production (falling wages and profits and the concomitant explosion in financial speculation and debts).

Widespread poverty and human misery is now seen on a massive scale in the so-called developed world. Some 40 million Americans, for example, are subsisting on food stamps. The distinction between “developed” and “developing” economies (always a myth anyway) is blurred. The ranks of the world’s long-suffering poor are swelled with dispossessed blue and white-collar workers and their families from across the US and Europe. Together more than ever, they stand shut out from those gated havens of obscene wealth for a global minority.

Similar historic junctures have been witnessed before when capitalism floundered from its inexorable tendency to make the rich richer and the poor poorer. Disturbingly, the release valve for the system and its bankruptcy has always been war. Death and destruction is the lender of last resort to an economic system that – despite itself – inevitably polarises wealth to an unworkable degree. The First and Second World Wars – claiming more than 70 million over a period of less than 10 years lives – were effectively the ultimate, grotesque bailouts.

In our time, war, it seems, has already begun. The US oligarchy and its NATO allies are waging a veritable war on the world: killing, disappearing and incarcerating millions of civilians in Iraq, Afghanistan and Pakistan – a war that is expanding into Yemen, Somalia and the rest of the Horn of Africa, with the militarisation of sea lanes and oceans (see Chossudovsky, www.Globalresearch.ca) and the setting up of “forward projecting” military and missile bases in every continent (see Rozoff, ditto). On top of ordinary poverty and misery, the world is truly seeing another historic descent into barbarism. Given this war-mongering dynamic, the growing US antagonism with Iran, Russia and China is far from an idle threat. It is the logical next step for a deeply illogical economic system.

But history is not inevitable. We are not necessarily programmed to repeat its horrors. A combination of global communications among citizens and political and social consciousness may be enough to prevent a military conflagration and overthrow the misrule of the oligarchy. What is needed is a) a widening of the recognition that capitalism as a system of social production is finished; and b) the case has to be confidently made that an alternative is very possible. That alternative is socialism (the subject of a further article). To those who remain skeptical, they should bear in mind the stark choice that Rosa Luxemberg foresaw for humanity: that is, socialism or barbarism. And we already have the latter.
inian.cunningham@gmail.com


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Will the US Meet Its Waterloo in Afghanistan and Iraq?

Global Research, February 9, 2010
Dear friends!


I am deeply honoured by being invited to hold this memorial lecture in honour of the late Anuradhu Ghandy, a great Indian revolutionary and intellectual.


At present, the US is waging two wars in West and Central Asia. In both of them the US have clear economic and strategic goals. A third war, one against Iran seems to be looming – the faithful British ally Blair mentioned Iran 58 times during the Chilcot testimony last week. As all these wars are directed against and conducted in Muslim countries they also take on the colour of what Huntington called Wars of Cultures.


This in itself is dangerous. These wars are becoming a factor in the rising tide of ethnical and religious contradictions. In Europe it is evident that the sharpened conflict about jobs and housing in the economic crisis between immigrants from Asia and Africa and local populations are being given religious and racial colouring by different reactionary groups.


The US seems to have learned from the British how to use and develop such contradictions in order to try to secure their own rule. They now develop the conflict between Shi\’a and Sunni in Iraq like the British developed the conflicts in Cyprus, Palestine and South Asia (Bengal!).


Possibly also with the same historically tragic long term results.


In both Iraq and Afghanistan the people have had to pay heavily -both materially and in dead and wounded – for the US war. At the same time it has proved impossible for the US and their more or less willing allies to gain a clear victory despite the fact that they have managed to install themselves militarily in the oil rich Iraq.


But what is generally important is that what is called the “War on Terror” has led to the militarisation of both the US and its allies; the long range effect in our countries has been the rise of modern police states. Even my own country – Sweden – has as a result seen the deterioration of traditional legal and civic rights.


But that the US and its empire in the longer run is doomed to failure is evident. No tree grows up into heaven. The US is a paper tiger, as Mao put it. It will follow the road of other world empires. The Roman and Spanish – and British. But that is a very general statement, it does not say when and how that empire will come to its end. But if it does so by meeting a Waterloo is another question., It is of course possible that its end will be of the Waterloo kind; a defeat like that of Napoleon by a coalition of powers. That is possible. Washington is after all waging its present wars on credit.


If China, The European Union, the Gulf states refused to finance the present wars of the United States any longer then they would stop.


It would be as turning the ignition key in a car. But even if these powers are getting reluctant they are much too afraid of the resulting financial meltdown; you could say that the US is blackmailing them to continue financing its wars by threatening suicide!


Already in the war against Iraq it was difficult for the US to get its European allies like France and Germany to become willing allies.


Today with the continuing war against Afghanistan there are new and increasing signs of tension. The European Union is beginning to act as if it has its own agenda in the Afghan war. China is showing increasing signs of uneasiness. China Daily published an interesting article by Han Dongping “Say no to NATO use of the Wahan Corridor” on January 15th. Even if the paper stated that the opinions expressed do not necessarily reflect those of the China Daily” the publication indicates that they are not contrary to the opinion of the Chinese government.


But still I don\’t think that such a Waterloo ending of the US empire is imminent. A repetition of the Soviet breakup after the military defeat in Afghanistan would of course be possible. The internal economic and social difficulties and conflicts in the ever more deeply divided United States are great. But still, they might not be as acute as those of the Soviet Union twenty years ago when the defeat in a relatively minor war triggered a total collapse of the system.


There is instead another Napoleonic example of an empire nearing it send. The US empire is now getting involved in its “Spanish War”.


It was the Spanish war that signalled the end of the Napoleonic empire.


For the first time the army of Napoleon got bogged down in un-

innable war. A war against a people in arms. As it dragged on it sapped the power of the undefeatable French army. The situation of the French forces in Spain are not unlike those of the US forces in Afghanistan.


A militarily superior army is met by a popular resistance by poorly armed peasants. (There are great differences of course – the role of Great Britain for instance.) The war becomes unwinnable. The costs (a million dollars a year for each US soldier in Afghanistan) mount and the war becomes ever more cruel while the results are not to be seen.


But there is also another lesson to be learned from the Spanish war of Napoleon. He had installed his brother as king of Spain. The policies of that king were officially liberal in the Napoleonic sense. For example the hated inquisition was abolished. But this did not endear the French occupation to the poor peasants. One could say that the Spanish people preferred the inquisition to the officially liberal French occupiers.


In their propaganda the US is in Afghanistan to help the Afghan people.


That is the normal verbiage of colonialism and imperialism. I remember when Mussolini was going to attack Ethiopia. It was the first such war I remember following on the radio. In the League of Nations his diplomats declared that Italy was waging this war in order to liberate the people from slavery and feudalism.


Of course Haile Selassie was a feudal monarch and official slavery had only just been abolished but certainly still existed. But I remember my parents laughing at Mussolini. His propaganda was fake. His troops were not there to liberate the people but for the loot to themselves and an empire to Mussolini.


Today it seems according to some Swedish politicians that the US forces, the NATO forces and the Swedish soldiers sent to Afghanistan are there to liberate the women of Afghanistan.


When some friends on the left side in politics begin to talk about liberating the women of Afghanistan from the Taliban I remind them first of how the Spanish peasants preferred the inquisition to the French occupiers and then point out that if they want to send Swedish soldiers abroad to liberate women there are other more suitable targets. The Swedish state does not allow men to buy women. Those who do are punished. But in Germany prostitution is legal. Hamburg on the other side of the Baltic is one of the large and legal prostitution centres of Europe. The German state takes much revenue in taxes from the Hamburg brothels. (Many of the women working in these brothels are trafficked from Africa, Asia, Eastern Europe.) Sweden could of course send its army, navy and air force to Hamburg in an attempt to liberate these unfortunate prostitutes from the tax paying brothels of Hamburg.


But we do not. Instead we send our soldiers to Afghanistan where they are to liberate Afghan women side by side with brothel keepers from Germ
any.


Up to now I have been discussing this fifth Afghan war from outside.


As if the interesting question was how much the war costs to the US (and to NATO and the European Union). But the real question is of course that it is a war against Afghanistan and its people. For me that is the main question. Not only in general but because I have a great feeling for the country and the people. It is now more than fifty years ago I and my wife came driving to Afghanistan in July 1958.


We were young, we were poor, we then travelled all around in Afghanistan that year and the next. We even drove up the Wakhan Corridor and up the Kunar valley to the Bashgul valley in Kafiristan.


Our small car was like donkey. The reason we got all these travel permits was simple: “You are from a small neutral country.” Britishers and Americans did not get them.


Even if we travelled in border areas where there was some tribal fighting we were always protected by the pushtun tribal tradition.


Unarmed travellers are guests. Of course we were unarmed. If we had carried arms we would have been regarded as enemies. I know some who did. They disappeared. They had not shown respect.


We travelled all around the country, stayed in big cities like Kabul (where we had a small house) and Herat, in robats high up in the mountains as with black tent nomads. The Afghans were always friendly, my wife and I never met a harsh word. Everybody was helpful. We often had punctures (16 in one day – in 1959 when our tires were bad) the truck drivers then always stopped and asked if we needed help. It was a partly tribal, partly feudal society but if you were from a small neutral country, behaved in a polite way and showed respect people were friendly, helpful and polite to you.


This is not the Afghanistan you meet in British travellers tales but it is the Afghanistan we met in the fifties and seventies when we were living there. I then also wrote two books on Afghanistan that are in their sixth edition now and sold through the Swedish association “Afghanistan Solidaritet”.


I have wanted to say this as this war for me is not just any war but a war against people I know and who are close to me. These last two Afghan wars have been barbaric. My anger is so strong that I can feel the taste of blood in my mouth when I see TV pictures of US marines, Swedish mercenaries or NATO soldiers in Afghanistan and my deepest personal feeling then is that the only good foreign soldier on Afghan soil is a dead one. But that is a personal feeling that I have to repress in order to be useful in the solidarity work.


Because in this war the international solidarity with the Afghan people is needed. I know that the Afghans will defend their land and people as they always have done. This fifth Afghan war is as horrible as the first barbaric three British wars and the fourth Russian one. The international solidarity is necessary not only in order to see to it that the price the Afghan people this time when the US empire is conducting the war will not be unbearably high but also for our own sake. As long as we can not stop our states participating in such a war we are both responsible for the cruelty to the Afghan people and at the same time our possibilities to change our own society are lessened.


The solidarity movement is not a political movement for the sake of others but for our own sake.


In Germany, Great Britain, Sweden and most of Western Europe a growing opinion – a majority in most cases – are demanding the withdrawal of forces from Afghanistan. This is creating increasing difficulties for the European governments taking part in the war. If we can strengthen this then it will become increasingly difficult for our governments to continue this war against the Afghan people.


In Sweden we founded a solidarity movement when the fourth war began.


It had to carry through a great struggle with false leftist groups trying to support the occupation policies of the then Soviet Union. We at that time discussed a principal question that had been central in European politics since the French revolution; the impossibility of carrying the revolution to others on bayonettes. In that Robespierre was right and Danton has been proved wrong! There was at that time areal left wing movement in Afghanistan but it was drenched by Soviet troops.


As the movement for Afghanistan grew in Sweden during that war time it also evolved into a state supported NGO organising schools and hospitals in the post-Soviet era in Afghanistan.


With the US war against Afghanistan it tended to follow the Swedish government line (not surprising as it was the state that paid it).


What then had to be built up was a new and growing movement based on the demand that all foreign troops should leave Afghanistan: “Afghanistan Solidaritet”.


We work together with other organizations with discussions, meetings, exhibitions, demonstrations and our own magazine. “Afghanistan Nu”.


It is not a sectarian organisation The former Swedish minister of defense and speaker of the parliament Thage G. Peterson who took the initiative to the appeal for calling home the Swedish force from Afghanistan is one of its most prominent members and activists.


Together with other social democratic politicians and prominent diplomats he demands that Sweden should return to its traditional foreign policy. “As a minister of defense I would not have allowed Swedish armed forces to be used in this way.”


The Swedish political situation is very labile. The elections this fall now seem to result in a change of government. Against the present conservative led government stands a coalition of the Social Democrats, the “Greens” and the “Left”. The party chairman of the “Left” has just declared that he will stand by the demand to take home the troops even if the elections will result in a change of government with the “Left” entering the new government.


If we are able to succeed in this work and change at least the Swedish participation in the Afghan war that could be a help to the Afghan people. Let us hope!

Jan Myrdal is a prominent and distinguished Swedish author.

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Liberals Get a War President of Their Very Own

Global Research, February 8, 2010
Murray Polner is the author of No Victory Parades: The Return of the Vietnam Veteran and is co-editor, with Thomas E. Woods Jr., of We Who Dared Say No to War.

Suddenly and surprisingly, we have a Bush-like Obama Doctrine. To the applause of liberal hawks and formerly critical neocons, the president declared in his Nobel Peace Prize speech that the U.S. will continue to wage war—though naturally, only “just” war—anywhere and against anyone it chooses in a never-ending struggle against the forces of evil. His antiwar supporters can take seats on the sidelines. It’s all reminiscent of John F. Kennedy and the prescient George Ball, and afterward Ball and Lyndon Johnson. In the early ’60s, JFK—reluctantly, we are told by his admirers—decided to send 16,000 “trainers” to Vietnam to teach the South Vietnamese how to play soldier and to stop the Communists from sweeping over Southeast Asia. Vast quantities of money and assorted advisers were shipped without accountability to the corrupt gang of thugs running and ruining that country.


Ball, the one dissenter in Kennedy’s entourage, pleaded with JFK to recall France’s devastating defeat in 1954 at Dien Bien Phu and throughout Indochina. “Within five years we’ll have 300,000 men in the paddies and jungles and never find them again,” he warned the liberal icon in the White House. But JFK thought he knew better, caustically answering, “George, you’re crazier than hell. That just isn’t going to happen.” Ball would also press Lyndon Johnson to stand down in Vietnam before he destroyed his presidency, domestic agenda, and more importantly the lives of tens of thousands of American soldiers and their families, not to mention a few million Southeast Asians. But LBJ wasn’t going to be the first president to lose a war and be blasted by pugnacious home-front warriors. Failing to stop the North Vietnamese would sooner or later have us fighting them on Waikiki Beach, or so the Cold War line went. Ever since then, we have continued to hear about regional menaces that supposedly, if left unchecked, will threaten vital U.S. interests or even Americans at home. Ronald Reagan employed that rationale in defending the proxy war in Central America waged by U.S.-backed Contras. George H.W. Bush and Bill Clinton extended the tradition of intervention, sending troops to theaters of combat as far-flung as Panama, Kuwait, and the Balkans, while the second Bush launched invasions of Iraq and Afghanistan. They have all been war presidents.


But Barack Obama was going to be different, or so my fellow antiwar liberals— and a few antiwar conservatives— hoped. He was to herald the end of that uncompromising and unilateral era of preventive war. The hundreds of thousands who joyously greeted the president- elect in Grant Park or the 1.5 million at his inauguration were ecstatic with anticipation. Left-wing pundits wrote excitedly about FDR’s One Hundred Days and projected great plans onto the new Man From Illinois. In countless articles, Republicans were declared brain dead, and the Bush- Cheney policies that got us into Iraq, Afghanistan, and the torture business were buried.


One year after those celebrations, it’s the neocons cheering, seeing in Obama’s policies a vindication of the late administration. Who would have dreamed that following Obama’s West Point speech announcing 30,000 more troops destined for Afghanistan, William Kristol would laud Obama in the pages of the Washington Post, writing, “the rationale for this surge is identical to Bush’s,” and praise the Democratic president for having “embraced the use of military force as a key instrument of national power”? War makes strange bedfellows. Michèle Flournoy, Obama’s under secretary of defense for policy, has been invited to speak about the president’s hopes for a new Afghanistan on a panel led by Frederick W. Kagan at the American Enterprise Institute, the heart of neoconservatism.


Why did Obama buy what the hawks sold him? What if he had leveled with the nation and acknowledged that, however obnoxious and cruel the Taliban may be, they pose no danger to the United States? What if he had vowed that we would not dispatch tens of thousands of additional troops to a civil war in an agrarian, impoverished, largely illiterate country divided by tribal loyalties?


It was not to be. Instead, as New York Times columnist David Brooks stated approvingly, “With his two surges, Obama will more than double the number of American troops in Afghanistan.” Charles Krauthammer was direct and sharp: “most supporters of the Afghanistan war were satisfied. They got the policy; the liberals got the speech”—and no say in the construction of that policy.


After West Point and Oslo, neocons saw Obama as a more coherent Bush, an electrifying orator who had dazzled antiwar Democrats and independents and then promptly dumped them. When the New York Times printed a photo of the men and women who helped Obama reach his decision to escalate, not one dove was present.


Were there no alternatives? In this huge country, could he not find a handful of realists, whether Left or Right, to supply some workable ideas for eliminating third and fourth tours for our overextended troops and the resulting suicides, amputations, epidemics of post-traumatic stress disorder, and legions of weeping relatives at gravesides?


Hold on, Obama’s loyal liberal defenders counter, shuddering at the memory of Bush. Why blame him for the miserable decisions he has to make based on impossible situations he did not create? They would prefer not to explain why they and their allies in the think tanks and Congress have so little influence.


Granted, some of Obama’s base reacted negatively. In December, MoveOn .org sent its millions of members a scorching email denouncing Obama’s troop escalation for “deepen[ing] our involvement in a quagmire.” Anti-Vietnam War rebel Tom Hayden removed the Obama sticker from his car. United for Peace and Justice, the main organizer of mass peace rallies around the country, announced, “It’s Obama’s War, and We Will Stop it.” The widely read liberal TomDispatch.com dubbed its former champion the “Commanded-in- Chief” for giving way to the hardball pressures exerted by the generals. Matthew Rothschild of The Progressive, founded by the fabled anti-militarist Robert M. LaFollette Sr. in 1909, compared Bush and Obama’s rhetoric and wrote an article called “Obama Steals Bush’s Speechwriters.”


But these protests notwithstanding, we remain—and will throughout Obama’s presidency—an empire of military colonization, the goal for decades of neoconservatives and assorted liberal hawks. In anthropologist Hugh Gusterson’s wonderfully evocative words, “The U.S. is to military bases as Heinz is to ketchup.” American forces are stationed at approximately 1,000 military bases in 120 countries at a cost topping $100 billion annually. Diego Garcia, a remote island in the Indian Ocean midway between Africa and Indonesia, is apparently so essential a base that 5,000 locals were thrown out of their homes so the U.S. could have yet another top-secret facility from which to conduct its perpetual wars.


Far from being a consensus-seeking peacenik, Obama would not even sign the Landmine Ban Treaty, which Bush also refused to endorse{
_VIR_} thus leaving the U.S. the only NATO nation unwilling to participate. Said Steve Goose of Human Rights Watch’s Arms Division, “they have simply decided to allow the Pentagon to dictate terms.” A shocked Bill Moyers pointed out that 5,000 people died from mine explosions in 2008, noting the disconnect between Obama’s refusal to enlist the support of the government he leads and the Oslo speech in which he maintained, “I am convinced that adhering to standards, international standards, strengthens those who do and isolates and weakens those who don’t.”


In another instance of history repeating, the first Obama defense budget has been virtually the same as Bush’s military appropriations. Obama has reduced spending on Cold War weapons such as the F-22 fighter, but he reportedly plans to ask Congress for an extra $33 billion for the ongoing wars in the Middle East and Central Asia. To his credit, the president is trying to negotiate a new nuclear-arms reduction pact with Russia and close a few of the CIA’s clandestine prisons. But in many other vital areas of defense and national security, like warrantless wiretaps and renewal of much of the Patriot Act, he persists in activities that violate fundamental freedoms. He has also refused to hold anyone from the Bush-Cheney era accountable.


There’s more: his administration has just signed an accord with Colombia granting the U.S. a ten-year right to use seven of its bases, including the centerpiece of the agreement, Palanquero AFB. Take heed, any leftist South American government that dares defy Uncle Sam. At the same time, Obama blinked at the coup d’état in Honduras. “They really thought he was different,” said Julia Sweig of the Council on Foreign Relations, referring to Latin America’s opinion of Obama. “But those hopes were dashed over the course of the summer.”


So what happened?


Barack Obama happened. More eloquence than substance happened. More time-honored political caution than audacity or hope. Liberal and conservative Cold Warriors as key advisers. A reluctance to cross wartime profiteers. A recognition by his poll-counters that, with future elections in mind, it was best to govern from some ill-defined center, acting tough abroad to keep the neocons off his back while throwing an occasional bone to his left.


That strategy may buy him a second term as fruitless as his first—or it could render him indistinguishable from his deservedly maligned predecessor and cost him re-election in 2012. The Left howls now, but from the very start, Obama signaled his lack of interest in McGovernite ideas of change in foreign policy. There was a time when he talked about pressing Israel to dismantle its settlements. But thus far he has been cowed by Netanyahu and his American backers, betraying any hope for a genuinely independent Palestinian state. There was that stirring speech in Cairo and then silence. There was talk about closing Guantanamo but no mention of the much larger Bagram prison in Afghanistan.


The sad truth is everything we are seeing we have already seen. Despite presidents who come and go, permanent war is a hallowed American institution. Start if you will with the War of 1812, the invasion of Mexico, and the carnage of a Civil War. Move to the mass murder of Native Americans and theft of their property, the killing, torture, and prison camps in the Philippines, then the blood-drenched 20th century. The 21st likewise dawns red. It never changes. Doves protest, hawks rule, ordinary people pay the penalty. All wars are “just.”


As surely as the bloodletting persists, so does the opposition. The old chestnut that liberals have always stood for peace and conservatives for war is historically false. In fact, our past is rich with anti-militarist heroes of surprisingly varied political colors. Daniel Webster opposed the War Hawks and the draft they proposed in 1812. Abolitionist Theodore Parker denounced the Mexican War and called on his fellow Bostonians in 1847 “to protest against this most infamous war.” Henry Van Dyke, a Presbyterian minister and ardent foe of the annexation of the Philippines, told his congregation in 1898, “If we enter the course of foreign conquest, the day is not far distant when we must spend in annual preparation for wars more than the $180,000,000 that we now spend every year in the education of our children for peace.” Socialist and labor leader Eugene Debs received a ten-year prison sentence for daring to tell potential draftees in 1918 that it was “the working class who fight all the battles, the working class who make the supreme sacrifices, the working class who freely shed their blood and furnish the corpses.” Against U.S. entry into World War I, Republican Sen. George Norris of Nebraska asked, “To whom does this war bring prosperity? Not to the soldier … not to the brokenhearted widow … not to the mother who weeps at the death of her baby boy … . War brings no prosperity to the great mass of common and patriotic citizens … .War brings prosperity to the stock gambler on Wall Street.” Rep. Barbara Lee (D-Calif.), the only member of Congress in 2001 who voted against George W. Bush’s decision to invade Afghanistan, warned her colleagues to be “careful not to embark on an open-ended war with neither an exit strategy nor a focused target.” Conservative Russell Kirk laid out a post-World War II program for conservatives by reminding them, “A handful of individuals, some of them quite unused to moral responsibilities on such a scale, made it their business to extirpate the populations of Nagasaki and Hiroshima; we must make it our business to curtail the possibility of such snap decisions.”


Anti-militarism is very much an American tradition, but it has never been a majority position. Who now reads Finley Peter Dunne, the Chicago newspaperman who invented the brogish bartender Mr. Dooley speaking to his customer, Mr. Hennessey, while deriding American excesses and the national passion for imperial expansion? He wondered why many leaders and everyday Americans passively embraced, without much knowledge, our devotion to world hegemony—specifically in his time, the decision to invade and occupy the Philippines. “‘Tis not more than two months,” he told his pro-annexation readers, “ye larned whether they were islands or canned goods.”


Yet just as certain as opposition to foreign adventuring arises, again it goes unheeded. As we begin President Obama’s second year in office, of this we can be certain: in global affairs, but for a few crumbs here and there, antiwar views will rarely be welcomed by this White House. And when these marginalized voters complain, all the president’s men will remind them that they were told Afghanistan was a “necessary war” and “national security” is everything. I can imagine Obama’s advisers confidently telling him that however many troops he ships to these and future wars, however much money he spends on military hardware, his anguished allies have no place else to go. Plus ça change.

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The US Economic Crisis: Jobs Continue to Vanish While the Media Applauds "Recovery"

Global Research, February 8, 2010
At first glance it appeared there was a typo in the headlines. The national media reported that, in January, another 20,000 more jobs were lost. Somehow, the unemployment rate dropped, from 10 percent to 9.7 percent. Nobody thought this paradox was worth explaining; instead, the media’s attitude was “more good news” about the economy.


But there was other evidence of an obliterated job market hiding behind the cheerful headlines. After revising the employment numbers in 2009, The New York Times reported, “…the economy lost 150,000 jobs in December, far more than the 85,000 initially reported.” Overall in 2009, the adjusted numbers showed an additional “…1.36 million fewer jobs…” (February 5, 2010).


And yet the unemployment rate dropped. One reason this happened is that the U.S. government uses a separate, more unreliable survey to calculate the unemployment rate, in contrast to the survey used to calculate job losses. There are other more important ways the government obscures the unemployment numbers: if you are no longer receiving unemployment benefits you’re not counted as unemployed; if you’ve given up looking for a job, you’re not counted either. You are counted, however, if you are working only 15 hours a week, or if you\’re a temporary worker.


In this way the government cooks the books to bring fake optimism to the masses. The mainstream mediareports these fraudulent numbers without asking questions, so that the Democrats can continue doing absolutely nothing towards creating jobs.


But there is a method to the madness. Mass unemployment brings incredible pressure on workers’ wages and benefits. The mere threat of being unemployed puts unorganized workers in a precarious position when they’re told to work for less.


The organized labor movement is suffering from the recession too. In 2009 the number of workers belonging to unions fell by 771,000. Since union workers have higher standards of living, this number implies a further drop in wages and benefits overall.


These depressing numbers are cheered by corporations and politicians alike. To them, “economic recovery” means corporate recovery — an increase in profits, nothing more. And lower wages mean that profits are going to be even higher.


The shallow recovery that politicians are boasting about has been limited to some big businesses, especially Wall Street. Obama rejoiced at the recent news of 5.7 percent increase in GDP, even though this increase came at the expense of hundreds of thousands of jobs. The New York Times also added insight to how corporations are boosting profits:
“Instead of adding workers, many companies are squeezing their existing work forces to produce more. Productivity rose by a seasonally adjusted 6.2 percent in the fourth quarter…” (February 5, 2010).

To summarize: jobs continue to be cut by the thousands, while the remaining workers are forced to work harder with the same or often lower wages and benefits. This is the “new economy” that politicians speak of when they discuss “increasing exports” on the world market, a plan that requires that U.S. workers make lower wages to compete with the slave-wages overseas.


This is why the Democrats are doing nothing of substance to create living wage jobs. They tell lies about the job market recovering, creating false hopes by announcing skewed employment numbers to the public.


Such illusions can have only a temporary pacifying effect. Resentment is building up and optimistic speeches are wearing thin. But action is needed. Workers and the unemployed must unite to demand the creation of living wage jobs — a real jobs program that rebuilds America’s infrastructure and promotes education and social services. A good first step would be for union members to demand that all unions, from the very top to the bottom, organize the unorganized, and fight for the jobless by building a massive spring demonstration inWashington, DC, and on the West Coast for a massive jobs program.



Shamus Cooke is a social service worker, trade unionist, and writer for Workers Action (www.workerscompass.org). He can be reached at shamuscook@yahoo.com


Shamus Cooke is a frequent contributor to Global Research. Global Research Articles by Shamus Cooke

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The Sword and the Shield: Surround Russia and China with Mobile ";Missile Defense"; Systems

Global Research, February 5, 2010
The latest news is that Romania will be hosting the U.S. Army\’s ground-based “missile defense” systems. Russia is not pleased with these developments.

These same Army Patriot Advanced Capability-3 (PAC-3) systems are going to be deployed in Taiwan as the U.S. continues its military encirclement of China. U.S. PAC-3 systems have already been deployed in Japan and South Korea.

Army Ground-based “missile defense” interceptors

The Standard Missile-3 (SM-3), already in the Persian Gulf and soon to be permanently based on Navy Aegis destroyers in the Baltic, South China, Mediterranean and Black Seas, has a range of 500 kilometers but can be enhanced for longer distances. The missile was used by the U.S. Navy to destroy a satellite 130 miles above the Pacific Ocean in February of 2008 in a test viewed by Admiral Michael Mullen, chairman of the U.S. Joint Chiefs of Staff. “The satellite was unlike any target the system was designed to go after….The satellite was in orbit rather than on a ballistic trajectory. Also, the satellite was traveling at incredible speeds,” Mullen said.

Aegis destroyers launching SM-3 “missile defense” systems

Translation: the SM-3 also has “anti-satellite” (ASAT) weapons capability. That means the Pentagon can use the Aegis-based missile to knock out Russian or Chinese satellites as part of a first-strike attack.

News that the U.S. is about to deploy a PAC-3 missile battery in Poland led Russia\’s ambassador to NATO, Dmitry Rogozin, to recently state: “Do they really think that we will calmly watch the location of a rocket system, at a distance of 60 km from Kaliningrad?”
The deployment of SM-3, with several times the reach of the Patriot, on land and sea in the same neighborhood will only makes matters more dangerous.

The official authorization of Patriot transfers to Taiwan – the missiles are produced by Raytheon Company headquartered in Massachusetts, whose former vice president of Government Operations and Strategy William Lynn is now Obama\’s Deputy Secretary of Defense – resulted in China\’s vice foreign minister, He Yafei, saying “We believe this move endangers China\’s national security.” Luo Yuan, senior researcher with the Chinese Academy of Military Science, added “The U.S. action gives China a justified cause to increase its national defense expenditure, to enhance the development and purchase of weapons, and to accelerate its modernization process in national defense….China did nothing to threaten the U.S., why should the US challenge our core strategic interests?”

William Lynn delivered a speech in Washington, DC on January 21, where he demanded that Congress “put the Defense Department on a permanent footing to fight both low-intensity conflicts to maintaining air dominance and the ability to strike any target on Earth at any time….The next air warfare priority for the Pentagon is developing a next-generation, deep-penetrating strike capability that can overcome advanced air defenses.”

The new Prompt Global Strike system is designed to accomplish just those objectives.

So the strategy is clear. Surround Russia and China with mobile “missile defense” systems whose job is to take out their retaliatory capability after a U.S. first-strike against their nuclear weapons. Russia and China then build counter-measures to the U.S. missile defense systems and then the Pentagon in return counters with the new “global strike” systems that are today under development.

All this means one thing – an extended arms race with Russia and China which will mean huge profits for the weapons industry and the very likely reality that no effective arms control treaties will be negotiated during this administration. Why would Russia and China negotiate to seriously reduce their nuclear arsenals when the U.S. is surrounding them with missile defense and building new global strike systems?

The U.S. war state (supported and funded by Democrats and Republicans) has become a pariah on this planet. You can dress it up nice with a smiling Obama but in the end one has to judge the U.S. by its deeds.

(Parts of this were written by Rick Rozoff in a piece called U.S. Extends Missile Buildup From Poland And Taiwan To Persian Gulf)
Global Research Articles by Bruce Gagnon

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Sovereign Debt Fears Signal New Stage of Global Crisis

Global Research, February 6, 2010
Stock markets in Europe and Asia fell sharply Friday in the second day of a near-panic selloff fueled by fears that the debt crisis facing weaker European economies will throw the world economy into a “double-dip” recession.


Commodity prices—oil and gold, in particular—also fell sharply.


In the US, triple-digit losses on the Dow Jones Industrial Average were recouped in the final hour, resulting in small gains for the Dow and the other major indexes in volatile trading, following a sharp selloff on Thursday.


The Dow ended the day with a 10-point gain, following a 268-point plunge on Thursday. The index, which was below the 10,000 mark for most of the day, has lost 6.5 percent over the past two weeks.


All of the major European indexes closed down, with France’s CAC-40 falling the most—3.4 percent, its biggest one-day drop since November 26. The Pan-European Dow Jones Stoxx 600 Index was off 2.2 percent, its lowest close since November 3.


Japan’s Nikkei fell 2.89 percent and the Shanghai Composite was off by 1.87 percent.


Stocks were down for the second day in Greece, Portugal and Spain, three heavily indebted eurozone countries whose ability to redeem bondholders—including major European and US banks—is increasingly in doubt. Prices of government bonds of all three countries continued to fall and interest rates rose further, as global investors increased pressure on the three governments to impose draconian austerity measures on their respective populations.


The cost of credit default swap (CDS) contracts on the debt of the three countries rose even more dramatically. Credit default swaps—now a multi-trillion-dollar market—are a form of unregulated derivatives in which CDS sellers guarantee the value of bonds held by CDS buyers. Rising CDS prices reflect eroding confidence in corporate or government bonds insured by the sellers of the CDS contracts.


The CDS market is a hotbed of speculation, since investors, including banks and hedge funds, can bet on the price of CDS contracts without holding the underlying bonds. The threat of sovereign default, most immediately by Greece, but also by Portugal and Spain, has provided an opportunity for speculators to drive up the price of insuring the countries’ bonds by speculating on the likelihood of a default, thereby further undermining confidence in the countries’ debt and increasing the prospects of such an outcome.


All three countries have pledged to impose sweeping cuts in public-sector jobs and wages and in social benefits, along with new consumption taxes, in line with demands from the European Union that they sharply reduce their budget deficits, currently 10 percent or more of their respective gross domestic products.


Greek President George Papandreou of the social-democratic PASOK party, who was elected last year on the basis of promises to reverse the right-wing policies of the preceding conservative government, this week announced plans for an across-the-board freeze on public sector wages along with a cut in allowances, which amounts to a wage cut of 4 percent. He also called for a pension “reform,” which entails raising the retirement age, as well as higher fuel taxes.


The social-democratic Portuguese and Spanish governments have pledged to impose similar austerity measures.


Signs of mounting resistance by the working class in these countries are playing an enormous role in the tremors rippling through the global financial markets. There is a growing sense in governments and board rooms around the world that a major confrontation with the working class is coming, with potentially revolutionary implications.


The banks and the media are demanding that heads of state and parliaments demonstrate the “political will” and “political consensus” necessary to impose historic attacks on the working class. These phrases are euphemisms for a degree of ruthlessness that implies a readiness to employ state repression. However, the financial markets are at once skeptical over the willingness of political leaders to employ the required measures and anxious over the outcome of such a confrontation.


On Thursday, Greek workers launched the first in a series of strikes to protest the government’s austerity package. Customs and tax officials began a 48-hour strike that shut ports and border crossings throughout the country. Strikes by other public and private-sector workers have been called for next week.


Greek farmers have been blockading highways in protest against government austerity proposals.


A major cause of the global stock selloff that began Thursday was the announcement by the Greek unions of a one-day general strike set for February 24. The unions had initially indicated their willingness to assist the PASOK government in carrying out its austerity plans, but have been forced by pressure from the working class to call the strike actions.


Union leaders hope to use the partial labor mobilizations to defuse popular anger and channel it behind nationalist slogans, while they maneuver to work out a deal with the government acceptable to the banks and the European Union. However, there are fears within ruling circles that the unions may not be able to contain the anger of workers and young people, who are already facing mass unemployment and declining living standards.


Portuguese and Spanish unions are also threatening to call strikes and protests.


Among other factors that precipitated the stock selloff was the failure of the Portuguese government to find buyers for the full amount of a government bond offering on Wednesday, and the defeat of its austerity package at the hands of opposition parties in parliament.


The debt crisis of the weaker countries in the 16-nation eurozone, including Ireland and Italy in addition to Greece, Portugal and Spain, is raising questions about the viability of the euro itself. There is increasing public speculation that the 11-year-old currency could collapse under the pressure of the economic and financial crisis.


In recent weeks, the euro has fallen precipitously against the US dollar and the yen. On Friday, it fell to $1.3620. It has declined 9 percent against the dollar since December.


This does not reflect any inherent strength of the US currency. On the contrary, looming above the debt crisis in Europe is the far greater crisis of the world’s biggest debtor—the United States. It is no accident that the European crisis has erupted in the aftermath of last week’s budget announcement by President Obama. The US budget plan revealed that the current deficit is $1.6 trillion, equivalent to 10.6 percent of the country’s’ gross domestic product, a record high since the end of World War II.


This approaches Greece’s deficit ratio of 12.7 percent of GDP, is higher than that of Spain and twice the eurozone average. The US budget, moreover, projects trillion-dollar deficits for years to come.


As in every other industrialized country, the American state responded to the financial crash of 2008 by taking on the debts of its banks and essentially bankrupting its treasury in order to preserve the wealth of it
s financial elite. The Obama administration, no less than the governments of Europe, is demanding that the cost be borne by the general population in the form of sweeping cuts in basic social programs and a reduction in consumption—i.e., a permanent and dramatic decline in working class living standards.


Unlike in previous international financial crises, such as the Asian debt crisis of the 1990s, the United States cannot play the role of lender of last resort. The United States has irretrievably lost its previous position as the dominant world economic power, and its decline is reflected in growing challenges to the role of the dollar as the world reserve and trading currency.


At last month’s World Economic Forum in Davos, French President Nicolas Sarkozy in his keynote speech said he would use his upcoming presidency of the Group of 20 nations to push for a new international monetary system in which the dollar would no longer be the primary reserve currency. And on Wednesday, Moody’s Investors Service warned that the United States faces the loss of its triple-A sovereign credit rating unless Obama moves to slash the federal deficit by carrying out more draconian spending cuts than he has thus far announced.


It is the erosion of US economic power and solvency that lends to the sovereign debt crises in Greece, Portugal and other European countries such an explosive and universal character.


The recent rise in the dollar is the result of a “flight to safety” by investors who fear a collapse in world asset bubbles and consider US Treasury bonds, along with German government debt, to be a temporary haven. In important respects, the short-term reversal in the dollar’s decline is an expression of a deepening of the crisis on world financial markets.


As a number of economists warned last year, the US policy of flooding financial markets with cheap credit on the basis of near-zero interest rates and the electronic equivalent of printing a trillion dollars—designed to prop up the major US banks and enable them to record bumper profits despite double-digit unemployment—fueled a huge wave of speculation on risky assets such as stocks, bonds, commodities and currencies. These economists predicted that a major rise in the value of the dollar would pull the rug out from under this speculation, which was based on the assumption of a continued decline in the dollar, and force a rapid and destabilizing selloff of inflated assets.


It now appears that this collapse in asset bubbles has begun.


Barry Grey is a frequent contributor to Global Research. Global Research Articles by Barry Grey

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Honduran Resistance against US sponsored Regime Change

Global Research, February 6, 2010
JRW: What are the principal demands of the resistance in this march today?


RA: The resistance has two principal pillars – a social pillar for the revindication of the people’s rights, in which the resistance accompanies people in their daily struggle, for agrarian reform, for just salaries, and opposition to the privatization of social services. This is the pillar of social mobilization.


The other pillar is the political arm – to convert ourselves into a militant political force which will work toward taking political power in our country.


JRW: What are the objectives of the Constituent Assembly that the resistance is demanding?


RA:The power of the people is going to result in massive transformations in this country. We are demanding a Constituent Assembly that is going to transform this country, into a participatory democracy. It will be a new Honduras – a country with social justice, with equality, with a new model of development in which everyone is included, and, as the Bolivians say, so that our entire country can live well.


It will be very different than the current situation, in which there is a privileged oligarchy, which owns and controls everything, while on the other hand there is an immense mass of impoverished people. This can’t continue.


There are a huge number of people in this march. And this is the message we are sending to the entire oligarchic power groups and to the rest of the people.


JRW: In the next few months, what will the strategy of the resistance be?


RA: We are in a process of national organization, of articulation, and establishing schools of political education. Our mobilizations are also going to continue. We have a concrete immediate agenda of mobilization. Beyond that, we’re preparing ourselves to participate in the elections in three years so that we can take definitive control. •


Jeffery R. Webber teaches political science at the University of Regina, Canada. He has three forthcoming books: Red October: Left-Indigenous Struggles in Modern Bolivia; The Politics of Evismo: Reform to Rebellion in Bolivian Politics; and (co-edited with Barry Carr) The Resurgence of Latin American Radicalism: From Cracks in the Empire to an Izquierda Permitida.

Global Research Articles by Jeffery R. Webber

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The Fateful Geological Prize Called Haiti

Global Research, January 30, 2010
President becomes UN Special Envoy to earthquake-stricken Haiti.

A born-again neo-conservative US business wheeler-dealer preacher claims Haitians are condemned for making a literal ‘pact with the Devil.’

Venezuelan, Nicaraguan, Bolivian, French and Swiss rescue organizations accuse the US military of refusing landing rights to planes bearing necessary medicines and urgently needed potable water to the millions of Haitians stricken, injured and homeless.

Behind the smoke, rubble and unending drama of human tragedy in the hapless Caribbean country, a drama is in full play for control of what geophysicists believe may be one of the world’s richest zones for hydrocarbons-oil and gas outside the Middle East, possibly orders of magnitude greater than that of nearby Venezuela.

Haiti, and the larger island of Hispaniola of which it is a part, has the geological fate that it straddles one of the world’s most active geological zones, where the deepwater plates of three huge structures relentlessly rub against one another—the intersection of the North American, South American and Caribbean tectonic plates. Below the ocean and the waters of the Caribbean, these plates consist of an oceanic crust some 3 to 6 miles thick, floating atop an adjacent mantle. Haiti also lies at the edge of the region known as the Bermuda Triangle, a vast area in the Caribbean subject to bizarre and unexplained disturbances.

This vast mass of underwater plates are in constant motion, rubbing against each other along lines analogous to cracks in a broken porcelain vase that has been reglued. The earth’s tectonic plates typically move at a rate 50 to 100 mm annually in relation to one another, and are the origin of earthquakes and of volcanoes. The regions of convergence of such plates are also areas where vast volumes of oil and gas can be pushed upwards from the Earth’s mantle. The geophysics surrounding the convergence of the three plates that run more or less directly beneath Port-au-Prince make the region prone to earthquakes such as the one that struck Haiti with devastating ferocity on January 12.

A relevant Texas geological project

Leaving aside the relevant question of how well in advance the Pentagon and US scientists knew the quake was about to occur, and what Pentagon plans were being laid before January 12, another issue emerges around the events in Haiti that might help explain the bizarre behavior to date of the major ‘rescue’ players—the United States, France and Canada. Aside from being prone to violent earthquakes, Haiti also happens to lie in a zone that, due to the unusual geographical intersection of its three tectonic plates, might well be straddling one of the world’s largest unexplored zones of oil and gas, as well as of valuable rare strategic minerals.

The vast oil reserves of the Persian Gulf and of the region from the Red Sea into the Gulf of Aden are at a similar convergence zone of large tectonic plates, as are such oil-rich zones as Indonesia and the waters off the coast of California. In short, in terms of the physics of the earth, precisely such intersections of tectonic masses as run directly beneath Haiti have a remarkable tendency to be the sites of vast treasures of minerals, as well as oil and gas, throughout the world.

Notably, in 2005, a year after the Bush-Cheney Administration de facto deposed the democratically elected President of Haiti, Jean-Baptiste Aristide, a team of geologists from the Institute for Geophysics at the University of Texas began an ambitious and thorough two-phase mapping of all geological data of the Caribbean Basins. The project is due to be completed in 2011. Directed by Dr. Paul Mann, it is called “Caribbean Basins, Tectonics and Hydrocarbons.” It is all about determining as precisely as possible the relation between tectonic plates in the Caribbean and the potential for hydrocarbons—oil and gas.

Notably, the sponsors of the multi-million dollar research project under Mann are the world’s largest oil companies, including Chevron, ExxonMobil, the Anglo-Dutch Shell and BHP Billiton.[1] Curiously enough, the project is the first comprehensive geological mapping of a region that, one would have thought, would have been a priority decades ago for the US oil majors. Given the immense, existing oil production off Mexico, Louisiana, and the entire Caribbean, as well as its proximity to the United States – not to mention the US focus on its own energy security – it is surprising that the region had not been mapped earlier. Now it emerges that major oil companies were at least generally aware of the huge oil potential of the region long ago, but apparently decided to keep it quiet.

Cuba’s Super-giant find

Evidence that the US Administration may well have more in mind for Haiti than the improvement of the lot of the devastated Haitian people can be found in nearby waters off Cuba, directly across from Port-au-Prince. In October 2008 a consortium of oil companies led by Spain’s Repsol, together with Cuba\’s state oil company, Cubapetroleo, announced discovery of one of the world’s largest oilfields in the deep water off Cuba. It is what oil geologists call a ‘Super-giant’ field. Estimates are that the Cuban field contains as much as 20 billion barrels of oil, making it the twelfth Super-giant oilfield discovered since 1996. The discovery also likely makes Cuba a new high-priority target for Pentagon destabilization and other nasty operations.

No doubt to the dismay of Washington, Russian President Dmitry Medvedev flew to Havana one month after the Cuban giant oil find to sign an agreement with acting-President Raul Castro for Russian oil companies to explore and develop Cuban oil.[2]

Medvedev’s Russia-Cuba oil agreements came only a week after the visit of Chinese President Hu Jintao to meet the recuperating Fidel Castro and his brother Raul. The Chinese President signed an agreement to modernize Cuban ports and discussed Chinese purchase of Cuban raw materials. No doubt the mammoth new Cuban oil discovery was high on the Chinese agenda with Cuba.[3] On November 5, 2008, just prior to the Chinese President’s trip to Cuba and other Latin American countries, the Chinese government issued their first ever policy paper on the future of China’s relations with Latin America and Caribbean nations, elevating these bilateral relations to a new level of strategic importance. [4]

The Cuba Super-giant oil find also leaves the advocates of ‘Peak Oil’ theory with more egg on the face. Shortly before the Bush-Blair decision to invade and occupy Iraq, a theory made the rounds of cyberspace, that sometime after 2010, the world would reach an absolute “peak” in world oil production, initiating a period of decline with drastic social and economic implications. Its prominent spokesmen, including retired oil geologist Colin Campbell and Texas oil banker Matt Simmons, claimed that there had not been a single new Super-giant oil discovery since 1976, or thereabouts, and that new fields found over the past two decades had been “tiny” compared with the earlier giant discoveries in Saudi Arabia, Prudhoe Bay, Daquing in China and elsewhere. [5]

It is critical to note that, more than half a century ago, a group of Russian and Ukrainian geophysicists, working in state secrecy, confirmed that hydroca
rbons originated deep in the earth’s mantle under conditions similar to a giant burning cauldron at extreme temperature and pressure. They demonstrated that, contrary to US and accepted Western ‘mainstream’ geology, hydrocarbons were not the result of dead dinosaur detritus concentrated and compressed and somehow transformed into oil and gas millions of years ago, nor of algae or other biological material.[6]

The Russian and Ukrainian geophysicists then proved that the oil or gas produced in the earth’s mantle was pushed upwards along faults or cracks in the earth as close to the surface as pressures permitted. The process was analogous to the production of molten lava in volcanoes. It means that the ability to find oil is limited, relatively speaking, only by the ability to identify deep fissures and complex geological activity conducive to bringing the oil out from deep in the earth. It seems that the waters of the Caribbean, especially those off Cuba and its neighbor Haiti, are just such a region of concentrated hydrocarbons (oil and gas) that have found their way upwards close to the surface, perhaps in a magnitude comparable to a new Saudi Arabia.[7]

Haiti, a new Saudi Arabia?

The remarkable geography of Haiti and Cuba and the discovery of world-class oil reserves in the waters off Cuba lend credence to anecdotal accounts of major oil discoveries in several parts of Haitian territory. It also could explain why two Bush Presidents and now special UN Haiti Envoy Bill Clinton have made Haiti such a priority. As well, it could explain why Washington and its NGOs moved so quickly to remove– twice– the democratically elected President Aristide, whose economic program for Haiti included, among other items, proposals for developing Haitian natural resources for the benefit of the Haitian people.

In March 2004, some months before the University of Texas and American Big Oil launched their ambitious mapping of the hydrocarbon potentials of the Caribbean, a Haitian writer, Dr. Georges Michel, published online an article titled ‘Oil in Haiti.’ In it, Michel wrote,

… .[I]t has been no secret that deep in the earthy bowels of the two states that share the island of Haiti and the surrounding waters that there are significant, still untapped deposits of oil. One knows not why they are still untapped. Since the early twentieth century, the physical and political map of the island of Haiti, erected in 1908 by Messrs. Alexander Poujol and Henry Thomasset, reported a major oil reservoir in Haiti near the source of the Rio Todo El Mondo, Tributary Right Artibonite River, better known today as the River Thomonde. [8]

According to a June 2008 article by Roberson Alphonse in the Haitian paper, Le Nouvelliste en Haiti, “The signs, (indicators), justifying the explorations of oil (black gold) in Haiti are encouraging. In the middle of the oil shock, some 4 companies want official licenses from the Haitian State to drill for oil.”

At the time, oil prices were climbing above $140 a barrel — on manipulations by various Wall Street banks. Alphonse’s article quoted Dieusuel Anglade, the Haitian State Director of the Office of Mining and Energy, telling the Haitian press: “We\’ve received four requests for oil exploration permits…We have had encouraging indicators to justify the pursuit of the exploration of black gold (oil), which had stopped in 1979.”[9]

Alphonse reported the findings from a 1979 geological study in Haiti of 11 exploratory oil wells drilled at the Plaine du Cul-de-sac on the Plateau Central and at L\’ile de La Gonaive: “Surface (tentative) indicators for oil were found at the Southern peninsula and on the North coast, explained the engineer Anglade, who strongly believes in the immediate commercial viability of these explorations.”[10]

Journalist Alphonse cites an August 16, 1979 memo by Haitian attorney Francois Lamothe, in which he noted that “five big wells were drilled” down to depths of 9000 feet and that a sample that “underwent a physical-chemical analysis in Munich, Germany” had “revealed tracks of oil.” [11]

Despite the promising 1979 results in Haiti, Dr. Georges Michel reported that, “the big multinational oil companies operating in Haiti pushed for the discovered deposits not to be exploited.” [12] Oil exploration in and offshore Haiti ground to a sudden halt as a result.

Similar if less precise reports claiming that Haitian oil reserves could be vastly larger than those of Venezuela have appeared in Haitian websites. [13] Then in 2010 the financial news site Bloomberg News carried the following:

The Jan. 12 earthquake was on a fault line that passes near potential gas reserves, said Stephen Pierce, a geologist who worked in the region for 30 years for companies that included the former Mobil Corp. The quake may have cracked rock formations along the fault, allowing gas or oil to temporarily seep toward the surface, he said Monday in a telephone interview. ‘A geologist, callous as it may seem, tracing that fault zone from Port-au-Prince to the border looking for gas and oil seeps, may find a structure that hasn\’t been drilled,’ said Pierce, exploration manager at Zion Oil & Gas Inc., a Dallas-based company that\’s drilling in Israel. [14]

In an interview with a Santo Domingo online paper, Leopoldo Espaillat Nanita, former head of the Dominican Petroleum Refinery (REFIDOMSA) stated, “there is a multinational conspiracy to illegally take the mineral resources of the Haitian people.” [15] Haiti’s minerals include gold, the valuable strategic metal iridium and oil, apparently lots of it.

Aristide’s development plans

Marguerite Laurent (\’Ezili Dantò\’), president of the Haitian Lawyers’ Leadership Network (HLLN) who served as attorney for the deposed Aristide, notes that when Aristide was President — up until his US-backed ouster during the Bush era in 2004 — he had developed and published in book form his national development plans. These plans included, for the first time, a detailed list of known sites where the resources of Haiti were located. The publication of the plan sparked a national debate over Haitian radio and in the media about the future of the country. Aristide’s plan was to implement a public-private partnership to ensure that the development of Haiti’s oil, gold and other valuable resources would benefit the national economy and the broader population, and not merely the five Haitian oligarchic families and their US backers, the so-called Chimeres or gangsters. [16]

Since the ouster of Aristide in 2004, Haiti has been an occupied country, with a dubiously-elected President, Rene Preval, a controversial follower of IMF privatization mandates and reportedly tied to the Chimeres or Haitian oligarchs who backed the removal of Aristide. Notably, the US State Department refuses to permit the return of Aristide from South African exile.

Now, in the wake of the devastating earthquake of January 12, the United States military has taken control of Haiti’s four airports and presently has some 20,000 troops in the country. Journalists and international aid organizations have accused the US military of being more concerned with imposing military control, which it prefers to call “security,” than with bringing urgently needed water, food and medicine from the airport sites to the population.
{_
ENTER_}
A US military occupation of Haiti under the guise of earthquake disaster ‘relief’ would give Washington and private business interests tied to it a geopolitical prize of the first order. Prior to the January 12 quake, the US Embassy in Port-au-Prince was the fifth largest US embassy in the world, comparab to its embassies in such geopolitically strategic places as Berlin and Beijing.[17] With huge new oil finds off Cuba being exploited by Russian companies, with clear indications that Haiti contains similar vast untapped oil as well as gold, copper, uranium and iridium, with Hugo Chavez’ Venezuela as a neighbor to the south of Haiti, a return of Aristide or any popular leader committed to developing the resources for the people of Haiti, — the poorest nation in the Americas — would constitute a devastating blow to the world’s sole Superpower. The fact that in the aftermath of the earthquake, UN Haiti Special Envoy Bill Clinton joined forces with Aristide foe George W. Bush to create something called the Clinton-Bush Haiti Fund ought to give everyone pause.

According to Marguerite Laurent (\’Ezili Dantò\’) of the Haitian Lawyers’ Leadership Network, under the guise of emergency relief work, the US, France and Canada are engaged in a balkanization of the island for future mineral control. She reports rumors that Canada wants the North of Haiti where Canadian mining interests are already present. The US wants Port-au-Prince and the island of La Gonaive just offshore – an area identified in Aristide’s development book as having vast oil resources, and which is bitterly contested by France. She further states that China, with UN veto power over the de facto UN-occupied country, may have something to say against such a US-France-Canada carve up of the vast wealth of the nation. [18]


Notes:
1 Paul Mann, Caribbean Basins, Tectonic Plates & Hydrocarbons, Institute for Geophysics, The University of Texas at Austin, accessed in ww.ig.utexas.edu/research/projects/cbth/…/ProposalCaribbean.pdf .
2 Rory Carroll, Medvedev and Castro meet to rebuild Russia-Cuba relations, London Guardian, November 28, 2008 accessed in http://www.guardian.co.uk/world/2008/nov/28/cuba-russia.

3 Julian Gavaghan, Comrades in arms: When China’s President Hu met a frail Fidel Castro, London Daily Mail, November 19, 2008, accessed in http://www.dailymail.co.uk/news/article-1087485/Comrades-arms-When-Chinas-President-Hu-met-frail-Fidel-Castro.html.

4 Peoples’ Daily Online, China issues first policy paper on Latin America, Caribbean region, November 5, 2008, accessed in http://english.people.com.cn/90001/90776/90883/6527888.html .

5 Matthew R. Simmons, The World’s Giant Oilfields, Simmons & Co. International, Houston, accessed in http://www.simmonsco-intl.com/files/giantoilfields.pdf .

6 Anton Kolesnikov, et al, Methane-derived hydrocarbons produced under upper-mantle conditions, Nature Geoscience, July 26, 2009.

7 F. William Engdahl, War and Peak Oil—Confessions of an ‘ex’ Peak Oil believer, Global Research, September 26, 2007, accessed in http://www.globalresearch.ca/index.php?context=va&aid=6880 .

8 Dr. Georges Michel, Oil in Haiti, English translation from French, Pétrole en Haiti, March 27, 2004, accessed in http://www.margueritelaurent.com/pressclips/oil_sites.html#oil_GeorgesMichelEnglish .

9 Roberson Alphonse, Drill, and then pump the oil of Haiti! 4 oil companies request oil drilling permits, translated from the original French, June 27, 2008, accessed in ttp://www.bnvillage.co.uk/caribbean-news-village-beta/99691-drill-then-pump-oil-haiti-4-oil-companies-request-oil-drilling-permits.html

10 Ibid.

11 Ibid. The full text indicated that, “five big wells were drilled at Porto Suel (Maissade) of a depth of 9000 feet, at Bebernal, 9000 feet, at Bois-Carradeux (Ouest), at Dumornay, on the road Route Frare and close to the Chemin de Fer of Saint-Marc. A sample, a ‘carrot’ (oil reservoir) drilled up from the well of Saint-Marc in the Artibonite underwent a physical-chemical analysis in Munich, Germany, at the request of Mr. Broth. ‘The result of the analysis was returned on October 11, 1979 and revealed tracks of oil,’ confided the engineer, Willy Clemens, who had gone to Germany.”

12 Dr. Georges Michel, op. cit.

13 Marguerite Laurent, Haiti is full of oil, say Ginette and Daniel Mathurin, Radio Metropole, Jan 28, 2008, accessed inttp://www.margueritelaurent.com/pressclips/oil_sites.html#full_of_oil.

14 Jim Polson, Haiti earthquake may have exposed gas, aiding economy, Bloomberg News, January 26, 2010.

15 Espaillat Nanita revela en Haiti existen grandes recursos de oro y otros minerals, Espacinsular.org, 17 November, 2009, accessed in ttp://www.espacinsular.org/spip.php?article8942 .

16 The Aristide development plan was contained in the book published in Haiti in 2000, Investir dans l’Human. Livre Blanc de Fanmi Lavalas sous la Direction de Jean-Bertrand Aristide, Port-au-Prince, Imprimerie Henri Deschamps, 2000. It contained detailed maps, tables, graphics, and a national development plan for 2004 “covering agriculture, environment, commerce and industry, the financial sector, infrastructure, education, culture, health, women\’s issues, and issues in the public sector.” In 2004, using NGOs and the UN and a vicious propaganda campaign to vilify Aristide, the Bush administration got rid of the elected President.

17 Cynthia McKinney, Haiti: An Unwelcome Katrina Redux, Global Research, January 19, 2010, accessed in ttp://www.globalresearch.ca/index.php?context=va&aid=17063.

18 Marguerite Laurent (Ezili Danto), Did mining and oil drilling trigger the Haiti earthquake?, OpEd News.com, January 23, 2010, accessed in ttp://www.opednews.com/articles/1/Did-mining-and-oil-drillin-by-Ezili-Danto-100123-329.html.


F. William Engdahl is a frequent contributor to Global Research. Global Research Articles by F. William Engdahl

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Bases, Missiles, Wars: U.S. Consolidates Global Military Network

Global Research, January 27, 2010
Afghanistan is occupying center stage at the moment, but in the wings are complementary maneuvers to expand a string of new military bases and missile shield facilities throughout Eurasia and the Middle East.

The advanced Patriot theater anti-ballistic missile batteries in place or soon to be in Egypt, Georgia, Germany, Greece, Israel, Japan, Kuwait, the Netherlands, Poland, Qatar, Saudi Arabia, South Korea, Taiwan, Turkey and the United Arab Emirates describe an arc stretching from the Baltic Sea through Southeast Europe to the Eastern Mediterranean Sea and the Caucasus and beyond to East Asia. A semicircle that begins on Russia\’s northwest and ends on China\’s northeast.

Over the past decade the United States has steadily (though to much of the world imperceptibly) extended its military reach to most all parts of the world. From subordinating almost all of Europe to the North Atlantic Treaty Organization through the latter\’s expansion into Eastern Europe, including the former Soviet Union, to arbitrarily setting up a regional command that takes in the African continent (and all but one of its 53 nations). From invading and establishing military bases in the Middle East and Central and South Asia to operating a satellite surveillance base in Australia and taking charge of seven military installations in South America. In the vacuum left in much of the world by the demise of the Cold War and the former bipolar world, the U.S. rushed in to insert its military in various parts of the world that had been off limits to it before.

And this while Washington cannot even credibly pretend that it is threatened by any other nation on earth.

It has employed a series of tactics to accomplish its objective of unchallenged international armed superiority, using an expanding NATO to build military partnerships not only throughout Europe but in the Caucasus, the Middle East, North and West Africa, Asia and Oceania as well as employing numerous bilateral and regional arrangements.

The pattern that has emerged is that of the U.S. shifting larger concentrations of troops from post-World War II bases in Europe and Japan to smaller, more dispersed forward basing locations south and east of Europe and progressively closer to Russia, Iran and China.

The ever-growing number of nations throughout the world being pulled into Washington\’s military network serve three main purposes.

First, they provide air, troop and weapons transit and bases for wars like those against Yugoslavia, Afghanistan and Iraq, for naval operations that are in fact blockades by other names, and for regional surveillance.

Second, they supply troops and military equipment for deployments to war and post-conflict zones whenever and wherever required.

Last, allies and client states are incorporated into U.S. plans for an international missile shield that will put NATO nations and select allies under an impenetrable canopy of interceptors while other nations are susceptible to attack and deprived of the deterrent effect of being able to retaliate.

The degree to which these three components are being integrated is advancing rapidly. The war in Afghanistan is the major mechanism for forging a global U.S. military nexus and one which in turn provides the Pentagon the opportunity to obtain and operate bases from Southeast Europe to Central Asia.

One example that illustrates this global trend is Colombia. In early August the nation\’s vice president announced that the first contingent of Colombian troops were to be deployed to serve under NATO command in Afghanistan. Armed forces from South America will be assigned to the North Atlantic bloc to fight a war in Asia. The announcement of the Colombian deployment came shortly after another: That the Pentagon would acquire seven new military bases in Colombia.

When the U.S. deploys Patriot missile batteries to that nation – on its borders with Venezuela and Ecuador – the triad will be complete.

Afghanistan is occupying center stage at the moment, but in the wings are complementary maneuvers to expand a string of new military bases and missile shield facilities throughout Eurasia and the Middle East.

On January 28 the British government will host a conference in London on Afghanistan that, in the words of what is identified as the UK Government\’s Afghanistan website, will be co-hosted by Prime Minister Gordon Brown, Afghanistan\’s President Karzai and United Nations Secretary General Ban Ki-moon and co-chaired by British Foreign Minister David Miliband, his outgoing Afghan counterpart Rangin Spanta, and UN Special Representative to Afghanistan, Kai Eide.

The site announces that “The international community are [sic] coming together to fully align military and civilian resources behind an Afghan-led political strategy.” [1]

The conference will also be attended by “foreign ministers from International Security Assistance Force partners, Afghanistan’s immediate neighbours and key regional player [sic].”

Public relations requirements dictate that concerns about the well-being of the Afghan people, “a stable and secure Afghanistan” and “regional cooperation” be mentioned, but the meeting will in effect be a war council, one that will be attended by the foreign ministers of scores of NATO and NATO partner states.

In the two days preceding the conference NATO\’s Military Committee will meet at the Alliance\’s headquarters in Brussels, Belgium. “Together with the Chiefs of Defence of all 28 NATO member states, 35 Chiefs of Defence of Partner countries and Troop Contributing Nations will also be present.” [2]

That is, top military commanders from 63 nations – almost a third of the world\’s 192 countries – will gather at NATO Headquarters to discuss the next phase of the expanding war in South Asia and the bloc\’s new Strategic Concept. Among those who will attend the two-day Military Committee meeting are General Stanley McChrystal, in charge of all U.S. and NATO troops in Afghanistan; Admiral James Stavridis, chief U.S. military commander in Europe and NATO\’s Supreme Allied Commander; Pakistani Chief of the Army Staff General Ashfaq Parvez Kayani and Israeli Chief of General Staff Gabi Ashkenazi.

Former American secretary of state Madeleine Albright has been invited to speak about the Strategic Concept on behalf of the twelve-member Group of Experts she heads, whose task it is to promote NATO\’s 21st century global doctrine.

The Brussels meeting and London conference highlight the centrality that the war in Afghanistan has for the West and for its international military enforcement mechanism, NATO.

During the past few months Washington has been assiduously recruiting troops from assorted NATO partnership program nations for the war in Afghanistan, including from Armenia, Bahrain, Bosnia, Colombia, Jordan, Moldova, Mongolia, Montenegro, Ukraine and other nations that had not previously provided contingents to serve under NATO in the South Asian war theater. Added to forces from all 28 NATO member states and from Partnership for Peace, Mediterranean Dialogue, Istanbul Cooperation Initiative, Adriatic Charter and Contact Country programs, the Pentagon and NATO are assembling a coalition of over fifty nations for combat operations in Afghanistan.

Almost as many NATO partner nations as full mem
ber states have committed troops for the Afghanistan-Pakistan war: Afghanistan itself, Armenia, Azerbaijan, Australia, Austria, Bahrain, Colombia, Egypt, Finland, Georgia, Ireland, Jordan, Macedonia, Mongolia, Montenegro, New Zealand, Pakistan, Singapore, South Korea, Sweden, Ukraine and the United Arab Emirates.

The Afghan war zone is a colossal training ground for troops from around the world to gain wartime experience, to integrate armed forces from six continents under a unified command, and to test new weapons and weapons systems in real-life combat conditions.

Not only candidates for NATO membership but all nations in the world the U.S. has diplomatic and economic leverage over are being pressured to support the war in Afghanistan.

The American Forces Press Service featured a story last month about the NATO-led International Security Assistance Force\’s Regional Command East which revealed: “In addition to…French forces, Polish forces are in charge of battle space, and the Czech Republic, Turkey and New Zealand manage provincial reconstruction teams. In addition, servicemembers and civilians from Egypt, Jordan and the United Arab Emirates work with the command, and South Korea runs a hospital in the region.”

With the acknowledgment that Egyptian forces are assigned to NATO\’s Afghan war, it is now known that troops from all six populated continents are subordinated to NATO in one war theater. [3]

How commitment to the Alliance\’s first ground war relates to the Pentagon securing bases and a military presence spreading out in all directions from Afghanistan and how worldwide interceptor missile plans are synchronized with both developments can be shown region by region.

Central And South Asia

After the U.S. Operation Enduring Freedom attacks on and subjugation of Afghanistan began in October of 2001 Washington and its NATO allies acquired the indefinite use of air and other military bases in Afghanistan, including Soviet-built airfields. The West also moved into bases in Kyrgyzstan, Tajikistan and Uzbekistan and with less fanfare in Pakistan and Turkmenistan. It has also gained transit rights from Kazakhstan and NATO conducted its first military exercise in that nation, Zhetysu 2009, last September.

The U.S. has lobbied the Kazakh government to supply troops for NATO in Afghanistan (as it had earlier in Iraq) under the bloc\’s Partnership for Peace provisions.

The Black Sea

The year after Romania was brought into NATO as a full member in 2004 the U.S. signed an agreement to gain control over four bases in Romania, including the Mihail Kogalniceanu Air Base. The next year a similar pact was signed with Bulgaria for the use of three military installations, two of them air bases. The Pentagon\’s Joint Task Force-East (which operates from the above-named base) conducted nearly three-month-long joint military exercises last summer in Bulgaria and Romania in preparation for deployment to Afghanistan.

On January 24 eight Romanian and Bulgaria soldiers were wounded in a rocket attack on a NATO base in Southern Afghanistan. Three days earlier Romania announced that it would deploy 600 more troops to that nation, bringing its numbers to over 1,600. Bulgaria has also pledged to increase its troop strength there and is considering consolidating all its forces in the country in Kandahar, one of the deadliest provinces in the war zone.

Late last November Foreign Minister Rumyana Zheleva of Bulgaria was in Washington, D.C. to “hear the ideas of US President Barack Obama\’s administration on the strategy of the anti-missile defense in Europe.” [4]

During the same month Bogdan Aurescu, State Secretary for Strategic Affairs in the Romanian Foreign Ministry, stated that “The new variant of the US anti-missile shield could cover Romania.” [5] A local newspaper at the time commented on Washington\’s new “stronger, smarter, and swifter” missile shield plans that “A strong and modern surveillance system located in Romania, Bulgaria and Turkey could monitor three hot areas at once: the Black Sea, the Caucasus and the Caspian and relevant zones in the Middle East.” [6]

Also last November a Russian news source wrote that “Anonymous sources in the Russian intelligence community say that the United States plans to supply weapons, including a Patriot-3 air defense system and shoulder-launched Stinger missiles, worth a total of $100 million, to Georgia.” [7] In October the U.S. led the two-week Immediate Response 2009 war games to prepare the first of an estimated 1,000 Georgian troops for counterinsurgency operations in Afghanistan, prompting neighboring Abkhazia – which knew who the military training was also aimed against – to stage its own exercises at the same time.

American Patriot Advanced Capability-3 interceptor missiles in Georgia would be deployed against Russia, as they will be 35 miles from its border in Poland.

Former head of the Pentagon\’s Missile Defense Agency Lt. Gen. Henry Obering stated two years ago that Georgia and even Ukraine were potential locations for American missile shield deployments.

Middle East

Last October and November the U.S. and Israel held their largest-ever joint military exercise, Operation Juniper Cobra 10, which established another precedent in addition to the number of troops and warships involved: The simultaneous testing of five missile defense systems. An American military official present at the war games was one of several sources acknowledging that the exercises were in preparation for the Barack Obama administration\’s more extensive, NATO-wide and broader, missile interception system. Juniper Cobra was the initiation of the U.S. X-Band radar station opened in 2008 in Israel\’s Negev Desert. Over 100 American service members are based there for the foreseeable future, the first U.S. troops formally deployed in that nation.

In December the Jerusalem Post quoted an unnamed Israeli defense official as saying “The expansion of the war in Afghanistan opens a door for us.”

The same source wrote “the NATO-U.S. plan to deploy a cross-continent missile shield in Europe also represents an opportunity for the Jewish state to market its military platforms….” [8]
“Meanwhile, recent months have seen several senior NATO officials travel to Israel for discussions that reportedly focused on, among other things, how
Israel could help NATO troops fight in Afghanistan.” [9]

Last June Israeli President Shimon Peres led a 60-member delegation that included Defense Ministry Director-General Pinhas Buchris to Azerbaijan and Kazakhstan, on opposite ends of the Caspian Sea. A year ago “Kazakhstan\’s defense ministry said…it had asked Israel to help it modernize its military and produce weapons that comply with NATO standards.” [10]

The United Arab Emirates (UAE) is the first Arab country to provide troops to NATO for Afghanistan. It has a partnership arrangement with NATO under provisions of the Istanbul Cooperation Initiative for Gulf Cooperation Council (GCC) members.

Early this month a local newspaper announced that “the UAE became the largest foreign purchaser of US defence equipment with sales of $7.9bn, ahead of Afghanistan ($5.4bn), Saudi Arabia ($3.3bn) and Taiwan ($3.2bn).
“The spending included orders for munitions for the UAE\’s F-16 fighter jets as well as a new Patriot defensive missile system and a fleet of c
orvettes for the navy.” [11]

Nine days later the same newspaper reported on a visit by Lt. Gen. Michael Hostage, commander of the U.S. Air Force Central Command, to discuss “the possibility of setting up a shared early warning system and enhancing theegion\’s ballistic-missile deterrence.”

Hostage was quoted as saying “I am attempting to organize a regional integrated and missile defense capability with our GCC partners.” [12]

An Emirati general added, “The GCC needs a national and multinational ballistic missile defence (BMD) to counter long-range proliferating regional ballistic missile threats.” [13]

The missile shield is aimed against Iran.

Last September Pentagon chief Robert Gates said, “The reality is we are working both on a bilateral and a multilateral basis in the Gulf to establish the same kind of regional missile defense [as envisioned for Europe] that would protect our facilities out there as well as our friends and allies.” [14]
“In a September 17 briefing, Gates said…the United States has already formed a Gulf missile defense network that consisted of PAC-3 and the Aegis sea-based systems.” The exact system soon to be deployed in the Baltic Sea and Mediterranean and afterwards the Black Sea.

In addition, the “UAE has ordered the Terminal High Altitude Area Defense system, designed to destroy nuclear missiles in the exoatmosphere.
“Over the last two years, the Pentagon has been meeting GCC military chiefs to discuss regional and national missile defense programs….At the same time, the U.S. military has been operating PAC-3 in Kuwait and Qatar. The U.S. Army has also been helping Saudi Arabia upgrade its PAC-2 fleet.” [15]

Turkey\’s Hurriyet Daily News reported at the end of last year that “Turkey is set to make crucial defense decisions in 2010 as the U.S. offer to join a missile shield program and multibillion-dollar contracts are looming over the country\’s agenda.
“If a joint NATO missile shield is developed, such a move may force Ankara to join the mechanism despite the possible Iranian reaction….U.S. President Barack Obama\’s administration has invited Ankara to join a Western missile shield system….” [16]

An account of the broader strategy adds:
“U.S. officials are also urging Turkey to choose the Patriot Advanced Capability-3 (PAC-3) against Russian and Chinese rivals competing for a Turkish contract for the purchase of high-altitude and long-range antimissile defense systems….[A] new plan calls for the creation of a regional system in southeastern Europe, the Mediterranean and part of the Middle East.
“In phase one of the new Obama plan, the U.S. will deploy SM-3 interceptor missiles and radar surveillance systems on sea-based Aegis weapons systems by 2011. In phase two and by 2015, a more capable version of the SM-3 interceptor and more advanced sensors will be used in both sea-and land-based configurations. In later phases three and four, intercepting and detecting capabilities further will be developed.” [17]

One of Russia\’s main news agencies reported on U.S. plans to incorporate Turkey into its new missile designs, with Turkey as the only NATO state bordering Iran serving as the bridge between a continent-wide system in Europe and its extension into the Middle East: “According to the Milliyet daily, U.S. President Barack Obama last week proposed placing a \’missile shield\’ on Turkish soil….Both Russia and Iran will perceive that [deployment] as a threat,\’ a Turkish military source was quoted as saying.” [18]

A broader description of the interceptor missile project in progress includes: “Obama\’s team has…sought to \’NATO-ise\’ the US plan by involving other allies more closely in its development and deployment. The idea is to create a NATO chain of command similar to that long used for allied air defences. That would involve a NATO \’backbone\’ for command-and-control jointly funded by the allies, into which the US sea-based defences and other national assets, such as short-range Patriot missile interceptors purchased by European nations including Germany, the Netherlands and Greece, could be \’plugged in\’ to the NATO system creating a multi-layered defence shield.” [19]

The advanced Patriot theater anti-ballistic missile batteries in place or soon to be in Egypt, Georgia, Germany, Greece, Israel, Japan, Kuwait, the Netherlands, Poland, Qatar, Saudi Arabia, South Korea, Taiwan, Turkey and the United Arab Emirates describe an arc stretching from the Baltic Sea through Southeast Europe to the Eastern Mediterranean Sea and the Caucasus and beyond to East Asia. A semicircle that begins on Russia\’s northwest and ends on China\’s northeast.

Baltic Sea

Poland\’s Defense Ministry revealed on January 20 that the U.S. will deploy a Patriot Advanced Capability anti-ballistic missile battery and 100 troops to a Baltic Sea location 35 miles from Russian territory.

The country\’s foreign minister – former investment adviser to Rupert Murdoch and resident fellow of the American Enterprise Institute in Washington, D.C. -Radek Sikorski, recently pledged to increase Polish troop numbers in Afghanistan from the current 1,955. “We will be at 2,600 by April and 400 additional troops on standby, which we will deploy if there is a need to strengthen security.” [20]

Fellow Baltic littoral states Estonia, Latvia and Lithuania combined have almost 500 troops in Afghanistan, a number likely to rise. The Lithuanian Siauliai Air Base was ceded to NATO in 2004 after the three Baltic states became full members. The Alliance has flown regular air patrols in the region, with U.S. warplanes participating in six-month rotations, ever since. Within a few minutes flight from Russia.

The three nations will be probable docking sites for U.S. Aegis-class warships and their Standard Missile-3 interceptors under new Pentagon-NATO missile shield deployments.

Far East Asia

South Korea pledged 350 troops for NATO\’s Afghan war last year and in late December Seoul announced that it would send a ranking officer for the first time “to attend a North Atlantic Treaty Organization (NATO) conference to seek ways to strengthen cooperation with other nations in dispatching troops to Afghanistan and coordinate military operations there,” [21] likely a reference to the January 26-27 Military Committee meeting.

In the middle of January the U.S. conducted Beverly Bulldog 10-01 exercises in South Korea which “involved more than 7,200 U.S. airmen at Osan and Kunsan air bases and other points around the peninsula in an air war exercise” and “about 125 soldiers of the U.S. Army\’s Patriot missile unit in South Korea….” [22]

On January 14 the new government of Prime Minister Yukio Hatoyama ended Japan\’s naval refuelling mission carried out in support of the U.S. war in Afghanistan since 2001. However, pressure will be exerted on Tokyo at the January 28 conference in London, particularly by Hillary Clinton, to reengage in some capacity.

On last year\’s anniversary of the Japanese attack on Pearl Harbor, December 7, the U.S. and Japan held joint war games, Yama Sakura (Mountain Cherry Blossom), on the island of Hokkaido in northernmost Japan, that part of the country nearest Russia on the Sea of Japan. North Korea was the probable alleged belligerent.

Over 5,000 troops participated in drills that included “battling a regional threat that includes missile defenses, air defense and ground-force
s operations….”
“Japan\’s military has been actively developing its anti-missile defenses in cooperation with the United States. It currently has deployed Patriot PAC-3 missile defenses at several locations and also has two sea-based Aegis-equipped Kongo-class warships with anti-missile interceptors,” [23] the latter having engaged in joint SM-3 missile interceptions with the U.S. off Hawaii.

If support for the war in Afghanistan is linked with deployment of tactical missile shield installations in Israel and Poland, in the first case aimed at Iran and in the second at Russia, the case of Taiwan is even more overt.

Almost immediately after announcements that the U.S. would provide it with over 200 Patriot Advanced Capability-3 missiles and double the amount of frigates it had earlier supplied, with Taiwan planning to use the warships for Aegis Ballistic Missile Defense System upgrades, the nation\’s China Times newspaper wrote that “Following a recent US-Taiwan military deal, the Obama administration has demanded that Taiwan provide non-military aid for troops in Afghanistan….The US wants Taiwan to provide medical or engineering assistance to US troops in Afghanistan that will be increased….” [24] Dispatching troops to Afghanistan would be too gratuitous an incitement against China (which shares a narrow border with the South Asian nation), but Taiwan will nevertheless be levied to support the war effort there.

Wars: Stepping Stones For New Bases, Future Conflicts

The 78-day U.S. and NATO air war against Yugoslavia in 1999, Operation Allied Force, allowed the Pentagon to construct the mammoth Camp Bondsteel in Kosovo and within ten years to incorporate five Balkans nations into NATO. It also prepared the groundwork for U.S. Navy warships to dock at ports in Albania, Croatia and Montenegro.

Two years later the attack on Afghanistan led to the deployment of U.S. and NATO troops, armor and warplanes to five nations in Central and South Asia. The war in Afghanistan and Pakistan has also contributed to the Pentagon\’s penetration of the world\’s second most populous nation, India, which is being pulled into the American military orbit and integrated into global NATO. The U.S. and Israel are supplanting Russia as India\’s main arms supplier and U.S. Secretary of Defense Robert Gates recently returned from India where his mission included “lifting bilateral military relations from a policy-alignment plane to a commercial platform that will translate into larger contracts for American companies.” [25]

With the quickly developing expansion of the Afghanistan-Pakistan war into an Afghanistan-Pakistan-Yemen-Somalia theater, NATO warships are in the Gulf of Aden and the Indian Ocean and the U.S. has stationed Reaper drones, aircraft and troops in Seychelles. [On the same day as the London conference on Afghanistan a parallel meeting on Yemen will be held in the same city.]

After the 2003 invasion of Iraq the Pentagon gained air and other bases in that nation as well as what it euphemistically calls forward operating sites and base camps in Jordan, Kuwait and the United Arab Emirates.

In less than a decade the Pentagon and NATO have acquired strategic air bases and ones that can be upgraded to that status in Afghanistan, Bulgaria, Iraq, Kyrgyzstan, Lithuania and Romania.

Global NATO And Militarization Of The Planet

The January 26 Chief of Defense session of NATO\’s Military Committee with top military leaders of 63 countries attending – while the bloc is waging and escalating the world\’s largest and lengthiest war thousands of miles away from the Atlantic Ocean – is indicative of the pass that the post-Cold War world has arrived at. Never in any context other than meetings of NATO\’s Military Committee do the military chiefs of so many nations (including at least five of the world\’s eight nuclear powers), practically a third of the world\’s, gather together.

That the current meeting is dedicated to NATO operations on three continents and in particular to the world\’s only military bloc\’s new Strategic Concept for the 21st century – and for the planet – would have been deemed impossible twenty or even ten years ago. As would have been the U.S. and its NATO allies invading and occupying a Middle Eastern and a South Asian nation. And the elaboration of plans for an international interceptor missile system with land, air, sea and space components. In fact, though, all have occurred or are underway and all are integrated facets of a concerted drive for global military superiority.

Notes
1) http://afghanistan.hmg.gov.uk/en/conference
2) NATO, Allied Command Transformation, January 22, 2010
3) http://www.isaf.nato.int/en/article/news/u.s.-chairman-of-the-joint-chiefs-of-staff-tours-bases-outposts.html
4) Standart News, November 25, 2009
5) ACT Media, November 16, 2009
6) The Diplomat, November, 2009
7) RosBusinessConsulting/Komsomolskaya Pravda, November 10, 2009
8) Jerusalem Post, December 3, 2009
9) Xinhua News Agency, December 3, 2009
10) Agence France-Presse, January 22, 2009
11) The National, January 2, 2010
12) The National, January 11, 2010
13) Gulf News, January 12, 2010
14) World Tribune, September 30, 2009
15) Ibid
16) Hurriyet Daily News, December 30, 2009
17) Ibid
18) Russian Information Agency Novosti, December 16, 2009
19) Europolitics, January 20, 2010
20) Sunday Telegraph, January 17, 2010
21) Xinhua News Agency, December 22, 2009
22) Stars and Stripes, January 16, 2010
23) Washington Times, December 3, 2009
24) China Times, December 27, 2009
25) The Telegraph (Calcutta), January 2, 2009

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ZERO CORNER, DEBT COSTS & ISOLATION

December 24, 2009
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Escalating War in Afghanistan Apt to Hurt Fragile U.S. Economy

Global Research, December 25, 2009
If Iraq war spending helped plunge the U.S. economy into its worst slump since the Depression, what does President Obama think his escalation of the Afghan war will do it?


Besides forcing taxpayers to cough up fresh billions to enable the Pentagon to chase down a few hundred Taliban fighters, the Afghan war is liable to continue to inflate oil prices—and this means more than the ongoing swindle of motorists at the pump.


Higher oil prices also slow the global economy, causing our trading partners to buy fewer Made-in-USA goods, thus reducing demand for our products and leading to layoffs.


Spending money on war also siphons billions of dollars from truly productive uses.

“Today, no serious economist holds the view that war is good for the economy,” write Nobel Prize-winning economist Joseph Stiglitz and Harvard government finance expert Linda Bilmes in their book “The Three Trillion Dollar War: the True Cost of The Iraq Conflict.”


Referring to Iraq, they write, “The question is not whether the economy has been weakened by the war. The question is only by how much.” They note, “Oil prices started to soar just as the war began, and the longer it has dragged on, the higher prices have gone.”


Even so, by their estimate, (a word they stress,) the increased price of oil attributed to the war comes “to somewhat in excess of $1.6 trillion.” Not only consumers but State and local governments “have had to cut back other spending to pay the higher prices of oil imports.”


The co-authors reason, “Government money spent in Iraq does not stimulate the economy in the way that the same amounts spent at home would.” A thousand dollars spent to hire a Nepalese worker to perform services in Iraq does not directly increase the income of Americans, Stiglitz and Bilmes point out. Ditto for Afghanistan—and Pakistan, friends.


By contrast, the same thousand dollars spent on university research in the U.S. directly boosts the U.S. economy, then ripples out as the university researchers spend their money on goods and services, many of them made in America.

“The money spent on Iraq could have been spent on schools, roads, or research. These investments yield high returns. It could also have been spent more productively within the Department of Veterans Affairs, in its teaching and research programs, or in expanding medical facilities such as mental health clinics….Expenditures on the Iraq war have no benefits of this kind.” And by fiscal year 2010, the Center For Defense Information reports, the cost of the Afghan fighting will total $739 billion on the cost of Iraq fighting $2.337 trillion. Imagine the good those dollars would have done spent at home!


Bilmes and Stiglitz say by the end of last year, the wars in Afghanistan and Iraq hiked U.S. indebtedness by $900 billion and just the debt from military spending (excluding veterans’ benefits) will exceed $2 trillion.


Today, the Pentagon sponge not only causes the U.S. to borrow billions from China and others but it is also putting American entrepreneurs out of business. “As the private sector competes for funds with the government, private investment gets crowded out…As a result, output is lower.”


The co-authors add that the crowding out causes a loss in investment in our economy by $1.2 trillion and “the forgone output” (unbuilt homes, etc.) could be as high as $5trillion.


Another expense the Pentagon doesn’t talk about is the waste involved when it doles out no-bid contracts to favored insiders such as KBR. Nearly all of the top 10 war machine contractors are said to land the majority of contracts without competing bidders. What a kick in the teeth to capitalist free enterprise!


Have your stocks suffered? U.S. economist Robert Wescott, Stiglitz and Bilmes write, estimated in the years immediately following the beginning of the Iraq war that “the value of the stock market was some $4 trillion less than would have been predicted on the basis of past performance.”


Why? Because, “Uncertainties caused by the war, the resulting turmoil in the Middle East, and soaring oil prices dampened prices from what they ‘normally’ would have been. This decrease in corporate wealth implies that consumption was lower than it otherwise would have been, again weakening the economy.”


Back in 2007, Democrats on Congress’ Joint Economic Committee issued a report on the two wars estimating their cost from 2002 to 2008 at $1.6 trillion. They put the cost to an American family of four at $20,900. That’s a whopping sum—but given all the indirect ways the wars have crippled the U.S. economy, probably a gross undercount.


President Obama’s expansion of the Afghan war into Pakistan has engulfed much of the Middle East in bloodshed that is, sad to say, of America’s making. And pouring more U.S. treasure into Pakistan will only further weaken the U.S. economy. This writer believes the American people—who want only what President Eisenhower’s slogan, “Peace and Prosperity,” once promised them—are going to pay dearly for a widening war the majority of them reject. And it may also bring economic catastrophe our way, courtesy of the “military-industrial complex” of which Eisenhower warned.



Sherwood Ross is a Miami-based public relations counselor who formerly worked for major dailies and wire services. Reach him at sherwoodross10@gmail.com

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Iran Sanctions are Precursor to War

Global Research, December 22, 2009
Last week the House overwhelmingly approved a measure to put a new round of sanctions on Iran. If this measure passes the Senate, the United States could no longer do business with anyone who sold refined petroleum products to Iran or helped them develop their ability to refine their own petroleum. The sad thing is that many of my colleagues voted for this measure because they felt it would deflect a military engagement with Iran. I would put the question to them, how would Congress react if another government threatened our critical trading partners in this way? Would we not view it as asking for war?

This policy is pure isolationism. It is designed to foment war by cutting off trade and diplomacy. Too many forget that the quagmire in Iraq began with an embargo. Sanctions are not diplomacy. They are a precursor to war and an embarrassment to a country that pays lip service to free trade. It is ironic that people who decry isolationism support actions like this.

If a foreign government attempted to isolate the US economically, cut off our supply of gasoline, or starve us to death, would it cause Americans to admire that foreign entity? Or would we instead unite under the flag for the survival of our country?

We would not tolerate foreign covert operations fomenting regime change in our government. Yet our CIA has been meddling in Iran for decades. Of course Iranians resent this. In fact, many in Iran still resent the CIA’s involvement in overthrowing their democratically elected leader in 1953. The answer is not to cut off gasoline to the Iranian people. The answer is to stay out of their affairs and trade with them honestly. If our operatives were no longer in Iran, they would no longer be available as scapegoats for the regime to, rightly or wrongly, blame for every bad thing that happens. As bad as other regimes may be, it is up to their own people to deal with them so they can achieve true self-determination. When foreigners instigate regime change, the new government they institute is always perceived as serving the interest of the overthrowing country, not the people. Thus we take the blame for bad governance twice. Instead we should stay out of their affairs altogether.

With the exception of the military industrial complex, we all want a more peaceful world. Many are hysterical about the imminent threat of a nuclear Iran. Here are the facts: Iran has never been found out of compliance with the nuclear non-proliferation treaty (NPT) they signed. However, being surrounded by nuclear powers one can understand why they might want to become nuclear capable if only to defend themselves and to be treated more respectfully. After all, we don’t sanction nuclear capable countries. We take diplomatic negotiations a lot more seriously, and we frequently send money to them instead. The non-nuclear countries are the ones we bomb. If Iran was attempting to violate the non-proliferation treaty, they could hardly be blamed, since US foreign policy gives them every incentive to do so.


Ron Paul is a frequent contributor to Global Research. Global Research Articles by Ron Paul

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Honduras: The Coup That Never Happened

Global Research, December 22, 2009
Nov. 26, 2009 – Tegucigalpa, indeed all of the country, is covered in political graffiti. It doesn\’t take long to recognize that the state is in a moment of intense political struggle and repression, despite the international media\’s insistence that \’everything is fine.\’
Honduras has been long dominated by a handful of some ten to fifteen wealthy families. Everyone here knows their names – Facusse, Ferrari, Micheletti – and now they are scrawled on walls everywhere, next to accusations of golpista (coup-supporter) and asesino(assassin). These oligarchs used to be satisfied by controlling the economy and buying off the politicians, but they now increasingly insist upon exercising direct political control themselves, and their names show up more and more in congress, in the supreme court and now even in the executive branch.
It is in that context that an event that fit perfectly the definition of a coup is being recast by the Honduran elite, and its foreign allies, as a constitutional transfer of power. Never mind that the democratically elected President was abducted from his home and flown out of the country in his pyjamas on the morning of a non-binding referendum on re-opening the constitution to reform. Never mind that the movement to reform the constitution was driven by a social movement that wanted to re-found the country along more equitable lines, breaking the decades of uncontested dominance by the few over the many. Never mind that President Manuel Zelaya’s only transgression was that he was appealing directly to the people, in defiance of a congress and supreme court that was subservient to the oligarchy and would never consent to reforming a constitution that was written to serve their interests.
These details – say the golpistas – are not important. Instead, they spin a tale in which Zelaya was a minion of Venezuela’s President Hugo Chávez (who according to this discourse is inherently bad) and claim that Zelaya intended to change the constitution to make himself president-for-life. In order to preserve democracy, the story says, the congress and supreme court proceeded with a legal process to remove the elected president and replace him until new elections could be held. This story has been taken up by the international press, despite its being patently untrue, and repeated ad nauseam in the hopes of giving legitimacy to a process that seeks to re-entrench an oligarchy feeling its power threatened for the first time in decades.
The U.S.S. Honduras
The central issue at stake in Honduras today – and the spark for the oligarchy’s risky decision to carry out the coup in June – is the increasingly adamant insistence on the part of Honduran social movements for a constituyente, the striking of an assembly to re-write the constitution. It was, indeed, this very question that was to be put to a non-binding referendum on the morning of the coup and it was expected that the people would support the idea overwhelmingly. Like many of its Central and South American neighbours, Honduras’ principle legal code was written during a period dominated by U.S. Cold War imperialism and local comprador quasi-fascists. The legacy of the Operation Condor/School of the Americas era was, among so many other tragedies, legal and political structures that ensured the continued dominance of the elite few and Honduras was a perfect case study.

In fact, the current constitution of Honduras was ratified in 1982, during the period in which it earned the nickname ‘U.S.S. Honduras.’ The most successful resistance group in Honduras in the 1970s was called the National Federation of Honduras Peasants (FENACH) and wasn’t able to muster the kind of strength that the Sandinistas in Nicaragua built, nor even to achieve the limited level of challenge of the guerillas in Guatemala or El Salvador. As a result, Honduras became the perfect base for U.S. operations in Central America, and indeed the Contra Wars against Nicaragua were waged from the U.S. military base at Palmerola, just outside of Tegucigalpa, among countless other interventions and terror campaigns in the region.

In addition to the 18 military bases it established and the 10,000 American troops stationed there, the U.S. also provided the Honduran armed forces with over $100-million between 1980-84. This infusion of money and technical support to the military and business elite reinforced the strength of the oligarchy in Tegucigalpa and led to dramatic increases in poverty, inequality and political repression. The 1982 constitution was written after decades of military dictatorship while Honduras was playing host to a U.S.-led paramilitary contra force of over 15,000 soldiers trained in what we now call ‘counter-insurgency’ – specializing in campaigns of terror against primarily poor and ill-equipped guerilla forces and their supporters. During that period, according to Joan Kruckewitt, “the use of repression, instead of concessions and reform, became the norm” and that “the military emerged from the period of U.S.-led militarization as the most powerful sector in the country, with few checks and balances to restrain them.”[1] Indeed, between 1981-84, while the new constitution was being written, ratified and established into political order, the military carried out 214 political assassinations, 110 ‘disappearances,’ and 1,947 illegal detentions.
Given that context, calling the 1982 constitution ‘representative’ of any but the most elite strata of Honduran society would be patently absurd; the vast majority of people in the country were living in abject poverty and ceaseless fear of their own soldiers and police. But as the political climate in Latin America has shifted, and as new openings for emancipatory projects have emerged, Hondurans have become increasingly insistent on the need to re-establish the country on their own terms. Social movements centered around trade-unions, human rights and campesino groups increasingly drew people from a wide variety of Honduran civil society into a broad movement for significant reform, and had their greatest successes between 2005-2008 under President Manuel “Mel” Zelaya.
June 28th and the Demise of Democracy
Perhaps the most interesting thing about June 28th was the way that it created Mel Zelaya as a popular figure in Honduras. He was elected President in 2005 as a member of the Liberal Party, one of the two primary parties, neither known for any history of radicalism. Zelaya’s own background was as a junior-member of the oligarchy, a wealthy rancher from the south, and his long political career had never shown any signs of divergence from the standard conservatism of Honduran politics. In fact, the only thing that separated Zelaya from someone like Roberto Micheletti – the tremendously unpopular figure who emerged as de facto President after the coup – was that he recognized the growing popularity of the movements for social reform. His decisions to raise the minimum wage, to declare a moratorium on foreign mining concessions and to veto a law banning birth-control pills were not simply manifestations of his own radical spirit, no matter how noble his intentions may have been.
No, Zelaya executed in a calculating way – through undeniably positive – political decisions that kept him palatable to the people on whom his support relied. Indeed, he relied on that support increasingly after his support for the constituent assembly broke him from his allies in the Liberal Party. But Zelaya before June 28th was simply a means to an end for the social mo
vements in Honduras – a politician who had proven to be malleable to demonstrations of popular politics. His endorsement of the constituyente was the most important move he made and, in fact, he conducted the process with due diligence to the existing constitution and, despite its being repeated in every AP news bulletin since the coup, it never contained even the possibility of giving Zelaya another term in office.


The process was to be as follows: on June 28th, Hondurans would vote in a non-binding referendum on whether they supported the addition of a fourth ballot in the general elections scheduled for Nov. 29th. Normally, Honduran elections feature three ballots, corresponding to each of the three levels of government. If the referendum came back with a strong ‘yes,’ Zelaya would have added the fourth ballot asking the question “do you support the creation of a national constituent assembly to re-draft the constitution?” Accordingly, the constitution could not have possibly been changed before the Nov. 29th elections, and so Zelaya could not have possibly stood for re-election. Furthermore, the primaries for that election had already taken place and, again, Zelaya’s name was not put forward – even had he wanted to, it was illegal.


The notion that Zelaya intended to manipulate the process to stay in power is patently absurd. But the Honduran Congress, packed with members of the oligarchy, felt that the re-opening of the constitution could represent a real threat to their stranglehold on power and refused to accept the idea. Zelaya, in response, appealed directly to the people – implicitly rejecting the legitimacy of the Honduran form of representative democracy that had brought him to power in the first place – and vowed to pursue the constituyente if the people asked for it.


Of course, that process never went ahead, because the morning that the first non-binding poll was supposed to happen, Zelaya was abducted by the military and flown to Costa Rica. Roberto Micheletti was sworn in as de facto President, and the referendum was cancelled. Dramatic footage from that morning showed people in the early hours of the day, coming out to vote and finding the military in the streets – outrage turned to despair which, in turn, was channeled into absolute determination to resist this transparently coercive undermining of popular will. Demonstrations erupted in the immediate aftermath of the coup, and the golpista regime expected them to last for only a few days. Unlike Zelaya, they underestimated the strength and commitment of the Honduran movement for reform.


Resistencia!

“I’m proud that Hondurans are usually so peaceful, but I’m even more proud that we’re finally standing up for ourselves.” – Rosa Mayda Martinez, office worker, Jutiapa.


What followed was the largest sustained demonstration in Central American history. For 156 straight days, Hondurans took to the streets of Tegucigalpa. The numbers fluctuated from as high as hundreds of thousands to the still impressive thousands that were protesting right up to the day of the ‘elections’ on Nov. 29th. Predictably, they met widespread and violent repression. Between June and November, 33 people were killed in political violence and hundreds more were detained, beaten, kidnapped, raped and otherwise victimized by an increasingly militarized state apparatus. In September, President Zelaya returned to the country and took refuge in the Brazilian embassy, where he still remains, guarded by police who are under orders to arrest him the moment he leaves Brazilian territory.


Nov. 29, 2009 – In the southern town of Jutiapa, the community has refused to be intimidated by the military and police. Despite kidnappings and detentions, beating and death threats, and a ceaseless campaign of terror, they hang a banner on the main road through town declaring themselves against the coup and the elections. They pose for a photo, cheering beneath their banner, knowing that police are stationed just a few blocks away.


There is much more to be said about the nature of the resistance than space here permits. For the time being, it will have to suffice to say that the coup produced the unintended consequence of uniting an otherwise fragmented group of organizations into a broad coalition – the Frente Popular Nacional de Resistencia (National Popular Resistance Front) – which has become the most important popular organization in Honduras. Its members come primarily from the poorest classes – workers and campesinos – but are also drawn from the relatively small ‘middle’ classes, including teachers, lawyers, doctors, left-liberal politicians and civil servants etc. They have worked closely with local human rights organizations and some foreign NGOs, but they have maintained absolute autonomy from foreign interlocutors (whatever their intentions) in defiance of the characterization of the Frente as a Chávez-exported ring of professional troublemakers and socialists.


The demonstrations have not been limited to Tegucigalpa. The second largest city in Honduras, San Pedro Sula, is a major industrial center and is the epicenter of foreign-owned Honduran maquiladora-style production. Protests have erupted there regularly, including one on the day of the Nov. 29th ‘elections.’ It was repressed with tear gas and rubber bullets injuring dozens of people, including a Reuters photographer from Brazil. Furthermore, rural Hondurans have been active in the resistance, blocking highways, distributing information and protesting outside government offices. Only a few areas of Honduras have not seen major movements against the coup – primarily Roatan and the Bay Islands, a ring of tropical island destinations off the north coast, dotted with, and politically controlled by, foreign-owned resort hotels (many of them Canadian).


The foreign and local elite who have turned the islands, and most of their inhabitants, into tools for their personal profit have been the most vocally supportive of the coup. They pump out misleading or, at best, willfully ignorant anti-Zelaya rants everywhere they can, notably on internet news sites; my own reports have been consistently attacked and, in one instance, they even went as far as to threaten my life. These attacks are most likely motivated by the insistence of the social movements for tax reforms that would bring a share of their profits back to the state for the purposes of re-distribution through increased support for education, housing, health care and other social programs. Foreign-owned companies currently operate in an almost-entirely tax free environment, one of the many grievances that the proponents of the constituyentewere hoping to redress.


The Re-Emergence of State Terror

“In my case, I am known by the police, they can do anything to me. I thought about moving to a new house with comrades, do you think this is a good idea?” – Rosner Giovanni Reyes, member of Resistance, in a meeting with COFADEH representatives, Nov. 28th, 2009.

But the golpistas and their beneficiaries are bound and determined to block that process indefinitely. Repression of the resistance has been violent and thorough. Human rights groups like the Committee of the Families of the Disappeared and Detained in Honduras (COFADEH) have worked tirelessly since June 28th to produce detailed
documentation of the brutality. Their reports, not surprisingly, fall on deaf ears. The campaign of state terror they have documented is too far-reaching to possibly reproduce here, but they pr ded a very useful summation in a report on Nov. 28th. This report, produced by the five leading human rights groups in Honduras, was presented to the Tribunal Supremo Electoral (TSE) on the day before the ‘elections’ in a formal declaration demanding that the elections be cancelled on account of the impossibility of their being fair and free in the context of the coup and state terror:

“(These elections are being conducted) in a context of grave and systematic violations of human rights. Since the day of the coup, we have documented 33 violent and politically motivated deaths, torture, cruel and inhuman and degrading treatment, sexual assault and restrictions on freedom of association, assembly, expression, opinion and more.”[2]


They go on to note that holding elections under these circumstances is absurd, given that the same people who are committing this violence are those who are supposed to be responsible for running fair elections. They also note some of the most high-profile cases of repression. Carlos H. Reyes, a member of the social movements and initially an independent Presidential candidate, was hospitalized after a brutal blow from police in a peaceful demonstration. Ulises Sarmiento, a well-known member of the Liberal Party who sympathized with the resistance had his home ransacked by soldiers with automatic weapons in the province of Olancho. Eliseo Hernandez Juarez, a vice-mayoral candidate, was assassinated.


Not surprisingly, the violence has not been limited to high-profile politicians. Victor Corrales Mejia and his son, members of the resistance, were arrested the night before the elections and beaten in their home. Police came to their home, hit Victor in the head and spine with batons and threatened to kill him. “They kicked in my door, they threw me out like I was a sack of corn, they want to intimidate us,” he told me. “But our desire for democracy is stronger than they are.” In Comayagua, where the resistance is strong and led by teachers, campesinos and women’s and indigenous rights activists, the Mayor threatened to give the names and addresses of anyone who interfered with the election to the military. In fact, the military sent a letter a month before the elections demanding such lists from all the Mayors across the country. Meanwhile, state henchmen shot Alejandro Villatoro, the owner of Radio Globo – one of the few media outlets brave enough to speak out against the coup – and stole the computer from which the station was broadcasting.


Indeed, Radio Globo had by that point resorted almost exclusively to broadcasting online from secret locations, after months of repression. Radio Globo, along with Radio Progreso and Radio Uno, television station Canal 36 and newspaper El Libertador are among the media outlets that have faced relentless repression since the coup. Some, like Canal 36, have shut down altogether after having equipment destroyed, signals interrupted, offices ransacked and editors assassinated. Even organizations that are not directly linked to the resistance are being targeted in the context of police impunity. Red Comal, a campesino organization that helps small farmers to market their produce and runs educational campaigns designed to build networks between campesinos and social movements, had its offices attacked, computers and money stolen, and employees beaten. Miguel Alonzo Macias, the director of the organization, explained to me, “we teach people why they are poor. For that, we are a threat.”


Whitewashing the Coup

“No to the coup regime elections! Free men and women of Honduras, they want to use your vote to legalize the coup. Each vote is a blow to your freedom.” – Resistencia poster.


Given the context described above, it is hard to imagine how anyone could seriously claim that ‘the event’ on Nov. 29th could be called a free or fair election. On the day of the vote, the Frente urged Hondurans to stay home and boycott la farsa(farce). And that is precisely what happened – on a day that is normally a boisterous street party filled with red or blue flags representing to the two primary political parties, Honduras was quiet and subdued. Most polling stations had more military and police than civilians. The TSE itself admitted that only around 1.7 million people voted, in a country of nearly 8 million, with 4.6 million eligible to vote. That makes a turnout of around 35%, the lowest since the end of military dictatorships in the early 80s. Inexplicably, on the night of Nov. 29th, the TSE announced a projected turnout of 60%, which became the number repeated in almost every international news source. Fox News in the United States was one of the few exceptions, reporting the absurd figure of 70% – no one has yet been able to explain where that number came from.


A few days after the election, video journalist Jesse Freeston of the Real News was able to get into the TSE headquarters and produced a video documenting fraudulent reporting of voter totals, designed to create the illusion that Hondurans had not boycotted the election. This documentation is important in demonstrating to the international community that these elections should never be recognized as legitimate in any way. But it is totally unnecessary for Hondurans themselves, who knew long before the elections ever took place that they would be a sham, and had that knowledge confirmed on Nov. 29th. As the human rights organizations explained in their Nov. 28th document:

“holding reliable elections does not depend solely on the implementation of sophisticated technology, international observers or the strict adherence to the formal process; it also requires knowing that there was a clean process preceding the elections, produced by a climate of full freedom, one where candidates and the electorate can express themselves openly and in a context of absolute equality, without fear of assassination, torture, detention and incarceration.”[3]


Indeed, an interview I conducted with Edward Fox, a former USAID official, Republican campaign financer and an elections observer sent from Washington to legitimate the process, demonstrated quite plainly that the few organizations who went to Honduras for Nov. 29th were not interested in investigating what was happening away from the polling stations. As we spoke on camera from Miami International Airport on Dec. 1st, Fox claimed to know nothing about “alleged” human rights violations, cast suspicion on the groups documenting the violence despite not being able to name a single one of them, and justified his endorsement of the elections by telling me that he had spoken to the U.S. Ambassador who is, Fox reminded me, “there all the time.” His organization, the Washington Senior Observer Group, reported that they:
“witnessed the enthusiastic desire of thousands of Honduran citizens to cast their ballots. Many took time to thank us for our presence today. Without exception, they expressed confidence in the electoral system, pride in exercising their right to vote, and a profound hope that their election is a decisive step toward the restoration of the constitutional and democratic order in Honduras.”[4]

They further asserted that they
saw “no voter intimidation by any group, individual, or party” and that their observations “coincide with those reported by other observers and by the media throughout Honduras.” Nonetheless, when I asked Edward Fox about those other observers, the groups who have been documenting the violence and terror, he admitted that he had not spoken to any of them. Avoiding them must have taken some effort, because when those groups presented their report to the TSE on Nov. 28th, the U.S. observers were there; in fact, the human rights delegation had their meeting scheduled for 2:00 p.m. but had to wait until well after 4:00 p.m. because TSE officials were meeting with the U.S. observers. We were all there together, and at one point I overheard the U.S. observers chatting amongst themselves derisively about the human rights group and about Honduras in general.


Looking Ahead

“Where are the people? The people are in the streets, struggling for their freedom!” – Resistencia chant.


Sadly, though not surprisingly, reports like Fox’s bolstered the positions taken by governments of the global North and their right-wing allies in Latin America. Both have fallen all over themselves to legitimate the election process and, in so doing, legitimate the coup itself. Canada’s foreign affairs minister Peter Kent responded to the elections announcing that Canada:

“congratulates the Honduran people for the relatively peaceful and orderly manner in which the country’s elections were conducted. While Sunday’s elections were not monitored by international organizations such as the Organization of American States, we are encouraged by reports from civil society organizations that there was a strong turnout for the elections, that they appear to have been run freely and fairly, and that there was no major violence.”[5]


Much more needs to be said about Canada’s relationship to Honduras and the golpistas. A petition, calling for non-recognition of the elections is circulating and has garnered nearly 400 names – a small step toward building public awareness of Canada’s complicity in this desecration of democracy and human rights.


In the meantime, a death squad killed five more people on a street corner on Dec. 6. A human rights worker with links to Amnesty International was murdered on Dec. 14. The teenaged daughter of a critical journalist was found dead on Dec. 16. Repression has increased and turned even more vicious and calculated since the farce elections; the regime has evidently been emboldened by their successful misrepresentation of the fiesta democratica and the willingness of the international media to ignore the reality facing the majority of Hondurans. Nonetheless, the resistance continues, having realized long ago that this will be a long struggle. It is hard to predict at this point what shape the struggle will take in the coming months, though it is clear that the Jan. 27th transfer of power to golpe-President-elect Pepe Lobo – Pepe Robo (the Robber) as the walls call him – will be another flashpoint for the resistance. “The police keep telling us they will come to our homes and take us away, and it makes us want to run,” says Francisca, a high school teacher in Comayagua. “But we have worked too hard for too long to build the homes we have.” •


Tyler Shipley is a doctoral candidate and activist from Toronto, Canada. He did research and human rights observation in Tegucigalpa with a delegation organized by Rights Action, reporting on the resistance to the coup and the Nov. 29 elections. The entire photo essay “Honduras Police State – A Week In Pictures” is at available at toronto.mediacoop.ca.


Notes

1. Joan Kruckewitt, “U.S. Militarization of Honduras in the 1980s and the Creation of CIA-backed Death Squads,” in Cecilia Mejivar and Nestor Rodriguez, When States Kill: Latin America, the U.S., and Technologies of Terror, University of Texas Press, Austin, TX, 2005.
2. Official Statement by representatives of CODEH, COFADEH, FIAN, CDM, CPTRT, CIPRODEH to the TSE, Nov. 28, 2009. Translated from Spanish.
3. Ibid.
4. Statement on the National Elections in Honduras, Washington Senior Observer Group, December 1, 2009.
5. Peter Kent, “Canada Congratulates Honduran People on Elections,” December 1, 2009.



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Mounting Political Tensions as the US, Russia and China Compete for the Control of the World';s Oil and Gas Reserves

Global Research, December 22, 2009
China’s completion of an historic natural gas pipeline with Kazakhstan bypassing Russia this week tightens the Asian behemoth’s grip on energy resources needed to fuel a burgeoning economy, a desire also forcing it on a quest for oil and gas wealth in other corners of the globe.


China is not alone in this scramble for energy security. Hungry for oil and gas, world powers like Russia and the United States are also relying on different strategies to grab resource treasures but their efforts have raised questions about conflicts down the road.


The U.S. Energy Information Administration describes China as the second largest energy consumer behind the United States . Taking advantage of the world’s financial crisis, the Asian powerhouse has tapped currency reserves to invest in both Russia and Central Asia , helping to construct power plants and other domestic infrastructure in return for long-term oil and gas supplies, said Ben Montalbano, a senior research analyst at the Washington-based Energy Policy Research Foundation.


Lacking energy reserves, China has been “working hard to lock in” investments in Africa, Central Asia and Venezuela , Montalbano told OilPrice.com. The country has also sought natural gas to satisfy increasing consumption and built many liquefied natural gas receiving terminals over the last year, he added.

“Cut off from African natural resources . . . China ‘s growth stops,” warned Peter Pham, director of the Africa Project at the New York-based National Committee on American Foreign Policy and an associate professor at James Madison University in Harrisonburg , Virginia .


This intensive bid for energy, however, has caused friction with the world community. Under an investment strategy in Africa, China “wins over very easily governing elites but doesn’t necessarily win over the populace,” Pham charged.


Chinese state-owned companies tend not to invest in exploration but prefer to offer “inducements,” he said. China’s offer of multibillion-dollar credit facilities to Angola was pivotal for the African nation to get “off the hook” from negotiating with the International Monetary Fund and the World Bank to meet “serious reform and certain conditions” before the organizations granted such facilities, he argued. China then bought stakes from the Angolan state oil company, he said.


China, moreover, has helped the Khartoum government to evade United Nations sanctions by assisting in the building of at least three weapons factories in Sudan , he said.


Not to be outdone, Russia has returned to Africa in “considerable force” pursuing natural resources in part to recover its “great power status,” said Pham. Russian firms are trying to “lock in partnerships” with resource producers to form, for example, the “stream of a natural gas OPEC,” he said.


Russia holds the world\’s largest natural gas reserves and the eighth largest oil reserves, according to the U.S. Energy Information Administration. Next year, its federal budget will be nearly 50 percent derived from oil and gas exports, emphasizing a reliance on gas exports to “feed the budget,” Montalbano of the Energy Policy Research Foundation told OilPrice.com. To some extent, China and Russia have worked together in the oil and gas domain. Earlier this year, China announced a $25-billion loan to Russian firms in return for a 20-year supply of crude oil.


Russia is not the “behemoth of financial reserves” it was two years ago and has a “fairly weak” banking system and industry, Montalbano maintained. While the country is discussing certain projects with Iran and potentially with Iraq , it is mainly concerned with opening up huge Arctic gas fields because its existing fields are declining, he noted.


Russia and other northern countries have increasingly turned to the melting Arctic but the region is “still up for delineation,” said Boyko Nitzov, director of the Eurasia Energy Center at the Atlantic Council in Washington . “The Arctic is still fairly off limits for large-scale production of oil and gas” and difficult to access especially during the winter, Nitzov explained.


For American oil companies, an over-reliance on the Middle East for energy needs has shifted its attention to Africa, a major energy supplier over the last several years edging out the Persian Gulf in energy imports to the United States , Pham explained. U.S. firms tend to forge production-sharing agreements or explore resource development, but lack carte blanche in their pursuit of oil riches in places like Africa due to U.S. government sanctions and public pressure, he said. This puts the United States at “a slight disadvantage” relative to Russia and China , he added.


Competition for energy assets will probably not lead to open conflict but rather to increasing political tension, predicted Africa expert Pham. Leading African organizations, Europe and the United States never recognized Guinea ‘s military coup last year, which led to a subsequent massacre of opposition members. Yet China signed a deal with the military junta, risking a perception as a “rogue operator in the single-minded pursuit of resources,” he warned.


Although Russia and China, meanwhile, have both benefited from joint oil and gas investments, making conflict doubtful in the forseeable future, “10, 20 years down the road, who knows,” Montalbano added.


Fawzia Sheikh of OilPrice.com who focus on Fossil Fuels, Alternative Energy, Metals, and Geopolitics. To find out more visit their website at: http://www.oilprice.com

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EU/IMF Revolt: Greece, Iceland, Latvia May Lead the Way

Global Research, December 22, 2009
Total financial collapse, once a problem only for developing countries, has now come to Europe. The International Monetary Fund is imposing its “austerity measures” on the outer circle of the European Union, with Greece, Iceland and Latvia the hardest hit. But these are not your ordinary third world debtor supplicants. Historically, the Vikings of Iceland successfully invaded Britain; Latvia n tribes repulsed the Vikings; and the Greeks conquered the whole Persian empire. If anyone can stand up to the IMF, these stalwart European warriors can.


Dozens of countries have defaulted on their debts in recent decades, the most recent being Dubai, which declared a debt moratorium on November 26, 2009. If the once lavishly-rich Arab emirate can default, more desperate countries can; and when the alternative is to destroy the local economy, it is hard to argue that they shouldn’t. That is particularly true when the creditors are largely responsible for the debtor’s troubles, and there are good grounds for arguing the debts are not owed. Greece’s troubles originated when low interest rates that were inappropriate for Greece were maintained to rescue Germany from an economic slump. And Iceland and Latvia have been saddled with responsibility for private obligations to which they were not parties. Economist Michael Hudson writes:

“The European Union and International Monetary Fund have told them to replace private debts with public obligations, and to pay by raising taxes, slashing public spending and obliging citizens to deplete their savings. Resentment is growing not only toward those who ran up these debts . . . but also toward the neoliberal foreign advisors and creditors who pressured these governments to sell off the banks and public infrastructure to insiders.”


The Dysfunctional EU: Where a Common Currency Fails


Greece may be the first in the EU outer circle to revolt. According to Ambrose Evans-Pritchard in Sunday’s Daily Telegraph, “Greece has become the first country on the distressed fringes of Europe\’s monetary union to defy Brussels and reject the Dark Age leech-cure of wage deflation.” Prime Minister George Papandreou said on Friday:

“Salaried workers will not pay for this situation: we will not proceed with wage freezes or cuts. We did not come to power to tear down the social state.”


Notes Evans-Pritchard:

“Mr Papandreou has good reason to throw the gauntlet at Europe\’s feet. Greece is being told to adopt an IMF-style austerity package, without the devaluation so central to IMF plans. The prescription is ruinous and patently self-defeating.”


The currency cannot be devalued because the same Euro is used by all. That means that while the country’s ability to repay is being crippled by austerity measures, there is no way to lower the cost of the debt. Evans-Pritchard concludes:

“The deeper truth that few in Euroland are willing to discuss is that EMU is inherently dysfunctional – for Greece, for Germany, for everybody.”


Which is all the more reason that Iceland, which is not yet a member of the EU, might want to reconsider its position. As a condition of membership, Iceland is being required to endorse an agreement in which it would reimburse Dutch and British depositors who lost money in the collapse of IceSave, an offshore division of Iceland’s leading private bank. Eva Joly, a Norwegian-French magistrate hired to investigate the Icelandic bank collapse, calls it blackmail. She warns that succumbing to the EU’s demands will drain Iceland of its resources and its people, who are being forced to emigrate to find work.


Latvia is a member of the EU and is expected to adopt the Euro, but it has not yet reached that stage. Meanwhile, the EU and IMF have told the government to borrow foreign currency to stabilize the exchange rate of the local currency, in order to help borrowers pay mortgages taken out in foreign currencies from foreign banks. As a condition of IMF funding, the usual government cutbacks are also being required. Nils Muiznieks, head of the Advanced Social and Political Research Institute in Riga, Latvia, complained:

“The rest of the world is implementing stimulus packages ranging from anywhere between one percent and ten percent of GDP but at the same time, Latvia has been asked to make deep cuts in spending – a total of about 38 percent this year in the public sector – and raise taxes to meet budget shortfalls.”


In November, the Latvian government adopted its harshest budget of recent years, with cuts of nearly 11%. The government had already raised taxes, slashed public spending and government wages, and shut dozens of schools and hospitals. As a result, the national bank forecasts a 17.5% decline in the economy this year, just when it needs a productive economy to get back on its feet. In Iceland, the economy contracted by 7.2% during the third quarter, the biggest fall on record. As in other countries squeezed by neo-liberal tourniquets on productivity, employment and output are being crippled, bringing these economies to their knees.


The cynical view is that that may have been the intent. Instead of helping post-Soviet nations develop self-reliant economies, writes Marshall Auerback, “the West has viewed them as economic oysters to be broken up to indebt them in order to extract interest charges and capital gains, leaving them empty shells.”


But the people are not submitting quietly to all this. In Latvia last week, while the Parliament debated what to do about the nation’s debt, thousands of demonstrating students and teachers filled the streets, protesting the closing of a hundred schools and reductions in teacher salaries of up to 60%. Demonstrators held signs saying, “They have sold their souls to the devil” and “We are against poverty.” In the Iceland Parliament, the IceSave debate had been going on for over 140 hours at last report, a new record; and a growing portion of the population opposes underwriting a debt they believe the government does not owe.


In a December 3 article in The Daily Mail titled “What Iceland Can Teach the Tories,” Mary Ellen Synon wrote that ever since the Icelandic economy collapsed last year, “the empire builders of Brussels have been confident that the bankrupt and frightened Icelanders must finally be ready to exchange their independence for the ‘stability’ of EU membership.” But last month, an opinion poll showed that 54 percent of all Icelanders oppose membership, with just 29 percent in favor. Synon wrote:

“The Icelanders may have been scared out of their wits last year, but they are now climbing out from under the ruins of their prosperity and have decided that the most valuable thing they have left is their independence. They are not willing to trade it, not even for the possibility of a bail-out by the European Central Bank.”


Iceland, Latvia and Greece are all in a position to call the bluff of the IMF and EU. In an October 1 article called “Latvia – the Insanity Continues,” Marshall Auerback maintained that Latvia’s debt problem could be fixed over a weekend, by a list of measures including (1) not answering the phone when foreign creditors call the government; (2) declaring the banks insolvent, converting their external debt t
o equity, and having them reopen with full deposit insurance guaranteed in local currency; and (3) offering “a local currency minimum wage job that includes healthcare to anyone willing and able to work as was done in Argentina after the Kirchner regime repudiated the IMF’s toxic package of debt repayment.”


Evans-Pritchard suggested a similar remedy for Greece, which he said could break out of its death loop by following the lead of Argentina. It could “restore its currency, devalue, pass a law switching internal euro debt into [the local currency], and ‘restructure’ foreign contracts.”


The Road Less Traveled: Saying No to the IMF


Standing up to the IMF is not a well-worn path, but Argentina forged the trail. In the face of dire predictions that the economy would collapse without foreign credit, in 2001 it defied its creditors and simply walked away from its debts. By the fall of 2004, three years after a record default on a debt of more than $100 billion, the country was well on the road to recovery; and it achieved this feat without foreign help. The economy grew by 8 percent for 2 consecutive years. Exports increased, the currency was stable, investors were returning, and unemployment had eased. “This is a remarkable historical event, one that challenges 25 years of failed policies,” said economist Mark Weisbrot in a 2004 interview quoted in The New York Times. “While other countries are just limping along, Argentina is experiencing very healthy growth with no sign that it is unsustainable, and they’ve done it without having to make any concessions to get foreign capital inflows.”


Weisbrot is co-director of a Washington-based think tank called the Center for Economic and Policy Research, which put out a study in October 2009 of 41 IMF debtor countries. The study found that the austere policies imposed by the IMF, including cutting spending and tightening monetary policy, were more likely to damage than help those economies.


That was also the conclusion of a study released last February by Yonca Özdemir from the Middle East Technical University in Ankara, comparing IMF assistance in Argentina and Turkey. Both emerging markets faced severe economic crises in 2001, preceded by chronic fiscal deficits, insufficient export growth, high indebtedness, political instability, and wealth inequality.

Where Argentina broke ranks with the IMF, however, Turkey followed its advice at every turn. The end result was that Argentina bounced back, while Turkey is still in financial crisis. Turkey’s reliance on foreign investment has made it highly susceptible to the global economic downturn. Argentina chose instead to direct its investment inward, developing its domestic economy.


To find the money for this development, Argentina did not need foreign investors. It issued its own money and credit through its own central bank. Earlier, when the national currency collapsed completely in 1995 and again after 2000, Argentine local governments issued local bonds that traded as currency. Provinces paid their employees with paper receipts called “Debt-Cancelling Bonds” that were in currency units equivalent to the Argentine Peso. The bonds canceled the provinces’ debts to their employees and could be spent in the community. The provinces had actually “monetized” their debts, turning their bonds into legal tender.


Argentina is a large country with more resources than Iceland, Latvia or Greece, but new technologies are now available that could make even small countries self-sufficient. See David Blume, Alcohol Can Be a Gas.


Local Currency for Local Development


Issuing and lending currency is the sovereign right of governments, and it is a right that Iceland and Latvia will lose if they join the EU, which forbids member nations to borrow from their own central banks. Latvia and Iceland both have natural resources that could be developed if they had the credit to do it; and with sovereign control over their local currencies, they could get that credit simply by creating it on the books of their own publicly-owned banks.


In fact, there is nothing extraordinary in that proposal. All private banks get the credit they lend simply by creating it on their books. Contrary to popular belief, banks do not lend their own money or their depositors’ money. As the U.S. Federal Reserve attests, banks lend new money, created by double-entry bookkeeping as a deposit of the borrower on one side of the bank’s books and as an asset of the bank on the other.


Besides thawing frozen credit pipes, credit created by governments has the advantage that it can be issued interest-free. Eliminating the cost of interest can cut production costs dramatically.


Government-issued money to fund public projects has a long and successful history, going back at least to the early eighteenth century, when the American colony of Pennsylvania issued money that was both lent and spent by the local government into the economy. The result was an unprecedented period of prosperity, achieved without producing price inflation and without taxing the people.


The island state of Guernsey, located in the Channel Islands between England and France, has funded infrastructure with government-issued money for over 200 years, without price inflation and without government debt.


During the First World War, when private banks were demanding 6 percent interest, Australia’s publicly-owned Commonwealth Bank financed the Australian government’s war effort at an interest rate of a fraction of 1 percent, saving Australians some $12 million in bank charges. After the First World War, the bank’s governor used the bank’s credit power to save Australians from the depression conditions prevailing in other countries, by financing production and home-building and lending funds to local governments for the construction of roads, tramways, harbors, gasworks, and electric power plants. The bank’s profits were paid back to the national government.


A successful infrastructure program funded with interest-free national credit was also instituted in New Zealand after it elected its first Labor government in the 1930s. Credit issued by its nationalized central bank allowed New Zealand to thrive at a time when the rest of the world was struggling with poverty and lack of productivity.


The argument against governments issuing and lending money for infrastructure is that it would be inflationary, but this need not be the case. Price inflation results when “demand” (money) increases faster than “supply” (goods and services). When the national currency is expanded to fund productive projects, supply goes up along with demand, leaving consumer prices unaffected.


In any case, as noted above, private banks themselves create the money they lend. The process by which banks create money is inherently inflationary, because they lend only the principal, not the interest necessary to pay their loans off. To come up with the interest, new loans must be taken out, continually inflating the money supply with new loan-money. And since the money is going to the creditors rather than into producing new goods and services, demand (money) increases without increasing supply, producing price inflation. If credit were ex
tended for public infrastructure projects interest-free, inflation could actually be reduced, by reducing the need to continually take out new loans to find the elusive interest to service old loans.


The key is to use the newly-created money or credit productive projects that increase goods and services, rather than for speculation or to pay off national debt in foreign currencies (the trap that Zimbabwe fell into). The national currency can be protected from speculators by imposing exchange controls, as Malaysia did in 1998; imposing capital controls, as Brazil and Taiwan are doing now; banning derivatives; and imposing a “Tobin tax,” a small tax on trade in financial products.


Making the Creditors Whole


If the creditors are really interested in having their debts repaid, they will see the wisdom of letting the debtor nation build up its producing economy to give it something to pay with. If the creditors are not really interested in repayment but are using the debt as a tool to exploit the debtor country and strip it of its assets, the creditors’ bluff needs to be called.


When the debtor nation refuses to pay, the burden shifts to the creditors to make themselves whole. British economist Michael Rowbotham suggests that in the modern world of electronic money, this can be accomplished by creative banking regulators simply with a change in accounting rules. “Debt” today is created with accounting entries, and it can be reversed with accounting entries. Rowbotham outlines two ways the rules might be changed to liquidate impossible-to-repay debt:

“The first option is to remove the obligation on banks to maintain parity between assets and liabilities . . . . Thus, if a commercial bank held $10 billion worth of developing country debt bonds, after cancellation it would be permitted in perpetuity to have a $10 billion dollar deficit in its assets. This is a simple matter of record-keeping.

“The second option . . . is to cancel the debt bonds, yet permit banks to retain them for purposes of accountancy. The debts would be cancelled so far as the developing nations were concerned, but still valid for the purposes of a bank’s accounts. The bonds would then be held as permanent, non-negotiable assets, at face value.”


If the banks were allowed either to carry unrepayable loans on their books or to accept payment in local currency, their assets and their solvency would be preserved. Everyone could shake hands and get back to work.



Ellen Brown is a California attorney and the author of eleven books, including “Web of Debt: The Shocking Truth About Our Money System and How We Can Break Free,” available in English, Swedish and German. Her websites are www.webofdebt.com and www.ellenbrown.com.



Ellen Brown is a frequent contributor to Global Research. Global Research Articles by Ellen Brown

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Full Circle of Govt Debt Default

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Yemen: Pentagon';s War On The Arabian Peninsula

Global Research, December 15, 2009
Yemen will become a battleground for a proxy war between the United States and Saudi Arabia – whose state-to-state relations are among the strongest and most durable of the entire post-World War II era – on one hand and Iran on the other.

It is perhaps impossible to determine the exact moment at which a U.S.- supported self-professed holy warrior – trained to perpetrate acts of urban terrorism and to shoot down civilian airliners – ceases to be a freedom fighter and becomes a terrorist. But a safe assumption is that it occurs when he is no longer of use to Washington. A terrorist who serves American interests is a freedom fighter; a freedom fighter who doesn\’t is a terrorist.

Yemenis are the latest to learn the Pentagon\’s and the White House\’s law of the jungle. Along with Iraq and Afghanistan which counterinsurgency specialist Stanley McChrystal used to perfect his techniques, Yemen is joining the ranks of other nations where the Pentagon is engaged in that variety of warfare, fraught with civilian massacres and other forms of so-called collateral damage: Colombia, Mali, Pakistan, the Philippines, Somalia and Uganda.

BBC News reported on December 14 that 70 civilians were killed when aircraft bombed a market in the village of Bani Maan in northern Yemen.

The nation\’s armed forces claimed responsibility for the deadly attack, but a website of the Houthi rebels against whom the bombing was ostensibly directed stated “Saudi aircraft committed a massacre against the innocent residents of Bani Maan.” [1]

The Saudi regime entered the armed conflict between the (eponymous) Houthis and the Yemeni government on behalf of the latter in early November and since has been accused of launching attacks inside Yemen with tanks and warplanes. Even before the latest bombing scores of Yemenis have been killed and thousands displaced by the fighting. Saudi Arabia has also been accused of using phosphorous bombs.

Moreover, the rebel group known as Young Believers, based in the Shi\’ite Muslim community of Yemen which comprises 30 percent of the country\’s population of 23 million, claimed on December 14 that “US fighter jets have attacked Yemen\’s Sa\’ada Province” and “US fighter jets have launched 28 attacks on the northwestern province of Sa\’ada.” [2]

The previous day\’s edition of Britain\’s Daily Telegraph reported on discussions with U.S. military officials, stating “Fearful that Yemen is in danger of becoming a failed state, America has now sent a small number of special forces teams to improve training of Yemen\’s army in reaction to the threat.”

One unnamed Pentagon official was quoted as saying “Yemen is becoming a reserve base for al-Qaeda\’s activities in Pakistan and Afghanistan.” [3]

The conjuring up of the al-Qaeda bogey, however, is a decoy. The rebels in the north of the nation are Shi\’ites and not Sunnis, much less Wahhabi Sunnis of the Saudi variety, and as such are not only not linked with any group of groups that could be categorized as al-Qaeda, but instead would be a likely target thereof.

In service to American designs in the region, the British and American press lately has been referring to Yemen as the “ancestral homeland” of Osama bin Laden. Bin Laden comes from a prominent billionaire Saudi Arabian family, of course, but as his father had been born in what is now the Republic of Yemen over a century ago the Western media are exploiting an insignificant historical accident to suggest Osama bin Laden\’s active role in the nation and to establish a tenuous link between the South Asian war in Afghanistan and Pakistan and Saudi and American armed intervention in a civil conflict in Yemen.

In 2002 the Pentagon dispatched an estimated 100 soldiers, by some accounts Green Beret special forces, to Yemen to train the country\’s military. In that instance, coming as it did two years after the suicide bombing attack against the Navy destroyer USS Cole in the southern Yemeni port of Aden, attributed to al-Qaeda, and accompanied by drone missile attacks against identified leaders of the same, Washington justified its actions as retaliation for that incident as well as the attacks in New York City and Washington, D.C. the year before.

The present context is different and a U.S.-backed counterinsurgency war in Yemen will have nothing to do with combating alleged al-Qaeda threats, but will in fact be an integral part of the strategy to expand the Afghan war into yet wider concentric circles taking in South and Central Asia, the Caucasus and the Persian Gulf, Southeast Asia and the Gulf of Aden, the Horn of Africa and the Arabian Peninsula. The eagerly awaited departure of President George W. Bush may have led to the end of the official global war on terror, now referred to as overseas contingencies operations, but nothing except the name has changed.

On December 13 the top commander of the Pentagon\’s Central Command in charge of the wars in Afghanistan, Iraq and Pakistan, General David Petraeus, told the Al Arabiya television network that “that U.S supports Yemen\’s security in the context of the military cooperation provided by America for its allies in the region” and “stressed that U.S. ships in the territorial waters of Yemen [are there] not only to control but to impede the infiltrations of weapons to Houthi rebels.” [4]

To be recalled the next time the al-Qaeda/bin Laden canard is used to justify expanding U.S. military involvement on the Arabian Peninsula.

The Yemen Post of December 13 wrote that the Houthi media office “accused the U.S. of participating in the war against Houthis” and released photographs of what were identified as U.S. warplanes “involved in bombing operations in Sa\’ada province [in] Northern Yemen.”

The source estimated there have been twenty U.S. bombing raids coordinated with satellite surveillance. [5]

The Western press is again leading the charge in linking the Houthis, whose religious background of Zaydi Shi\’ism is quite distinct from the Iranian version, to sinister machinations imputed to Tehran. Even U.S. government officials have to date acknowledged no evidence that Iran is supporting much less arming the Yemeni rebels. That will change if the script goes according to precedent as is indicated by Petraeus\’s comment above, and Washington will dutifully echo the Yemeni government\’s claim that Iran is arming its Shi\’ia brethren in Yemen as it is accused of doing in Lebanon.

Yemen will become a battleground for a proxy war between the United States and Saudi Arabia – whose state-to-state relations are among the strongest and most durable of the entire post-World War II era – on one hand and Iran on the other.

In an editorial of five days ago the Tehran Times accused all parties to the Yemeni conflict – the government, the rebels and Saudi Arabia – of recklessness and issued a warning: “History provides a good example. Saudi Arabia funded extremist groups in Afghanistan and still, two decades since the withdrawal of the Soviet army from the country, the flames of war in Afghanistan are overwhelming the allies of Saudi Arabia.
“And a similar scenario is emerging in Yemen.” [6]

The comparison between Yemen and Afghanistan alluded in particular to Riyadh, in the second case hand-in-glove with the United States, exporting Saudi-based Wahhabism to expand its political influence.

Saudi Arabia is attempting to promote its own version of extremism in Yemen as it did earlier
in Afghanistan and Pakistan and is currently doing in Iraq. Far from the U.S. and its Western allies expressing any objection, the Saudis and their fellow Persian Gulf monarchies will be in the forefront of what is estimated to be $100 billion worth of Middle East arms purchases from the West over the next five years. “The core of this arms-buying spree will undoubtedly be the $20 billion U.S. package of weapons systems over 10 years for the six states of the Gulf Cooperation Council – Saudi Arabia, the U.A.E., Kuwait, Oman, Qatar and Bahrain.” [7] Saudi Arabia is also armed with state-of-the-art British and French warplanes as well as U.S. missile defense systems.

What the earlier cited Iranian commentary warned about regarding “the flames of war” in Afghanistan is perfectly confirmed by the Commander\’s Initial Assessment of August 30, 2009 issued by top American and NATO military commander in Afghanistan General Stanley McChrystal and published by the Washington Post on September 21 with the redactions demanded by the Pentagon. The 66-page document served as the blueprint for President Barack Obama\’s December 1 announcement that 33,000 more American troops are headed to Afghanistan.

In the report McChrystal stated, “The major insurgent groups in order of their threat to the mission are: the Quetta Shura Taliban (05T), the Haqqani Network (HQN), and the Hezb-e Islami Gulbuddin (HiG).”

The last two are named after their founders and current leaders, Jalaluddin Haqqanni and Gulbuddin Hekmatyar, the Mujahideen darlings of the U.S. Central Intelligence Agency in the 1980s when the Agency\’s deputy director (from 1986-1989) was Robert Gates, now U.S. Secretary of Defense in charge of prosecuting the war in Afghanistan. And in Yemen.

In his 1996 book From the Shadows, Gates boasted that “CIA had important successes in covert action. Perhaps the most consequential of all was Afghanistan where CIA, with its management, funnelled billions of dollars in supplies and weapons to the mujahideen….” [8]

The New York Times in 2008 divulged these details:
“In the 1980s, Jalaluddin Haqqani was cultivated as a \’unilateral\’ asset of the CIA and received tens of thousands of dollars in cash for his work in fighting the Soviet Army in Afghanistan, according to an account in \’The Bin Ladens,\’ a recent book by Steve Coll. At that time, Haqqani helped and protected Osama bin Laden, who was building his own militia to fight the Soviet forces, Coll wrote.” [9] Coll is also the author of the 2001 volume Ghost Wars: The Secret History of the CIA, Afghanistan, and Bin Laden, from the Soviet Invasion to September 10, 2001.

Haqqani\’s colleague Hekmatyar “received millions of dollars from the CIA through the ISI [Pakistan\'s Inter-Services Intelligence]. Hezb-e-Islami Gulbuddin received some of the strongest support from Pakistan and Saudi Arabia, and worked with thousands of foreign mujahideen who came to Afghanistan.” [10]

This past May the (superlatively) pro-American president of Pakistan, Asif Ali Zardari, told the American NBC news network that Taliban is “part of our past and your past, and the ISI and CIA created them together….It (the Taliban) was (a) monster created by all of us….” [11]

On September 11, 2001 there were only three nations in the world that recognized Taliban rule in Afghanistan: Pakistan, Saudi Arabia and the United Arab Emirates. U.S. President George W. Bush immediately afterward singled out seven so-called states supporting terrorism for potential retaliation: Cuba, Iran, Iraq, Libya, North Korea, Sudan and Syria. Only Sudan, which expelled Osama bin Laden in 1996, had any conceivable connections to al-Qaeda. Of the nineteen accused September 11 airline hijackers, fifteen were from Saudi Arabia, two from the United Arab Emirates, one from Egypt and one from Lebanon.

Pakistan and Saudi Arabia remain highly-valued American political and military allies and the United Arab Emirates has troops serving under NATO command in Afghanistan.

It is perhaps impossible to determine the exact moment at which a U.S.-supported self-professed holy warrior – trained to perpetrate acts of urban terrorism and to shoot down civilian airliners – ceases to be a freedom fighter and becomes a terrorist. But a safe assumption is that it occurs when he is no longer of use to Washington. A terrorist who serves American interests is a freedom fighter; a freedom fighter who doesn\’t is a terrorist.

For decades the African National Congress of Nelson Mandela and the Palestine Liberation Organization of Yasser Arafat were at the top of the U.S. State Department\’s list of terrorist groups. No sooner had the Cold War ended than both Mandela and Arafat (and Sinn Fein\’s Gerry Adams) were invited to the White House. The first shared the Nobel Peace Prize in 1993 and the second in 1994.

If a hypothetical self-styled jihadist left Saudi Arabia or Egypt in the 1980s for Pakistan to fight against the Afghan government and its Soviet ally, he was a freedom fighter in the U.S.\’s eyes. If he then went to Lebanon he was a terrorist. In the early 1990s if he arrived in Bosnia he was a freedom fighter again, but if he showed up in the Gaza Strip or the West Bank a terrorist. In the Russian North Caucasus he was a reborn freedom fighter, but if he returned to Afghanistan after 2001 a terrorist.

Depending on how the wind is blowing from Foggy Bottom, an armed Baloch separatist in Pakistan or a Kashmiri one in India is either a freedom fighter or a terrorist.

Contrariwise, in 1998 U.S. special envoy to the Balkans Robert Gelbard described the Kosovo Liberation Army (KLA) fighting the government of Yugoslavia as a terrorist organization: “I know a terrorist when I see one and these men are terrorists.” [12]

The following February U.S. Secretary of State Madeleine Albright brought five members of the KLA, including its chief Hashim Thaci, to Rambouillet, France to offer an ultimatum to Yugoslavia that she knew would be rejected and lead to war. The next year she escorted Thaci on a personal tour of the United Nations Headquarters and the State Department and invited him as a guest to the Democratic Party presidential nominating convention in Los Angeles.

This November 1st Thaci, now prime minister of a pseudo-state only recognized by 63 of the world\’s 192 nations, hosted former U.S. President Bill Clinton for the unveiling of a statue honoring the latter\’s crimes. And vanity.

Washington supported armed separatists in Eritrea from the mid-1970s until 1991 in their war against the Ethiopian government.

Currently the U.S. is arming Somalia and Djibouti for war against independent Eritrea. The Pentagon has its first permanent military base in Africa in Djibouti, where it stations 2,000 troops and from where it conducts drone surveillance over Somalia. And Yemen.

In the words of Balzac\’s character Vautrin, “There are no such things as principles, there are only events; there are no laws, there are only circumstances….”

Yemenis are the latest to learn the Pentagon\’s and the White House\’s law of the jungle. Along with Iraq and Afghanistan which counterinsurgency specialist Stanley McChrystal used to perfect his techniques, Yemen is joining the ranks of other nations where the U.S. military is engaged in that variety of warfare, fraught with civilian massacres and other forms of so-called collateral damage: Colombia, Mali, Pakistan, t
he Philippines, Somalia and Uganda.

Notes
1) BBC News, December 14, 2009
2) Press TV, December 14, 2009
3) Daily Telegraph, December 13, 2009
4) Yemen Post, December 13, 2009
5) Ibid
6) Tehran Times, December 10, 2009
7) United Pres nternational, August 25, 2009
8) BBC News, December 1, 2008
9) New York Times, September 9, 2008
10) Wikipedia
11) Press Trust of India, May 11, 2009
12) BBC News, June 28, 1998

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Iraq';s Oil Auction Hits the Jackpot


Global Research, December 16, 2009
BEIJING – Former United States vice president Dick Cheney, ex-defense minister Donald Rumsfeld and assorted US neo-cons will have plenty of time to nurse their apoplexy. One of their key reasons to unleash the war on Iraq in 2003 was to seize control of its precious oilfields and thus shape a great deal of the new great game in Eurasia – the energy front – by restricting the access of Europe and Asia to Iraq\’s staggering 115 billion barrels of proven oil reserves.

After at least US$2 trillion spent by Washington and arguably more than a million dead Iraqis, it has come to this: a pipe dream definitely buried this past weekend in Baghdad with round two of bids to exploit a number of vast and immensely profitable oil fields.

The bids, supervised by the Oil Ministry, were presented on a live TV game show. Instead of American Idol, Iraqis got “Oil Idol”. In a raucous carpet bazaar atmosphere, the ministry played “my way or the highway” and forced 44 foreign Big Oil corporations to cut to the max the fee they collect on every barrel extracted in Iraq and submit to 20-year contracts. These multinationals were not given a share in Iraqi oil production; they will be paid a $2 fee per barrel for raising output above a mutually agreed level.

Still, for Big Oil, the possibility of having a crack at all those mega-giant fields in Shi\’ite-controlled southeast Iraq – the largest concentration of its kind in the world – led all players to yell , “It\’s raining oil!” Once you\’ve paid the ticket, you\’re inside the theater. And what a theatre … The Iraqi government may end up paying foreign Big Oil as much as $50 billion for its know-how. All these “service” deals will dodge Iraq\’s parliament – which might throw a wrench in the works. And Big Oil will still get $2 for each barrel of extra crude above a minimum production target.

In June, Iraq held its first oil auction, offering foreign companies the chance to increase production at already-pumping fields. The latest auction was the first time foreign firms could bid on untapped fields. Of the 10 groups of fields available, seven were awarded.

Win-win for Russia and China

Cheney\’s and Rumsfeld\’s script was never supposed to develop like this. Instead of US Big Oil getting the lion\’s share, strategic competitors Russia and China turned out to be big winners. Dick Cheney\’s “consolation prize” was an Exxon-Mobil-Shell alliance getting the phase 1 of West Qurna in early November. Exxon-Mobil had been the favorite to also win Rumaila (17.8 billion barrels of reserves). But a BP-CNPC (China National Petroleum Corporation) alliance got it in the end because unlike Exxon-Mobil they agreed to cut their fee per barrel down to the Oil Ministry-enforced $2.

CNPC (50%), along with partners Total from France (25%) and Petronas from Malaysia (25%), was also a big winner for Halfaya (4.1 billion barrels of reserves, projected output of 535,000 barrels per day (bpd)), southeast of Amara.

Petronas again (with 60%), and the Japan Petroleum Exploration Company (Japex), with 40%, will invest a cool $7 billion to develop Gharaf (reserves of around 860 million barrels, projected output of 230,000 bpd). Bidding was fierce. Losers were a joint Turkish-Indian bid, a Kazakh/South Korean/Italian consortium, and Pertamina from Indonesia.

A Petronas-Shell alliance got the highly coveted Majnoon (reserves of more than 12 billion barrels, projected output of 1.8 million bpd), near the Iranian border. Russia\’s Lukoil (85%), with junior partner Statoil (15%), got phase 2 of the immense West Qurna (located 65 kilometers northwest of Basra; about 12 billion barrels of reserves; projected production of 1.8 million bpd) – which in theory it had already bagged under Saddam Hussein. When Lukoil was stripped of its contract by Saddam, it blamed US-instigated United Nations sanctions, while Saddam blamed Lukoil itself.

West Qurna\’s phase 1 (8.7 billion barrels of reserves, with a projection to increase output from 300,000 bpd to 2.3 million bpd before 2016) was won in November by the aforementioned Exxon Mobil-Shell alliance. Losers were Total from France, a consortium of Petronas, Pertamina and Petrovietnam, and a BP-CNPC alliance.

Gazprom (40%), with junior partners TPAO, Kogas and Petronas, got Badra (projected production of 170,000 bpd). Unlike the mad scramble for the southern fields, no one even bid for the East Baghdad field, for obvious reasons: it\’s located in a virtual war zone. [1]

The Shi\’ites are coming!

Iraq nationalized its oil industry in 1972. Now Big Oil is back with a vengeance. Iraqi Oil Minister Hussain al-Shahristani made no bones about Iraq\’s ambitions, saying, “Our principal objective is to increase our oil production from 2.4 million barrels per day to more than four million in the next five years.” Iraq is at present exporting less oil than under Saddam, but it aims to export seven million barrels a day by 2016. Shahristani also insists “our country will have total control over production”.

That is enormously debatable.

For the moment, Prime Minister Nuri al-Maliki\’s government in Baghdad is obviously a winner. Iraq currently gets only $60 billion a year in oil revenues. It\’s not enough to rebuild a country destroyed by the Iran-Iraq war of the 1980s, UN sanctions and the American occupation. Arguably, Iraq\’s oil industry would not have sufficient funds, equipment and technical people to get back on its feet alone.

Whether with more oil revenues Baghdad will be able to impose law and order – starting with the capital – and fully equip its 275,000 military plus police forces, that\’s an open question. No one knows for sure who will be in control of Iraq in the near future, with parliamentary elections due early next year. A new government may be tempted to renegotiate these contracts, or even invalidate them.

In the next few years, with Iraq being able to reach the target of producing at least four million barrels a day, it\’s fair to argue this won\’t substantially influence the price of oil; but it will prevent it from shooting up out of proportion. China is now importing over four million bpd – and this will continue to rise. China by itself will be gobbling up any output increase in the global oil market.

What the early 2010s will definitely see is the rise of a relatively wealthy, Shi\’ite-controlled Iraq friendly with Iran and Lebanon\’s Hezbollah. Essentially, Shi\’ite Islam on the rise. The US-friendly autocracies and dictatorships in the Gulf will cry again, “It\’s the return of the Shi\’ite crescent!” United States think-tanks may be tempted to define Maliki as the new Saddam. The only difference is that by then, Cheney and company will be safely ensconced in the dustbin of history.

Note
1. To see which companies got what in detail, go here

Pepe Escobar is the author of Globalistan: How the Globalized World is Dissolving into Liquid War (Nimble Books, 2007) and Red Zone Blues: a snapshot of Baghdad during the surge. His new book, just out, is Obama does Globalistan (Nimble Books, 2009).

He may be reached at pepeasia@yahoo.com.

Global Research Articles by Pepe Escobar

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The ";Obama Doctrine";: Eternal War For Imperfect Mankind

Global Research, December 11, 2009
President and commander-in-chief of the armed forces of the United States Barack Obama delivered his Nobel Peace Prize acceptance address in Oslo on December 10, which has immediately led to media discussion of an Obama Doctrine.

With obligatory references to Martin Luther King, Jr. and Mohandas Gandhi (the second referred to only by his surname) but to no other American presidents than Ronald Reagan, Richard Nixon and John F. Kennedy – fellow peace prize recipients Theodore Roosevelt, Woodrow Wilson and Jimmy Carter weren\’t mentioned – the U.S. head of state spoke with the self-assurance of the leader of the world\’s first uncontested superpower and at times with the self-righteousness of a would-be prophet and clairvoyant. And, in the words of German philosopher Friedrich von Schlegel, a prophet looking backward.

Accompanied by visionary gaze and cadenced, oratorical solemnity, his comments included the assertion that “War, in one form or another, appeared with the first man.” Unless this unsubstantiated claim was an allusion to the account in the Book of Genesis in the Hebrew Bible of Cain murdering his brother Abel, which would hardly constitute war in any intelligible meaning of the word (nor was Cain the first man according to that source), it is unclear where Obama acquired the conviction that war is coeval with and presumably an integral part of humanity.

Paleontologists generally trace the arrival of modern man, homo sapiens, back 200,000 years, yet the first authenticated written histories are barely 2,400 years old. How Obama and his speechwriters filled in the 197,600-year gap to prove that the practice of war is as old as mankind and implicitly inseparable from the human condition is a question an enterprising reporter might venture to ask at the next presidential press conference.

Perhaps delusions of omniscience is the answer. The Oslo speech is replete with references to and appropriations of the attributes of divinity. And to historical and anthropological fatalism; a deeply pessimistic concept of Providence.

Obama affirmed that “no Holy War can ever be a just war. For if you truly believe that you are carrying out divine will, then there is no need for restraint.” Then shortly afterward stated “Let us reach for the world that ought to be – that spark of the divine that still stirs within each of our souls.” An adversary\’s invocation of the divine is false, heretical, sacrilegious; Washington\’s is true, unerring, sufficient to justify any action, however violent and deadly. As unadulterated an illustration of secular Manicheaism as can be found in the modern world.

Toward the beginning of his speech the first standing American president in ninety years to receive the Peace Prize acknowledged that “perhaps the most profound issue surrounding my receipt of this prize is the fact that I am the Commander-in-Chief of the military of a nation in the midst of two wars.”

Understandably he exerted no effort to justify one of the two wars in question, that in Iraq, but endorsed and pledged the continuation of the other, that in Afghanistan and increasingly Pakistan – while elsewhere speaking disparagingly of the European Crusades of the later Middle Ages.

Neither the Nobel Committee nor its honoree seemed inordinately if at all concerned by the unprecedented awarding of the prestigious and generous ($1.4 million) Peace Prize to a commander-in-chief in charge of two simultaneous wars far from his nation\’s shores and in countries whose governments and peoples never threatened it in any manner.

In language that never before was heard during a peace prize acceptance speech, Obama added “we are at war, and I\’m responsible for the deployment of thousands of young Americans to battle in a distant land. Some will kill, and some will be killed.”

With not a scintilla of national self-awareness, balance or irony, he also derided the fact that “modern technology allows a few small men with outsized rage to murder innocents on a horrific scale,” as he orders unmanned aerial vehicles (drones) linked by space satellites to launch deadly missile attacks in Afghanistan and Pakistan.

The central themes of Obama\’s speech are reiterations of standing U.S. policy going back over a decade with the waging of war against Yugoslavia in early 1999 without United Nations authorization or even a nominal attempt to obtain one; that the U.S. and its Western military allies can decide individually and collectively when, to what degree, where and for what purpose to use military force anywhere in the world. And the prerogative to employ military force outside national borders is reserved exclusively for the United States, its fellow NATO members and select military clients outside the Euro-Atlantic zone such as Colombia, Ethiopia, Georgia, Israel and Saudi Arabia of late.

What is arguably unique in Obama\’s address is the bluntness with which it reaffirmed this doctrine of international lawlessness. Excerpts along this line, shorn of ingenuous qualifications and decorative camouflage, include:
“We must begin by acknowledging the hard truth: We will not eradicate violent conflict in our lifetimes. There will be times when nations – acting individually or in concert – will find the use of force not only necessary but morally justified.”

He offered a summary of the just war argument that a White House researcher could have cribbed from Wikipedia.
“[A]s a head of state sworn to protect and defend my nation, I cannot be guided by their [Gandhi\'s and King\'s] examples alone. I face the world as it is, and cannot stand idle in the face of threats to the American people. For make no mistake: Evil does exist in the world.”
“I – like any head of state – reserve the right to act unilaterally if necessary to defend my nation.”

Evil, as a noun rather than an adjective, is used twice in the speech, emblematic of a quasi-theological tone alternating with coldly and even callously pragmatic pronouncements.

Indicative of the second category are comments like these:
“[T]he instruments of war do have a role to play in preserving the peace.”
“A non-violent movement could not have halted Hitler\’s armies. Negotiations cannot convince al Qaeda\’s leaders to lay down their arms. To say that force may sometimes be necessary is not a call to cynicism….
“I raise this point, I begin with this point because in many countries there is a deep ambivalence about military action today, no matter what the cause. And at times, this is joined by a reflexive suspicion of America, the world\’s sole military superpower.”

Comparing a small handful of al-Qaeda personnel to Hitler\’s Wehrmacht is unconscionable. Whatever else the former are, they barely have arms to lay down. But Obama does, the world\’s largest and most deadly conventional and nuclear arsenal.

His playing the trump card of Nazi Germany is not only an act of rhetorical recklessness, it is historically unjustified. There would have been no need to confront the Third Reich\’s legions if timely diplomatic actions had been taken when Hitler sent troops into the Rhineland in 1936; if Britain and France had not collaborated with Hitler\’s Germany and Mussolini\’s Italy to enforce the naval blockade of Republican Spain while German aircraft devastated Guernica and other towns and German and Italian troops poured into the country by the tens of thousands in su
pport of Generalissimo Franco\’s uprising. If, finally, Britain, France, Germany and Italy had not met in Munich in 1938 to sacrifice Czechoslovakia\’s Sudetenland to Hitler to encourage his murderous drive to the east. The same four nations met 70 years later, last year, to reprise the Munich betrayal by engineering the secession of Kosovo from Serbia, to demonstrate how much had been learned in thenterim.

As to the accusation that many nations bear an alleged “deep ambivalence about military action” and even more so “a reflexive suspicion of America, the world\’s sole military superpower,” it bespeaks alike arrogance, sanctimony, and an absolute imperviousness to the reality of American foreign policy now and in the recent and not so recent past. According to this imperial “sole military superpower” perspective, the White House and the Pentagon can never be wrong. Not even partially, unavoidably or unintentionally.

If others find fault with anything the world\’s only military juggernaut does, it is a reflection of their own misguided pacifism and ingrained, pathological “anti-Americanism.” Perhaps this constitutes the aforementioned “threats to the American people,” as there aren\’t any others in Afghanistan or in the world as a whole that were convincingly identified in the speech.

What may be the most noteworthy – and disturbing – line in the address is what Obama characterised as the “recognition of history; the imperfections of man and the limits of reason.” Lest this observation be construed as an example of personal or national humility, other – grandiose Americocentric – comments surrounding it leave no doubt that the inadequacies in question are only applied to others.

One would search in vain for a comparable utterance by another American head of state. For a nation that prides itself on being the first one founded on the principles of the 18th century Enlightenment and the previous century\’s Age of Reason, that its leader would lay stress on inherent and ineradicable human frailty and at least by implication on some truth that is apart from and superior to reason is nothing less than alarming. The door is left open to irrationalism and its correlates, that the ultimate right can be might and that there are national imperatives beyond good and evil.

And if people are by nature flawed and their reasoning correspondingly impaired, then for humanity, “Born but to die and reasoning but to err” (Alexander Pope), war may indeed be its birthright and violent conflicts will not be eradicated in its lifetime. War, which came into existence with mankind, will last as long as it does. They may both end, as Obama believes they originated, simultaneously.

How the leader of the West, both the nation and the individual, has arrived at this bleak and deterministic impasse was also mentioned in Obama\’s speech in reference to pivotal post-Cold War events that have defined this new century.

It is only a single step from:
“I believe that force can be justified on humanitarian grounds, as it was in the Balkans, or in other places that have been scarred by war. Inaction tears at our conscience and can lead to more costly intervention later. That\’s why all responsible nations must embrace the role that militaries with a clear mandate can play to keep the peace.”

To:
“The belief that peace is desirable is rarely enough to achieve it. Peace requires responsibility. Peace entails sacrifice. That\’s why NATO continues to be indispensable.”

In proclaiming these and similar sentiments, Obama made reference to his host country in alluding to the war in Afghanistan: “[W]e are joined by 42 other countries – including Norway – in an effort to defend ourselves and all nations from further attacks.”

Again, threats are magnified to inflated and even universal dimensions. All nations on the planet are threatened and some of them – 43 NATO states and partners – are fending off the barbarians at the gates. It is difficult to distinguish the new Obama Doctrine from the preceding Blair and Bush ones except in regard to its intended scope.

It is a mission outside of time, space and constraints. “The United States of America has helped underwrite global security for more than six decades with the blood of our citizens and the strength of our arms….America\’s commitment to global security will never waver. But in a world in which threats are more diffuse, and missions more complex, America cannot act alone. America alone cannot secure the peace. This is true in Afghanistan. This is true in failed states like Somalia….And sadly, it will continue to be true in unstable regions for years to come.
“The leaders and soldiers of NATO countries, and other friends and allies, demonstrate this truth through the capacity and courage they\’ve shown in Afghanistan.”

The U.S. president adduced other nations – by name – that present threats to America and its values, its allies and the world as a whole in addition to Afghanistan and Somalia, which are Iran, Myanmar, North Korea, Sudan and Zimbabwe. All five were either on George W. Bush\’s post-September 11 list of state sponsors of terrorism or on Condoleezza Rice\’s later roster of “outposts of tyranny” or both.

Hopes that the policies of Obama\’s predecessor were somehow outside of the historical continuum, solely related to the aftermath of September 11, 2001, have been dashed. The rapidly escalating war in South Asia is proof enough of that lamentable fact. War is not a Biblical suspension of ethics but the foundation of national policy.

In his novel La Bête Humaine (The Human Beast) Emile Zola interwove images of a French crowd clamoring for a disastrous war with Prussia (“A Berlin!”) and a locomotive heading at full steam down the track without an engineer. Obama\’s speech in Oslo indicates that America remains bent on rushing headlong to war even after a change of engineers. Veteran warhawks Robert Gates, James Jones, Richard Holbrooke, David Petraeus and Stanley McChrystal have stoked the furnace for a long run.

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Nobel Committee Celebrates War As Peace

Global Research, December 8, 2009
On Thursday December 10 U.S. President Barack Obama will receive the Nobel Peace Prize in Oslo, Norway.

The Norwegian Nobel Committee announced its selection for the prize on October 9 of this year, less than nine months after Obama assumed the mantle of the American presidency and less than a month after that announced the doubling of his nation\’s troops for the world\’s longest-running war in Afghanistan. The first contingent of new forces, consisting of 1,500 Marines, is to arrive next week, right before Christmas.

Ten days before the bestowal of the Nobel Peace Prize, the American president delivered a speech at the West Point Military Academy in which he pledged an additional 30,000 troops for a war now in its ninth year. His (and his predecessor George W. Bush\’s) Defense Secretary Robert Gates hastened to add that 3,000 more support troops would be deployed, bringing the total to over 100,000, only 20,000 short of American soldiers in Iraq, and with as many as 50,000 more non-U.S. forces serving under the NATO-led International Security Assistance Force. In his West Point address Obama reminded his listeners that “When I took office, we had just over 32,000 Americans serving in Afghanistan….” He has ordered that number to be more than tripled.

A brief report on Obama\’s peace prize appeared on the CBS News website on December 7 with the seemingly paradoxical title “A Peace Prize for a War President” by the news agency\’s White House correspondent, Mark Knoller.

Neither the title nor the article it introduced was ironic. They reflected the straightforward truth.

The feature stated “There\’ll be no effort by Barack Obama to disguise or obscure the fact that he\’s a war president when he accepts the Nobel Peace Prize in Oslo on Thursday.
“The ceremony takes place ten days after he announced plans to escalate the U.S. military engagement in Afghanistan by deploying another 30,000 American troops there.”

The selection of Obama evoked a prompt and aptly indignant response from Michel Chossudovsky at the Centre for Research on Globalization, who on October 11 published a piece called “Obama and the Nobel Prize: When War Becomes Peace, When the Lie becomes the Truth” [1] which stated inter alia that “When the Commander in Chief of the largest military force on planet earth is presented as a global peace-maker,” then “the Lie becomes the Truth.”

Although there are no firm, codified guidelines for nominating and agreeing upon a Peace Prize recipient, Alfred Nobel\’s will states that it should be conferred upon a “person who shall have done the most or the best work for fraternity between nations, for the abolition or reduction of standing armies and for the holding and promotion of peace congresses.”

Those criteria have arguably never been honored or strictly abided by since the annual prize was first awarded in 1901. Several winners have been cited for helping to end wars – often by simply prevailing in them. One of the two American presidents previously awarded the prize, Woodrow Wilson, is such a one.

The other was Theodore Roosevelt, who as Assistant Secretary of the Navy in 1897 said “I should welcome almost any war, for I think this country needs one.”

Both Roosevelt in 1906 and Wilson in 1919 were standing presidents when they received the prize. The first had fought in Cuba during the Spanish-American War (the war he demanded a year before it began) and Wilson brought the United States into the First World War.

The Spanish-American War inaugurated the expansion of the U.S. from a hemispheric to an Asia Pacific power. And an empire. World War I placed the American army on the European continent for the first time and signaled its emergence as a international military power. Theodore Roosevelt became president in 1901 when William McKinley, who launched the conflict with Spain and acquired Cuba, Guam, the Philippines and Puerto Rico as spoils of war, was assassinated; Wilson not only sent over one million soldiers to France but also deployed 13,000 troops to fight the new Russian government of Vladimir Lenin in 1918.

But neither Roosevelt nor Wilson were commanders-in-chief of a war when they were given the Nobel Prize. And they received it for, at least in theory, contributing to ending wars; the Russo-Japanese War and World War I, respectively. Granting the Nobel Peace Prize to a head of state escalating a war already in its ninth year half a world away from his own nation is a precedent that was reserved for this year.

Reuters quoted White House spokesman Robert Gibbs on December 7 stating “We\’ll address directly the notion that many have wondered, which is the juxtaposition of the timing for the Nobel Peace Prize and – and his [Obama\'s] commitment to add more troops around – into Afghanistan.”

Juxtaposition, paradox, irony, contradiction and so forth are terms too weak and inaccurate to describe the timing of the announcement of this year\’s Nobel Peace Prize recipient, coming as it did between two pledges of military reinforcements for the world\’s largest-scale and longest-running war. Travesty is a better word.

Speculation was rife after October 9 regarding the Norwegian Nobel Committee\’s rationale and motives for awarding Obama the prize, and press pundits were not amiss in offering explanations. But actions are more revealing than assumed or imaginary intentions and what the Nobel Committee has accomplished is to yet further tarnish its reputation and that of the prize it grants.

It is hard to think of any recipient, and surely any recent one, who personifies the qualities indicated by Alfred Nobel himself. Advocating and working for peace seem to have little if anything to do with being awarded the nominal Peace Prize. But twice in the last three years it has been conferred upon individuals far more deserving of indictment for violating the Principles of the Nuremberg Tribunal, especially that section of Principle VI, Crimes against peace, which is defined as “Planning, preparation, initiation or waging of a war of aggression or a war in violation of international treaties, agreements or assurances.”

Two years ago the prize was shared by Al Gore, who as the vice president of the U.S.\’s first post-Cold War administration helped preside over deadly street battles in Somalia and bombing – incessant bombing – attacks in Iraq, Bosnia, Afghanistan, Sudan and Yugoslavia. And the launching of Plan Colombia in 1999, the latest fruit of which is the Pentagon\’s acquisition of seven new military bases in the country and the resulting threat of armed conflict with its neighbors. Arranged by this year\’s Peace Prize recipient. But, again, Gore received the prize years after leaving office and for work in an area unrelated to his former government posts.

Obama\’s December 1 speech was larded with lines evocative of the worst rhetorical excesses of his predecessor combined with allusions to broadening the war reminiscent of Richard Nixon\’s and Henry Kissinger\’s expansion of what had previously been America\’s longest war from Vietnam into Cambodia in 1970. “[S]hortly after taking office, I approved a long-standing request for more troops. After consultations with our allies, I then announced a strategy recognizing the fundamental connection between our war effort in Afghanistan, and the extremist safe-havens in Pakistan. I set a goal that was na
rrowly defined as disrupting, dismantling, and defeating al Qaeda and its extremist allies….”

The current administration has, in addition to plans to boost combined U.S. and NATO (“our allies”) military forces to 150,000 in Afghanistan, dramatically escalated drone missile attacks inside neighboring Pakistan and, as the above quote demonstrates, declared western and southern Pakistan part of the expanding war theater.

The president mentioned or alluded to the North Atlantic Treaty Organization several times in his address, in one instance with a degree of hyperbole that is as frightening as it is extravagant. “For what’s at stake is not simply a test of NATO’s credibility – what’s at stake is the security of our Allies, and the common security of the world.
“We are in Afghanistan to prevent a cancer from once again spreading through that country. But this same cancer has also taken root in the border region of Pakistan. That is why we need a strategy that works on both sides of the border.”

The entire world is threatened by a spreading cancer. This alarmist and crude phraseology was employed by a 21st century leader of the world\’s superpower, a Harvard graduate, but could as well have been lifted from the lowest yellow journalism screed of the Cold War.

In attempting to deny the obvious – the inevitable – Obama continued by stating that “there are those who suggest that Afghanistan is another Vietnam. They argue that it cannot be stabilized, and we are better off cutting our losses and rapidly withdrawing. Yet this argument depends upon a false reading of history. Unlike Vietnam, we are joined by a broad coalition of 43 nations….” Troops from America\’s NATO and NATO partner vassals and tributaries in the war against barbarians – the terms are those of Zbigniew Brzezinski from his 1997 The Grand Chessboard: American Primacy and Its Geostrategic Imperatives – will not be limited to the war in Afghanistan, which in fact is a laboratory for a far broader global strategy, as “The struggle against violent extremism will not be finished quickly, and it extends well beyond Afghanistan and Pakistan….Where al Qaeda and its allies attempt to establish a foothold – whether in Somalia or Yemen or elsewhere –hey must be confronted by growing pressure and strong partnerships.”

U.S. National Security Adviser James Jones said in October that “according to the maximum estimate, al Qaeda has fewer than 100 fighters operating in Afghanistan without any bases or ability to launch attacks on the West.” Government estimates for Taliban fighters in Afghanistan are in the neighborhood of 20,000.

This is the global cancer that requires 150,000 U.S. and NATO troops and an Afghan army of a quarter million or more troops. And a war that will continue well beyond the 2011 deadline mentioned in the West Point speech and be fought with intensified vigor and as far from Afghanistan as the Horn of Africa, the Arabian Peninsula and the Southeast Asian archipelago.

With the deployment of “senior members of Mr. Obama’s war council,” as the New York Times characterized them, on the Sunday morning television news program circuit on December 7, the scope and the length of the already biggest and longest war in the world became undeniable.

The National Security Adviser, former Marine general and NATO top military commander James Jones, told CNN\’s State of the Union: “We have strategic interests in South Asia that should not be measured in terms of finite times. We’re going to be in the region for a long time.”

He added that the influx of more American and NATO troops “will allow us to move our forces back towards the border regions, where really the most important struggle that we\’re going to have is to make sure that on the Pakistani side of the border, that we eliminate the safe havens.”

Pentagon chief Robert Gates said on NBC’s Meet the Press that although there would still be over 100,000 American troops in Afghanistan in 2011, only “some handful, or some small number, or whatever the conditions permit, will begin to withdraw at that time.”

The Pentagon\’s Central Command chief, General David Petraeus, appeared on Fox News Sunday and acknowledged that there were no plans for a “rush to the exits” and that there “could be tens of thousands of American troops in Afghanistan for several years.” [2]

Little noted with the expansion of the war is that its range is widening as its intensity is deepening.

The top U.S. Air Force commander in Europe and Eurasia, General Roger A. Brady, was in Georgia on December 7 and in the neighboring South Caucasus nation of Azerbaijan on the 8th to discuss both nations\’ increased troop deployments to Afghanistan and solidifying strategic military relations.

The president of Azerbaijan, Ilham Aliyev, has recently and once again threatened war against Nagorno Karabakh and by unavoidable implication Armenia, which is a member of the Collective Security Treaty Organization with Russia. The latter is obligated to provide Armenia military assistance under terms of the treaty in the event of it becoming the victim of aggression. With the American commander listening attentively, defense minister of Azerbaijan Colonel-General Safar Abiyev said that ongoing negotiations over Nagorno Karabakh “were not fruitful and such a situation forced Azerbaijan to use other ways to liberate its lands from the occupation.” [3]

On December 4 the president of Georgia, Mikheil Saakashvili, who fought a five-day war with Russia in August of last year, spoke of his offering the U.S. and NATO 1,000 more troops for the Afghan war and ominously added: “This is a unique chance for our soldiers to receive a real combat baptism.
“We do not need the army only for showing it in military parades….While our allies – in this case the United States and Europe – are concentrating on other issues [Afghanistan and Iraq], our enemy is getting active. The sooner the Afghan situation is resolved and sooner the war is over in Iraq, [the sooner] Georgia will be more protected.” [4]

The enemy is Russia and the quid pro quo is U.S.-trained Georgian troops receiving a war zone “baptism” for a future conflict with their “numerous, dangerous and perfidious” adversary. The adjectives are also Saakashvili\’s, as are these words: “We need an army that knows how to fight. And participation in the operation in Afghanistan is a unique chance to study this and receive experience….Our final aim is to free the occupied territories [Abkhazia and South Ossetia] and unite and integrate Georgia.” [5]

Other nations are obtaining combat experience in Afghanistan under NATO auspices for use in and on the borders of their homelands, including, like Azerbaijan and Georgia, nations bordering Russia – Estonia, Finland, Latvia, Lithuania, Mongolia, Norway, Poland and Ukraine – as well as future belligerents in conflicts elsewhere like Colombia, South Korea and the United Arab Emirates.

If the world\’s sole superpower and its NATO entourage can employ the military necessity at will to advance their interests abroad, their “vassals” will be emboldened to do so nearer home and will receive the arms and training to execute their designs.

Far from promoting peace, even an enforced peace, a Pax Americana, the war in Afghanistan and U.S. foreign policy in general are igniting power kegs around the world.

If it can be argued that Obama inherited the war in South A
sia from George W. Bush and is intent on “finishing the job,” his signing of the $106 billion Iraq and Afghanistan War Supplemental Appropriations in July and the $680 billion 2010 National Defense Authorization Act in late October belies any claim of objection to the enhanced use of the military general and war in particular.

Next year\’s Pentagon budget is the largest, in both current and real U.S. dollars, since 1945, the last year of World War II. Although it contains $130 billion for the war in Afghanistan and the occupation of Iraq that previously would have been appropriated as separate supplemental funds, immediately after the signing of the Defense Department budget the chairman of the U.S. Joint Chiefs of Staff, Admiral Michael Mullen, stated “he expected the Pentagon to ask Congress in the next few months for emergency financing to support the wars in Iraq and Afghanistan,” [6] with the first request to be approximately $50 billion.

With the announcement on December 1 of another Afghan troop surge, the Pentagon\’s requests for “emergency financing” can be expected to grow in both size and frequency. As with the claim of a troop withdrawal (or “drawdown”) by 2011, the alleged ending of war supplements is a public relations ploy and sleight of hand trick employed to beguile a gullible public.

Even in a world that over the last decade has been afflicted with such logical and moral affronts as humanitarian war and preemptive retaliation, awarding a peace prize to a war president represents a new nadir of cynical realpolitik and a flagrant endorsement of militarism, however well-disposed many may have been toward its most recent recipient.

Notes
1) http://www.globalresearch.ca/index.php?aid=15622&context=va
2) New York Times, December 7, 2009
3) Azeri Press Agency, December 8, 2009
4) Civil Georgia, December 5, 2009
5) Rustavi2, December 4, 2009
6) Associated Press, November 1, 2009

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End the Fed? Or End the Market Economy?

Global Research, December 9, 2009
When Republican Congressman Ron Paul recently introduced legislation to audit the Federal Reserve, diverse sections of the political spectrum applauded. And rightfully so. The Fed’s role in the still-developing bank bailouts is one of utter secrecy; the total cost of which — as estimated by the bailout’s Special Inspector General, Neil Barofsky — could cost taxpayers $23.7 trillion. The fact that legislation needed to be introduced to raise the question of the whereabouts of these funds points to a larger breakdown in U.S. democracy.

Ron Paul’s legislative maneuver is consistent with his larger political philosophy, which he attributes to the Austrian school of economics. Central to this economic outlook is a focus on monetary policy, and the blaming of central banks for much of our economic troubles. Paul’s popularity has increased exponentially, rising in consequence to the bank bailouts and the Federal Reserve’s role in the Great Recession. The title of his recent book, End the Fed, was also used as the slogan of protests held around the country — many organized by Ron Paul supporters — outside of central banks.

As elite-controlled as the Federal Reserve system is, it’s “ending” cannot be the final goal of a progressive political movement. Larger social/economic forces must be considered too — and be dealt with.

For instance, a cursory glance at the history of the Federal Reserve shows its inadequacy as a goal for any social movement. After Andrew Jackson abolished the U.S. Central Bank in 1833, the market-economy [capitalism] continued to evolve; small companies out-competed and incorporated others, continued growing, and soon morphed into the giant corporations that we know today — driving down wages, boosting profits, and increasing social inequality.

Contrary to the beliefs of Ron Paul and Austrian economists, the lack of a national bank does not end the boom-bust cycle inherent in a market-economy. Four years after Andrew Jackson abolished the U.S. National Bank, a severe depression rocked the country, lasting seven years. The regular, capitalistic boom and bust cycle continued until the Panic of 1907, which pushed congressmen to re-institute the National Bank, re-named the Federal Reserve in 1913. The goal was to give the market economy extra stability. In 1929 the Great Depression began.

Recessions/depressions do not happen because of bad monetary policy, which can accentuate them. Instead, recessions occur naturally under capitalism, which produces a nearly unlimited amount of goods and services for a very limited market. As wages are driven down by the demands of profit-seeking corporations, the ability for the market to consume the produced goods shrinks (of course).

As wages continue their downward spiral, the demand for credit rises, as workers look to compensate for their lowered standard of living. But banks will issue only so much credit, and will shut off the money-valve when their loans come back unpaid (the “credit crunch”). When this happens, a recession begins. Austrian economics looks at the last stage of the economic cycle — the credit crunch —as its cause. Thus, the money lenders receive all the blame, while the other corporate culprits — functioning according to the “rules of the market” — are left unblemished. Bankers are blamed for what is ultimately the natural processes of capitalism: too many goods are produced to be consumed within the confines of the market.

Every major economic goal of Ron Paul would fail to alter the above dynamic. For example, if the U.S. were to return to the gold standard — another policy of Ron Paul — would giant corporations cease to dominate social life? Would the undemocratic power of the super-rich be somehow restricted? Would workers wages increase, enabling them to consume all the goods produced? Paul never asks such questions, but the answers are obvious — mega-corporations and the billionaires who own them will continue to wield more than votes to steer society in their favor, at the continued expense of workers’ wages.

It must be noted that a hero of Ron Paul, Austrian economist Friedrich Hayek, was also a hero to Margaret Thatcher, Ronald Reagan, and other founders of the neo-con movement. Workers will recognize these figures as natural enemies, who destroyed social programs, attacked unions, and drastically lowered taxes for the super-rich — helping to create the current budget deficits.

Austrian economics is simply one of the many variations of free-market capitalism. The goal being an un-regulated market economy, where there would be no limit to the mega-employers greed for profits, no minimum wage, no social security, no workplace protections, no social safety net, etc. The super-rich, however, would be “free” to do whatever they liked with their money, since the “free market” doesn’t levy income taxes.

Since Paul is for a “pure” form of capitalism, he lavishes god-like praise on the power of the market. For him, society must produce goods only if it can be sold on a market, and offer an individual (or corporation) a profit. Human needs thus belong to the realm of charities, churches, etc. The market remains the decider, and the super-rich who own the corporations control the workings of the market.

Ultimately, it’s unrealistic to focus on one aspect of our economic system in isolation, as if it were un-connected — and not subservient — to larger economic forces. In doing so, a simple cure-all is offered for the systemic breakdown of the international economy. But like all easy answers, ending the Federal Reserve is a false remedy. It thus serves as a distraction to the above workings of Paul’s revered capitalism, in the same way that his constant scapegoating of immigrants does.

The tremendous anger towards our economic system is currently directed at the banks, which deserve the hatred. But they are not the only giant corporations demanding that workers get paid less, have little or no health insurance, no pensions, no time off, etc. The mega-corporations in general deserve our attention, for they are every bit as undemocratic as the Federal Reserve, and benefit from its policies. The end goal is to boost profits by dominating the market, so that a very small number of people get incredibly rich at the great expense of the rest of society.

Shamus Cooke is a social service worker, trade unionist, and writer for Workers Action (www.workerscompass.org). He can be reached at shamuscook@yahoo.com


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Loose Cannon And Nuclear Submarines: West Prepares For Arctic Warfare

Global Research, December 1, 2009
This year is ending as it began, with heightened U.S. interest in the Arctic Ocean. For energy, transportation and military purposes. Especially the third.

An American website has scanned and posted a 36-page document released by the U.S. Department of the Navy on November 10, 2009 called Navy Arctic Roadmap [1]

The paper states that “The primary policy guidance statements influencing this roadmap are the National Security Presidential Directive 66/Homeland Security Presidential Directive 25 (NSPD 66/HSPD 25) and the Cooperative Strategy for 21st Century Seapower (CS21).” [2] The second policy document was issued by the U.S. Navy on October of 2007 and the first, the National Security Directive, was written on January 9 of this year. A previous article in this series examined the second in detail shortly after it was made public. [3]

The key components of January\’s National Security Directive are these, the first reproduced verbatim:
“The United States has broad and fundamental national security interests in the Arctic region and is prepared to operate either independently or in conjunction with other states to safeguard these interests. These interests include such matters as missile defense and early warning; deployment of sea and air systems for strategic sealift, strategic deterrence, maritime presence, and maritime security operations; and ensuring freedom of navigation and overflight.”

The document also speaks unapologetically of the intent to “Preserve the global mobility of United States military and civilian vessels and aircraft throughout the Arctic region” and stipulates in its fourth point that “The Senate should act favorably on U.S. accession to the U.N. Convention on the Law of the Sea promptly, to protect and advance U.S. interests, including with respect to the Arctic. Joining will serve the national security interests of the United States, including the maritime mobility of our Armed Forces worldwide. It will secure U.S. sovereign rights over extensive marine areas, including the valuable natural resources they contain.” [4]

A Russian news source commented four days after the directive\’s release as follows: “In his final days in power, President George W. Bush asserted U.S. military ‘sea power’ over the oil-rich Arctic in a fresh effort to ensure permanent American presence in the region and the deployment of missile defense facilities there.
“According to the text of a sweeping new directive on the Arctic released just eight days before Barack Obama is to be sworn in, the United States declares the territories within the Arctic Circle a zone of its strategic interests and the new Administration is advised to expand the US foothold in the Arctic.” [5]

Indeed the new American administration has here as in most every other instance proven a faithful enforcer of its predecessor\’s geopolitical blueprints.

Less than three weeks after the Bush White House unveiled its new Arctic strategy, NATO held a hastily convened two-day meeting in Iceland attended by its secretary general and its top military commanders. The get-together, called a Seminar on Security Prospects in the High North, dutifully followed the American Arctic initiative and proclaimed that “the High North is going to require even more of the Alliance’s attention in the coming years.” [6]

Four of the five official Arctic claimants – the U.S., Canada, Denmark and Norway – were represented as founding members of the military bloc; Russia was not invited to send even an observer.

Another Russian news report wrote of the inescapable logic of the meeting: “NATO is seriously thinking of [establishing] military presence in the Arctic. It considers global warming and consequently an Arctic thaw as an occasion for this. NATO sees this as a possibility for its Arctic expansion.
“When taking into account the fact that all Arctic littoral nations but Russia are NATO member countries, it is quite clear who the alliance considers its rival in this region.” [7]

In the intervening months the four NATO members with longstanding territorial claims in the region – Canada, Denmark, Norway and the United States – have made military moves into the Arctic Circle in fulfillment of the Alliance\’s pledge in January.

Norway has moved its Operational Command Headquarters into the Arctic and purchased 48 Lockheed F-35 fighter jets for Arctic patrols, and Denmark announced plans to establish an all-service Arctic Command, an Arctic Response Force and a military buildup at the Thule airbase in Greenland, to be shared with its NATO allies. [8]

Great Britain, Finland and Sweden have been conscripted into the common effort, the latter two nations having been surreptitiously integrated into NATO behind the backs of their peoples. [9]

But it is Canada that has been appointed the role of vanguard in the impending showdown with Russia over the Arctic. Specifically, over the Lomonosov Ridge which runs 1,800 kilometers from Russia’s New Siberian Islands through the center of the Arctic Ocean to Canada’s Ellesmere Island in the Canadian Arctic Archipelago. [10]

Ottawa has conducted its largest-ever military exercises, established new bases and exhibited increasing truculence and saber rattling toward Russia in the region.

Washington, although it along with Brussels is employing Canada to confront Russia at the top of the world, is not shy in asserting its own military presence and pursuing its own geostrategic objectives in the Arctic.

The Navy Arctic Roadmap – a curious choice of nouns when speaking of a part of the globe without land – as the document itself takes pains to point out, proceeds from the National Security Directive of the beginning of the year and reaffirms most of the latter\’s major goals.

It highlights these strategic components for the intensified application of military deployments in the Arctic region:

Strategy, policy, mission and plans

Operations and training

Investments in weapons, platforms, sensors, command, control. communications, computers, intelligence, surveillance, and reconnaissance (C41SR) installations, and facilities

Strategic communications and outreach

In another section of the document these are the four operations mentioned first:

Undersea Warfare

Expeditionary Warfare

Strike Warfare

Strategic Sealift

The Navy Arctic Roadmap also states that “the naval services must be prepared to prevent or limit regional conflict when required,” giving particular emphasis to strategic deterrence and ballistic missile defense. [11]

A reiteration of the priorities itemized in the National Security Presidential Directive 66 ten months earlier.

What the practical implementation of this policy means is the expanded penetration of the Arctic Circle by the U.S. Navy\’s submarine-launched ballistic missile (SLBM) third of the American nuclear triad, as will be examined later, and the extension of plans for a U.S.-NATO-Asian NATO worldwide interceptor missile system already being put into place near Russia\’s western, southern and eastern borders. U.S. and NATO radar, submarine and missile deployments in the so-called High North will complete the encirclement.

The U.S. and Britain have conducted joint submarine warfare exercises un
der the polar ice cap twice in the last two years, Operation Ice Exercise 2007 and Operation Ice Exercise 2009. A U.S. Navy website said during the first exercise that “The submarine force continues to use the Arctic Ocean as an alternate route for shifting submarines between the Atlantic and Pacific Oceans….Submarines can reach the western Pacific directly by transiting through international waters of the Arctic rather than through the Panama Canal.” [12]

The Arctic Ocean, in particular that part of it under the ice cap, is Russia\’s last retaliatory refuge, that spot on the earth where any element of its strategic forces is comparatively safe from a Western first strike and least targetable by interceptor missiles after such an attack.

Earlier this month the American attack submarine the USS Texas “completed an Arctic mission, with some U.S. media outlets noting the nuclear-powered submarine broke through the ice near the North Pole and stayed on the surface for 24 hours.” [13]

A Canadian news agency reported that the government\’s Foreign Affairs spokesman Alain Cacchione “said information about submarine operations is considered secret. He noted…that Canada permits shipping through its Arctic waters….” [14]

A rather broad definition of shipping, to be sure, but Cacchione\’s attempt at evasiveness wore thin when he added “There are safety protocols in place under NATO that provide for the exchange of information on allied submarine movements….” [15] That is, the U.S. submarine was off the Canadian coast with Ottawa\’s full knowledge. And blessings. “The U.S. navy did not release details on what, if any, weapons tests were performed by the Texas.” Nor did the Canadian government ask, even though January\’s U.S. National Security Directive explicitly challenges Canada\’s claim to exclusive rights over the legendary Northwest Passage, now navigable for the first time in recorded history.

Instead, Prime Minister Stephen Harper and Foreign Affairs Minister Lawrence Cannon “have taken a hard line in regard to excursions by the Russians into the Arctic. Earlier this year, [Defence Minister Peter] MacKay accused the Russians of sending military aircraft too close to Canadian northern airspace. He vowed that Canadian Forces CF-18 fighter aircraft would intercept Russian aircraft each and every time they came near the country.”

By excursions are meant routine patrols over neutral, international waters conducted according to the terms of the relevant treaties.
“In March, Cannon said Canada \’will not be bullied\’ by a Russian plan to create a new security force for the Arctic.” [16]

If loose lips could sink ships, Harper, Cannon and McKay would have sent the entire Russian navy to the bottom of the Arctic and the North Atlantic. All three have delivered a steady stream of exhortations, bluster and downright threats to Russia throughout the year.

This blunt, eminently non-diplomatic, and incessant saber rattling by a relatively minor military and international political player would not persist for as long as it has – questionable domestic gains notwithstanding – if the three ministers were not assured of support from the United States and NATO. In the second case, the Article 5 mutual obligation to engage in armed intervention if any member state requests it. In fact Canada has nothing to back it up except for its military ties with Washington and the Alliance.

That Canada has advanced to the front rank of Western nations confronting and challenging a disproportionately stronger Russia in the Arctic strongly suggests that it has been put up to the task. Being a smaller and weaker nation allows it to be cast in the role of a sympathetic victim of “Russian aggression,” much like Estonia two years ago with alleged cyber attacks and Georgia last year after its invasion of South Ossetia. Leading Western elected officials were champing at the bit to activate NATO\’s Article 5 in the last two cases (even though Georgia is not yet a full member of the bloc), and Canada could provide a casus belli impossible to resist.

In line with that scenario, the Canadian foreign affairs minister, the self-styled Lawrence of the Arctic, was back on the warpath on November 23, warning “the world…that this country will respond \’firmly\’ when other nations \’push the envelope\’ with military exercises or other provocative actions anywhere along Canada\’s northern frontier.” [17]

He was not, of course, referring to the United States or Great Britain or Denmark, who as NATO allies are allowed to parade their military presence off Canada\’s coast as they choose to do. He singled out Russia.

Cannon spoke three days after U.S. Defense Secretary Robert Gates addressed the Halifax International Security Forum in Nova Scotia. “The future of NATO and international claims on untapped Arctic oil [also] dominated discussions, largely behind closed doors, between Gates and top officials from Belgium, Brazil, Canada, France, Japan, Germany, India, New Zealand, and the Netherlands.
“Gates announced…that Washington planned to boost cooperation with Canada in the Arctic, as Russia and others eye its vast energy and mineral resources.” [18]

Cannon\’s – laughable except for the broader context – comments were made at the Economic Club of Canada in Toronto where he retrieved a chestnut from the archives (“Arctic superpower” and “energy superpower” from last August) and “said the country\’s future as an \’energy superpower\’ is closely tied to potentially rich deposits of Arctic oil and gas on land and seabed.” [19]

This year\’s study by the U.S. Geological Survey “assessed the area north of the Arctic Circle and concluded that about 30% of the world’s undiscovered gas and 13% of the world’s undiscovered oil may be found there, mostly offshore under less than 500 meters of water. Undiscovered natural gas is three times more abundant than oil in the Arctic and is largely concentrated in Russia.” [20]

Hence Cannon\’s assertion that “This is why we react so strongly when other nations, like Russia, engage in exercises and other activities that appear to challenge our security in the North….” [21]

Three North American news sources, one Canadian and two U.S., all not unsympathetic to the initiative, recently wrote about the new Navy Arctic Roadmap.

The National Post recently published this:
“The U.S. Navy is planning a massive push into the Arctic to defend national security, potential undersea riches and other maritime interests.
“An \’Arctic road map\’ released by the Department of the Navy details a five-year strategic plan to expand fleet operations into the North in the expectation the frozen Arctic Ocean will be open water in summer by 2030.
“[I]t is clear the United States is intent on seriously retooling its military presence and naval combat capabilities in a region increasingly seen as a potential flashpoint as receding polar ice allows easier access.” [22]

An American source which linked the online version of the Roadmap added of it in relation to U.S.-Canadian collaboration in the Arctic:
“It includes a comprehensive, three-phase outline of measures the Navy hopes to undertake in the Arctic region within four years: develop new, resilient vessels and weaponry; map the seabed floor for potential resources and geological information; and innovate diagnostic tools to more accurately predict when the cap will thaw.
“Even as the ratification process lurches through the Senate{_
VIR_} the U.S. Navy is launching the first phases of its program. In August, Navy service-members and administrators took part in a Canadian training program, Nanook, where they learned tactical strategy for rugged climates and underwent disaster-relief training. In October, the United States Naval War College hosted the 19th biennial Seapower Symposium, where American and Ca ian Naval administrators discussed their 6,500-nautical-mile dispute over waterway boundaries.” [23]

Third, with the unabashed title of “U.S. Navy Prepares for Militarization of the Arctic,” another report revealed that “the U.S. Navy is…planning for potential combat situations that may arise once global warming has melted the Arctic Ocean’s summer ice within two decades. A 35-page memo from the Department of the Navy spells out a five-year plan expressing the need to develop new technology and strategies in the event things become contentious in the open waters of the Arctic Circle by 2030.” [24]

As the U.S. and NATO campaign in Afghanistan is being intensified to an all-time high level of fighting (with more foreign troops in that nation than at any previous period in its history), with the Pentagon expanding into Colombia in a move that could trigger a regional and even continental war, and with Western proxies in the South Caucasus eager to launch new armed hostilities on Russia\’s southern border, even the top of the world, the remote Arctic Circle, is not being spared the threat of war.

Notes
1) http://www.wired.com/images_blogs/dangerroom/2009/11/us-navy-arctic-roadmap-nov-2009.pdf
2) Ibid
3) NATO’s, Pentagon’s New Strategic Battleground: The Arctic
February 2, 2009
http://rickrozoff.wordpress.com/2009/08/26/natos-pentagons-new-strategic-battleground-the-arctic
4) National Security Presidential Directive 66
http://www.fas.org/irp/offdocs/nspd/nspd-66.htm
5) Voice of Russia, January 16, 2009
6) NATO, January 29, 2009
7) Voice of Russia, January 30, 2009
8) Encroachment From All Compass Points: Canada Leads NATO Confrontation With
Russia In North
Stop NATO, August 5, 2009
http://rickrozoff.wordpress.com/2009/09/01/encroachment-from-all-compass-points-canada-leads-nato-confrontation-with-russia-in-north
9) End of Scandinavian Neutrality: NATO’s Militarization Of Europe
Stop NATO, April 10, 2009
http://rickrozoff.wordpress.com/2009/08/28/end-of-scandinavian-neutrality-natos-militarization-of-europe
10) Canada: Battle Line In East-West Conflict Over The Arctic
Stop NATO, June 3, 2009
http://rickrozoff.wordpress.com/2009/08/31/canada-battle-line-in-east-west-conflict-over-the-arctic
11) Navy Arctic Roadmap, November 10, 2009
12) Navy NewsStand, March 20, 2007
13) Canwest News Service, November 16, 2009
14) Ibid
15) Ibid
16) Ibid
17) Canwest News Service, November 24, 2009
18) Agence France-Presse, November 22, 2009
19) Ibid
20) Science, May 29, 2009
21) Canwest News Service, November 24, 2009
22) National Post, November 27
23) World Politics Review, November 30, 2009
24) AllGov, November 30, 2009

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Bogus Honduran Elections

Global Research, November 29, 2009

“What are we going to do, sit for four years and just condemn the coup?” a senior U.S. official, speaking on the condition of anonymity, told reporters in Washington.

The true divides in Latin America – between justice and injustice, democracy and dictatorship, human rights and corporate rights, people\’s power and imperial domination – have never been more visible than today. People\’s movements throughout the region to revolutionize corrupt, unequal systems that have isolated and excluded the vast majority in Latin American nations, are successfully taking power democratically and building new models of economic and social justice. Venezuela, Bolivia, Nicaragua and Ecuador are the vanguard of these movements, with other nations such as Uruguay and Argentina moving at a slower pace towards change.

The region has historically been plagued by brutal US intervention, seeking at all costs to dominate the natural and strategic resources contained in this vast, abundant territory. With the exception of the defiant Cuban Revolution, Washington achieved control over puppet regimes placed throughout Latin America by the end of the twentieth century. When Hugo Chávez won the presidency in 1998 and the Bolivarian Revolution began to root, the balance of power and imperial control over the region started to weaken. Eight years of Bush/Cheney brought coup d\’etats back to the region, in Venezuela in 2002 against President Chávez and Haiti in 2004 against President Aristide. The former was defeated by a mass popular uprising, the latter succeeded in ousting a president no longer convenient to Washington\’s interests.

Despite the Bush administration\’s efforts to neutralize the spread of revolution in Latin America through coups, economic sabotages, media warfare, psychological operations, electoral interventions and an increasing military presence, nations right across the border such as Honduras, El Salvador and Guatemala elected leftist-leaning presidents. Latin American integration solidified with UNASUR (the union of South American nations) and ALBA (the Bolivarian Alliance of the Americas), and Washington\’s grip on power began to slip away.

Henry Kissinger said in the seventies, “if we can\’t control Latin America, how can we dominate the world?” This imperial vision is more evident today than ever before. Obama\’s presence in the White House was erroneously viewed by many in the region as a sign of an end to US aggression in the world, and especially here, in Latin America. At least, many believed, Obama would downscale the growing tensions with its neighbors to the south. In fact, he himself, the new president of the United States, made allusion to such changes.

But now, the Obama administration\’s “Smart Power” strategy has been unmasked. The handshakes, smiles, gifts and promises of “no intervention” and “a new era” made by President Obama himself to leaders of Latin American nations last Spring at the Summit of the Americas meeting in Trinidad have unraveled and turned into cynical gestures of hypocrisy. When Obama came to power, Washington\’s reputation in the region was at an all-time low. The meager attempts to “change” the North-South relationship in the Americas have made things worse and reaffirmed that Kissinger\’s vision of control over this region is a state policy, irrespective of party affiliation or public discourse.

Washington\’s role in the coup in Honduras against President Zelaya has been evident from day one. The continual funding of coup leaders, the US military presence at the Soto Cano base in Honduras, the ongoing meetings between State Department officials and the US Ambassador in Honduras, Hugo Llorens, with coup leaders, and the cynical attempts to force “mediation” and “negotiation” between the coup leaders and the legitimate government of Honduras, have provided clear evidence of Washington\’s intentions to consolidate this new form of “smart coup”. The Obama administration\’s initial public insistence on Zelaya\’s legitimacy as president of Honduras quickly faded after the first weeks of the coup. Calls for “restitution of democratic and constitutional order” became weak whispers repeated by the monotone voices of State Department spokesmen.

The imposition of Costan Rican president Oscar Arias – a staunch ally of neoliberalism and imperialism -to “mediate” the negotiation ordered by Washington between coup leaders and President Zelaya was a circus. At the time, it was apparent that Washington was engaging in a “buying time” strategy, pandering to the coup leaders while publicly “working” to resolve the conflict in Honduras. Arias\’ insincerity and complicity in the coup was evident from the very morning of Zelaya\’s violent kidnapping and forced exile. The Pentagon, State Department and CIA officials present on the Soto Cano base, which is controlled by Washington, arranged for Zelaya\’s transport to Costa Rica. Arias had subserviently agreed to refuge the illegally ousted president and to not detain those who kidnapped him and piloted the plane that – in violation of international law – landed in Costa Rican territority.

Today, Oscar Arias has called on all nations to “recognize” the illegal and illegitimate elections occurring in Honduras. Why not? he says, if there is no fraud or irregularity, “why not recognize the newly elected president?” The State Department and even President Obama himself have said the same thing, and are calling on all nations – pressuring – to recognize a regime that will be elected under a dictatorship. Seems that fraud and irregularity are already present, considering that today, no democracy exists in Honduras that would permit proper conditions for an electoral process. Not to mention that the State Department admitted to funding the elections and campaigns in Honduras weeks ago. And the “international observers” sent to witness and provide “credibility” to the illegal process are all agencies and agents of empire. The International Republican Institute and National Democratic Institute, both agencies created to filter funding from USAID and the National Endowment for Democracy (NED) to political parties abroad in order to promote US agenda, not only funded those groups involved in the Honduran coup, but now are “observing” the elections. Terrorist groups such as UnoAmerica, led by Venezuelan coup leader Alejando Peña Esclusa, have also sent “observers” to Honduras. Miami-Cuban terrorist and criminal Adolfo Franco, former USAID director, is another “heavyweight” on the list of electoral observers in Honduras today.

But the Organization of American States (OAS) and Carter Center, hardly “leftist” entities, have condemned the electoral process as illegitimate and refused to send observers. So has the United Nations and the European Union, as well as UNASUR and ALBA.

Washington stands alone, with its right-wing puppet states in Colombia, Panamá, Perú, Costa Rica and Israel, as the only nations to have publicly indicated recognition of the electoral process in Honduras and the future regime. A high-level State Department official cynically declared to the Washington Post, “What are we going to do, sit for four years and just condemn the coup?” Well, Washington has sat for 50 years and refused to recognize the Cuban government. But that\’s because the Cuban government is not convenient for Washington. The Honduran dictatorship is.

The Honduran resistance movement
is boycotting the elections, calling on people to abstain from participating in an illegal process. The streets of Honduras have been taken over by thousands of military forces, under control of the coup regime and the Pentagon. With advanced weapons technology from Israel, the coup regime is prepared to massively repress and brutalize any who attempt to resist the electoral process. We must remain vigilant and stand with the people of Honduras in the face of the immense danger surrounding them. Today\’s elections are a second coup d\’etat against the Honduran people, this time openly designed, promoted, funded and supported by Washington. Whatever the result, no justice will be brought to Honduras until Washington\’s intervention ceases.

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Red Alert: The Second Wave of The Financial Tsunami

Global Research, November 22, 2009
Many of my friends who have been receiving my e-mail alerts over the last two years have lamented that in recent weeks I have not commented on the state of the global economy. I appreciate their anxiety but they forget that I am not a stock market analyst who is paid to write articles to lure investors back into the market. My website is free and I do not sell a financial newsletter so there is no need for me to churn out daily forecasts or analysis.

However, when the data is compelling and supports an inevitable trend, it is time for another review. This Red Alert is to enable visitors to my website to take appropriate actions to safeguard their wealth and welfare of their families in the coming months.

Since the last quarter of 2008, unrelenting currency warfare has been waged by the key global economies and while this competition thus far has been non-antagonistic, it will soon be antagonistic because the inherent differences are irreconcilable. The consequences to the global economy will be devastating and for the ordinary people, massive unemployment and social unrest are assured.

The policy-makers of these countries faced with the total collapse of the international financial architecture have concluded that the solution, the only solution is quantitative easing (i.e. massive injection of liquidity) to salvage the “too big to fail” banks and reflate their depressed economies. This is best reflected in Bernanke’s candid remark that, “the US government has a technology, called the printing press (or today, its electronic equivalent), that allows it to produce as many US dollars as it wishes at essentially no cost”.

This is the crux of the problem!

The Irreconcilable Differences

Some two decades ago, it was decided by the global financial elites that the framework for the global economy shall consist of:
1) A global derivative-based financial system, controlled by the US Federal Reserve Bank and its associate global banks in the developed countries.
2) The re-location from the West to the East in the production of goods, principally to China and India to “feed” the developed economies.

The entire system was built on a simple principle, that of a FED-controlled global reserve currency which will be the engine for growth for the global economy. It is essentially an imperialist economic principle.

Once we grasp this fundamental truth, Bernanke’s boast that the “US can produce as many US dollars as it wishes at no cost” takes on a different dimension.

I have talked to so many economists and when asked what is the crux of the present financial problem, they all respond in unison, “it is the global imbalances… the West consumes too much while the East saves too much and consumes not enough”. This is exemplified by the huge US trade deficits on the one part and China’s massive surpluses on the other.

Incredible wisdom and almost everyone echoes this mantra. The recent concluded APEC Summit was no different. This mantra was repeated as well as the call for freer trade between trading nations.

This is a grand hoax. All the current leaders on the world’s stage are corrupted to the rotten core and as such have no interest to call a spade a spade and expose the inherent contradictions within the existing financial system.

The call for a multi-polar world is meaningless when the entire global financial system is based on the unipolar US dollar reserve currency. This is the inherent contradiction within the present system and the problems associated with it cannot be resolved by another global reserve currency based on the IMF’s Special Drawing Rights as advocated by some countries. It was stillborn, the very moment it was conceived!

The leaders of China, Japan and the oil producing countries of the Middle East are all cursing and pissing about the current situation, but they don’t have the courage of their convictions to spell it out to their countrymen that they have been conned by the financial spin masters from the Fed acting on the instructions from Goldman Sachs.

Tell me which leader would dare admit that they have exchanged the nation’s wealth for toilet papers?

The toilet paper currency pantomime continues.

We have now reached a stalemate in the current currency war, not unlike the situation of the Cold War between the NATO pact countries and the Warsaw pact countries. Both sides were deterred by the MAD (Mutually Assured Destruction) doctrine of nuclear wars. The costs to both sides were horrendous and it was only when the Soviet Union could not continue with the pace and cost of maintaining a nuclear deterrent and was forced into bankruptcy that the balance tilted in favour of the NATO alliance.

But it was a pyrrhic victory for the US and it allies. What kept the ability of the US to maintain its military might and outspend the Soviet Union was the right to print toilet paper currency and the acceptance of the US dollar by her allies as the world’s reserve currency.

But why did the countries allied to the US during the Cold War accepted the status quo?

Simple! They were all conned into believing that without the protection of Big Brother and its military outreach, they would be swallowed up by the communist menace. They agreed to march to the tune of the US Pied-Piper.

The next big question – why did the so-called “liberated” former communist allies of the Soviet bloc jump on the bandwagon?

Simple! They all believed in the illusion that was fostered by the global banks, led by Goldman Sachs that trading and selling their goods and services for the toilet paper US reserve currency would ensure untold wealth and prosperity.

But the biggest game in town was the Asia gambit. Japan, after a decade of recession following the burst of her property bubble did not have the means and the capacity to bring the game to the next level as envisaged by the financial architects in Goldman Sachs.

And China was the biggest beneficiary. The senior management of Goldman Sachs brokered a secret pact with China’s leaders that in exchange for orchestrating the most massive injection of US dollar capital and wholesale re-location of manufacturing capacity in the history of the global economy, China would recycle their hard-earned US toilet paper reserve currency wealth into US treasuries and other US debt instruments.

This was the necessary condition precedent for the global financial casino to rise to the next level of play.

Why?

The New Game

The financial architects at Goldman Sachs had a master plan – to dominate the global financial system. The means to achieve this financial power was the Shadow Banking System, the lynchpin being the derivative market and the securitization of assets, real and synthetic. The stakes would be huge, in the hundreds of US$ trillions and the way to transform the market was through massive leverage at all levels of the financial game.

But there was an inherent weakness in the overall scheme – the threat of inflation, more precisely hyperinflation. Such huge amounts of liquidity in the system would invariably trigger the depreciation of the reserve currency and the confidence in the system.

Hence the need for a system to keep in check price inflation and the illusion that the purchasing power of the toilet paper reserve currency could be maintained.

This is where China came in. Once Chin
a became the world’s factory, the problem would be resolved. When a suit which previously cost US$600 could be had for less than US$100, and a pair of shoes for less than US$5, the scam masterminds concluded that there would be no foreseeable threat to the largest casino operation in history.

China agreed to the exchange as it has over a billion mouths to feed and jobs for hundreds of millions needed to be secured, without which the system could not be maintained. But China was pragmatic enough to have two “economic systems” – a Yuan based domestic economy and a US$ based export economy, in the hope that the profits and benefits of the export economy would enable China to transform and establish a viable and dynamic domestic market which in time would replace the export dependent economy. It was a deal made with the devil, but there were no viable alternative options at the material time, more so after the collapse of the Soviet Union.

The Next Level of the Game

The next level of the game was reached when the toilet paper reserve currency literally went virtual – through the simple operation of a click of the mouse in the computers of the global banks.

The big boys at Goldman Sachs and other global banks were more than content to leave Las Vegas for the mafia and their miserable billions in turnover. The profits were considered dimes when compared to the hundreds of trillions generated by the virtual casino. It was a financial conquest beyond their wildest dreams. They even called themselves, “Master of the Universe”. Creating massive debts was the new game, and the big boys could even leverage more than 40 times capital! Asset values soared with so much liquidity chasing so few good assets.

However, the financial wizards failed to appreciate and or underestimate the amount of financial products that were needed to keep the game in play. They resorted to financial engineering – the securitization of assets. And when real assets were insufficient for securitization, synthetic assets were created. Soon enough, toxic waste was even considered as legitimate instruments for the game so long as it could be unloaded to greedy suckers with no recourse to the originators of these so-called investments.

For a time, it looked as if the financial wizards have solved the problem of how to feed the global casino monster.

Unfortunately, the music stopped and the bubble burst! And as they say the rest is history.

The Goldman Sachs Remedy

When losses are in the US$ trillions and whatever assets / capital remaining are in the US$ billions, we have a huge problem – a financial black-hole.

The preferred remedy by the financial masterminds at Goldman Sachs was to create another hoax – that if the big global banks were to fail triggering a systemic collapse, there would be Armageddon. These “too big to fail” banks must be injected with massive amount of virtual monies to recapitalize and get rid of the toxic assets on their balance sheet. The major central banks in the developed countries in cahoots with Goldman Sachs sang the same tune. All sorts of schemes were conjured to legitimize this bailout.

In essence, what transpired was the mere transfer of monies from the left pocket to the right pocket, with the twist that the banks were in fact helping the Government to overcome the financial crisis.

The Fed and key central banks agreed to lend “virtual monies” to the “too big to fail” global banks at zero or near zero interest rate and these banks in turn would “deposit” these monies with the Fed and other central banks at agreed interest rates. These transactions are all mere book entries. Other “loans” from the Fed and central banks (again at zero or near zero interest rates) are used to purchase government debts, these debts being the stimulus monies needed to revive the real economy and create jobs for the growing unemployed. So in essence, these banks are given “free money” to lend to the government at prior agreed interest rates with no risks at all. It is a hoax!

These “monies” are not even the dollar bills, but mere book entries created out of thin air.

So when the Fed injects US$ trillions into the banking system, it merely credits the amount in the accounts of the “too big to fail” banks at the Fed.

When the system is applied to international trade, the same modus operandi is used to pay for the goods imported from China, Japan etc.

For the rest of world, when buying goods denominated in US$, these countries must produce goods and services, sell them for dollars in order to purchase goods needed in their country. Simply put, they have to earn an income to purchase whatever goods and services needed. In contrast, all that the US needs to do is to create monies out of thin air and use them to pay for their imports!

The US can get away with this scam because it has the military muscle to compel and enforce this hoax. As stated earlier, this status quo was accepted especially during the Cold War and with some reluctance post the collapse of the Soviet Union, but with a proviso – that the US agrees to be the consumer of last resort. This arrangement provided some comfort because countries which have sold their goods to the US, can now use the dollars to buy goods from other countries as more than 80 per cent of world trade is denominated in dollars especially crude oil, the lifeline of the global economy.

But with the US in full bankruptcy and its citizens (the largest consumers in the world) being unable to borrow further monies to buy fancy goods from China, Japan and the rest of the world, the demand for dollar has evaporated. The dollar status as a reserve currency and its usefulness is being questioned more vocally.

The End Game

The present fallout can be summarized in simple terms:

Should a bankrupt country (the US) be allowed to use money created out of thin air to pay for goods produced with the sweat and tears of hardworking citizens of exporting countries? Adding insult to injury, the same dollars are now purchasing a lot less than before. So what is the use of being paid in a currency that is losing rapidly its value?

On the other hand, the US is telling the whole world, especially the Chinese that if they are not happy with the status quo, there is nothing to stop them from selling to the other countries and accepting their currencies. But if they want to sell to the mighty USA, they must accept US toilet paper reserve currency and its right to create monies out of thin air!

This is the ultimate poker game and whosoever blinks first loses and will suffer irreparable financial consequences. But who has the winning hand?

The US does not have the winning hand. Neither has China the winning hand.

This state of affairs cannot continue for long, for whatever cards the US or China may be contemplating to throw at the table to gain strategic advantage, any short term gains will be pyrrhic, for it will not be able to address the underlying antagonistic contradictions.

When the survival of the system is dependent on the availability of credit (i.e. accumulating more debts) it is only a matter of time before both the debtor and creditor come to the inevitable conclusion that the debt will never be paid. And unless the creditor is willing to write off the debt, resorting to drastic means to collect the outstanding debt is inevitable.

It would be naïve to think that the US would q
uietly allow itself to be foreclosed! When we reach that stage, war will be inevitable. It will be the US-UK-Israel Axis against the rest of the world.

The Prelude to the End Game

The US economy will be spiraling out of control in the coming months and will reach critical point by the end of the 1st quarter 2010 and implode by the 2nd quarter.

The massive US$ trillions of dollars stimulus has failed to turn the economy around. The massive blood transfusion may have kept the patient alive, but there are nu ous signs of multi-organ failure.

There will be another wave of foreclosures of residential and more importantly commercial properties by end December and early 2010. And the foreclosed properties in 2009 will lead to depressed prices once they come through the pipeline. Home and commercial property values will plunge. Banks’ balance sheets will turn ugly and whatever “record profits” in the last two quarters of 2009 will not cover the additional red ink.

Given the above situation, will the Fed continue to buy mortgage-backed securities to prop up the markets? The Fed has already spent trillions buying Fannie Mae and Freddie Mac mortgages with no potential substitute buyer in sight. Therefore, the Fed’s balance sheet is as toxic as the “too big to fail” banks that it rescued.

In the circumstances, it makes no sense for anyone to assert that the worst is over and that the global economy is on the road to recovery.

And the surest sign that all is not well with the big banks is the recent speech by the President of the Federal Reserve Bank of New York, William Dudley at Princeton, New Jersey when he said that the Fed would curtail the risk of future liquidity crisis by providing a “backstop” to solvent firms with sufficient collateral.

This warning and assurance deserves further consideration. Firstly, it is a contradiction to state that a solvent firm with sufficient collateral would in fact encounter a liquidity crisis to warrant the need for a fall back on the Fed. It is in fact an admission that banks are not sufficiently capitalized and when the second wave of the tsunami hits them again, confidence will be sorely lacking.

Dudley actually said that, “the central bank could commit to being the lender of last resort… [and this would reduce] the risk of panics sparked by uncertainty among lenders about what other creditors think”.

To put it bluntly what he is saying is that the Fed will endeavour to avoid the repeat of the collapse of Bear Stearns, Lehman Bros and AIG. It is also an indication that the remaining big banks are in trouble.

It is interesting to note that a Bloomberg report in early November revealed that Citigroup Inc and JP Morgan Chase have been hoarding cash. The former has almost doubled its cash holdings to US$244.2 billion. In the case of the latter, the cash hoard amounted to US$453.6 billion. Yet, given this hoarding by the leading banks, the New York Federal Reserve Bank had to reassure the financial community that it is ready to inject massive liquidity to prop up the system.

It should come as no surprise that the value of the dollar is heading south.

When currencies are being debased, volatility in the stock market increases. But the gains are not worth the risks and if anyone is still in the market, they will be wiped out by the 1st quarter of 2010. The S&P may have shot up since the beginning of the year by over 25 per cent but it has been out-performed by gold. The gains have also lagged behind the official US inflation rate. It has in fact delivered a total return after inflation of approximately minus 25 per cent. When Meredith Whitney remarked that, “I don’t know what’s going on in the market right now, because it makes no sense to me”, it is time to get out of the market fast.

In a report to its clients, Société Générale warned that public debt would be massive in the next two years – 105 per cent of GDP in the UK, 125 per cent in the US and in Europe and 270 per cent in Japan. Global debt would reach US$45 trillion.

At some point in time, all these debts must be repaid. How will these debts be repaid?

If we go by what Bernanke has been preaching and practising, it means more toilet paper currency will be created to repay the debts.

As a result, debasement of currencies will continue and this will further aggravate existing tensions between the competing economies. And when creditors have enough of this toilet paper scam, expect violent reactions!


Matthias Chang is a frequent contributor to Global Research. Global Research Articles by Matthias

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The ";Double Dip Economic Depression";


Global Research, November 20, 2009
When I was a kid, a “double dip” was an ice cream cone with two scoops. Yummy,


Today, the same expression is being used to warn us that the recession we are still struggling with could, and is supposedly posed for recovery could fall even deeper into another dip. That d word seems to be a substitute for another—a depression.


What’s going wrong? Isn’t the stock market sailing high? Hasn’t GM managed to cut its losses to only a billion? Isn’t Goldman Sachs setting aside ” a half a billion dollars to help small business and show how sorry it is for its role in the financial meltdown? (That pay out is over ten years—just 2.6% of its bonus pile, but who’s counting. A half a billion still sounds like real money.


To hear Joe Bidden tell Jon Stewart how many jobs were created or saved, you would almost think it’s all under control. That’s what they want is to believe: we are on the way back, baby because the big dicks are swinging on Wall Street again.


And yet, when you read between the lines and figure out how to decode the lies and cheerleading, another picture emerges.


A Double Dip is not that remote.


There are Structural problems like a growing wall of debt that try as you might cannot all be blamed on The Democrats if you are of the other persuasion or on the Repugs if you stand with the Donkeys.


It’s a system thing, a cancer that is eating away at the economy. The Financial Times reported Wednesday night, “US President Barrack Obama warned that the US economy could head into a “double-dip recession” unless urgent steps were taken to rein in mounting public debt.


Obama told Fox News—I guess they are talking again– “That\’s when the economy begins to recover briefly from a recession only to be dragged back under. Obama told Fox News in an interview Wednesday that his administration is weighing tax breaks that could encourage businesses to begin hiring again.


But he added that it\’s important to recognize that if the nation keeps adding to deficit spending through tax cuts or more stimulus spending, at some point people could lose confidence in the U.S. economy and that could “lead to a double-dip recession.”


What are the chances that can happen?


Quiet as its kept, the odds are pretty good.


Can a Congress addicted to financing from lobbyists and compromise and collusion do what needs to be done? The financial industry has 6 lobbyists playing every Congressman. (My new book, THE CRIME OF OUR TIME offers the details)


While Obama was in China kowtowing to our nation’s real bankers, Tim Geithner was on the hill pleading for financial reforms even as most observers believe that because the public thinks thing are getting better, and because our legislators don’t want to think about it, there is no passion for cracking down on the practices and people that got us into this mess.

AP reported: “Treasury Secretary Timothy Geithner told Congress on Tuesday that efforts to strengthen the global financial system to prevent another deep crisis will falter if the United States drops the ball on overhauling regulation of its own banking system.

“We need to move on the reform agenda when the memory of the crisis is still acute.”


Sorry Tim: We have no memory in our United States of Amnesia where the national attention span finds twittered messages too long.


Already the Obama Administration is preaching reform while also killing reform as in watering down the Sarbanes Oxley rules, enacted after the Enron Scandal and passed by Busheviks, for companies making less than $75 billion. That’s considered “small business.”


And what about protecting Consumers from abuses that EVERYONE knows are outrageous. Mike Kranish writes in the Boston Globe that reforms to lower credit card rates are fading:


WASHINGTON – Efforts in Congress to cap credit-card interest rates are faltering because of opposition from Democrats and a lack of specific support from the White House, despite growing consumer outrage over a rush by banks to impose rates as high as 30 percent.

During the 2008 presidential campaign, Barack Obama vowed to back a strict limit on credit-card interest rates. But the White House is not yet behind any particular plan this year. While Obama has chastised credit-card companies, his spokeswoman declined to say this week how he planned to follow through on his campaign pledge.”


And what about jobs? New organizing efforts are underway to press Congress to act. The reason, according to the Economic Policy Institute:

“The U.S. unemployment rate exceeded 10% in October for the first time in a quarter century. Nearly 16 million Americans who are able and willing to work cannot find a job. More than one out of every three unemployed workers has been out of a job for six months or more. The situation facing African-American and Latino workers is even bleaker, with unemployment at 15.7% and 13.1%, respectively.”


What to do?


For starters we have to get hip about the dangers of a double dip. We have to care more about these issues than we do. Enough bloviating about Sarah Palin and Khalid Sheikh Mohammad.


Enough about Rush and Beck and company and other distractions.

Educate yourself about how serious the crisis still is. Get engaged with economic justice issues. Press for financial reform with groups like ANewWayForward.org.


Lets start focusing on stopping a more serious collapse before it occurs.



Danny Schechter, News Dissector, is finishing the film Plunder: the Crime of Our Time and has a companion book on the financial meltdown as a crime story. Visit: Plunderthecrimeofourtime.com Write: dissector@mediachannel.org



Danny Schechter is a frequent contributor to Global Research. Global Research Articles by Danny Schechter

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The Pentagon Budget: Largest Ever and Growing

Global Research, November 19, 2009
On Oct. 28, President Barack Obama signed the 2010 Defense Authorization Act, the largest military budget in U.S. history.

It is not only the world\’s largest military budget but is larger than the military expenditures of the whole rest of the world combined. And it is growing nonstop. The 2010 military budget–which doesn\’t even cover many war-related expenditures–is listed as $680 billion. In 2009 it was $651 billion and in 2000 was $280 billion. It has more than doubled in 10 years.

What a contrast to the issue of health care!

The U.S. Congress has been debating a basic health care plan–which every other industrialized country in the world has in some form–for more than six months. There has been intense insurance company lobbying, right-wing threats, and dire warnings that a health care plan must not add one dime to the deficit.

Yet in the midst of this life-and-death debate on medical care for millions of working and poor people who have no health coverage, a gargantuan subsidy to the largest U.S. corporations for military contracts and weapons systems–a real deficit-breaker–is passed with barely any discussion and hardly a news article.

Physicians for a National Health Program estimates that a universal, comprehensive single-payer health plan would cost $350 billion a year, which would actually be the amount saved through the elimination of all the administrative costs in the current private health care system–a system that leaves out almost 50 million people.

Compare this to just the cost overruns each year in the military budget. Even President Obama on signing the Pentagon budget said, “The Government Accountability Office, the GAO, has looked into 96 major defense projects from the last year, and found cost overruns that totaled $296 billion.” (whitehouse.gov, Oct. 28)

Harry Madoff\’s $50-billion Ponzi scheme, supposedly the biggest rip-off in history, pales in comparison. Why is there no criminal inquiry into this multibillion-dollar theft? Where are the congressional hearings or media hysteria about $296 billion in cost overruns? Why are the CEOs of the corporations not brought into court in handcuffs?

The cost overruns are an integral part of the military subsidy to the largest U.S. corporations. They are treated as business as usual. Regardless of the party in office, the Pentagon budget grows, the cost overruns grow and the proportion of domestic spending shrinks.

Addicted to war

This year\’s military budget is only the latest example of how the U.S. economy is kept afloat by artificial means. Decades of constantly reviving the capitalist economy through the stimulus of war spending has created an addiction to militarism that U.S. corporations can\’t do without. But it is no longer large enough to solve the capitalist problem of overproduction.

The justification given for this annual multibillion-dollar shot in the arm was that it would help to cushion or totally avoid a capitalist recession and could curb unemployment. But as Workers World Party founder Sam Marcy warned in 1980 in “Generals Over the White House,” over a protracted period more and more of this stimulant is needed. Eventually it turns into its opposite and becomes a massive depressant that sickens and rots the entire society.

The root of the problem is that as technology becomes more productive, workers get a smaller and smaller share of what they produce. The U.S. economy is more and more dependent on the stimulant of superprofits and multibillion-dollar military cost overruns to soak up a larger and larger share of what is produced. This is an essential part of the constant redistribution of wealth away from the workers and into the pockets of the superrich.

According to the Center for Arms Control and Non-Proliferation, U.S. military spending is now significantly more, in 2009 inflation-adjusted dollars, than it was during the peak years of the Korean War (1952: $604 billion), the Vietnam War (1968: $513 billion) or the 1980s Reagan-era military buildup (1985: $556 billion). Yet it is no longer enough to keep the U.S. economy afloat.

Even forcing oil-rich countries dependent on the U.S. to become debtor nations with endless weapons purchases can\’t solve the problem. More than two-thirds of all weapons sold globally in 2008 were from U.S. military companies. (Reuters, Sept. 6)

While a huge military program was able in the 1930s to pull the U.S. economy out of a devastating collapse, over a long period this artificial stimulus undermines capitalist processes.

Economist Seymour Melman, in books such as “Pentagon Capitalism,” “Profits without Production” and “The Permanent War Economy: American Capitalism in Decline,” warned of the deterioration of the U.S. economy and the living standards of millions.

Melman and other progressive economists argued for a rational “economic conversion” or the transition from military to civilian production by military industries. They explained how one B-1 bomber or Trident submarine could pay the salaries of thousands of teachers, provide scholarships or day care or rebuild roads. Charts and graphs showed that the military budget employs far fewer workers than the same funds spent on civilian needs.

These were all good and reasonable ideas, except that capitalism is not rational. In its insatiable drive to maximize profits it will always choose immediate superprofit handouts over even the best interests of its own long-term survival.

No “peace dividend”

The high expectations, after the end of the Cold War and the collapse of the Soviet Union, that billions of dollars could now be turned toward a “peace dividend” crashed against the continued astronomical growth of the Pentagon budget. This grim reality has so demoralized and overwhelmed progressive economists that today almost no attention is paid to “economic conversion” or the role of militarism in the capitalist economy, even though it is far larger today than at the highest levels of the Cold War.

The multibillion-dollar annual military subsidy that bourgeois economists have relied on since the Great Depression to prime the pump and begin again the cycle of capitalist expansion is no longer enough.

Once corporations became dependent on multibillion-dollar handouts, their appetite became insatiable. In 2009, in an effort to stave off a meltdown of the global capitalist economy, more than $700 billion was handed over to the largest banks. And that was just the beginning. The bailout of the banks is now in the trillions of dollars.

Even $600 to $700 billion a year in military spending can no longer restart the capitalist economy or generate prosperity. Yet corporate America can\’t do without it.

The military budget has grown so large that it now threatens to overwhelm and devour all social funding. Its sheer weight is squeezing out funding for every human need. U.S. cities are collapsing. The infrastructure of bridges, roads, dams, canals and tunnels is disintegrating. Twenty-five percent of U.S drinking water is considered “poor.” Unemployment is officially reaching 10 percent and in reality is double that. Black and Latino/a youth unemployment is more than 50 percent. Fourteen million children in the U.S. are living in households below the poverty level.

Half of military costs are hidden

The announced 2010 military budget of $680 billion is really only about half of the annual cost of U.S. mili
tary expenditures.

These expenditures are so large that there is a concerted effort to hide many military expenses in other budget items. The War Resisters League annual analysis listed the real 2009 U.S. military expenses at $1,449 billion, not the official budget of $651 billion. Wikipedia, citing several different sources, came up with a total military budget of $1,144 billion. Regardless of who is counting, it is beyond dispute that the military budget actually exceeds $1 trillion a year.

The National Priorities Project, the Center for Defense Information and the Center for Arms Control and Non-Proliferation analyze and expose many hidden military expenses tucked into other parts of the total U.S. budget.

For example, veterans\’ benefits totaling $91 billion are not included in the Pentagon budget. Military pensions totaling $48 billion are stuck into the Treasury Department budget. The Energy Department hides $18 billion in nuclear weapons programs in its budget. The $38 billion financing of foreign arms sales is included in the State Department budget. One of the largest hidden items is the interest on debt incurred in past wars, which totals between $237 billion and $390 billion. This is really an endless subsidy to the banks, which are intimately linked to the military industries.

Every part of these bloated budgets is expected to grow by 5 to 10 percent a year, while federal funding to states and cities is shrinking by 10 to 15 percent annually, leading to deficit crises.

According to the Office of Management and Budget, 55 percent of the total 2010 U.S. budget will go to the military. More than half! Meanwhile, federal block grants to states and cities for vital human services–schools, teacher training, home-care programs, school lunches, basic infrastructure maintenance for drinking water, sewage treatment, bridges, tunnels and roads–are shrinking.

Militarism breeds repression

The most dangerous aspect of the growth of the military is the insidious penetration of its political influence into all areas of society. It is the institution that is the most removed from popular control and the most driven to military adventure and repression. Retired generals rotate into corporate boardrooms, become talking heads in major media outlets, and high-paid lobbyists, consultants and politicians.

It is not a coincidence that along with having the world\’s largest military machine, the U.S. has the world\’s largest prison population. The prison-industrial complex is the only growth industry. According to the U.S. Justice Department\’s Bureau of Justice Statistics, more than 7.3 million adults were on probation or parole or incarcerated in 2007. More than 70 percent of the incarcerated are Black, Latino/a, Native and other people of color. Black adults are four times as likely as whites to be imprisoned.

Just as in the military, with its hundreds of thousands of contractors and mercenaries, the drive to maximize profits has led to the growing privatization of the prison system.

The number of prisoners has grown relentlessly. There are 2.5 times more people in the prison system today than 25 years ago. As U.S. capitalism is less and less able to provide jobs, job training or education, the only solutions offered are prisons or the military, wreaking havoc on individuals, families and communities.

The weight of the military pushes the repressive state apparatus into every part of society. There is an enormous growth of police of every kind and countless police and intelligence agencies.

The budget for 16 U.S. spy agencies reached $49.8 billion in fiscal year 2009; 80 percent of these secret agencies are arms of the Pentagon. (Associated Press, Oct. 30) In 1998 this expense was $26.7 billion. But these top secret agencies are not included in the military budget. Nor are the repressive agencies of immigration and border control.

U.S. armed forces are stationed at more than 820 military installations around the world. This doesn\’t count hundreds of leased bases and secret listening posts and many hundreds of ships and submarines.

But the more the military machine grows, the less it can control its world empire because it offers no solutions and no improvements in living standards. Pentagon high-tech weapons can read a license plate on a car from a surveillance satellite; their night vision goggles can penetrate the dark; and their drones can incinerate an isolated village. But they are unable to provide potable water, schools or stability to the nations attacked.

Despite all the Pentagon\’s fantastic high-tech weapons, the U.S. geopolitical position is slipping year after year. Regardless of its massive firepower and its state-of-the-art weaponry, U.S. imperialism has been unable to reconquer the world markets and position of U.S. finance capital. Its economy and its industries have been dragged down by the sheer weight of maintaining its military machine. And as the resistance in Iraq and Afghanistan has shown, that machine cannot match the determination of people to control their own future.

As the mighty U.S. capitalist economy is able to offer less and less to working people here in the U.S. , that level of determined resistance is sure to take root here as well.

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Washington: ";Democratizing"; the Military Coup in Honduras

Global Research, November 19, 2009
Negotiate with coup leaders, and well, obviously you won\’t get justice. The same goes for Empire. The deal Obama/Clinton negotiated via Sub-Secretary of State Thomas Shannon last week in Honduras has just gone sour. No surprise. Like I wrote earlier in a prior article, “Honduras: A Victory for Smart Power”, there is no dialogue with a criminal coup regime that stole power illegally by force. Washington\’s “Smart Power” strategy tried to fool the world into believing otherwise. Many bought it. Thankfully, the people of Honduras in the resistance movement didn\’t, and they remain strong with their fight for justice, refusing to recognize the upcoming presidential elections scheduled for November 29th. In fact, the only government so far that has outwardly stated it will now recognize those elections as legitimate, despite the fact that President Manuel Zelaya has not been restored to power – I repeat, Zelaya has not been restored to power – is the United States. The Department of State made that clear in several statements over the past couple of days. For Washington, the “end of the crisis” in Honduras was the forced signing of that bogus “agreement” on October 30th.

The only point of contention and actually the only important point at all is the restoration of Zelaya to the presidency. Washington wiggled out an agreement – via Smart Power tactics – that would not require Zelaya\’s restoration to power, but merely a congressional debate on the issue. Right, again, the same Congress that forged his resignation letter to justify the coup and the same Congress that illegally installed dictator Roberto Micheletti to power.

Now, the coup regime has decided that it will create a “government of unity and reconciliation” led by none other than….Roberto Micheletti!!! And Washington will accept it as a “proud day for Honduras”!

Incredible. Anyway, just wanted to write a quick note on this particularly considering many so-called leftists and progressives have celebrated the “agreement” negotiated by Washington last week and those same folks actually criticized my prior article on Washington\’s “smart power” victory as “trying to blame the US for everything”. Look at the facts. We don\’t even have to mention Washington\’s role in the coup, just look at the “negotiation” process. Which government imposed the mediation, the mediator, legitimized the coup regime by doing so, later imposed the “agreement” and applauded it before it was implemented? Only one: the United States of America.

The facts speak for themselves.

Viva la resistencia hondureña!!!


Eva Golinger is a Venezuelan-American attorney from New York, living in Caracas, Venezuela since 2005 and author of the best-selling books, “The Chávez Code: Cracking US Intervention in Venezuela” (2006 Olive Branch Press) and “Bush vs. Chávez: Washington’s War on Venezuela” (2007, Monthly Review Press). Since 2003, Eva, a graduate of Sarah Lawrence College and CUNY Law School in New York, has been investigating, analyzing and writing about US intervention in Venezuela using the Freedom of Information Act (FOIA) to obtain information about the US Government’s efforts to destabilize progressive movements in Latin America.


Eva Golinger is a frequent contributor to Global Research. Global Research Articles by Eva Golinger

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;Worst-case debt scenario;: Société Générale tells clients how to prepare for potential ';global collapse';

Global Research, November 19, 2009
Société Générale has advised clients to be ready for a possible “global economic collapse” over the next two years, mapping a strategy of defensive investments to avoid wealth destruction.

In a report entitled “Worst-case debt scenario”, the bank\’s asset team said state rescue packages over the last year have merely transferred private liabilities onto sagging sovereign shoulders, creating a fresh set of problems.

Overall debt is still far too high in almost all rich economies as a share of GDP (350pc in the US), whether public or private. It must be reduced by the hard slog of “deleveraging”, for years.

“As yet, nobody can say with any certainty whether we have in fact escaped the prospect of a global economic collapse,” said the 68-page report, headed by asset chief Daniel Fermon. It is an exploration of the dangers, not a forecast.

Under the French bank\’s “Bear Case” scenario (the gloomiest of three possible outcomes), the dollar would slide further and global equities would retest the March lows. Property prices would tumble again. Oil would fall back to $50 in 2010.

Governments have already shot their fiscal bolts. Even without fresh spending, public debt would explode within two years to 105pc of GDP in the UK, 125pc in the US and the eurozone, and 270pc in Japan. Worldwide state debt would reach $45 trillion, up two-and-a-half times in a decade.

(UK figures look low because debt started from a low base. Mr Ferman said the UK would converge with Europe at 130pc of GDP by 2015 under the bear case).

The underlying debt burden is greater than it was after the Second World War, when nominal levels looked similar. Ageing populations will make it harder to erode debt through growth. “High public debt looks entirely unsustainable in the long run. We have almost reached a point of no return for government debt,” it said.

Inflating debt away might be seen by some governments as a lesser of evils.

If so, gold would go “up, and up, and up” as the only safe haven from fiat paper money. Private debt is also crippling. Even if the US savings rate stabilises at 7pc, and all of it is used to pay down debt, it will still take nine years for households to reduce debt/income ratios to the safe levels of the 1980s.

The bank said the current crisis displays “compelling similarities” with Japan during its Lost Decade (or two), with a big difference: Japan was able to stay afloat by exporting into a robust global economy and by letting the yen fall. It is not possible for half the world to pursue this strategy at the same time.

SocGen advises bears to sell the dollar and to “short” cyclical equities such as technology, auto, and travel to avoid being caught in the “inherent deflationary spiral”. Emerging markets would not be spared. Paradoxically, they are more leveraged to the US growth than Wall Street itself. Farm commodities would hold up well, led by sugar.

Mr Fermon said junk bonds would lose 31pc of their value in 2010 alone. However, sovereign bonds would “generate turbo-charged returns” mimicking the secular slide in yields seen in Japan as the slump ground on. At one point Japan\’s 10-year yield dropped to 0.40pc. The Fed would hold down yields by purchasing more bonds. The European Central Bank would do less, for political reasons.

SocGen\’s case for buying sovereign bonds is controversial. A number of funds doubt whether the Japan scenario will be repeated, not least because Tokyo itself may be on the cusp of a debt compound crisis.

Mr Fermon said his report had electrified clients on both sides of the Atlantic. “Everybody wants to know what the impact will be. A lot of hedge funds and bankers are worried,” he said.

Global Research Articles by Ambrose Evans-Pritchard

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Rumors Of Coups And War: U.S., NATO Target Latin America

Global Research, November 18, 2009

November 28 will mark five months since the coup led by U.S.-trained commanders deposed the president of Honduras, the next day will see a mock election in the same nation designed to legitimize the junta of Roberto Micheletti, and the day following that will be a month since Washington signed an agreement with the Alvaro Uribe government in Colombia for the use of seven military bases in the country.

While intensifying a full-scale war in South Asia, continuing occupation missions in Iraq and the Balkans, maintaining warships off the coasts of Somalia and Lebanon, and deploying troops and conducting war games in most parts of the world, the United States and its NATO allies have not neglected Latin America.

Central and South America and the Caribbean are receiving a degree of attention from the U.S. and its partners not witnessed since the Cold War and in some ways are the targets of even more intense scrutiny and intervention.

Nearly five months since the June 28 coup d\’etat against Honduran President Manuel Zelaya led by General Romeo Vasquez Velasquez, a graduate of the Western Hemisphere Institute for Security Cooperation, formerly the School of the Americas, Washington has not used its substantial – decisive – leverage with the illegal government and its military supporters to reverse the armed takeover of power. Instead it has conspired with the junta to drag out deliberately futile negotiations and has thrown its weight behind the November 29 election which, occurring without the previous reinstalling of President Zelaya, will be a travesty of law and international protocols and is in fact intended to lend false credibility to the current regime.

On November 15 Manuel Zelaya wrote a letter to American President Barack Obama decrying Washington\’s machinations and stating that accepting the terms of the U.S.-sanctioned (to say no more) arrangement with Micheletti regarding the upcoming election would amount to “covering up the coup d’etat, which we know has a direct impact due to the military repression on the human rights of the inhabitants of our country.”

The letter also said “The same day that the accord’s Verification Commission was set up in Tegucigalpa the statements by officials from the State Department surprised (everyone) where they modify their position and interpret the accord unilaterally with the following statement: ‘the elections should be recognized by the United States with or without the reinstatement’” of President Zelaya. [1]

The accord in question was one brokered by Costa Rican President Oscar Arias and signed on October 29 which would have led to a unity government with Manuel Zelaya returned to the presidency preparatory to a new election.

Micheletti and his supporters in the country\’s business community and “muscle” in the military unilaterally abrogated the terms of the agreement by thwarting Zelaya\’s reinstatement and appointing all members of the national cabinet. With the active connivance of Washington, as Zelaya\’s letter to Obama contends.

If a government friendly to the United States was overthrown in the manner that the Honduran one was on June 28 it would not take the White House and the State Department five months to respond, and even then only to abet the crime. Censure, sanctions and covert operations would have been resorted to immediately.

In nations where candidates not entirely to the West\’s liking win elections or unapproved presidents win reelection, the whole panoply of “regime change” interventions are put into effect with some variation of a “color revolution” ultimately negating and reversing the result. That such efforts have not been extended in Honduras is ample proof that the U.S. is satisfied with matters as they stand and would prefer the likes of Micheletti and General Vasquez to preside over a country where the Pentagon has a military facility at the Soto Cano Air Base and there stations its Joint Task Force Bravo replete with Black Hawk and Chinook helicopters.

On November 16 a photograph appeared on a Pentagon website, Defense Link, of the chairman of the U.S. Joint Chiefs of Staff, Admiral Michael Mullen, and his Colombian opposite number, General Freddy Padilla de Leon, shaking hands outside the Pentagon three days earlier. [2]

No story on or details of their meeting are available, not even on Defense Department sites. Only the photograph and brief notices on Facebook and Twitter.

Padilla\’s resume is both illustrative and typical. He earlier matriculated in “terrorism studies” at George Washington University and received a fellowship for the Foreign Service Program at Georgetown University, as well as taking a course on advanced military studies at Fort Belvoir, Virginia and and training in strategic intelligence at the Defense Intelligence Analysis Center in Washington, D.C.

The transcripts of his discussions with Mullen would prove intriguing, focusing as they no doubt did on the buildup at the seven military bases in Colombia recently turned over to the Pentagon and on the uses thereof.

Since the agreement on their acquisition by the United States was signed on October 30 confirmation of the bases\’ dual purpose – escalating the counterinsurgency war inside the country and containing and confronting two of its neighbors, Venezuela and Ecuador – has been witnessed.

Bogota reported that nine of its soldiers were killed and four wounded in a major clash with FARC (Revolutionary Armed Forces of Colombia) fighters in the southwestern department of Cauca on November 10.

Five days later Colombia seized four Venezuelan border guards on a river off Colombia\’s Vichada Department. A few days earlier two Venezuelan National Guard troops were killed in the state of Tachira on the Colombian border, leading Caracas to deploy 15,000 troops to the area on November 5.

The preceding week Venezuela arrested eight Colombian nationals and two locals suspected of paramilitary activity on the two countries\’ border. Government official Ricardo Sanguino “denounced increasing paramilitary activity as a strategy to conceal soaring US access to Colombian military bases” and said “they are trying to destabilize the government of Venezuela….” [3]

Recently Venezuelan President Hugo Chavez renewed repeated concerns over the new American bases on the territory of his western neighbor, saying “that according to recently produced documents, the military bases would be used for espionage purposes, allowing US troops there to launch a military offensive against Venezuela.” [4]

On November 8 Bolivian President Evo Morales said that “the use of Colombian military bases by U.S. troops meant a provocation to the Latin American peoples, mainly to the members of the Bolivarian Alliance of the Americas (ALBA).”

He specified that “With the excuse of fighting against drug trafficking and terrorism, thousands of U.S. soldiers will be deployed in Colombia.” [5]

ALBA, the Bolivarian Alliance for the Peoples of Our America, consists of Bolivia, Venezuela, Nicaragua, Honduras (until the coup), Cuba, Dominica, Ecuador, Saint Vincent and the Grenadines, and Antigua and Barbuda, the last three nations joining this June.

Washington using Colombia as the nucleus of a new Latin American military bloc to counteract ALBA has been explored in a previous article in this series. [6] Other prospective candidates include post-coup Honduras, Panama, Peru and
Chile, with pressure placed on Brazil, Guyana and Suriname to either supply bases or in other ways augment American and European military presence in Latin America and the Caribbean. [7]

The seven new U.S. military bases in Colombia allow the Pentagon far more scope than is required merely for alleged drug interdiction surveillance and even for the counterinsurgency war against the FARC. The agreement on the bases, bearing the sleep-inducing title of Supplemental Agreement for Cooperation and Technical Assistance in Defense and Security Between the Governments of The United States of America and the Republic of Colombia, lists where U.S. military personnel and equipment will be deployed:

German Olano Moreno Air Base, Palanquero; Alberto Pawells Rodriguez Air Base, Malambo; Tolemaida Military Fort, Nilo; Larandia Military Fort, Florencia; Capitan Luis Fernando Gomez Nino Air Base, Apiay; ARC Bolivar Naval Base in Cartagena; and ARC Malaga Naval Base in Bahia Malaga. [8]

The document also states that “the Parties agree to deepen their cooperation in areas such as interoperability, joint procedures, logistics and equipment, training and instruction, intelligence exchanges, surveillance and reconnaissance capabilities, combined exercises, and other mutually agreed activities” and Washington\’s Colombian client concedes, in addition to the seven bases named above, “access to and use of other facilities and locations as may be agreed by the Parties.”

Furthermore, “The authorities of Colombia shall, without rental or similar costs to the United States, allow access to and use of the agreed facilities and locations, and easements and rights of way, owned by Colombia that are necessary to support activities carried out within the framework of this Agreement, including agreed construction. The United States shall cover all necessary operations and maintenance expenses associated with its use of agreed facilities and locations.”

U.S. military, intelligence and drug enforcement personnel – and American private contractors – “and their dependents” are granted “the privileges, exemptions, and immunities accorded to the administrative and technical staff of a diplomatic mission under the Vienna Convention….Colombia shall guarantee that its authorities verify, as promptly as possible, the immunity status of United States personnel and their dependents who are suspected of criminal activity in Colombia and hand them over as promptly as possible to the appropriate United States diplomatic or military authorities.”

One of the military bases obtained by the United States – the Larandia Military Fort in Florencia – is within easy striking distance of Ecuador (as the Alberto Pawells Rodriguez Air Base in Malambo is of Veneuzela).

Ecuadoran President Rafael Correa and Defense Minister Javier Ponce visited Russia late last month and on October 29 the two nations signed a declaration on strategic partnership. Correa and Russian President Dmitry Medvedev discussed energy and military cooperation. Ahead of the visit Ecuador\’s president stated, “We need to restore the might of our army” in reference to the U.S. buildup in Colombia, its neighbor to the north. “Ecuador has been alarmed by the decision of Colombia, with which it severed diplomatic relations in March 2008, to allow U.S. troops to use its bases.” [9] The severing of relations occurred after Colombia\’s army launched an attack inside Ecuador.

Ecuador and Russia signed a contract for the delivery of Mi-171E Hip transport helicopters to the Ecuadoran Ground Forces and a Russian newspaper said “Russia could supply six Su-30MK2 Flanker multirole fighters, several helicopters, and air defense systems to Ecuador, which would increase the value of their military cooperation to over $200 million.” [10]

Like other members of ALBA – Venezuela, Bolivia and Nicaragua – Ecuador is purchasing Russian military equipment as a counterbalance to traditional U.S. domination of its defense procurements, with the potential for sabotage and blackmail it entails, and as protection against potential attacks from Washington and its proxies, most notably Colombia.

There is no way of overestimating the challenge that the emergence of ALBA and the overall reawakening of Latin America pose to the role that the U.S. arrogates to itself as lord of the entire Western Hemisphere. The almost two-century-old Monroe Doctrine exemplifies Washington\’s claim to exclusive influence over all of North, Central and South America and the Caribbean Basin and its self-claimed right to subordinate them to its own interests. Never before the election victories of anti-neoliberal forces throughout Latin America over the past eleven years has the prospect of a truly democratic, multipolar New World existed as it does now.

It is in response to those developments that the U.S. and its former colonialist allies in NATO are attempting to reassert their influence in the Americas south of the U.S. border.

The Pentagon recommissioned the Navy\’s Fourth Fleet, disbanded in 1950 after World War II, last year and fully activated it this one. Its area of responsibility is the Caribbean Sea and Central and South America.

In early November a new commander for U.S. Army South was appointed, Major General Simeon Trombitas. The Army Times of November 10 provided background information on him:
“Trombitas, a 1978 West Point graduate, began his career in the 2nd Armored Division and served three tours with 7th Special Forces Group. He served in U.S. Southern Command and Special Operations Command in Panama and commanded the U.S. Military Group in Colombia. His general officer assignments include commanding general of Special Operations Command, Korea, and he served on the Iraq National Counter-Terrorism Force Transition Team.” [11]

The United States is not alone in threatening a newly and truly independent Latin America and Colombia and Honduras are not the only parts of Washington\’s plans. On November 5 Paraguay\’s President Fernando Lugo replaced the nation\’s top military commanders – Army General Oscar Velazquez, Navy Rear Admiral Claudelino Recalde and Air Force General Hugo Aranda – against a backdrop of what Agence France-Presse reported as a fear of “an ouster similar to the one that befell Honduran President Manuel Zelaya….” [12]

That the Honduran putsch is intended to be the first in a series of similar plots in Latin America and is neither an aberration nor the last of its kind was also indicated last week when Nicaragua expelled a Dutch European Union parliamentarian. Radio Netherlands characterized the motivation for the action as follow: “Nicaraguan President Daniel Ortega says Dutch MEP Hans van Baalen was in Nicaragua to see how the army felt about attempting a coup d´etat, but found no officers willing to go along with the idea.”

Van Baalen then moved to Honduras to “mediate in the political conflict between ousted President Manuel Zelaya and his de facto successor Roberto Micheletti.” [13]

Mexican journalist Luis Gutierrez, speaking at a conference against NATO\’s global expansion in Berlin last month and in particular of the bloc\’s Article 5 military mutual assistance clause, observed that “Mexico\’s 3,000 kilometer border with the United States is also a border with NATO.” [14] Troops from 50 nations on five continents and in the Persian Gulf, the Caucasus and the South Pacific are serving or pledged to serve under NATO command in Afghanistan at the moment because of Articl
e 5.

The Netherlands, for example, is not only assisting its American NATO ally in Nicaragua and Honduras, but allows its island possessions in the Caribbean – the Netherlands Antilles – to be employed for surveillance of and future military actions against Venezuela.

In Curacao, a Du possession only 70 kilometers from the Venezuelan coast, the leader of an opposition party, Pueblo Soberano (Sovereign People), demanded that the U.S. military base on the island be closed down.

Helmin Wiels said that “he wants to prevent Curacao from being dragged into what he predicts will be a future war between the US and Venezuela.
“The US has a number of military bases in Colombia, and Mr Wiels claims the country is intent on a confrontation with Venezuela\’s leftwing President Hugo Chavez.” [15]

In May of 2008 a U.S. warplane flying from Curacao violated Venezuelan airspace, conducting surveillance of the Venezuelan military base on
Orchila Island. President Chavez said of the intrusion: “They\’re spying, they\’re even testing our reaction capacity.” [16]

Moreover, Venezuela accused the U.S. of coordinating the action with Colombia, whose soldiers had crossed the Venezuelan border the day before.

In 2005 Chavez appeared on the American television news program Nightline and warned that the U.S. and its NATO allies were rehearsing invasion plans for his nation, codenamed Balboa, which involved aircraft carriers and warplanes, and said that American troops had been deployed to Curacao as part of the preparations.

He further admonished: “We are coming up with a counter-Balboa plan. That is to say if the government of the United States attempts to commit the foolhardy enterprise of attacking us, it would be embarked on a 100-year war. We are prepared.” [17]

A former Dutch possession in the Caribbean, Suriname, one country (Guyana) removed from Venezuela, offered the Pentagon bases to test military vehicles for jungle warfare in 2007.

In Guyana, Venezuela\’s eastern neighbor, the nation\’s former colonial master Britain canceled a security agreement after the Guyanese government questioned its partner\’s real intentions.

The nation\’s Office of the President released a statement which in part said: “This decision by the UK Government is believed to be linked to the administration’s refusal to permit training of British Special Forces in Guyana using live firing in a hinterland community on the western border with Brazil and Venezuela.” [18]

The Head of the Presidential Secretariat, Dr. Roger Luncheon, stated, “It could be that the UK Government did not fully appreciate how dearly held was our position on the non-violation of the sovereignty of Guyana. Their insistence in installing in their design in April…management features that seriously compromise Guyana’s ownership and when our new design re-established ownership that was more consistent with our notions of sovereignty, the plug was pulled….” [19]

With U.S. bases in Colombia to the west and in the Netherlands Antilles to the north, British military presence in the east would tighten the encirclement of Venezuela. A collective siege conducted by NATO allies the U.S., the Netherlands and Britain.

This June the chief of the Pentagon command that covers Central America, South America and the Caribbean – Southern Command (SOUTHCOM) – Admiral James Stavridis, was transferred to Brussels to become top military commander of United States European Command (EUCOM) and NATO\’s Supreme Allied Commander Europe (SACEUR).

The transition was seamless, as one of the first initiatives on his new watch was to recruit U.S.-trained Colombian counterinsurgency troops for the war in Afghanistan. When they arrive they will be the first forces from Latin America, and the Western Hemisphere in general except for NATO members the U.S. and Canada, to serve under the Alliance\’s command in the escalating South Asian war. [20]

Elsewhere in the Caribbean, Panamanian opposition sources report that Washington is in the process of securing four air and naval bases in their country. A news story from late September revealed that a preliminary agreement on the bases “was reached between Panamanian President Ricardo Martinelli and U.S. Secretary of State Hillary