| Author | Message | | Alpha | |  | | Alpha | | | | Alpha | | Posted: Mon Sep 29, 2008 8:01 am Post subject: |
| http://www.arabnews.com/?page=4§ion=0&article=114960&d=29&m=9&y=2008
US deploys radar system in Israel
Agencies —
TEL AVIV: The US has recently deployed an anti-missile radar in Israel that is mainly to warn of incoming Iranian ballistic missiles, Israeli state radio reports.The radar with a range of more than 2,000 km is sited in the south of the country, the radio station said yesterday.It is operated by a permanent 120-strong US army staff.The Associated Press news agency quoted officials as saying that the new radar was flown into Israel last week along with some 120 American crew members and has been set up at the Nevatim air base in the Negev desert.The system can pick up a ballistic missile shortly after launch. That will cut the response time of Israel’s Arrow system, designed to intercept incoming missiles.The officials spoke on condition of anonymity because the radar’s arrival has not been officially made public. It was first reported in Defence News.The Israeli military said yesterday that it has “various forms” of co-operation with the US military but that “as a rule we do not detail the content” of the ties.Questioned by the AFP news agency, a Defense Ministry spokesman said he did “not know about such a deployment”.A senior Pentagon official had said in late July that Robert Gates, the US defense secretary, agreed to explore deploying a powerful missile defense targeting radar in Israel.“The idea here is to help Israel create a layered missile defence capability to protect it from all sorts of threats in the region, near and far,” the official, who spoke on condition of anonymity, said.Besides the radar, Gates also agreed to explore sharing missile early warning launch data, as well as US funding for two costly Israeli projects designed to counter short-range rockets and mortars, he said.The official said deploying the X-band radar was a near-term proposition, and “all this is moving pretty quickly.”“We are going to station this land-based system there, and the Israelis would plug into it,” the official said.An X-band radar is a powerful phased array radar that can target the warhead of a long or medium range missile in space. The US has deployed one in Japan and plans to install a larger X-band radar in the Czech Republic.The official linked the assistance to the US administration’s push for progress on a road-map for peace between Israel and the Palestinians.But it appeared to be more directly related to Israel’s concern about Iran’s nuclear program. | | | | Alpha | | Posted: Mon Sep 29, 2008 8:18 am Post subject: |
| Bet on Israel bombing Iran
http://www.nydailynews.com/opinions/2008/09/27/2008-09-27_bet_on_israel_bombing_iran.html
By Robert Baer
Saturday, September 27th 2008, 6:45 PM
Are we going to have an October surprise, an attack on Iran by either the Bush administration or by Israel to stop the regime from becoming a nuclear power?
It could happen - and alter the dynamics of the presidential race in the blink of an eye - but only if Israel pulls the trigger. Don't expect the United States to drop bombs anytime soon. The reason: Iran has us over a barrel.
According to Britain's Guardian newspaper, Bush earlier this year nixed an Israeli plan to attack Iran's nuclear facilities. Reportedly, the President said no because we couldn't afford Iranian retaliation against our troops in Iraq and Afghanistan or Iran closing down Persian Gulf shipping. Nonetheless, cynical speculation is now swirling in some quarters that with the financial collapse working against McCain - and Bush's legacy coming into focus - the President might reconsider. Could that tail really wag the dog?
Probably not. The fundamental global power dynamics have not changed. Iran has successfully blackmailed us. Iranian Silkworm missiles could close down Gulf oil exports in a matter of minutes, taking about 17 million barrels a day of oil off world markets. Americans could suddenly be looking at the prospect of $10-$12 for a gallon of gas. If the collapse of Wall Street doesn't push us into a depression, that would. And Bush is right: An angered Iran could punish us with thousands of extra casualties in Iraq and Afghanistan, as Iranian-trained, armed and funded fighters flow back into the war zones with a vengeance.
So, giving the go ahead to Israel would just not be worth it.
But none of this changes the fact that Israel - on its own, without U.S. complicity - is moving closer to a decision to attack Iran, almost by the day.
What many Americans miss is that Iran is a threat to Israel's very existence, not an imagined danger used by politicians for political advantage. Every Israeli city is within range of Iranian/Hezbollah rockets. To make matters worse, since the July 2006 34-day war, Hezbollah may have as much as trebled the number of rockets it has targeted on Israel.
Meantime, Hezbollah has become the de facto state in Lebanon. And lest we forget, Israel lost that July 2006 war to Hezbollah, pulling its troops out of Lebanon without having obtained a single objective. In other words, Israel no longer has its deterrence credibility, the fear that it can decisively retaliate against its enemies.
Israel knows that international diplomacy against Iran up until now has been a farce. Iran called Bush's bluff, ignored sanctions and continued its nuclear program with impunity. And if the Israelis needed another psychological kick in the pants, last week North Korea announced that it is back to building a bomb, likewise with impunity.
Finally, Israel has to calculate that American influence around the world is on the wane. Americans are tired of the wars in Iraq and Afghanistan. And now, after the war in Georgia, Russia is opening up its flow of weapons to Iran.
Couple all of this with Israel's suspicion that Iran is within only a few short years of having a nuclear bomb, and Israel knows time is not on its side. It is starting to believe that it has no choice but to change its fortunes with arms.
This much is certain. Whether the President is named Bush, McCain or Obama, he will either have to prepare for war in the Gulf or find a way to bring Iran back into the nation-state system. The day of reckoning is near.
I myself think a deal can be cut with Iran. During the last 30 years, Iran has gone from a terrorist, revolutionary power to far more rational, calculating regional hegemon. Its belligerence today has more to do with a weakened United States and Israel than with any plans to start World War III.
The question is what price Iran would exact for a settlement. Or more to the point: Would we prefer to take our chances with an Israeli surprise?
Baer, a former CIA case officer, is author of the just-released "The Devil We Know: Dealing with the New Iranian Superpower." | | | | Alpha | | Posted: Mon Sep 29, 2008 8:50 am Post subject: West, Islamic nations split at nuclear meeting |
| West, Islamic nations split at nuclear meeting
By GEORGE JAHN, Associated Press Writer
59 minutes ago
VIENNA, Austria — Islamic anger over Israel's nuclear program and bids by Iran and Syria to gain more influence threaten to turn this week's 145-nation International Atomic Energy Agency meeting into an unprecedented showdown between the West and the developing world.
Opening Monday, the IAEA's general conference has traditionally been an annual chance for the United Nations nuclear monitoring agency's member countries to plan general nuclear policies that range from strengthening nonproliferation to programs of medical and scientific benefit.
Decisions are traditionally made by consensus, a practice that had led all sides to bridge sometimes substantial differences and opt for compromise on most issues for most of the general conference's 52-year history. A vote on any topic is unusual and considered a huge dent in the meeting's credibility.
But Islamic frustration over Israel's refusal to put its nuclear program under international purview and resistance by the Jewish state to Muslim pressure on the issue threatens to force a vote for the third year running.
After losing the vote two consecutive years, Islamic nations are threatening to up the ante this year, warning they will call for a ballot on every item, no matter how uncontroversial, unless they get conference backing on the issues close to their heart.
"In all my years of dealing with the general conference, I have never seen it as divided as this," said one conference veteran Sunday, the eve of the conference. The diplomat demanded anonymity because he wasn't authorized to comment to the media.
As in the past two years, Islamic IAEA members are expected to put forward a resolution urging all Mideast nations to refrain from testing or developing nuclear arms and urging nuclear weapons states "to refrain from any action" hindering a Mideast nuclear-free zone.
Israel, widely considered the only Mideast nuclear weapons state, last year called for a vote on that resolution because of the introduction of a separate Arab-backed resolution deeming Israel a "nuclear threat" and refusal by its sponsors to withdraw it. The resolution was defeated but the fact it was put to the ballot further weakened the consensus principle.
Arab members — backed by Iran — this year have again asked conference organizers to include a similar item. Although it is now labeled "Israeli Nuclear Capabilities" instead of "Nuclear Threat," the Jewish State still objects to being singled out. And diplomats told The Associated Press ahead of the meeting that it will again force a vote on the Mideast nuclear-free zone resolution unless the second item is withdrawn.
Focusing on Israel by name "is substantially unwarranted and flawed," said a letter prepared for review by the conference from Israel Michaeli, the Jewish State's IAEA representative.
Sponsors of the item should instead "address the most pressing proliferation concerns in the Middle East," said the letter in allusion to Iran's defiance of U.N. Security Council sanctions for refusal to stop uranium enrichment and world concerns about allegations that Tehran had past plans to make nuclear weapons.
On Saturday, the U.N. Security Council approved a fourth resolution critical of Tehran's defiance on uranium enrichment, which can create both nuclear fuel and the fissile core of warheads.
But Iran, along with ally Syria, figures even more directly at the Vienna conference because they are among four nations seeking their geographic region's nomination for a seat on the IAEA's decision-making 35-nation board.
Iran's bid is strategic. Tehran is running to counteract a U.S. push to have Afghanistan or outsider Kazakhstan elected over Syria, which is under IAEA investigation for allegedly hiding a secret nuclear program, including a nearly completed plutonium producing reactor destroyed last year by Israel.
Tehran is ready to withdraw from the race if Afghanistan does so, narrowing the field to favored Syria and Kazakhstan, diplomats told the AP. But as of Sunday, Afghanistan, backed by the U.S. and its allies, was not ready to do so.
If the regional group does not agree on a candidate by the time the conference turns to the issue, the meeting will also be asked to vote on which nation should take the board seat.
___
On the Net: http://www.iaea.org | | | | Alpha | | Posted: Sat Oct 11, 2008 7:06 pm Post subject: |
| Israel Warns It Will Use “Disproportionate Force” Against Lebanon in Next War
http://www.democracynow.org/2008/10/10/headlines#11
The head of the Israeli army’s northern command says Israel will use disproportionate force on Lebanese villages used by Hezbollah to fire rockets if another war is fought against Lebanon. Major General Eisenkot said, "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.” Eisenkot went on to say, "This is not a recommendation. This is a plan. And it has been approved.”
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Israel going back into Lebanon would be right in accordance with the rest of the 'A Clean Break' agenda (see the 'A Clean Break' link on the right of http://NEOCONZIONISTTHREAT.COM):
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From: Claude Salhani
Sent: Friday, October 10, 2008 9:00 AM
Subject: Israel Caught Between Islamist Crossfire: Lebanon Pays Price
http://www.metimes.com/International/2008/10/10/
israel_caught_between_islamist_crossfire_lebanon_pays_price/6669/
Israel Caught Between Islamist Crossfire: Lebanon Pays Price
By CLAUDE SALHANI (Editor, Middle East Times)
Published: October 10, 2008
Both Israel and Hezbollah feel that another round of violence is inevitable, though for the moment neither side wants to initiate a fight, the consequences of which would be devastating for all sides.
It may only be rhetoric, but rhetoric in the Middle East has a nasty habit of transforming itself into anger, and when fueled by the urge for revenge, situations can easily escalate into open conflict. Conditions are now in the red zone of the rhetoric stage with the needle beginning to dip into the yellow part of the revenge zone. From here, it's a short step to the full cardinal red conflict quadrant.Hezbollah is itching to avenge the killing of its operations chief, Imad Mughnieh, whom it accuses Israel of masterminding his assassination in Damascus a few months ago. Israel , for its part, is worried by Hezbollah's build-up of weaponry across its northern border.Predicting the political future of the Middle East is one of the riskiest tasks for journalists covering the region given the unpredictability of the area. However, one point upon which many analysts seem to agree is that another showdown between Israel and the Lebanese Shiite organization Hezbollah appears inevitable. The last confrontation, the Second Lebanon War in 2006, which pitted Hezbollah against the full brunt of the Israeli armed forces left much business unfinished: for both sides.Israel has repeatedly stated that it would have to return and "finish the job." Hezbollah, meanwhile, has not been idle, rearming and repositioning itself for the day, not if, but when the next confrontation comes.Bear in mind that Hezbollah has obtained a number of medium range missiles capable of hitting Tel Aviv and possibly farther south. Together with Hamas, the Islamic Resistance Movement dominant in the Gaza Strip, Israel appears caught between the crosshairs of the two Islamist movements, both backed by Iran .The distance from the Lebanese border to Tel Aviv is 77 miles or 126 kilometers, roughly the same as Baltimore, MD., to Fredericksburg, VA.; while the distance from northern Gaza to Tel Aviv is a mere 32 miles, or 57 kilometers, about the same from downtown San Diego to Oceanside, CA.It is believed that most of Hezbollah's arsenal consists of relatively inaccurate Soviet era Katyushas. Those have a short range of only 25 kilometers, or 15.6 miles. But Hezbollah is also believed to have been supplied with Fajr-5 missiles, with a range of 75 kilometers, enough to hit the area around Hadera. The real threat to the security of Israel comes from the Zelzal-2 missile, with a range of 200 kilometers. Those can easily reach Tel Aviv, the most densely populated area of Israel .In response to this growing threat brewing north of its border, underlined by rhetoric coming from Hezbollah's military commander in south Lebanon that Hezbollah might revert to armed action to liberate the Shebaa Farms, Israel's army planners have issued a stern warning, not only to Hezbollah, but to all of Lebanon.Just days ago three senior Israeli military commanders threatened to "decimate Lebanon 's infrastructure."The Farms area is the last remaining parcels of Lebanese territory occupied by Israel . Israel claims it belongs to Syria . Syria has avoided stating its position on the controversy.The Israeli officers have warned Lebanon of "disproportionate firepower," stating that Israel would be prepared to "wipe out villages in the south" believed to harbor Hezbollah missile launch sites.This is what Gen. Gadi Eisenkot, in charge of Israel 's Northern Command said was the "Dahiyeh Doctrine." Under this plan – and Eisenkot made it clear that this was a plan, not just a suggestion – all of Lebanon would be treated as the enemy.Dahiyeh, meaning "suburb" in Arabic, refers to Hezbollah's stronghold in Beirut 's southern suburbs."We will wield disproportionate power against every village from which shots are fired on Israel , and cause immense damage and destruction. From our perspective, these are military bases," said Eisenkot.Once again Lebanon is caught between Israel 's fight with another enemy. Before it was the Palestine Liberation Organization that brought the wrath of Israel 's military might on Lebanon ; today it's Iran .But Lebanon 's trans-border problems are not reserved exclusively to its southern neighbor. Lebanon is also looking nervously over its shoulder at its other neighbor, Syria .In recent weeks Syria has been amassing troops along its border with Lebanon . Damascus says this is in order to fight smugglers. Nevertheless, this prompted French President Nicolas Sarkozy to warn Damascus not to cross into Lebanon , the London-based Al-Hayat has reported.According to the newspaper, France told the Syrians not to turn " Lebanon into another Georgia ."In Washington , meanwhile, U.S. Deputy Assistant Secretary of State David Hale said in a television interview that Washington still supports Lebanon 's independence and sovereignty.Is that enough to deter Israel 's threats to "decimate" Lebanon ? I wouldn't take that to the bank. That statement and $85 billion should buy you peace of mind. | | | | Alpha | | Posted: Sun Oct 12, 2008 8:49 am Post subject: |
| From The Sunday TimesOctober 12, 2008
http://www.timesonline.co.uk/tol/comment/columnists/guest_contributors/article4926251.ece
Warning signs of an Israeli strike on Iran
David Owen Some key decision makers in Israel fear that unless they attack Iranian nuclear enrichment facilities in the next few months, while George W Bush is still president, there will not be another period when they can rely on the United States as being anywhere near as supportive in the aftermath of a unilateral attack. In the past 40 years there have been few occasions when I have been more concerned about a specific conflict escalating to involve, economically, the whole world. We are watching a disinformation exercise involving a number of intelligence services. Reality is becoming ever harder to disentangle. Last month a story in The Guardian claimed that on May 14 Ehud Olmert, the Israeli prime minister, in a meeting with Bush, had asked for a green light to attack Iran’s nuclear enrichment facilities. We were told that Bush refused. He believed Iran would see the United States as being behind any such assault and Americans would come under renewed attack in Iraq and Afghanistan. Shipping in the Gulf would be vulnerable. We were told that the source of the story was a European head of government and “his” officials – as if to exclude Angela Merkel and Germany. It is, however, improbable that Israel abandoned its option to take unilateral action. Three weeks later the Israeli military conducted an exercise over the Mediterranean to demonstrate to the United States as well as Iran that it could attack. More recently there have been a number of stories raising concern about what is happening in Iran. One said Iran’s first nuclear electricity generating plant would go critical in December and thereafter any air attack would become impossible since it would trigger a nuclear explosion. Then we were told that a US radar system had been deployed in Israel with US personnel to strengthen Israel’s defence against Iranian airstrikes. There was also an interview with Olmert where he dismissed as “megalomania” any thought that Israel should attack Iran. He appeared to be trying to disrupt the Israeli coalition negotiations. Finally, on Friday, The New York Times revealed that in February an IAEA inspector had talked of experiments in Iran that were “not consistent with any application other than the development of a nuclear weapon”. Iran denied the claim. Before the Israeli negotiations got under way, Ehud Barak, the Labour leader, spoke first to Benjamin Netanyahu, leader of the Likud opposition party, rather than to Tzipi Livni, the newly elected leader of Kadima. This indicated that Barak was interested in an all-party coalition, presumably believing that a Palestinian settlement is not yet achievable and that Israel needs maximum unity to deal with a world transfixed by the economic crisis and resigned to Iran becoming a nuclear weapon state. If Israel were to attack Iran, one Iranian response would be to block the Strait of Hormuz. On September 16 Iran said its Revolutionary Guards would defend the Gulf waters. In the narrow strait just one oil tanker sunk would halt shipping for months. Insurance cover would be refused and owners would fear the risks of sailing even if the US navy cleared mines. The Revolutionary Guards are committed to a war against Israel and prepared, in the process, to take on the rest of the world. They have good equipment and operate from the land, sea and air. They will be suicide soldiers, seamen and airmen. If Iran is attacked, Russia and China will supply it with arms. The circumstances surrounding Georgia’s decision to attack South Ossetia are worth remembering. The Georgian president was advised by Condoleezza Rice, the US secretary of state, not to attack but there were powerful voices in Washington that, by a nod and a wink, were encouraging action, so the Georgian government felt confident in going ahead. Following an Israeli attack and Iranian countermeasures, the American military would be bound to follow Bush’s orders. The president-designate or, if before the election, the two candidates, would be wary of criticising him. It is imperative that voices are raised in America and Europe to warn Israel off unilateral action against Iran. The experience of Georgia has given an amber, if not a green, light to Israel and only Bush can switch that to red. Bush’s legacy would be best served by taking dramatic diplomatic action to prevent a war with Iran. He should publicly warn Israel that the United States will use its air power to prevent it bombing Iran, while announcing that he is sending Rice to Tehran to start negotiating a grand bargain whereby all sanctions would be lifted if Iran forgoes the nuclear weapons option. He could indicate that the negotiations would not continue indefinitely, but they would give his successor, as president, time to consider all the options, military and economic. It would also allow time for Israel either to negotiate a coalition to last until 2010 or to hold elections. It would replace the present multilateral negotiations, which are stalled with Russia and China unwilling to move on strong economic sanctions. Above all, it would be a last act of real statesmanship from Bush who is otherwise destined to end his term a miserable failure. David Owen was foreign secretary from 1977 to 1979. | | | | Apricot | | Posted: Wed Oct 15, 2008 10:03 pm Post subject: |
| The October Surprise - Global Panic
The October Surprise: Global Panic - by Stephen Lendman
http://sjlendman.blogspot.com/
Since 9/11, the notion of an October surprise has been around. The idea going something like this. Another real or manufactured terror attack. The dominant media stokes fear. The public is again traumatized. The Bush administration pledges all effective measures to protect national security. Formerly seizes total power. Suspends the Constitution and declares martial law. Mass detentions follow. Beginning with dissenters and elements of the public considered "dangerous."
This may be coming with the 3rd Infantry's 1st Brigade Combat Team back in the US as of October 1. According to the Army Times, as "an on-call federal response force for natural or manmade emergencies and disasters, including terrorist attacks." Augmented by USNORTHCOM.
According to Wayne Madsen's recent article titled "FEMA sources confirm coming martial law," it gets worse. He cites "knowledgeable" FEMA sources saying that "the Bush administration is putting the final touches on a plan (to declare) martial law in the US with various scenarios anticipated as triggers." Economic collapse. Massive social unrest. Bank closures. Street protests. Violence in response, and another stolen election.
Early in the month, a different October surprise arrived. Not the expected one. Not yet at least. The Wall Street Journal put it this way: "The Dow Jones Industrial Average (DJIA) capped the worst week in its 112-year history with its most volatile day ever, as hopes for a major international bank rescue plan were overwhelmed at day's end by another wave of selling."
The DJIA dropped 22% over the past eight trading sessions. Investors were "shell-shocked." Many spent Friday "trying to protect themselves from further declines. The past week's (October 6 - 10) 18% decline "and Friday's 1018.77 point swing from low to high were the biggest since the Dow was created in 1896." The VIX measure of market fear hit 69.95. By far its highest level ever, and some investors think it may touch 100 in the current climate. Until now, the Dow's worst week was in 1933. Trading volume also set a record at 11.16 billion shares.
"Market crash shakes world" headlined the Financial Times (FT). Mass trauma, fear and uncertainty sent tremors everywhere, and no one knows if Friday ended it. Maybe just began it. First markets crater. Then world economies, and finally the inevitable human fallout. Affecting many tens of millions everywhere. Innocent people paying dearly.
Morning headlines say it all. And they're getting grimmer. On October 10, the Wall Street Journal said the "Market's 7-Day Rout Leaves US Reeling. Stocks in a Slow-Motion Crash....After Year of Declines, Investors Lose $8.4 Trillion of Wealth." Most scary is what's ahead and how much more people can or will tolerate.
The Financial Times was just as grim headlining "Global equities plunge....Japan leads Asian market rout...Wall Street in biggest fall since 1987 crash." Once the nation's largest company, General Motors may now face bankruptcy. Its October 10 stock fell to its 1950 valuation and now has a market capitalization of just $2.6 billion. Shockingly expressed in one headline saying "Wheels falling off for General Motors." Add the engine and chassis, too.
Ford Motor's outlook is little better. Its stock price is the lowest in decades, and one analyst warned that "the accelerating deterioration in industry fundamentals will be a serious challenge to liquidity (for both companies and Chrysler) during 2009." JD Power and Associates was even grimmer saying that the global auto market may experience an "outright collapse" in 2009. And we're only talking about autos.
Look at banks and world finance. The source of today's crisis and reason global economies are reeling. Economists like Nouriel Roubini were once scoffed at. No longer. He warned for months that "the risk of a total systemic meltdown is now as high as ever since the credit crunch is gripping European banks as well" and spreading globally. Affecting good ones as well as bad. Trashing the baby with the bath water. Erasing savings for tens of millions everywhere. And for seniors who may not have time to recoup.
The crisis didn't emerge like Topsy. It's been simmering for years, and in July 2006 historian Gabriel Kolko warned about it in an article titled "Bankers Fear World Economic Meltdown." He noted how:
the "whole nature of the global finance system has changed radically in ways that have nothing whatsoever to do with 'virtuous' national economic policies....The investment managers of private equity funds and major banks have displaced national banks....moving well beyond regulatory structures....Traders have taken over from traditional bankers because buying and selling shares, bonds, derivatives and the like now generate the greater profits, and taking more and higher risks is now the rule....They often bet with house money (and) low interest rates....let them do things....that were once deemed foolhardy."
Compounded by the irrational development of global finance, liberalization and loose regulations. Playing fast and loose and betting on the come. The potential gains are enormous and so are the risks of a major financial crisis. A meltdown. Now we've got one that global institutions are "utterly inadequate" to deal with.
Kolko warned then that "the entire global financial structure (was) becoming uncontrollable....financial liberalization produced a monster....contradictions wrack the world's financial system (that's) both crisis-prone (and) immoral. (We) may very well be on the verge of serious crises." Now we've got one and in dire straits.
Because "a kleptocratic class (took) over the economy," according to economist Michael Hudson. A criminal element betting on high returns through computerized gambling "and when bad bets are made, bailouts are the (payoff) for campaign contributions." For having friends in high places as well.
Today's crisis isn't an accident or from happenstance. It was planned, according to economist and critic F. William Engdahl in his recent article titled "Behind the Panic." To "shape the future of global banking" through creative destruction. Panic incited by a well-designed "long-term strategy." To change the "face of European banking." Weaken it with toxic junk. Asset Backed Securities. Force enough of it into liquidation or cheap enough to buy at fire sale valuations. The idea being to "create three colossal global financial giants - Citigroup, JP Morgan Chase, and Goldman Sachs." Add Bank of America and make it a foursome. Then use their "muscle to ravage European banks." Even if they wreck the US and world economies. Resuscitate them so they can "advance their global agenda over the coming years." To dominate world finance and increase US hegemony in the new century.
That's the scheme, and Engdahl calls it "a fight for the survival of the American Century." Built on "the twin pillars of American financial (and military) dominance," but the game is far from over. "Battle lines are drawn." EU nations have their own ideas. Stabilization and recovery plans as well that differ from Washington's and look much sounder. It remains to be seen where things are heading and whether competing nations can work together and do it effectively. They haven't much time.
Washington's Efforts to Shape the Last Century
Engdahl recounted some of them in his important book on war, geopolitics, oil and finance: "A Century of War." He explained how Washington designed "the greatest confidence game" ever. A "special hegemony" to:
-- print limitless amounts of dollars;
-- accumulate huge trade deficits;
-- "inflate (the) currency beyond imagination;"
-- have the government pay bankers interest on its own money; and
-- create an unprecedented public and private debt to enrich the few at the expense of the many.
Up to now it worked. Let America rule the world. Control its energy and finance. Avoid serious challengers and crush potential ones.
From the early years of the last century, US muscle flexing took many forms. From conflicts to geopolitics to controlling world resources to financial warfare. JP Morgan and other Wall Street notables were experts on the latter. Creating panics for greater power. Like today's with similar aims.
In 1969, Richard Nixon had his own scheme with the country in recession. Interest rates were cut. Dollars flowed abroad. The money supply was expanded, and in May 1971 America recorded its first monthly trade deficit. It triggered a panic US dollar sell-off. Gold backed the currency then. Reserves were one-quarter of official liabilities, and (on August 15) Nixon unilaterally imposed a 90-day wage and price freeze. A 10% import surcharge. An 8% currency devaluation, and he closed the gold window. Suspended dollar convertibility into the metal and ended compliance with Bretton Woods' core provision. He pulled the plug on world economies. Shook them and on February 12, 1973 did again. With a further 10% dollar devaluation that created the worst global instability since the 1930s. What lay behind his actions?
To buy time ahead of a bold new monetary "paradigm shift." To revive a strong dollar and US hegemony. By a "colossal assault" on world industrial growth. Through an engineered oil embargo. A 400% increase in oil prices. A flood of petrodollars to be recycled into US investments and purchases. Big Oil and major banks to profit hugely at the cost of economic crisis. The worst since the 1930s. Causing bankruptcies, unemployment and stagflation.
Under Jimmy Carter in 1979, Fed chairman Paul Volker advanced his own radical monetary policy on the pretext of fighting high inflation. It was another Washington scheme to preserve dollar hegemony. Keep it the world's reserve currency, and do it by crushing industrial growth to let political and financial power prop up dollar strength.
It worked by raising interest rates from 10% to 16% and then 20% in weeks. The US and world economies plunged into deep recessions, and the dollar began a strong five year ascent.
In the 1980s under Ronald Reagan, Mexican president Jose Lopez Portillo wanted to use his oil revenue to modernize and industrialize the country. To make it stronger and more independent. That prospect was anathema to Washington and it reacted. With a scheme to demand rigid repayment of Mexican debt at exorbitant rates.
In 1981, it began with an orchestrated run on the peso. Stories were circulated about an impending devaluation and capital flight. Portillo instituted an austerity plan, and his government cracked under pressure. The peso was devalued 30%. Mexican industry was devastated. Industrial production cut. Bankruptcies followed. Millions of Mexicans suffered grievously. The nation became effectively insolvent. It had to accept IMF help. Took on large amounts of debt, and major banks profited hugely by working with the government and IMF. Socializing the debt. Spinning it off to tax payers and privatizing gains through structural adjustment looting. Similarly in other countries. Causing mounting debt. Charging onerous interest rates, and earning greater profits from hundreds of billions of dollars in servicing costs.
Reagan-era deregulation caused the S & L crisis. A lesser version of today's. By letting banks invest in speculative real estate. Engage in massive fraud. And get the right wing Cato Institute to say: "If Congress had set out in 1980 to create an environment that would lure all the crooks and frauds in the country into one industry, few would have been more suitable than" this one. "It was easy (finding) disenchanged S & L owners who were willing to sell out for a reasonable price, and once one had an S & L charter, opportunities abounded."
It ended up bankrupting hundreds of banks. Shrunk the industry from 4500 in 1979 to about 2200 in 1991 and hundreds more afterward. It also cost taxpayers around $200 billion. Pocket change compared to the trillions needed for the current crisis.
In the 1980s, Japan was the country that could say "no." At decade's end, it was the world's economic and banking leader. Because reckless speculation left American banks in deep crisis. Japan operated more prudently. It prospered, and challenged American dominance. Washington feared former communist countries would adopt its model. This was anathema. It might shut out US companies. Show Japan's way was superior so it had to be stopped.
The 1985 Plaza accord was the scheme. To get Japan to exercise monetary and fiscal measures to expand domestic demand and reduce the country's external surplus. At the same time, the Bank of Japan held interest rates at 2.5% from 1987 - 1989. To stimulate US goods purchases. Instead cheap money went into Japanese stocks and real estate. It created two colossal bubbles. A lost decade followed, and the economy is still recovering and under new duress from the current panic.
The 1990s Asian crisis was also manufactured. In summer 1997, it hit. For no apparent reason beyond rumors that the Thai bhat was in trouble, and Thailand had too few dollars to back it. "Asian Contagion" was unleashed. Hot money came in earlier. Then exited electronically. From Thailand, Indonesia, South Korea, the Philippines, and other Asian Tiger countries. Through a Washington-engineered scheme because these nations' economic model bested America's and threatened it.
Tiger countries grew by protecting their markets and barring foreign companies from owning land and national firms. They also restricted Western and Japanese imports to grow their own economies and homegrown industries. Again anathema so it had to be stopped.
The countries were hammered. Forced to devalue their currencies and get IMF help. With strings. Accepting debt bondage. Opening their markets. Structural adjustments. Privatizations. Spending cuts. Mass layoffs and constrained wages and benefits. The whole toxic package in return for aid. The regional toll was devastating. An estimated 24 million lost jobs. Its growing middle class destroyed. A black hole of misery for around 20 million people. Forcing them to do anything to survive. Crushing the Asian miracle to let Western brands replace local ones. Bargain hunters get great deals at fire sale prices. The New York Times called it "the world's biggest going-out-of-business sale." The region now hammered again from the current crisis. No secret where it was manufactured. No telling how it will end up. No guessing many millions feel pain and are fearful.
No end to other notable examples. Two especially stand out. The 1990s ones affecting post-Soviet Russia and South Africa. In each case, neoliberal "shock therapy" was devastating. It empowered an oligarch class in Russia. Let them strip mine the nation's wealth and offshore it to tax havens. Impoverished tens of millions of people. Bankrupted 80% of farmers. Caused mass unemployment. Created a permanent underclass. An annual 700,000 a year population decline and much more.
South Africa fared no better. Despite Nelson Mandela's pledge to support black economic empowerment. As president he surrendered to capital. The consequences were horrific. Far worse than under apartheid. Double the unemployment rate and number of people in desperate poverty. Millions of poor blacks without homes. Another million evicted from farms. One-fourth of the population with no running water or electricity. Around 60% with inadequate sanitation. A 13 year life expectancy decline since 1990. Appalling human wreckage much like what happened in Russia and elsewhere. To empower capital at the expense of people. Heading for America and in one week took a quantum leap.
Spreading everywhere. On October 2, enough for The New York Times to say that Latin American leaders have gone from "schadenfreude to fear(ful)." Hugo Chavez skipped the UN General Assembly opening to visit China and said Beijing is more relevant than New York. Venezuela and Bolivia expelled their US ambassadors, and Brazil's Lula da Silva railed against an American regional naval presence and said his nation's warships must be on alert in response. He's also furious at Wall Street and Washington for the current crisis and said: "We did what we were supposed to do to get our house in order. They spent years telling us what to do and they themselves didn't do it."
Argentina's Christina Fernandez de Kirchner was also bitter in stating: "We are witnessing the First World, which at one point had been painted as a mecca we should strive to reach, popping like a bubble." And the Chicago Tribune quoted an Inter-American Dialogue expert saying that "whatever credibility the US had in the region, on economic management, that's clearly gone."
Forty world specialists from 20 countries attended the International Conference of Political Economy in Caracas, Venezuela from October 8 - 11. To analyze and propose South-based, alternative solutions to the financial crisis. Venezuela's Minister for Planning and Development, Haiman El Troudi, highlighted his country's relative strength. Its impressive economic growth (at 6% in first half 2008), and recommended that Venezuelans repatriate their US investments given the current climate. To protect them from unsafe American banks.
He and President Chavez also criticized the IMF and called for it to "dissolve....kill itself." They were harsh on the World Bank as well. Chavez added that "We are decoupling from the wagon of death." El Troudi said we are witnessing the end of neoliberal hegemony. Others agreed that a new model is needed. The old one clearly failed.
The Current Panic and Meltdown
Credit today is frozen. From a debt crisis, not a liquidity one. Markets are reeling as a result. Crashing in free fall from severe financial stress. From the largest ever leveraged asset and credit bubbles. Multiple ones. Imploding. Starting with housing. Causing widespread mortgage defaults and huge financial institution losses. Multi-trillions more asset dollars at risk. Compounded by banks reluctant to lend. Fearing they won't be repaid. Prices are falling. Trust is eroded. Losses mounting from destructive deleveraging. Mortgages, stocks, bonds, commodities, credit, private equity, hedge funds imploding more intensively than since the Great Depression.
Forcing troubled companies to the wall. Each one exposing others. Some too big to fail but they did. Getting investors to run for the exits. Selling good assets to cover bad ones. Freezing up money markets. Making short-term Treasuries the only safe bet. Getting world governments scrambling for solutions. Already in recession and getting worse. Fearing an intensified financial crisis. A systemic collapse.Turning a deepening recession into a global depression. A disaster only urgent, well-designed, and coordinated actions may prevent. But no assurance anything will work this late.
Here's what Nouriel Roubini and others recommend. Mirror opposite of EESA that will do more harm than good:
-- additional rapid rate cuts globally; at least to 1% in America; much lower in the EU, Asia and elsewhere;
-- guarantee all deposits until stability is restored at least;
-- partially nationalize troubled banks; recapitalize them with public funds; in some form that now seems the plan according to The New York Times in its October 11 article headlined: "White House Overhauling Rescue Plan;" capital to be injected into banks by buying non-voting shares; what's known is Henry Paulson's October 10 statement that "We can use the taxpayer's money more effectively....if we develop a standardized program to buy equity in financial institutions;" it remains to be seen what, in fact, happens; Paulson represents Wall Street; not the public, national or world interests;
-- he's not for reestablishing responsible regulation to curb market excesses; what economists like Roubini recommend;
-- freeze all home foreclosures; establish a 1930s type Home Owners' Loan Corporation (HOLC) to refinance homes and prevent foreclosures; let foreclosed homeowners retain their properties and pay affordable rent;
-- ease the debt burden of distressed households; cap credit card and other high consumer loan interest rates at much lower levels; put cash in peoples' hands; lots of it; at least several hundred billion dollars for starters; more if needed; as much as it takes;
-- provide solvent financial institutions with as much liquidity as they need; corporate sector companies as well, including small businesses;
-- save solvent companies; liquidate troubled ones too far gone;
-- fund massive stimulus to revive the economy; for public works, infrastructure, education, alternative energy, unemployment benefits, job training, tax rebates to the needy, and state and local governments strapped for cash; money for what's needed most and that can do the most good;
-- get stronger, more solvent countries to help weaker, more indebted ones; and
-- move on these policies fast; world governments have little time left to save themselves; there's no assurance they can; and these measure don't address our destructive military Keynsianism; permanent war economy and need to redirect those funds for constructive homeland needs; mirror opposite of a reported a new Pentagon document requesting an additional $450 billion over the next five years.
Reeling from One Policy Response to Another
First came EESA. The Emergency Economic Stabilization Act. To reward fraudsters and not address the root of the crisis. Nor help millions of troubled households. Homeowners in foreclosure. Others threatened. The public traumatized by the most calamitous economic events since the 1930s.
Europeans formed their own plans. Different from Washington's. On October 10, G-7 finance ministers met to discuss policy. In early evening, they presented an action plan. Long on promises. Short on specifics. The New York Times reported that: "Many investors had hoped the ministers would (propose) more concrete steps" and quoted Peterson Institute of International Economics deputy director, Adam Posen, saying: "This fell short." But he wasn't giving up entirely or saying what they have in mind or will later decide can't work.
They agreed to:
-- act decisively with all available tools to support financial institutions and prevent their failure;
-- unfreeze credit and money markets; assure banks and other financial institutions "have broad access to liquidity and funding;"
-- ensure banks and financial intermediaries "can raise (sufficient) capital from public (and) private sources;" to rebuild confidence and get them again lending to households and businesses;
-- ensure national deposit insurance protection is sound so people have confidence in the safety of their deposits; and
-- take appropriate action "to restart the secondary markets for mortgages and other securitized assets;" assure accurate valuations and transparency according to "high quality accounting standards."
Besides the US Treasury planning to "buy equity in financial institutions," AP reported on October 12 that the 15 euro-zone countries will "temporarily guarantee future bank debt to encourage lending....for an interim period and on appropriate terms" for up to five years. Recapitalizing banks is part of the plan. The hope is to unfreeze credit and get markets operating normally again.
According to The New York Times on October 12, "each country will announce concrete figures for the measures they expect to take individually." Belgian finance minister Didier Reynders said "There is no question of setting up a European fund." A final proposal will be presented to the full 27-member EU summit later in the week, and individual parliaments will have to vote on it.
Key to understand about whatever emerges in final details or any that follow - world governments will loot their treasuries to save powerful capital interests. Despite bold pronouncements we can expect more of ahead, practically nothing will be done for many tens of millions of people globally in greatest need. At best for them....crumbs.
In the coming days and weeks, we'll see statements become policies and how world markets react. Given the immensity of the crisis, no one's sure if anything can work. Nor is it reassuring to hear George Bush say remain calm. We've got things under control. On October 10, the Dow dropped 300 points while he spoke.
In an October 13 Barron's interview, noted money manager Jeremy Grantham (now age 70) was asked if he thought we'd learn anything from the current crisis. His response: "an enormous amount in a very short time, quite a bit in the medium-term, and absolutely nothing in the long-term."
He's been bearish since last year but added that "the fundamentals are turning out worse than" he expected. "The terrible thing - after all this pain - is that the US equity market is not even cheap." It was so high in 2000 that it hasn't come down to trend, but it's getting close. However, "the really bad news is that great bubbles in history always overcorrect." He believes S & P 500 fair value is around 1025 compared to its 899.22 October 10 close. But "typically bubbles overcorrect by quite a bit, possibly by 20%. This is very discouraging," so he's not rushing to buy but he fears he'll act too soon. He predicts a market low in 2010.
Where he sees things going from here was also posed. He's highly respected as an expert, and yet he emphasized "how little (he) understand(s about) all of the intricate workings of the global financial system. (He) hopes that someone else gets it, because (he) doesn't. And (he) has no idea, really, how this will work out....(It's) so intricate that all (he) can conclude, by instinct (and from history), is that it will be longer, harder and more complicated than we expect." Quite an assessment from a man called "the philosopher king of Wall Street."
The Human Cost of Manufactured Crisis
Ordinary people are hit hardest. Millions will suffer grievously for years as a result of this totally avoidable crisis. Fraudsters who caused it are rewarded. Innocent homeowners, households, and workers are punished. Mercilessly. The result:
-- trillions of dollars lost; likely trillions more ahead;
-- millions of lost homes, homeowners behind in their payments, or threatened with foreclosure in the worst housing crisis since the Great Depression; ultimately may exceed it given current estimates of up to 10 million foreclosures before stability and recovery;
-- likely well over a million 2008 personal bankruptcies and much higher numbers in 2009 compared to 800,000 in 2007 and 573,000 in 2006; figures below the 2000 - 2005 1.5 million average before passage of the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act; according to Samuel Gerdano, American Bankruptcy Institute director, consumer over-indebtedness "made worse by the home mortgage crisis" is the problem; it won't likely recede in the near or intermediate-term;
-- rising unemployment; not the spurious 6.1%; including discouraged workers and people working part-time who want (but can't find) full-time jobs, economist John Williams puts the real figure above 12% and rising;
-- consumer over-indebtedness; maxed out on credit but needing more of it to survive; and charged usurious rates to get it;
-- declining wages and benefits in the face of soaring expenses; making it all the harder to cope;
-- food banks and homeless shelters facing increasing demands but forced to turn away people for lack of resources; and
-- things overall are worsening; to the edge of the abyss according to some; even the most optimistic fear what's coming; who can know; no one dares be complacent.
Whatever final policies emerge. In whatever form they take. Unless they address the human dimension, they'll do nothing for people in most need. Growing millions. Desperate and in trouble. Their issue is economic and ethical. The G-7 statement addressed neither. It dealt only with saving Wall Street. Industrial capitalism. A better idea is let them die and replace them with a new order. A workable one. Respecting people, not capital.
Stephen Lendman is a Research Associate of the Centre for Research on Globalization. He lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.
Also visit his blog site at sjlendman.blogspot.com and listen to The Global Research News Hour on RepublicBroadcasting.org Mondays from 11AM - 1PM US Central time for cutting edge discussions with distinguished guests. All programs are archived for easy listening. | | | | Von Curtis | | Posted: Wed Oct 15, 2008 10:09 pm Post subject: GET RID OF THEM |
| | I wish some good force would stage a coup in the US and arrest Bush and Cheney and others for treason. We have been putting up with these psychos for way too long. | | | | Alpha | | | | | ©2002-2009 WarWithoutEnd.co.uk |
