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2011-01-30
The Protest Movement in Egypt: "Dictators" do not Dictate, They Obey Orders
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by Michel Chossudovsky
The Mubarak regime could collapse in the a face of a nationwide protest movement... What prospects for Egypt and the Arab World?
"Dictators" do not dictate, they obey orders. This is true in Egypt, Tunisia and Algeria.
Dictators are invariably political puppets. Dictators do not decide.
President Hosni Mubarak was a faithful servant of Western economic interests and so was Ben Ali.
The national government is the object of the protest movement.
The objective is to unseat the puppet rather than the puppet-master.
The slogans in Egypt are "Down with Mubarak, Down with the Regime". No anti-American posters have been reported... The overriding and destructive influence of the USA in Egypt and throughout the Middle East remains unheralded.
The foreign powers which operate behind the scenes are shielded from the protest movement.
No significant political change will occur unless the issue of foreign interference is meaningfully addressed by the protest movement.
The US embassy in Cairo is an important political entity, invariably overshadowing the national government. The Embassy is not a target of the protest movement.
In Egypt, a devastating IMF program was imposed in 1991 at the height of the Gulf War. It was negotiated in exchange for the annulment of Egypt's multibillion dollar military debt to the US as well as its participation in the war. The resulting deregulation of food prices, sweeping privatisation and massive austerity measures led to the impoverishment of the Egyptian population and the destabilization of its economy. The Mubarak government was praised as a model "IMF pupil".
The role of Ben Ali's government in Tunisia was to enforce the IMF's deadly economic medicine, which over a period of more than twenty years served to destabilize the national economy and impoverish the Tunisian population. Over the last 23 years, economic and social policy in Tunisia has been dictated by the Washington Consensus.
Both Hosni Mubarak and Ben Ali stayed in power because their governments obeyed and effectively enforced the diktats of the IMF.
From Pinochet and Videla to Baby Doc, Ben Ali and Mubarak, dictators have been installed by Washington. Historically in Latin America, dictators were instated through a series of US sponsored military coups. In todays World, they are installed through "free and fair elections" under the surveillance of the "international community".
Our message to the protest movement:
Actual decisions are taken in Washington DC, at the US State Department, at the Pentagon, at Langley, headquarters of the CIA. at H Street NW, the headquarters of the World Bank and the IMF.
The relationship of "the dictator" to foreign interests must be addressed. Unseat the political puppets but do not forget to target the "real dictators".
The protest movement should focus on the real seat of political authority; it should target the US embassy, the delegation of the European Union, the national missions of the IMF and the World Bank.
Meaningful political change can only be ensured if the neoliberal economic policy agenda is thrown out.
Regime Replacement
If the protest movement fails to address the role of foreign powers including pressures exerted by "investors", external creditors and international financial institutions, the objective of national sovereignty will not be achieved. In which case, what will occur is a narrow process of "regime replacement", which ensures political continuity.
"Dictators" are seated and unseated. When they are politically discredited and no longer serve the interests of their US sponsors, they are replaced by a new leader, often recruited from within the ranks of the political opposition.
In Tunisia, the Obama administration has already positioned itself. It intends to play a key role in the "democratization program" (i.e. the holding of so-called fair elections). It also intends to use the political crisis as a means to weaken the role of France and consolidate its position in North Africa:
"The United States, which was quick to size up the groundswell of protest on the streets of Tunisia, is trying to press its advantage to push for democratic reforms in the country and further afield.
The top-ranking US envoy for the Middle East, Jeffrey Feltman, was the first foreign official to arrive in the country after president Zine El Abidine Ben Ali was ousted on January 14 and swiftly called for reforms. He said on Tuesday only free and fair elections would strengthen and give credibility to the north African state's embattled leadership.
"I certainly expect that we'll be using the Tunisian example" in talks with other Arab governments, Assistant Secretary of State Feltman added.
He was dispatched to the north African country to offer US help in the turbulent transition of power, and met with Tunisian ministers and civil society figures.
Feltman travels to Paris on Wednesday to discuss the crisis with French leaders, boosting the impression that the US is leading international support for a new Tunisia, to the detriment of its former colonial power, France. ...
Western nations had long supported Tunisia's ousted leadership, seeing it as a bulwark against Islamic militants in the north Africa region.
In 2006, the then US defense secretary Donald Rumsfeld, speaking in Tunis, praised the country's evolution.
US Secretary of State Hillary Clinton nimbly stepped in with a speech in Doha on January 13 warning Arab leaders to allow their citizens greater freedoms or risk extremists exploiting the situation.
"There is no doubt that the United States is trying to position itself very quickly on the good side,..." " AFP: US helping shape outcome of Tunisian uprising emphasis added
Will Washington be successful in instating a new puppet regime?
This very much depends on the ability of the protest movement to address the insidious role of the US in the country's internal affairs.
The overriding powers of empire are not mentioned. In a bitter irony, president Obama has expressed his support for the protest movement.
Many people within the protest movement are led to believe that president Obama is committed to democracy and human rights, and is supportive of the opposition's resolve to unseat a dictator, which was installed by the US in the first place.
Cooptation of Opposition Leaders
The cooptation of the leaders of major opposition parties and civil society organizations in anticipation of the collapse of an authoritarian puppet government is part of Washington's design, applied in different regions of the World.
The process of cooptation is implemented and financed by US based foundations including the National Endowment for Democracy (NED) and Freedom House (FH). Both FH and the NED have links to the US Congress. the Council on Foreign Relations (CFR), and the US business establishment. Both the NED and FH are known to have ties to the CIA.
The NED is actively involved in Tunisia, Egypt and Algeria. Freedom House supports several civil society organizations in Egypt.
"The NED was established by the Reagan administration after the CIA’s role in covertly funding efforts to overthrow foreign governments was brought to light, leading to the discrediting of the parties, movements, journals, books, newspapers and individuals that received CIA funding. ... As a bipartisan endowment, with participation from the two major parties, as well as the AFL-CIO and US Chamber of Commerce, the NED took over the financing of foreign overthrow movements, but overtly and under the rubric of “democracy promotion.” (Stephen Gowans, January « 2011 "What's left"
While the US has supported the Mubarak government for the last thirty years, US foundations with ties to the US State department and the Pentagon have actively supported the political opposition including the civil society movement. According to Freedom House: "Egyptian civil society is both vibrant and constrained. There are hundreds of non-governmental organizations devoted to expanding civil and political rights in the country, operating in a highly regulated environment." (Freedom House Press Releases).
In a bitter irony, Washington supports the Mubarak dictatorship, including its atrocities, while also backing and financing its detractors, through the activities of FH, the NED, among others.
Under the auspices of Freedom House, Egyptian dissidents and opponents of Hosni Mubarak were received in May 2008 by Condoleezza Rice at the State Department and the US Congress. They also met White House National Security Adviser Stephen Hadley, who was "the principal White House foreign policy adviser" during George W. Bush's second term.
Freedom House’s effort to empower a new generation of advocates has yielded tangible results and the New Generation program in Egypt has gained prominence both locally and internationally. Egyptian visiting fellows from all civil society groups received [May 2008] unprecedented attention and recognition, including meetings in Washington with US Secretary of State, the National Security Advisor, and prominent members of Congress. In the words of Condoleezza Rice, the fellows represent the "hope for the future of Egypt."
Freedom House, http://www.freedomhouse.org/template.cfm?page=66&program=84 (emphasis added).
Political Double Talk: Chatting with "Dictators", Mingling with "Dissidents"
The Egyptian pro-democracy delegation to the State Department was described by Condoleezza Rice as "The Hope for the Future of Egypt".
In May 2009, Hillary Clinton met a delegation of Egyptian dissidents, several of which had met Condoleezza Rice a year earlier. These high level meetings were held a week prior to Obama's visit to Egypt:
U.S. Secretary of State Hillary Clinton praised the work of a group of Egyptian civil society activists she met with today and said it was in Egypt’s interest to move toward democracy and to exhibit more respect for human rights.
The 16 activists met with Clinton and Acting Assistant Secretary of State for Near Eastern Affairs Jeffrey Feltman in Washington at the end of a two-month fellowship organized by Freedom House’s New Generation program.
The fellows raised concern about what they perceived as the United States government distancing itself from Egyptian civil society and called on President Obama to meet with young independent civil society activists when he visits Cairo next week. They also urged the Obama administration to continue to provide political and financial support to Egyptian civil society and to help open the space for nongovernmental organizations which is tightly restricted under Egypt’s longstanding emergency law.
The fellows told Clinton that momentum was already building in Egypt for increased civil and human rights and that U.S. support at this time was urgently needed. They stressed that civil society represents a moderate and peaceful “third way” in Egypt, an alternative to authoritarian elements in the government and those that espouse theocratic rule. (Freedom House, May 2009)
During their fellowship, the activists spent a week in Washington receiving training in advocacy and getting an inside look at the way U.S. democracy works. After their training, the fellows were matched with civil society organizations throughout the country where they shared experiences with U.S. counterparts. The activists will wrap up their program ... by visiting U.S. government officials, members of Congress, media outlets and think tanks." (Freedom House, May 2009, emphasis added)
These opposition civil society groups --which are currently playing an important role in the protest movement-- are supported and funded by the US. They indelibly serve US interests.
The invitation of Egyptian dissidents to the State Department and the US Congress also purports to instil a feeling of commitment and allegiance to American democratic values. America is presented as a model of Freedom and Justice. Obama is upheld as a "Role Model".
The Puppet Masters Support the Protest Movement against their own Puppets
The puppet masters support dissent against their own puppets?
Its called "political leveraging", "manufacturing dissent". Support the dictator as well as the opponents of the dictator as a means of controlling the political opposition.
These actions on the part of Freedom House and the National Endowment for Democracy, on behalf of the Bush and Obama administrations, ensure that the US funded civil society opposition will not direct their energies against the puppet masters behind the Mubarak regime, namely the US government.
These US funded civil society organizations act as a "Trojan Horse" which becomes embedded within the protest movement. They protect the interests of the puppet masters. They ensure that the grassroots protest movement will not address the broader issue of foreign interference in the affairs of sovereign states.
The Facebook Twitter Bloggers Supported and Financed by Washington
In relation to the protest movement in Egypt, several civil society groups funded by US based foundations have led the protest on Twitter and Facebook:
"Activists from Egypt's Kifaya (Enough) movement - a coalition of government opponents - and the 6th of April Youth Movement organized the protests on the Facebook and Twitter social networking websites. Western news reports said Twitter appeared to be blocked in Egypt later Tuesday." (See Voice of America, ,Egypt Rocked by Deadly Anti-Government Protests
The Kifaya movement, which organized one of the first protests directed against the Mubarak regime in late 2004, is supported by the US based International Center for Non-Violent Conflict . Kifaya is a broad-based movement which has also taken a stance on Palestine and US interventionism in the region.
In turn, Freedom House has been involved in promoting and training the Middle East North Africa Facebook and Twitter blogs:
Freedom House fellows acquired skills in civic mobilization, leadership, and strategic planning, and benefit from networking opportunities through interaction with Washington-based donors, international organizations and the media. After returning to Egypt, the fellows received small grants to implement innovative initiatives such as advocating for political reform through Facebook and SMS messaging.
http://www.freedomhouse.org/template.cfm?page=66&program=84 (emphasis added)
From February 27 to March 13 [2010], Freedom House hosted 11 bloggers from the Middle East and North Africa [from different civil society organizations] for a two-week Advanced New Media Study Tour in Washington, D.C. The Study Tour provided the bloggers with training in digital security, digital video making, message development and digital mapping. While in D.C., the Fellows also participated in a Senate briefing, and met with high-level officials at USAID, State [Department] and Congress as well as international media including Al-Jazeera and the Washington Post.http://www.freedomhouse.org/template.cfm?page=115&program=84&item=87 emphasis added
One can easily apprehend the importance attached by the US administration to this bloggers' "training program", which is coupled with high level meetings at the US Senate, the Congress, the State Department, etc.
The role of the Facebook Twitter social media as an expression of dissent, must be carefully evaluated in the light of the links of several Egyptian civil society organizations to Freedom House (FH), the National Endowment for Democracy (NED) and the US State Department.
BBC News World (broadcast in the Middle East) quoting Egyptian internet messages has reported that "the US has been sending money to pro-democracy groups." (BBC News World, January 29, 2010). According to a report in The Daily Telegraph, quoting a secret US embassy document (Jan 29, 2011):
"The protests in Egypt are being driven by the April 6 youth movement, a group on Facebook that has attracted mainly young and educated members opposed to Mr Mubarak. The group has about 70,000 members and uses social networking sites to orchestrate protests and report on their activities.
The documents released by WikiLeaks reveal US Embassy officials [in Cairo] were in regular contact with the activist throughout 2008 and 2009, considering him one of their most reliable sources for information about human rights abuses." (emphasis added)
The Muslim Brotherhood
The Muslim Brotherhood in Egypt constitutes the largest segment of the opposition to president Mubarak. According to reports, The Muslim Brotherhood dominates the protest movement.
While there is a constitutional ban against religious political parties Brotherhood members elected to Egypt's parliament as "independents" constitute the largest parliamentary block.
The Brotherhood, however, does not constitute a direct threat to Washington's economic and strategic interests in the region. Western intelligence agencies have a longstanding history of collaboration with the Brotherhood. Britain's support of the Brotherhood instrumented through the British Secret Service dates back to the 1940s. Starting in the 1950s, according to former intelligence official William Baer, "The CIA [funnelled] support to the Muslim Brotherhood because of “the Brotherhood’s commendable capability to overthrow Nasser.”1954-1970: CIA and the Muslim Brotherhood Ally to Oppose Egyptian President Nasser, These covert links to the CIA were maintained in the post-Nasser era.
Concluding Remarks
The removal of Hosni Mubarak has, for several years, been on the drawing board of US foreign policy.
Regime replacement serves to ensure continuity, while providing the illusion that meaningful political change has occurred.
Washington's agenda for Egypt has been to "hijack the protest movement" and replace president Hosni Mubarak with a new compliant puppet head of state. Washington's objective is to sustain the interests of foreign powers, to uphold the neoliberal economic agenda which has served to impoverish the Egyptian population.
From Washington's standpoint, regime replacement no longer requires the installation of an authoritarian military regime as in the heyday of US imperialism, It can be implemented by co-opting political parties, including the Left, financing civil society groups, infiltrating the protest movement and manipulating national elections.
With reference to the protest movement in Egypt, President Obama stated in a January 28 video broadcast on Youtube: "The Government Should Not Resort to Violence". The more fundamental question is what is the source of that violence? Egypt is the largest recipient of US military aid after Israel. The Egyptian military is considered to be the power base of the Mubarak regime:
"The country’s army and police forces are geared to the teeth thanks to more than $1 billion in military aid a year from Washington. ... When the US officially describes Egypt as “an important ally” it is inadvertently referring to Mubarak’s role as a garrison outpost for US military operations and dirty war tactics in the Middle East and beyond. There is clear evidence from international human rights groups that countless “suspects” rendered by US forces in their various territories of (criminal) operations are secretly dumped in Egypt for “deep interrogation”. The country serves as a giant “Guantanamo” of the Middle East, conveniently obscured from US public interest and relieved of legal niceties over human rights." (Finian Cunningham, Egypt: US-Backed Repression is Insight for American Public, Global Research, January 28, 2010).
America is no "Role Model" of Democratization for the Middle East. US military presence imposed on Egypt and the Arab World for more than 20 years, coupled with "free market" reforms are the root cause of State violence.
America's intent is to use the protest movement to install a new regime.
The People's Movement should redirect its energies: Identify the relationship between America and "the dictator". Unseat America's political puppet but do not forget to target the "real dictators".
Shunt the process of regime change.
Dismantle the neoliberal reforms.
Close down US military bases in the Arab World.
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Establish a truly sovereign government.
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2011-01-18
China Plays the Euro Card
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Message: "Don't Mess With Us (Or Iran)"
By THOMAS H. NAYLOR
Buried on page 3 of the business section of The New York Times on January 7 was an obscure article reporting that China had committed to purchase 6 billion euro ($7.8 billion) worth of Spanish bonds. What went unnoticed by the writer was that the economic and political consequences of such an event could be quite far reaching.
China currently has $2.7 trillion in foreign currency reserves, over $900 billion of which takes the form of U.S. Treasury debt. For years critics of U.S. monetary policy have argued that in response to low yields on U.S. Treasury notes and the risk of a precipitous decline in the value of the dollar, China might pull the plug on its U.S. Treasury investments. Others claim that this will never happen because the Chinese economy is so dependent on exports to the United States, which could dry up if China were to trigger a collapse of the U.S. economy by its actions.
In the meantime, the White House continues to harass China on its human rights record as well as what the U.S. claims is the inflated value of the Chinese currency, the yuan. When China refused to allow Nobel Peace Prize winner Liu Xiaobo to go to Oslo to receive the prize, China was subjected to intense criticism by Washington.
In a series of recent visits to European capitals China’s executive deputy prime minister Li Keqiang promised Chinese support for European Union economies. By pledging to buy bonds worth billions of euros and committing billions more to European based business deals, could Beijing be signaling to Washington that “enough is enough”? By investing in European economies, China strengthens one of its other most important export markets and makes itself less dependent on the United States.
It is interesting that Spanish bonds should be the first euro-denominated government investment made by China. Spain is arguably the most independent country in the EU. Its prime minister, Jose Luis Rodriguez Zapatero, is the only leader in Europe who has the guts to stand up to Washington, Tel Aviv, and the Vatican. The Spanish socialist government is also the most left-leaning government in Europe today.
Spain has significant strategic holdings in Latin America and Africa, two parts of the world where China would like to expand its influence in its quest for oil and other natural resources. Playing the Spanish card was a stroke of genius by Beijing.
I believe there are two reasons why Washington has not succumbed to Israeli pressure to take out Iran’s nuclear program. First, Russia could severely damage the European economy, if it were to cut off the supply of natural gas to Europe in retaliation. Second, China could precipitate the collapse of the U.S. economy, if it were to walk away from U.S. Treasury bonds. By stepping in to help bail out the European Union, China demonstrates that the threat of pulling the plug on its investments in U.S. Treasury securities is a credible one.
The only thing surprising about China’s move on Europe is that it didn’t happen sooner. But the message from Beijing to Washington is loud and clear, “Don’t mess with us, or Iran.”
Thomas H. Naylor is a professor emeritus of economics at Duke University. He is the co-author of Downsizing the U.S.A. and The Abandoned Generation: Rethinking Higher Education and co-founder of the Middlebury Institute.
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2011-01-16
Israel’s violence against Separation Wall protests – along the road of state terrorism
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By Richard Falk
One of the flashpoints in Occupied Palestine in recent years has involved peaceful weekly protests against continued Israeli construction of a separation wall extending throughout the whole of the West Bank. A particularly active site for these protests has been the village of Bil’in near the city of Ramallah, and it is here where the Israeli penchant to use deadly force to disrupt nonviolent demonstrations raises deep legal and moral concerns. These concerns are accentuated when it is realized that way back in 2004 the International Court of Justice (the highest judicial body in the UN System) in a rare near unanimous ruling declared the construction of the wall on occupied Palestinian territory to be unlawful, and reached findings ordering Israel to dismantle the wall and compensate Palestinians for the harm done. Israel has defied this ruling, and so the wall remains, and work continues on segments yet to be completed.
It is against this background that the world should take note of the shocking death of Jawaher Abu Rahma on the first day of 2011 as a result of suffocation resulting from tear gas inhalation while not even being part of the Bil’in demonstration. Witnesses confirm that she was standing above the actual demonstration as an interested spectator. It was a large year end demonstration that included the participation of 350 Israeli and international activists. There was no excuse for the use of such a harsh method of disrupting a protest against a feature of the occupation that had been pronounced to be unlawful by an authoritative international body. As it happens the brother of Ms. Rahman had been killed a few months earlier by a tear gas canister fired with a high velocity from a close range. And there are many other reports of casualties caused by Israel’s extreme methods of crowd control. International activists have also been injured and harshly detained in the past, including the Irish Nobel Peace Laureate, Mairead Maguire. Together these deaths exhibit a general unacceptable Israeli disposition to use excessive force against Palestinians living under occupation. Just a day later an unarmed young Palestinian, Ahmed Maslamany, peacefully on his way to work was shot to death at a West Bank checkpoint because he failed to follow an instruction given in Hebrew, a language he did not understand.
When this lethal violence is directed against unarmed civilians seeking to uphold fundamental rights to land, routine mobility, and self-determination it dramatizes just how lawless a state Israel has become and how justifiable and necessary is the growing world campaign of delegitimation centered upon the boycott, divestment, and sanctions movement (BDS). Each instance of Israeli excessive and criminal violence inflicts suffering on innocent Palestinian civilians, but it also is a form of martyrdom in the nonviolent Legitimacy War that the Palestinians have been waging within Palestine and on the symbolic global battlefields of world public opinion with growing success.
Israel knows very well how to control unruly crowds with a minimum of violence. It has demonstrated this frequently by the way it gently deals, if it deals at all, with a variety of settler demonstrations that pose far greater threats to social peace than do these anti-wall demonstrations. It is impossible to separate this excessive use of force by Israel on the ground against Palestinians from the indiscriminate use of force against civilians in Israel’s larger occupation policy, as illustrated by the cruel punitive blockade that has been imposed on the people of Gaza for more than three years and by the criminal manner in which carried out attacks for three weeks on the defenseless population in Gaza exactly two years ago. Is it not time for the international community to step in and offer this long vulnerable Palestinian population protection against Israeli violence?
Underneath Israel’s reliance on excessive force as a matter of strategic doctrine are thinly disguised racist ideas: Israeli lives are worth many times the value of Palestinian lives and Palestinians, like all Arabs, only understand the language of force (an essentially genocidal idea launched influentially years ago in a notorious book The Arab Mind by Raphael Patai published in 1973. It is also part of a punitive approach to the occupation, especially in Gaza, where WikiLeaks cables confirm what was long suspected: “As part of their overall embargo plan against Gaza, Israeli officials have confirmed to [U.S, Embassy economic officers] on multiple occasions that they intend to keep the Gaza economy on the brink of collapse without quite pushing it over the edge.” (cable reported on Jan. 5, 2011, Norwegian daily) Then Prime Minister Ehud Olmert in a speech delivered in January 2008 said of the blockade: “We will not harm the supply of food for children, medicine for those who need it and fuel to save lives..But there is no justification for demanding we allow residents of Gaza to live normal live while shells and rockets are fired from their streets and courtyards (at southern Israel).”
This is a clear confession of collective punishment of a civilian population by Israel’s political leader at the time, violating the unconditional prohibition of Article 33 of the Fourth Geneva Convention. Such gross criminality should subject Israeli political leaders to international mechanisms designed to impose accountability on individuals responsible for the commission of crimes against humanity. It also makes it evident that the blockade is punitive, not responsive to cross-border violence that incidentally at all times was far more destructive of Palestinian lives and property than that of Israelis. Beyond this, the Hamas leadership in Gaza had since its election repeatedly attempted to establish a ceasefire along its border, which when agreed upon with the help of Egypt reduced casualties on both sides to almost zero after being establishment in mid-2008. This ceasefire was provocatively disrupted by Israel on November 5, 2008 to set the stage for launching of the massive attacks on Gaza, lasting for three weeks after being initiated on December 27th of 2008.
In that war, if such a one-sided conflict should be so described, the criminality of the tactics relied upon by the Israeli Defense Forces Amnesty International and Human Rights Watch. There is no reasonable basis for any longer doubting the substance of the allegations of criminality associated with those three weeks of all out attacks on the people and civilian infrastructure, including UN schools and buildings. has been abundantly documented by The Goldstone Report, by a comprehensive fact-finding mission headed by John Dugard under the auspices of the Arab League, and by detailed reports issued by
The Goldstone Report correctly noted that the overall impression left by the attacks was an extension of the Dahiya Doctrine attributed to an Israeli general during the Lebanon War 2006 in which the Israeli destruction from the air of a district in South Beirut was a deliberately excessive response, at the expense of civilian society, because of being an alleged Hezbollah stronghold, and in response to a border incident in which ten Israeli soldiers lost their lives in an encounter with Hezbollah combatants. The 2009 Goldstone report Gadi Eisenkot, who said, “What happened in the Dahiya quarter of Beirut in 2006 will happen in every village from which Israel is fired on. We will apply disproportionate force on it and cause great damage and destruction there. From our standpoint, these are not civilian villages, they are military bases. [...] This is not a recommendation. This is a plan. And it has been approved.” In effect, the civilian infrastructure of adversaries such as Hamas or Hezbollah are treated as permissible military targets, which is not only an overt violation of the most elementary norms of the law of war and of universal morality, but an avowal of a doctrine of violence that needs to be called by its proper name: STATE TERRORISM. quoted IDF Northern Command Chief
We have reached a stage where the oppressiveness of the Israeli occupation, extending now for more than 43 years and maintained in multiple daily violations of international humanitarian law. In its essence and by design the Israeli occupation of the West Bank, East Jerusalem, and the Gaza Strip should be understood and condemned as STATE TERRORISM as exhibited both in structure and practice.
Richard Falk , Professor Emeritus of International Law at Princeton University is also author of Explorations of the Edge of Time : The Prospects for World Order;Crimes of War: Iraq and The Costs of War: International Law the UN and World Order after Iraq. He is the current UN’s Special Rapporteur for Human Rights in the Occupied Palestinian Territories.
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2011-01-16
The Real Crime of Mikhail Khodorkovsky
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by F. William Engdahl
The final decision in the Russian trial against former oil oligarch Mikhail Khodorkovsky has drawn dramatic statements of protest from the US Obama Administration and governments around the world labeling Russian justice as tyrannical and worse. What is carefully omitted from the Khodovkorsky story however is the true reason Putin arrested and imprisoned the former head of Russia’s largest private oil giant, Yukos. Khodorkovsky’s real crime was not stealing Russia’s assets for a pittance in the bandit era of Yeltsin.
Mikhail Khodorkovsky’s real crime is that he was a key part of a Western intelligence operation to dismantle and destroy what remains of Russia as a functioning state. When the facts are known the justice served on him is mild by comparison to US or UK standard treatment of those convicted of treason against the state. Obama’s torture prison at Guantanamo is merely one example of Washington’s double standard.
According to the politically correct sanitized account in Wikipedia, “Yukos Oil Company was a petroleum company in Russia which, until 2003, was controlled by Russian oligarch Mikhail Khodorkovsky…Khodorkovsky was convicted and sent to prison…Yukos was one of the biggest and one of the most successful Russian companies in 2000-2003. In 2003, following a tax reassessment, the Russian government presented Yukos with a series of tax claims that amounted to $27 billion. As Yukos's assets were frozen by the government at the same time, the company was not able to pay these tax demands. On August 1, 2006, a Russian court declared Yukos bankrupt. Most of Yukos' assets were sold at low prices to oil companies owned by the Russian government. The Parliamentary Council of Europe has condemned Russia's campaign against Yukos and its owners as manufactured for political reasons and a violation of human rights.”1
If we dig a little deeper however we find a quite different case. As he stepped out of his private plane in Siberia in October 2003 Khodorkovsky was arrested. He was arrested, as Wikipedia correctly states, for tax crimes. What they did not say is that he at the tender age of 40 had risen to become the richest man in Russia worth some $15 billion by fraudulent acquisition of state assets during the lawless Yeltsin era. In an auction run by his own bank, Khodorkovsky paid $309 million for Yukos. In 2003 the same company was assessed as worth $45 billion, and not owing to Khodorkovsky’s management genius.
In 1998, Khodorkovsky had been let free in a US case where he was charged with helping launder $10 billion with his own bank and the Republic National Bank of New York. He had very influential friends in the US it appeared. The then head of the Republic National Bank of New York, Edmund Safra, was murdered some months later in his Monaco apartment reportedly from members of an alleged “Russian mafia” whom he had cheated in a drug money laundering scheme.2
But there was more. Khodorkovsky built some impressive ties in the West. With his new billions in effect stolen from the Russian people, he made some powerful friends. He set up a foundation called the Open Russia Foundation. He invited two powerful Westerners to its board—Henry Kissinger and Jacob Lord Rothschild. Then he set about to develop ties with some of the most powerful circles in Washington where he was named to the Advisory Board of the secretive private equity firm, Carlyle Group where he attended board meetings with fellow advisors such as George H.W. Bush and James Baker III. 3
However, the real crime that landed Khodorkovsky behind Russian bars was the fact that he was in the middle of making a US-backed coup d’etat to capture the Russian presidency in planned 2004 Russian Duma elections. Khodorkovsky was in the process of using his enormous wealth to buy enough seats in the coming Duma elections that he could change Russian laws regarding ownership of oil in the ground and of pipelines transporting same. In addition he planned to directly challenge Putin and become Russian President. As part of the horse trade that won Putin the tacit support of the wealthy so-called Russian Oligarchs, Putin had extracted an agreement that they be allowed to hold on to their wealth provided they repatriate a share back into Russia and provided they not interfere in domestic Russian politics with their wealth. Most oligarchs agreed, as did Khodorkovsky at the time. They remain established Russian businessmen. Khodorkovsky did not.
Moreover, at the time of his arrest Khodorkovsky was in the process of negotiating via his Carlyle friend George H.W. Bush, father of the then-President George W. Bush, the sale of 40% of Yukos to either Condi Rice’s former company, Chevron or ExxonMobil in a move that would have dealt a crippling blow to the one asset left Russia and Putin to use for the rebuilding of the wrecked Russian economy: oil and export via state-owned pipelines to the West for dollars. During the ensuing Russian state prosecution of Yukos, it came to light that Khodorkovsky had also secretly made a contract with London’s Lord Rothschild not merely to support Russian culture via the Open Russia Foundation of Khodorkovsky.4 In the event of his possible arrest (Khodorkovsky evidently knew he was playing a high-risk game trying to create a coup against Putin) the 40% share of his Yukos stocks would pass into the hands of Lord Rothschild. 5
The crocodile tears of Hillary Clinton and Barack Obama for the violations of Khodorkovsky’s human rights hide a far deeper agenda that is not being admitted. Washington used the Russian to try to reach its goal of totally destroying the only power left on the earth with sufficient military strike power to challenge the Pentagon’s Full Spectrum Dominance strategy—control of the entire planet. When seen in that light the sweet loaded words “human rights” take on a quite different meaning.
F. William Engdahl, author of Full Spectrum Dominance: Totalitarian Democracy in the New World Order
1 Wikipedia, Yukos, accessed in http://en.wikipedia.org/wiki/Yukos
2 David Kohn, Murder In Monaco: An American On Trial Is Ted Maher Guilty Of Arson?, February 4, 2003, accessed in http://www.cbsnews.com/stories/2003/07/08/48hours/main562214.shtml
3Dateline D.C., Soros and Khodorkovsky, TribLiveNews, November 16, 2003, accessed in http://www.pittsburghlive.com/x/pittsburghtrib/s_165315.html#
4 AFP, Arrested oil tycoon passed shares to banker, November 2, 2003, The Washington Times, accessed in http://www.washingtontimes.com/news/2003/nov/2/20031102-111400-3720r/?page=2
5 F. William Engdahl, Full Spectrum Dominance: Totalitarian Democracy in the New World Order, edition.engdahl, 2009, pp. 58-60.
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2011-01-16
Julian Assange's Deal With the Devil
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The Secrets of Wikileaks
By ISRAEL SHAMIR
In Part One of my report last weekend here on the CounterPunch site I showed that the US was secretly funnelling money into Belarus to fund the unelected opposition. Previously, the claim had been routinely denied. Now we have sterling proof. It is engraved in a confidential cable from a US Embassy to the State Department. It is undeniable.
That is, if you found the cable and were able to understand it.
And you happened to understand the political background of the cable.
The cables are raw data. Not as raw as Afghan Diaries, the previous coup of Wikileaks, but still quite raw. They are written in obscure state department lingo; much of the story is implied, as the cables were composed for colleagues and definitely not for strangers. They simply have to be explained, interpreted, annotated and then finally delivered to the reader. Dumping raw cables onto the web would not do: you’d never find the relevant cables and probably you wouldn’t be able to understand its significance even if you did find it.
The main job of a newspaper or news website is to process raw data and transmit it to a reader. This work requires an experienced and highly qualified staff. Not every newspaper or website has such resources, and none of the independent sites can compete with the mainstream outlets for readership. If all the cables were published in a local newspaper in Oklahoma or Damascus, who would read them? In order to get our news to you, our reader, we are forced to make use of the dreaded mainstream media.
That is why Julian Assange chose to partner with a few important Western liberal newspapers of the mainstream media. Let us make it perfectly clear that we understand that all mainstream media are at their heart embedded; in bed with the Pentagon, the CIA, with Wall Street and all its counterparts. Let us also make it clear that we understand that not every journalist on the staff of The Guardian, Le Monde or The NY Times is a crooked enforcer of imperialist ideology; no, not even every editor. We do understand that not everyone is willing to sacrifice their career to field a story that will attract storms of protest. From this point of view, the difference between the soft liberal and the hardline imperialist media is one of style only.
For instance, if they plan to attack Afghanistan, the hardline Fox News would simply demand a high-profile strike against the sand rats, while the liberal Guardian would publish a Polly Toynbee piece bewailing the bitter fate of Afghani women. The bottom line is the same: war.
Modern embedded media constitute the most powerful weapon of our rulers. The modern Russian writer Victor Pelevin succinctly explained their modus operandi: "The embedded media does not care about the content and does not attempt to control it; they just add a drop of poison to the stream in the right moment."
Furthermore, they skilfully arrange the information in order to mislead us. The headline might scream MURDER MOST FOUL but the article describes an unavoidable accident. We do not look beyond the headline, but the headline has been written by the editor and not the journalist who penned the article. Twitter is nothing but a mess of headlines; we are being trained to think in terms of slogans.
In the case of Belarus, the Guardian published three cables the day before elections in order to maximize the exposure and to influence the results of the election. One of the headlines, published on December 18, 2010 said: “WikiLeaks: Lukashenka’s [sic] fortune estimated at 9 billion USD”. It was a very misleading headline. Wikileaks made no claims about Lukashenko’s wealth. Read the entire article, and you will find that it was nothing more than a US embassy employee who had heard a rumor and transmitted it to the State Department. Only in the second to last sentence of the article do they mention that the cable admits: “the embassy employee couldn’t verify the sources [sic!] or accuracy of the information”.
So a corrected headline would read: “Wikileaks reveals: US diplomats spread unverifiable rumors about Lukashenko’s personal wealth.” But the Guardian made it appear as if it was Wikileaks itself that made the claim.
Let us suppose that one day Wikileaks will publish cables from the Russian Embassy in Washington to Moscow Centre. Shall we expect to see in the Guardian a screaming headline like: "WikiLeaks: The Mossad behind 9/11!!"
Isn’t it more likely we would be soberly told: “Wikileaks reveals that Russian diplomats in Washington report the persistent rumors on Israeli involvement in 9/11”?
Another cable on Belarus published on the same day was headlined: “US embassy cables: Belarus president justifies violence against opponents”. Again, a misleading headline, and again the majority will never read beyond it. In reality, this very interesting report contains the debriefing of the Estonian Foreign Minister after his long chat with President Lukashenko. The most interesting factoid was deliberately not highlighted in the article: Lukashenko told the Estonian visitor that the opposition in Belarus would never unite, and only existed “to live off western grants.” When you read the article, your eye gravitates to the highlighted section, skipping the valuable information just above. In fact, the highlighted section itself says nothing about justifying violence against opponents. The text says something completely different: “Lukashenko stated the opposition should expect to get hurt when they attack the riot police”. Again, it is sterling truth: in every country, people who attack riot police end up getting hurt. In Israel they also get shot, but that’s another story.
Thus the Guardian made use of Wikileaks in order to influence Belarus voters and Western audiences, and prepare them for an Election Day riot.
So here we are: in order to get valuable data to the people, Julian Assange had to make a deal with the devil: the mainstream media. It was most natural for him to deal with the liberal flank of the mainstream, for the hardliners would not even touch it. But since the liberal papers are also embedded, they freely distort the cables by attaching misleading headlines and misquoting from the text.
For me, a Guardian reader since I worked at the BBC in the mid-1970s, it is painful to say that the Guardian has become an impostor. This paper pretends to provide the thinking liberal and socialist people of England with true information; but at the moment of truth, the Guardian, like a good Blairite, will switch sides.
Next, the Guardian apparently decided to destroy Wikileaks after using it. The Moor did his job, the Moor may go. The Guardian’s embedded editors, understanding full well that the Wikileaks crew won’t be tamed or subverted, are preparing a book called The Rise and Fall of Wikileaks. It’s not quite released yet; they have still to arrange for the fall.
This will be done in two ways.
First, by slandering the Wikileaks chief Julian Assange. Destroy the head, and the body will wither and die. This is not the place to deal with allegations in detail, but I’ve never seen an article more crooked and lying than the one the Guardian published recently on Assange - and I’ve seen some beauties. It is trial by media in the best tradition of Pravda 1937. Its author Nick Davies ingratiated himself into the vicinity of the trustful Julian and then bit him in the best scorpion’s manner. Davies wrote years ago in his Flat Earth News that the practice of journalism in the UK is "bent"; now he proven it beyond a doubt by his own writing.
There is no doubt: Assange never raped. The day after the alleged rape, the alleged victim boasted to her friends in a twitter that she had a wonderful time with the alleged rapist. It was all published.
Moreover, if Swedish authorities are primarily concerned about prosecuting Julian for rape, why do they attach a special condition to their demands of extradition, specifically reserving the right to pass him on to US authorities?
Nick Davies clearly performed a cruel hatchet job. But was publishing the article a simple case of bad judgement by the Guardian, or the beginning of a smear campaign? "Once is happenstance, twice is coincidence, three times is enemy action", as James Bond in Goldfinger put it neatly. Here is the second attack. The third piece was surprisingly an attempt to smear Assange by association with me.
This last attack was written by Andrew Brown has been described as “The Guardian‘s resident moron”, and with good reason. I always enjoy discussing my views, though Brown completely missed the subtleties and nuances of my writings. Andrew Brown is a man who understands the public’s need for screaming headlines. Now we are left with a lot of crazy bloggers who claim I am the Mossad’s liaison to Wikileaks and that Wikileaks is a wholly owned subsidiary of the Mossad.
I do not for a moment think that anybody sane takes these ridiculous accusations seriously – they are just more things to throw at Julian. I am not a member of Wikileaks, not even a spokesman, just a friend. But even without me, Brown will still be able to attack Assange for quoting Solzhenitsyn, the Nobel Prize winner and “notorious antisemite whose works are being published by a racist site.” Quoting a popular blog, Brown “is beneath contempt, and, from now on, beneath notice”. Still, the Guardian editors let him off his leash from time to time, to their eternal disgrace.
The second mode of attack on Wikileaks is to use it as a source of misinformation.
These US State Department cables are double-edged swords. They are full of rumors, trial balloons, and hopeful thinking. Worse, the newspaper headlines often declare that Wikileaks is the source of the rumor, and leave it to the discerning reader to discover that an embassy staffer was the real source of the story. Readers often do not understand that headlines are little more than come-ons, and reflect a very loose interpretation of the article content. They tend to believe the misleading headline that says, “Wikileaks: Iran prepares nuclear weapons” or, “Wikileaks: all Arabs want the US to destroy Iran”. Wikileaks never said it! It was the Guardian and the NY Times that said it, and loudly. A corrected headline would look like this:
Wikileaks reveals that US diplomats spread unsubstantiated rumours on the Iran nuclear program in order to ingratiate themselves with the State Department
But you will not live long enough to see this headline. Such is the price for using mainstream media: they will eventually poison the purest source.
However, I would rather place my bet on Assange. He is smart, and he has a mind of a first-class chess player. He has many surprises up his sleeve. It is possible that the Guardian will have to rename their book The Rise and Rise of Wikileaks.
The Israeli Angle
Now you can understand the mystery of Israeli satisfaction with Wikileaks. While the US officials were furious at the disclosure, Israelis were rather smug and complacent. Haaretz has this headline: “Netanyahu: WikiLeaks revelations were good for Israel.”
Simple-minded conspiracy junkies immediately concluded that Wikileaks is an Israeli device, or, in the words of a particularly single-minded man: a “Zionist poison”.
The truth is less fantastic, but much more depressing. The Guardian and the New York Times, Le Monde and Spiegel are quite unable to publish a story unacceptable to Israel. They may pen a moderately embarrassing piece of fluff, or a slightly critical technical analysis in order to convince discerning readers of their objectivity. They may even let an opponent air his or her views every once in a blue moon. But they could never publish a story really damaging to Israel. This is true for all mainstream media.
Furthermore, no American ambassador would ever send a cable really unacceptable to Israel – unless he intended to retire the next month. Yet even supposing this kamikaze ambassador would send the cable, the newspapers would overlook it.
Even with thousands of secret cables about Israel in their hands, the mainstream media delays and prevaricates. They don’t want anyone to yell at them. That is why they have postponed publishing the articles. Once forced by circumstance or competition to publish the contents of the cables, you can bet they’ll twist the revelations into toady headlines and bury the truth in the final paragraph.
Always kind, Julian Assange attributes this behavior to the “sensitivity of the English, German and French audience”. I am not that kind; I call it cowardice, or if you insist, prudence. Any journalist who confronts the Jewish state will be made to suffer.
In such a situation, the mainstream media just can’t help us. Professional journalists have families and careers to protect. We can’t count on them when the rubber meets the road. We shall never know and will never fully understand the truth behind any Israel-connected event as long as the cables remain only in the hands of the mainstream media.
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2011-01-11
Joseph Stiglitz: Why we have to change capitalism
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In an exclusive extract from his new book, Freefall, the former World Bank chief economist, reveals why banks should be split up and why the West must cut consumption.
In the Great Recession that began in 2008, millions of people in America and all over the world lost their homes and jobs. Many more suffered the anxiety and fear of doing so, and almost anyone who put away money for retirement or a child's education saw those investments dwindle to a fraction of their value.
A crisis that began in America soon turned global, as tens of millions lost their jobs worldwide – 20m in China alone – and tens of millions fell into poverty.
This is not the way things were supposed to be. Modern economics, with its faith in free markets and globalisation, had promised prosperity for all. The much-touted New Economy – the amazing innovations that marked the latter half of the 20th century, including deregulation and financial engineering – was supposed to enable better risk management, bringing with it the end of the business cycle. If the combination of the New Economy and modern economics had not eliminated economic fluctuations, at least it was taming them. Or so we were told.
The Great Recession – clearly the worst downturn since the Great Depression 75 years earlier – has shattered these illusions. It is forcing us to rethink long-cherished views.
For a quarter century, certain free-market doctrines have prevailed: free and unfettered markets are efficient; if they make mistakes, they quickly correct them. The best government is a small government, and regulation only impedes innovation. Central banks should be independent and only focus on keeping inflation low.
Today, even the high priest of that ideology, Alan Greenspan, the chairman of the Federal Reserve Board during the period in which these views prevailed, has admitted that there was a flaw in this reasoning – but his confession came too late for the many who have suffered as a consequence.
In time, every crisis ends. But no crisis, especially one of this severity, passes without leaving a legacy. The legacy of 2008 will include new perspectives on the long-standing conflict over the kind of economic system most likely to deliver the greatest benefit.
I believe that markets lie at the heart of every successful economy but that markets do not work well on their own. In this sense, I'm in the tradition of the celebrated British economist John Maynard Keynes, whose influence towers over the study of modern economics.
Government needs to play a role, and not just in rescuing the economy when markets fail and in regulating markets to prevent the kinds of failures we have just experienced. Economies need a balance between the role of markets and the role of government – with important contributions by non-market and non-governmental institutions. In the last 25 years, America lost that balance, and it pushed its unbalanced perspective on countries around the world.
The current crisis has uncovered fundamental flaws in the capitalist system, or at least the peculiar version of capitalism that emerged in the latter part of the 20th century in the US (sometimes called American-style capitalism). It is not just a matter of flawed individuals or specific mistakes, nor is it a matter of fixing a few minor problems or tweaking a few policies.
It has been hard to see these flaws because we Americans wanted so much to believe in our economic system. "Our team" had done so much better than our arch enemy, the Soviet bloc.
Numbers reinforced our self-deception. After all, our economy was growing so much faster than almost everyone's, other than China's – and given the problems we thought we saw in the Chinese banking system, it was only a matter of time before it collapsed too.
Even now, many deny the magnitude of the problems facing our market economy. Once we are over our current travails – and every recession does come to an end – they look forward to a resumption of robust growth. But a closer look at the US economy suggests that there are some deeper problems: a society where even those in the middle have seen incomes stagnate for a decade, a society marked by increasing inequality; a country where, though there are dramatic exceptions, the statistical chances of a poor American making it to the top are lower than in "Old Europe".
It is said that a near-death experience forces one to re-evaluate priorities and values. The global economy has just had a near-death experience. The crisis exposed not only flaws in the prevailing economic model but also flaws in our society. Too many people had taken advantage of others. Almost every day has brought stories of bad behaviour by those in the financial sector – Ponzi schemes, insider trading, predatory lending, and a host of credit card schemes to extract as much from the hapless user as possible.
My book, Freefall, is focused, though, not on those who broke the law, but the legions of those who, within the law, had originated, packaged and repackaged, and sold toxic products and engaged in such reckless behavior that they threatened to bring down the entire financial and economic system. The system was saved, but at a cost that is still hard to believe.
We should take this moment as one of reckoning and reflection, of thinking about what kind of society we would like to have, and ask ourselves: are we creating an economy that is helping us achieve those aspirations?
We have gone far down an alternative path – creating a society in which materialism dominates moral commitment, in which the rapid growth that we have achieved is not sustainable environmentally or socially, in which we do not act together as a community to address our common needs, partly because rugged individualism and market fundamentalism have eroded any sense of community and have led to rampant exploitation of unwary and unprotected individuals and to an increasing social divide.
Economics, unintentionally, provided sustenance to this lack of moral responsibility. A naive reading of Adam Smith might have suggested that he had relieved market participants from having to think about issues of morality. After all, if the pursuit of self-interest leads, as if by an invisible hand, to societal well-being, all that one has to do is be sure to follow one's self-interest. And those in the financial sector seemingly did that. But clearly, the pursuit of self-interest – greed – did not lead to societal well-being.
The model of rugged individualism combined with market fundamentalism has altered not just how individuals think of themselves and their preferences but how they relate to each other. In a world of rugged individualism, there is little need for community and no need for trust. Government is a hindrance; it is the problem, not the solution.
But if externalities and market failures are pervasive, there is a need for collective action, and voluntary arrangements will typically not suffice (simply because there is no "enforcement").
But worse, rugged individualism combined with rampant materialism has led to an undermining of trust. Even in a market economy, trust is the grease that makes society function. Society can sometimes get by without trust – through resort to legal enforcement, say, of contracts – but it is a very second-best alternative.
In the current crisis, bankers lost our trust, and lost trust in each other. Economic historians have emphasized the role that trust played in the development of trade and banking. The reason why certain communities developed as global merchants and financiers was that the members of the community trusted each other. The big lesson of this crisis is that despite all the changes in the last few centuries, our complex financial sector was still dependent on trust. When trust broke down, our financial system froze.
It's easy to curtail excessive risk-taking: restrict it and incentivise banks against it. Not allowing banks to use incentive structures that encourage excessive
risk-taking, and forcing more transparency will go a long way. So too will requiring banks that engage in high-risk activities to put up much more capital and to pay high deposit insurance fees. But further reforms are needed: leverage needs to be much more limited and restrictions need to be placed on particularly risky products.
Given what the economy has been through, it is clear that the federal government should reinstitute some revised version of the Glass-Steagall Act. There is no choice: any institution that has the benefits of a commercial bank – including the government's safety nets – has to be severely restricted in its ability to take on risk.
There are simply too many conflicts of interest and too many problems to allow commingling of the activities of commercial and investment banks. The promised benefits of the repeal of Glass-Steagall proved illusory and the costs proved greater than even critics of the repeal imagined. The problems are especially acute with the too-big-to-fail banks.
The imperative of reinstating the Glass-Steagall Act quickly is suggested by recent behaviour of some investment banks, for whom trading has once again proved to be a major source of profits.
The alacrity with which all the major investment banks decided to become "commercial banks" in the fall of 2008 was alarming – they saw the gifts coming from the federal government, and evidently, they believed that their risk-taking behaviour would not be much circumscribed. They now had access to the Fed window, so they could borrow at almost a zero interest rate; they knew that they were protected by a new safety net; but they could continue their high-stakes trading unabated. This should be viewed as totally unacceptable.
There is an obvious solution to the too-big-to-fail banks: break them up. If they are too big to fail, they are too big to exist. The only justification for allowing these huge institutions to continue is if there were significant economies of scale or scope that otherwise would be lost. I have seen no evidence to that effect. Indeed, the evidence is to the contrary, that these too-big-to-fail, too-big-to-be-financially-resolved institutions are also too big to be managed. Their competitive advantage arises from their monopoly power and their implicit government subsidies.
This crisis has exposed fissures in our society, between Wall Street and Main Street, between America's rich and the rest of our society. While the top has been doing very well over the last three decades, incomes of most Americans have stagnated or fallen.
The consequences were papered over; those at the bottom – or even the middle – were told to continue to consume as if their incomes were rising; they were encouraged to live beyond their means, by borrowing; and the bubble made it possible. The consequences of being brought back to reality are simple – standards of living are going to have to fall.
Someone will have to pick up the tab for the bank bail-outs. Even a proportionate sharing would be disastrous for most Americans. With median household income already down some 4pc from 2000, there is no choice: if we are to preserve any sense of fairness, the brunt of the adjustment must come from those at the top who have garnered for themselves so much over the past three decades, and from the financial sector, which has imposed such high costs on the rest of society.
But the politics of this will not be easy. The financial sector is reluctant to own up to its failings. Part of moral behaviour and individual responsibility is to accept blame when it is due; all humans are fallible – including bankers. But as we have seen, they have repeatedly worked hard to shift blame to others – including to those they victimised.
America is not alone in facing hard adjustments ahead. The UK financial system was even more overblown than that of the US. The Royal Bank of Scotland, before it collapsed, was the largest bank in Europe and suffered the most losses of any bank in the world in 2008.
Like the United States, the United Kingdom had a real estate bubble that has now burst. Adjusting to the new reality may require a decrease in consumption by as much as 10pc.
I have argued that the problems our nation and the world face entail more than a small adjustment to the financial system. Some have argued that we had a minor problem in our plumbing. Our pipes got clogged. We called in the same plumbers who installed the plumbing – having created the mess, presumably only they knew how to straighten it out. Never mind if they overcharged us for the installation; never mind that they overcharged us for the repair. We should be grateful that the plumbing is working again, quietly pay the bills, and pray that they do a better job this time than the last.
But it is more than just a matter of "plumbing": the failures in our financial system are emblematic of broader failures in our economic system, and the failures of our economic system reflect deeper problems in our society. We began the bail-outs without a clear sense of what kind of financial system we wanted at the end, and the result has been shaped by the same political forces that got us into the mess. And yet, there was hope that change was possible. Not only possible, but necessary.
That there will be changes as a result of the crisis is certain. There is no going back to the world before the crisis. But the questions are, how deep and fundamental will the changes be? Will they even be in the right direction? In several critical areas, in the midst of the crisis, matters have already become worse. We have altered not only our institutions – encouraging ever increased concentration in finance – but the very rules of capitalism. We have announced that for favoured institutions there is to be little, or no, market discipline. We have created an ersatz capitalism with unclear rules – but with a predictable outcome: future crises; undue risk-taking at the public expense, no matter what the promise of a new regulatory regime; and greater inefficiency.
We have lectured about the importance of transparency, but we have given the banks greater scope for manipulating their books. In earlier crises, there was worry about moral hazard, the adverse incentives provided by bail-outs; but the magnitude of this crisis has given new meaning to the concept.
It has become a cliché to observe that the Chinese characters for crisis reflect "danger" and "opportunity". We have seen the danger. The question is, will we seize the opportunity to restore our sense of balance between the market and the state, between individualism and the community, between man and nature, between means and ends?
We now have the opportunity to create a new financial system that will do what human beings need a financial system to do; to create a new economic system that will create meaningful jobs, decent work for all those who want it, one in which the divide between the 'haves' and 'have-nots' is narrowing, rather than widening; and, most importantly of all, to create a new society in which each individual is able to fulfill his aspirations and live up to his potential, in which we have created citizens who live up to shared ideals and values, in which we have created a community that treats our planet with the respect that in the long run it will surely demand. These are the opportunities. The real danger now is that we will not seize them.
www.telegraph.co.uk/finance/news
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2011-01-11
China or the U.S.: Which Will Be the Last Nation Standing?
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by Richard Heinberg
Silly me. Here I had thought that world leaders would want to keep their nations from collapsing. They must be working hard to prevent currency collapse, financial system collapse, food system collapse, social collapse, environmental collapse, and the onset of general, overwhelming misery—right? But no, that's not what the evidence suggests. Increasingly I am forced to conclude that the object of the game that world leaders are actually playing is not to avoid collapse; it's simply to postpone it a while so as to be the last nation to go down, so yours can have the chance to pick the others' carcasses before it meets the same fate.
I know, that sounds unbearably cynical. And in fact it may not accurately describe the conscious attitudes of leaders of some smaller nations. But for the U.S. and China, arguably the countries most likely to lead the way for the rest of the world, actions speak louder than words. (Mental health advisory: readers with a low tolerance for bad news should turn back now; there are lots of cheerier articles on the Internet and this might be a good time to find and enjoy one.)
For these two nations, avoiding collapse would require solving a range of enormous problems, of which at least four are non-negotiable: climate change; peak fossil fuels (in effect, stagnating and, soon, declining energy supplies); the inherent instability of growth-based financial systems; and the vulnerability of food systems to factors like fresh water scarcity and soil erosion (in addition to global warming and fuel scarcity). If they fail to address any one of these, societal collapse is inevitable—in a few decades certainly, but perhaps in just the next few years.
So how are our contestants doing? There's not much to report on the climate score—just vague promises for future action. So their apparent strategy in this case is to delay (not to delay the impacts, mind you, but to delay efforts to address the problem).
Likewise, there is little positive action occurring regarding food systems: the assumption appears to be that conventional industrial agriculture—which is responsible for most of the global food system's enormous and growing vulnerabilities—will somehow shoulder the task of feeding seven to nine billion humans. We just need to continue with what we are already doing, but on a larger scale and using more gene-engineered crop varieties.
Officially, peak energy is not even a concern, so evidently the strategy being adopted here is denial. We'll see how that works out.
How about the financial mess? Here the U.S. and China are in situations so different that a more extended discussion seems justified.
China Surges to the Lead!
The U.S. is in debt up to its eyeballs and has mortgaged the paychecks of every generation approximately until hell freezes over in order to bail out its "too-big-to-fail" banks. In contrast, China has piles of cash (resulting from its enormous trade surpluses) and has bought a mountain of U.S. debt in order to keep its main customer's currency from losing value. It would seem that, in this department, one nation is set to flag while the other is poised to leap into first place as world economic superpower.
And that happens to be the conventional wisdom on the subject. It's not hard to find commentators who say the United States is a has-been for a variety of reasons. In addition to its huge debt burden, the U.S. also suffers from a shrinking manufacturing base, a big trade deficit, eroding quality of education, and a foreign policy that serves the interests of arms manufacturers while undermining the long-term interests of the nation. Regarding the last of these items, a 2006 World Public Opinion poll showed large majorities in four leading ally nations (Egypt, Morocco, Pakistan, and Indonesia), together accounting for a third of the Muslim world's population, believe the U.S. is determined to destroy or undermine Islam. Within those countries, most people surveyed support attacks on American targets. And it just so happens that most of the world's future oil supplies will be coming from Muslim nations. Brilliant.
By contrast, China is enjoying springtime on amphetamines. It now has the biggest car market in the world. And, according to Stuart Staniford in a recent fact-filled article, "if present trends continue, the Chinese expressway system will likely grow larger than the U.S. interstate highway system within the next couple of years, and Chinese car ownership will exceed U.S. car ownership by somewhere in the neighborhood of 2017." As of 2010 China is the leading producer of hydroelectric and solar power and by 2011 will be the top producer of wind power. China's smart grid investments dwarf those of the U.S. by 200 to one. The Chinese are also investing heavily in nuclear energy. Staniford goes on: "Oversimplifying greatly, it's as though the U.S. borrowed a pile of money from China in order to fight a war to free up oil supply in Iraq in order that China could become the greatest industrial power the world has ever seen."
China's foreign policy consists largely of buying friends by purchasing rights to oil, gas, coal, and other resources (in Canada, Australia, Venezuela, Iraq, Kazakhstan, and throughout Africa), while the U.S. spends money it doesn't have rooting out bad guys and making more enemies in the process.
In an October, 2009 lecture, George Soros showed refreshing candor about the seriousness of the continuing global financial crisis: "What differentiated [the recent economic crisis] from the Great Depression is that this time the financial system was not allowed to collapse, but was put on artificial life support. In fact [however], the magnitude of the credit and leverage problem we have today is even greater than the 1930s." Soros then went on to discuss the relative positions of the U.S. and China:
In the short term, all countries were negatively affected. But in the long term, there will be winners and losers. . . . To put it bluntly, the U.S. stands to lose the most, and China is poised to emerge as the greatest winner. . . . China has been the primary beneficiary of globalization, and it has been largely insulated from the financial crisis. For the West, and the U.S. in particular, the crisis was an internally-generated event [that] led to the collapse of the financial system. For China, it was an external shock [that] has hurt exports, but left the financial, political, and economic system unscathed.
China Stumbles!
But remember: without solutions to climate change, peak energy, and the looming food crisis, winning the financial contest is only temporary solace. Consider just the energy conundrum: China may be building nukes and windmills, but there's no way it can maintain 8 percent annual growth for long with flat or declining energy from coal. China and India, between them, are currently planning to build 800 new coal-fired power plants by 2020. Where will the coal come from? Both countries are already experiencing domestic production shortfalls and are starting to import the fuel. But coal-exporting countries will be unable to keep up with their growing combined demand.
Moreover, there is a school of thought that says China's apparently unstoppable economic miracle is a bubble waiting to burst. Beijing's housing market is overheated, like that of Las Vegas circa 2006. Last year, the Chinese economy enjoyed 9 percent GDP growth—on paper. But in order to achieve that goal, the government and banks had to loan out 30 percent of China's GDP (the rate of growth in loans accelerated during the latter part of the year; at year-end rates, banks were on track to loan out an amount equal to the nation's entire GDP in 2010). In any case, much of that growth probably occurred through speculation on real estate and questionable stocks.
Generally, China is at a Wild West stage of economic development: it is a collection of powerful local capitalist power bases unaccountable to anyone, all jockeying to create and inflate assets and credit. While the central government has recently exerted control over the banks, its ability to halt regional Ponzi schemes is still limited.
In January the Chinese banking regulatory commission attempted to rein in lending in order to slow the rapid increase in real estate and stock market values. (On the other hand, during the same month, China's cabinet agreed to permit margin trading and short selling of stocks and to launch a stock futures index.) Significantly, there is evidence that China's central bank's attempts to harmlessly deflate the housing and stock market bubbles may be going badly. The sudden suspension in lending has, according to Joe Weisenthal in Business Insider, "caught importers, along with many other companies, by surprise and could cause turbulence in China's import orders. Letters of credit (LoC) suddenly became unavailable, despite previous agreements. We believe that this will inevitably lead to delays or cancellations in China's imports. Import orders for commodities and machineries could be affected most." Translation: the government was faced with the options of letting a rapidly growing bubble burst, taking the economy down; or deliberately deflating the bubble, risking taking the economy down by another route. The central bank chose the latter, and the risked takedown may be unfolding.
Meanwhile Google and the Obama Administration have been exerting external pressure on China to relax its censorship of electronic communications—moves that some see as reducing the central government's options for controlling both information flow and the economy.
In a recent op-ed, New York Times columnist Tom Friedman countered worries about a bursting of the China bubble with a robust display of confidence in Beijing's unstoppable expansionary momentum. Given Friedman's record (remember his columns in 2003 extolling the benefits that would flow to America from an invasion of Iraq?), this alone should be cause to doubt whether the Chinese locomotive can stay on its tracks much longer.
What Does It Mean to "Win"?
In his book Reinventing Collapse: The Soviet Example and American Prospects, Dmitry Orlov discusses the "collapse gap" between the United States and the old Soviet Union: the latter, he argues, was in effect much better prepared for economic crisis and the fall of its central government; when the U.S. eventually goes the way of the U.S.S.R., the pain and suffering of its citizens will be much greater. (I can't adequately summarize Orlov's evidence and reasoning here, but they are persuasive; if you haven't read the book, do yourself a favor.)
So: How is the U.S. doing today in terms of collapse preparedness as compared to China?
After six decades of nearly uninterrupted economic growth, Americans have developed unrealistic expectations about the future. They are urbanized consumers whose manufacturing capability has shriveled and whose practical survival skills are in most cases vestigial. The Chinese, in contrast, have less of a steep fall ahead of them. Most still dwell in the countryside, and many who live in the cities are only one generation removed from subsistence agriculture and can still draw on their own, or their parents', practical skills learned during decades of poverty and immersion in a traditional farming culture.
Both nations face fierce political challenges. In the U.S., the central government has reached nearly complete paralysis: it is evidently incapable of solving even relatively minor problems, and confidence in it among the citizenry has largely evaporated. Political leaders have succeeded in polarizing the people geographically with "hot-button" issues, few of which have anything to do with the factors currently undermining the nation's ability to survive. The Chinese central government appears far more capable of acting decisively and strategically, but it is confronted with nasty facts of geography and history: there is an extreme and growing economic and social division between the wealthy coastal cities and the poor, rural interior; and a demographic schism between those 40 years old or younger who have high economic expectations, and the older generation who grew up under Mao, with an ethic of collectivism and self-sacrifice. The young, especially, have accepted a trade-off between civil freedoms and economic prosperity. If the latter is not delivered, there will be shrill demands for the former. These divisions are so deep and profound that they could tear society apart if expectations are dashed—and the leaders know this.
Thus, in the event of collapse, both nations face the possibility of a breakdown in their political systems, entailing widespread violence (uprisings and crackdowns).
China still maintains a crucial advantage in one key area: its food system. Far more of its citizens still grow food, even taking into account recent trends toward rapid urbanization (in the U.S., full-time farmers make up only about two percent of the population and the average farmer is approaching retirement age). This is not to say that China will have the capacity to feed all its people; it is already moving in the direction of being a major net food importer. Meanwhile, the U.S. remains a significant food exporter. The key difference has to do with the resiliency of the two nations' respective food systems: that of the United States is more centralized, more highly fuel dependent, and therefore probably more vulnerable.
The Geopolitics of Collapse
It's easy to see the advantage of collapse preparedness for the citizenry—with better preparation, more will survive. But does a higher survival rate during and after collapse translate to some sort of geopolitical advantage?
The process of collapse will be determined by many factors, some hard to predict, and so it is difficult to know the size or scope of the political power structure that might re-emerge in either country. It's possible that one nation, or both, could devolve into smaller political units squabbling among themselves and unable to engage much in global jockeying for resources. All new political units emerging within the present territories of China or the U.S. would be immediately beset with enormous practical problems, including poverty, hunger, environmental disasters, and mass migrations.
Presumably some potent weaponry from the age of global warfare would remain intact and usable, so it is possible in principle that one or another of these smaller political entities could assert itself on the world stage as a short-lived, bargain-basement empire of limited geographic scope. But even in that case "winning" the collapse race would be small comfort.
The possibility of armed conflict between the two powers prior to mutual collapse is not to be entirely excluded if, for example, U.S. efforts to contain Iran's nuclear ambitions were to set off a deadly chain reaction of attacks and counter-attacks possibly involving Israel, with world powers being forced to choose sides; or if the U.S. were to persist in arming Taiwan. But neither the U.S. nor China wants a direct mutual military confrontation, and both nations are highly motivated to avoid one. Thus all-out nuclear war—still the worst-case imaginable scenario for homo sapiens and planet Earth—seems thankfully unlikely, though in the few decades ahead the use of some of these weapons, on some occasions, by one nation or another, is probable.
Trade wars are another matter, and we might even see one this year, according to Michael Pettis at Financial Times, who notes that
. . . trade imbalances are more necessary than ever to justify increased investment in surplus countries [i.e., China], but rising unemployment makes them politically and economically unacceptable in deficit countries [i.e., the U.S.]. Rising savings in the U.S. will collide with stubbornly high savings in China. Unless a long-term solution is jointly worked out immediately, trade conflict will worsen and it will become increasingly hard to reverse offensive policies. Most importantly, if deficit countries demand structural change faster than surplus countries can manage, we will almost certainly finish with a nasty trade dispute that will . . . poison relationships for years.
How likely is the prospect for the last nation standing to be able to, as I put it in the first paragraph above, "pick the carcasses" of its competitors? Such a scenario presupposes that one nation will be able to stay on its feet for at least a few years after others fall. But this may not be possible. Recall the prophetic words of Joseph Tainter in The Collapse of Complex Societies (1988):
"A nation today can no longer unilaterally collapse, for if any national government disintegrates, its population and territory will be absorbed by some other [or bailed out by international agencies]. . . . Collapse, if and when it comes again, will this time be global. No longer can any individual nation collapse."
When the U.S.S.R. crashed, the U.S. and various multinational corporations were able to sweep in and gobble up some of the treasure left lying around. One example: U.S. nuclear power plants have for many years been using uranium fuel cannibalized from old Soviet missile warheads. Soon, international institutions such as the World Bank and IMF helped organize new financial structures for Russia, Ukraine, Belarus, Lithuania, Estonia, and the other nations born from Soviet political and economic disintegration, so as to limit and reverse the process of social disintegration that had already passed beyond its early stages.
But now the game has changed. A collapse of the U.S. would leave China devastated. Not only would Beijing lose its main customer, but the hundreds of billions of dollars' worth of treasury notes it has accumulated would be rendered worthless. If China were internally stable, such impacts could be absorbed with difficulty. But in light of China's own simmering social and financial predicaments, a U.S. collapse would almost certainly be enough to tip Beijing's economy into a tailspin, resulting in both social and political crises.
A collapse of China would similarly devastate the U.S. Obviously, the loss of a source of cheap consumer products would discomfit WalMart shoppers, but the shock soon would go much deeper. The Treasury would lose its main foreign buyer of government debt, which means that the Fed would be forced to step in and monetize that debt (in common parlance, "turn on the printing presses"), undermining the dollar's value. The result: a hyperinflationary economic crash. Such a crash is probably inevitable at some point anyway, but a collapse of the Chinese system would hasten and worsen it.
In neither instance would international institutions be capable of preventing substantial social and political fall-out. The last nation standing would not stand for long. We have reached the stage where, as Tainter says, "World civilization will disintegrate as a whole."
The Transition Marathon
Okay, so there is no serious effort on the part of U.S. or Chinese leaders to avoid collapse in the long run (say, over the next 10 to 20 years). Perhaps this is because they have concluded that it is impossible to do so—there are just too many trends leading in the same direction, and actually dealing with any of those trends head-on would entail huge, immediate political risks. In reality, however, it is much more likely that they simply refuse seriously to think about these trends and their implications, because they do have another option—to postpone collapse through deficit spending, bailouts, and more financial bubbles, while enacting their parts in a climate-policy kabuki play and engaging in resource geopolitics. This way blame will at least fall on the next set of leaders. Postponing collapse is itself a big job, enough so as to take all of one's attention away from having to contemplate the awfulness and inevitability of what is being postponed.
Do these short-term efforts in any way reduce the risk of dissolution? Hardly. In fact, the longer the reckoning is delayed, the worse it will be.
What would make more sense than just trying to put off the inevitable is quite simply to build resilience throughout society, re-localizing basic social systems involving food, manufacture, and finance. There is no need to rehearse the existing discourse about this strategy: readers who are not familiar with it can find plenty of useful pointers at www.transitiontowns.org, or in the books and articles of authors such as Rob Hopkins, Albert Bates, David Holmgren, Pat Murphy, and Sharon Astyk (and in some of my own writings, including Museletter #192).
It is understandably hard for national politicians to think along those lines. Building societal resilience means disregarding the dictates of economic efficiency; it means systematically reducing the power of the central government and national/global commercial institutions (banks and corporations). It also means questioning the central dogma of our modern world: the efficacy and possibility of unending economic growth.
So if the best outcome lies in a strategy of resilience and re-localization, and our national leaders can't even contemplate such a strategy, that means those leaders are, in one sense at least, irrelevant to our future.
Some blog readers are so in tune with this line of thinking that they no longer see any point in paying attention to the global scene. They may even think this article is a waste of time (and I expect to get an email or two to that effect). But following world events is more than a matter of infotainment: when and how China and the U.S. come apart at the seams is a question of far greater consequence than that of whether the New Orleans Saints or the Indianapolis Colts will win the Superbowl. The reality is that no nation, and no community will be able to completely protect itself from the sudden, harsh winds that will rush to fill the vacuum left by an implosion of either superpower.
By the way, my apologies to the other 190 or so nations of the world, large and small: my singling out of the U.S. and China for discussion does not signify that other countries are unimportant, or that their destinies will not be as unique as their cultures and geographies; merely that those destinies will probably unfold in the context of a global collapse spreading from the two nations we have been discussing. For any nation—India, Bolivia, Russia, Brazil, South Africa—and for any community or family, survival will require some comprehension of the direction of large events, so as to get out of the way when debris is flying and to anticipate opportunities to regroup.
So: Pay attention to the weather reports from Washington and Beijing, but meanwhile build local resilience wherever you are. If the roof needs mending, don't dawdle.
Meanwhile, after a long day of organizing neighborhood Transition gardens, you may want to get a foretaste of post-collapse America by reading James Howard Kunstler's A World Made by Hand; or savor an entertainingly erudite discussion of collapse as an extended process (which it will likely be), rather than as a sudden, all-out event, by reading John Michael Greer's books The Long Descent and The Ecotechnic Future.
Just because the sky is falling, that doesn't mean it's time to stop thinking.
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2011-01-11
Central Banks are Acquiring Gold, Dumping US Dollars
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by Michel Chossudovsky
There is evidence that central banks in several regions of the World are building up their gold reserves. What is published are the official purchases.
A large part of these Central Bank purchases of gold bullion are not disclosed. They are undertaken through third party contracting companies, with utmost discretion.
US dollar holdings and US dollar denominated debt instruments are in effect being traded in for gold, which in turn puts pressure on the US dollar.
In turn, both China and Russia have boosted domestic production of gold, a large share of which is being purchased by their central banks:
It has long been assumed that China is surreptitiously building up its gold reserves through buying local production. Russia is another major gold miner where the Central bank has been purchasing gold from another state entity, Gokhran, which is the marketing arm and central repository for the country's mined gold production. Now it has been reported by Bloomberg that the Venezuelan Central Bank director, Jose Khan, has said that country will boost its gold reserves through purchasing more than half the gold produced from its rapidly growing domestic gold mining industry.
In Russia, for example, Gokhran sold some 30 tonnes of gold to the Central Bank in an internal accounting exercise late last year. In part, so it was said at the time, the direct sale was made rather than placing the metal on the open market and perhaps adversely affecting the gold price.
China is currently the world's largest gold producer and last year it confirmed it had raised its own Central Bank gold holdings by more than 450 tones over the previous six years. Mineweb.com - The world's premier mining and mining investment website Venezuela taking own gold production into Central Bank reserves - GOLD NEWS | Mineweb
The 450 tons figure corresponds to an increase in the gold reserves of the central bank from 600 tons in 2003 to 1054 tons in 2009. If we go by official statements, China's gold reserves are increasing by approximately 10 percent per annum:
China has risen to now be the largest gold producing nation in the world at around 270 tonnes. The amount bought in by the government initially looks like 90 tonnes per annum or just under, 2 tonnes a week. Before 2003 the announcement by the Chinese central bank that gold reserves had been doubled to 600 tonnes, accounted for similar purchases before that date. Why so small an amount you may well ask? We think local and national issues clouded the central bank’s view as it was the government that bought the gold since 2003 and have now placed it on the central bank’s Balance Sheet. So we would conclude that the government has ensured central bank gold purchasing must continue. "How will Chinese Central Bank Gold Buying affect the Gold Price short & Long-Term?" by Julian Phillips. FSO Editorial 05/07/2009
Russia
Russia's Central bank holdings are in excess of 20 million troy ounces (January 2010)
Russia’s Central Bank reserves have increased markedly in recent years. The RCB reported in May 2010 purchasing 34.2 tons of gold in a single month. Russian Central Bank Gold Purchases Soar In May – China Too? | The Daily Gold
The diagram below shows a significant increase in monthly purchases by the the RCB since June 2009.
Central Banks in the Middle East are also building up their gold reserves, while reducing their dollar forex holding.
Gold reserves of GCC states is less than 5 percent:
Dubai International Financial Centre Authority economists released a report yesterday calling for local countries to build gold reserves, according to The National.
Despite a high interest in gold, GCC states maintain less than 5 percent of their total reserves in gold. Compared to the ECB, which holds 25 percent of reserves in gold, that leaves a lot of room for growth. http://www.businessinsider.com/gcc-boost-gold-holdings-2010-12#ixzz18FEqpTy3
GCC states should boost their foreign reserve holdings of gold to help shield their billions of dollars of assets from turbulence in global currency markets, say economists at the Dubai International Financial Centre Authority (DIFCA).
Diversifying more of their reserves from US dollars to the yellow metal would help to offer central banks in the region higher investment returns, said Dr Nasser Saidi, the chief economist of DIFCA, and Dr Fabio Scacciavillani, the director of macroeconomics and statistics at the authority.
"When you have a great deal of economic uncertainty, going into paper assets, whatever they may be - stocks, bonds, other types of equity - is not attractive," said Dr Saidi. "That makes gold more attractive."
Declines in the dollar during recent months have dented the value of GCC oil revenues, which are predominantly weighted in the greenback. GCC urged to boost gold reserves
According to a report in People`s Daily;
The latest rankings of gold reserves show that, as of mid-December, the United States remains the top country and the Chinese mainland is ranked sixth with 1,054 tons of reserves, the World Gold Council announced recently.
Russia climbed to eighth place because its gold reserves increased by 167.5 tons since December 2009. The top ten in 2010 remains the same compared to the rankings of the same period of last year. And Saudi Arabia squeezed to the top 20.
Developing countries and regions, including Saudi Arabia and South Africa, have become the main force driving the gold reserve increase. ... .
The International Monetary Fund (IMF) and the European central bank are the major gold sellers, and the IMF's gold reserves decreased by 158.6 tons. (China's gold reserves rank 6th worldwide - People's Daily Online
It should be understood that actual purchases of physical gold are not the only factor in explaining the movement of gold prices. The gold market is marked by organized speculation by large scale financial institutions.
The gold market is characterised by numerous paper instruments, gold index funds, gold certificates, OTC gold derivatives (including options, swaps and forwards), which play a strong role, particularly in short-term movement of gold prices. The recent increase and subsequent decline of gold prices are the result of manipulation by powerful financial actors.
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2011-01-10
2010: U.S. To Wage War Throughout The World
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by Rick Rozoff
January 1 will usher in the last year of the first decade of a new millennium and ten consecutive years of the United States conducting war in the Greater Middle East.
Beginning with the October 7, 2001 missile and bomb attacks on Afghanistan, American combat operations abroad have not ceased for a year, a month, a week or a day in the 21st century.
The Afghan war, the U.S.'s first air and ground conflict in Asia since the disastrous wars in Vietnam and Cambodia in the 1960s and early 1970s and the North Atlantic Treaty Organization's first land war and Asian campaign, began during the end of the 2001 war in Macedonia launched from NATO-occupied Kosovo, one in which the role of U.S. military personnel is still to be properly exposed [1] and addressed and which led to the displacement of almost 10 percent of the nation's population.
In the first case Washington invaded a nation in the name of combating terrorism; in the second it abetted cross-border terrorism. Similarly, in 1991 the U.S. and its Western allies attacked Iraqi forces in Kuwait and launched devastating and deadly cruise missile attacks and bombing sorties inside Iraq in the name of preserving the national sovereignty and territorial integrity of Kuwait, and in 1999 waged a 78-day bombing assault against Yugoslavia to override and fatally undermine the principles of territorial integrity and national sovereignty in the name of the casus belli of the day, so-called humanitarian intervention.
Two years later humanitarian war, as abhorrent an oxymoron as the world has ever witnessed, gave way to the global war on terror(ism), with the U.S. and its NATO allies again reversing course but continuing to wage wars of aggression and "wars of opportunity" as they saw fit, contradictions and logic, precedents and international law notwithstanding.
Several never fully acknowledged counterinsurgency campaigns, some ongoing - Colombia - and some new - Yemen - later, the U.S. invaded Iraq in March of 2003 with a "coalition of the willing" comprised mainly of Eastern European NATO candidate nations (now almost all full members of the world's only military bloc as a result of their service).
The Pentagon has also deployed special forces and other troops to the Philippines and launched naval, helicopter and missile attacks inside Somalia as well as assisting the Ethiopian invasion of that nation in 2006. Washington also arms, trains and supports the armed forces of Djibouti in their border war with Eritrea. In fact Djibouti hosts the U.S.'s only permanent military installation in Africa to date [2], Camp Lemonier, a United States Naval Expeditionary Base and home to the Combined Joint Task Force - Horn of Africa (CJTF-HOA), placed under the new U.S. Africa Command (AFRICOM) when it was launched on October 1, 2008. The area of responsibility of the Combined Joint Task Force - Horn of Africa takes in the nations of Djibouti, Ethiopia, Eritrea, Kenya, Seychelles, Somalia, Sudan, Tanzania, Uganda and Yemen and as "areas of interest" the Comoros, Mauritius and Madagascar.
That is, much of the western shores of the Arabian Sea and the Indian Ocean, among the most geostrategically important parts of the world. [3]
U.S. troops, aerial drones, warships, planes and helicopters are active throughout that vast tract of land and water.
With senator and once almost vice president Joseph Lieberman's threat on December 27 that "Yemen will be tomorrow's war" [4] and former Southern Command chief and NATO Supreme Allied Commander Europe Wesley Clark's two days later that "Maybe we need to put some boots on the ground there," [5] it is evident that America's new war for the new year has already been identified. In fact in mid-December U.S. warplanes participated in the bombing of a village in northern Yemen that cost the lives of 120 civilians as well as wounding 44 more [6] and a week later "A US fighter jet...carried out multiple airstrikes on the home of a senior official in Yemen's northern rugged province of Sa'ada...." [7]
The pretext for undertaking a war in Yemen in earnest is currently the serio-comic "attempted terrorist attack” by a young Nigerian national on a passenger airliner outside of Detroit on Christmas Day. The deadly U.S. bombing of the Yemeni village mentioned above occurred ten days earlier and moreover was in the north of the nation, although Washington claims al-Qaeda cells are operating in the other end of the country. [8]
Asia, Africa and the Middle East are not the only battlegrounds where the Pentagon is active. On October 30 of 2009 the U.S. signed an agreement with the government of Colombia to acquire the essentially unlimited and unrestricted use of seven new military bases in the South American nation, including sites within immediate striking distance of both Venezuela and Ecuador. [9] American intelligence, special forces and other personnel will be complicit in ongoing counterinsurgency operations against the Revolutionary Armed Forces of Colombia (FARC) in the nation's south as well as in rendering assistance to Washington's Colombian proxy for attacks inside Ecuador and Venezuela that will be portrayed as aimed at FARC forces in the two states.
Targeting two linchpins of and ultimately the entire Bolivarian Alliance for the Peoples of Our America (ALBA), Washington is laying the groundwork for a potential military conflagration in South and Central America and the Caribbean. After the U.S.-supported coup in Honduras on June 28, that nation has announced it will be the first ALBA member state to ever withdraw from the Alliance and the Pentagon will retain, perhaps expand, its military presence at the Soto Cano Air Base there.
A few days ago "The Colombian government...announced it is building a new military base on its border with Venezuela and has activated six new airborne battalions" [10] and shortly afterward Dutch member of parliament Harry van Bommel "claimed that US spy planes are using an airbase on the Netherlands Antilles island of Curaçao" [11] off the Venezuelan coast.
In October a U.S. armed forces publication revealed that the Pentagon will spend $110 million to modernize and expand seven new military bases in Bulgaria and Romania, across the Black Sea from Russia, where it will station initial contingents of over 4,000 troops. [12]
In early December the U.S. signed a Status of Forces Agreement (SOFA) with Poland, which borders the Russian Kaliningrad territory, that "allows for the United States military to station American troops and military equipment on Polish territory." [13] The U.S. military forces will operate Patriot Advanced Capability-3 (PAC-3) and Standard Missile 3 (SM-3) batteries as part of the Pentagon's global interceptor missile system.
At approximately the same time President Obama pressured Turkish Prime Minister Recep Tayyip Erdogan to base missile shield components in his country. "We discussed the continuing role that we can play as NATO allies in strengthening Turkey's profile within NATO and coordinating more effectively on critical issues like missile defense," [14] in the American leader's words.
"Foreign Minister Ahmet Davutoglu has hinted his government does not view Tehran [Iran] as a potential missile threat for Turkey at this point. But analysts say if a joint NATO missile shield is developed, such a move could force Ankara to join the mechanism." [15]
2010 will see the first foreign troops deployed to Poland since the breakup of the Warsaw Pact in 1991 and the installation of the U.S's "stronger, swifter and smarter" (also Obama's words) interceptor missiles and radar facilities in Eastern Europe, the Middle East and the South Caucasus. [16]
U.S. troop strength in Afghanistan, site of the longest and most wide-scale war in the world, will top 100,000 early in 2010 and with another 50,000 plus troops from other NATO nations and assorted "vassals and tributaries" (Zbigniew Brzezinski) will represent the largest military deployment in any war zone in the world.
American and NATO drone missile and helicopter gunship attacks in Pakistan will also increase, as will U.S. counterinsurgency operations in the Philippines and Somalia along with those in Yemen where CIA and Army special forces are already involved.
U.S. military websites recently announced that there have been 3.3 million deployments to Afghanistan and Iraq since 2001 with 2 million U.S. service members sent to the two war zones. [17]
In this still young millennium American soldiers have also deployed in the hundreds of thousands to new bases and conflict and post-conflict zones in Albania, Bosnia, Bulgaria, Colombia, Djibouti, Georgia, Israel, Jordan, Kosovo, Kuwait, Kyrgyzstan, Macedonia, Mali, the Philippines, Romania, Uganda and Uzbekistan.
In 2010 they will be sent abroad in even larger numbers to man airbases and missile sites, supervise and participate in counterinsurgency operations throughout the world against disparate rebel groups, many of them secular, and wage combat operations in South Asia and elsewhere. They will be stationed on warships and submarines equipped with cruise and long-range nuclear missiles and with aircraft carrier strike groups prowling the world's seas and oceans.
They will construct and expand bases from Europe to Central and South Asia, Africa to South America, the Middle East to Oceania. With the exception of Guam and Vicenza in Italy, where the Pentagon is massively expanding existing installations, all the facilities in question are in nations and even regions of the world where the U.S. military has never before ensconced itself. Practically all the new encampments will be forward bases used for operations "down range," generally to the east and south of NATO-dominated Europe.
U.S. military personnel will be assigned to the new Global Strike Command and for expanded patrols and war games in the Arctic Circle. They will serve under the Missile Defense Agency to consolidate a worldwide interceptor missile network that will facilitate a nuclear first strike capability and will extend that system into space, the final frontier in the drive to achieve military full spectrum dominance.
American troops will continue to fan out to most all parts of the world. Everywhere, that is, except to their own nation's borders.
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2011-01-10
The 'false' pandemic: Drug firms cashed in on scare over swine flu, claims Euro health chief
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By Fiona Macrae
The swine flu outbreak was a 'false pandemic' driven by drug companies that stood to make billions of pounds from a worldwide scare, a leading health expert has claimed.
Wolfgang Wodarg, head of health at the Council of Europe, accused the makers of flu drugs and vaccines of influencing the World Health Organisation's decision to declare a pandemic.
This led to the pharmaceutical firms ensuring 'enormous gains', while countries, including the UK, 'squandered' their meagre health budgets, with millions being vaccinated against a relatively mild disease.
Read more: http://www.dailymail.co.uk/news/article-1242147/The-false-pandemic-Drug-firms-cashed-scare-swine-flu-claims-Euro-health-chief.html#ixzz1AdAfQE00
A resolution proposed by Dr Wodarg calling for an investigation into the role of drug firms has been passed by the Council of Europe, the Strasbourg-based 'senate' responsible for the European Court of Human Rights.
An emergency debate on the issue will be held later this month.
Dr Wodarg's claims come as it emerged the British government is desperately trying to offload up to £1billion of swine flu vaccine, ordered at the height of the scare.
Chief Medical Officer Sir Liam Donaldson last year ordered the NHS to plan for up to 65,00 deaths
Chief Medical Officer Sir Liam Donaldson last year ordered the NHS to plan for up to 65,000 deaths
The Department of Health warned of 65,000 deaths, set up a special advice line and website, suspended normal rules so anti-flu drugs could be given out without prescription and told health and local authorities to prepare for a major pandemic.
Planners were told to get morgues ready for the sheer scale of deaths and there were warnings that the Army could be called in to prevent riots as people fought to obtain drugs.
But with fewer than 5,000 in England catching the disease last week and just 251 deaths overall, Dr Wodarg has branded the H1N1 outbreak as 'one of the greatest medical scandals of the century'.
He said: 'We have had a mild flu - and a false pandemic.'
He added the seeds of the scare were sown five years ago, when it was feared the much more lethal bird flu virus would mutate into a human form.
The 'atmosphere of panic' led to governments stockpiling the anti-flu drug Tamiflu and putting in place 'sleeping contracts' for millions of doses of vaccine
Dr Wodarg said: 'The governments have sealed contracts with vaccine producers where they secure orders in advance and take upon themselves almost all the responsibility.
'In this way the producers of vaccines are sure of enormous gains without having any financial risks.
'So they just wait, until WHO says "pandemic" and activate the contracts.'
He also claims that to further push their interests, leading drug companies placed 'their people' in the 'cogs' of the WHO and other influential organisations.
Read more: http://www.dailymail.co.uk/news/article-1242147/The-false-pandemic-Drug-firms-cashed-scare-swine-flu-claims-Euro-health-chief.html#ixzz1AdAtD7sb
He added that their influence could have led the WHO to soften its definition of a pandemic - leading to the declaration of a worldwide outbreak last June.
Dr Wodarg said: 'In order to promote their patented drugs and vaccines against flu, pharmaceutical companies have influenced scientists and official agencies, responsible for public health standards, to alarm governments worldwide.
'They have made them squander tight healthcare resources for inefficient vaccine strategies and needlessly exposed millions of healthy people to the risk of unknown side-effects of insufficiently tested vaccines.'
He does not name any Britons with conflicts of interest.
But last year, the Daily Mail revealed that Sir Roy Anderson, a scientist who advises the Government on swine flu, also holds a £116,000-a-year post on the board of GlaxoSmithKline.
GSK makes anti-flu drugs and vaccines and is predicted to be one of the biggest beneficiaries of the pandemic.
The Department of Health says that although the disease appears to be on the wane, it cannot rule out a third surge and urges all those entitled to the jab to have it.
Professor David Salisbury, the Government's head of immunisation said there were 'no grounds whatsoever' for Dr Wodarg's claims, saying people with conflicts of interest were kept out of the decision-making process.
A GSK spokesman said: 'Allegations of undue influence are misguided and unfounded. The WHO declared that H1N1 swine flu met the criteria for a pandemic.
'As WHO have stated, legal regulations and numerous safeguards are in place to manage possible conflicts of interest.'
The company, which still employs Sir Roy, said he had declared his commercial interests and had not attended any meetings related to the purchase of drugs or vaccine for either the Government or GSK.
Read more: http://www.dailymail.co.uk/news/article-1242147/The-false-pandemic-Drug-firms-cashed-scare-swine-flu-claims-Euro-health-chief.html#ixzz1AdBFB2xi
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