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Are Plunging Petrodollar Revenues Behind The Fed’s Projected Rate Hikes?

January 21, 2015 by · Leave a Comment 

If This Doesn’t Make You Mad…

Why is the Fed threatening to raise interest rates when the economy is still in the doldrums? Is it because they want to avoid further asset-price inflation, prevent the economy from overheating, or is it something else altogether? Take a look at the chart below and you’ll see why the Fed might want to raise rates prematurely. It all has to do with the sharp decline in petrodollars that are no longer recycling into US financial assets. This is from Reuters:

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Petrodollar Exports
Source: Reuters

“Energy-exporting countries are set to pull their ‘petrodollars’ out of world markets this year for the first time in almost two decades, according to a study by BNP Paribas. Driven by this year’s drop in oil prices, the shift is likely to cause global market liquidity to fall, the study showed…

This decline follows years of windfalls for oil exporters such as Russia, Angola, Saudi Arabia and Nigeria. Much of that money found its way into financial markets, helping to boost asset prices and keep the cost of borrowing down, through so-called petrodollar recycling.

This year, however, the oil producers will effectively import capital amounting to $7.6 billion. By comparison, they exported $60 billion in 2013 and $248 billion in 2012, according to the following graphic based on BNP Paribas calculations:

‘At its peak, about $500 billion a year was being recycled back into financial markets. This will be the first year in a long time that energy exporters will be sucking capital out,’ said David Spegel, global head of emerging market sovereign and corporate Research at BNP.

In other words, oil exporters are now pulling liquidity out of financial markets rather than putting money in. That could result in higher borrowing costs for governments, companies, and ultimately, consumers as money becomes scarcer.” (Petrodollars leave world markets for first time in 18 years – BNP, Reuters)

Can you see what’s going on?

Now that petrodollar funding has dried up, the Fed needs to find an alternate source of capital to keep the markets bubbly and to shore up the greenback. That’s why the Fed has been talking up the dollar (“jawboning”) and promising to raise rates even though the economy is still pushing up daisies. According to the Fed’s favorite mouthpiece, Jon Hilsenrath:

“Federal Reserve officials are on track to start raising short-term interest rates later this year, even though long-term rates are going in the other direction amid new investor worries about weak global growth, falling oil prices and slowing consumer price inflation…

Many Fed officials have signaled they expect to start lifting their benchmark short-term rate from near zero around the middle of the year. Recent developments in the economy and markets have caused some trepidation among Fed officials and, if sustained, could cause them to delay acting. However several have indicated recently they still expect to move this year and are withholding judgment on delay.” (Fed Officials on Track to Raise Short-Term Rates Later in the Year, Jon Hilsenrath, Wall Street Journal)

And we’re hearing the same from Reuters: “The Federal Reserve is still on track for a potential mid-year interest-rate increase, a top Fed official said on Friday, citing strong U.S. economic momentum and a falling unemployment rate.”

Notice the sudden change in tone from dovish to hawkish? Expect that to intensify in the months ahead as the major media tries to spin the data in a way that serves the Fed’s broader objectives. Like this article in Bloomberg titled, “Yellen Signals She Won’t Babysit Markets in Turmoil”:

“Janet Yellen is leaving the Greenspan ‘put”’behind as she charts the first interest-rate increase since 2006 amid growing financial-market volatility.

The Federal Reserve chair has signaled she wants to place the economic outlook at the center of policy making, while looking past short-term market fluctuations. To succeed, she must wean investors from the notion, which gained currency under predecessor Alan Greenspan, that the Fed will bail them out if their bets go bad — just as a put option protects against a drop in stock prices.

“The succession of Fed puts over the years has led to a wide range of distortions in financial markets,” said Lawrence Goodman, president of the Center for Financial Stability, a monetary research group in New York. “There have been swollen asset values followed by sharp declines. This is a very good time for the Fed to move away.

“Let me be clear, there is no Fed equity market put,” William C. Dudley, president of the New York Fed, the central bank’s watchdog on financial markets, said in a Dec. 1 speech in New York.” (She’s No Greenspan: Yellen Signals She Won’t Babysit Markets in Turmoil)

“There’s no Fed equity put”?

That’s ridiculous. Then how does one explain the way the Fed has launched additional rounds of QE every time stocks have started to sputter? And how does one explain the Fed’s $4 trillion balance sheet all of which was spent on financial assets?

Let’s face it, Central bank intervention has been the only game in town. It’s not just the main driver of stocks. It’s the only driver of stocks. Everyone knows that. Yellen is going to do everything in her power to keep stocks in the stratosphere just like her predecessors, Greenspan and Bernanke. The only that’s going to change, is her approach.

As for the economy, well, just a glance of the headlines tells the whole story. Like this gem from CNBC last week:

“U.S. consumer prices recorded their biggest decline in six years in December and underlying inflation pressures were benign,…The Labor Department said on Friday its Consumer Price Index fell 0.4 percent last month, the largest drop since December 2008, after sliding 0.3 percent in November. In the 12 months through December, CPI increased 0.8 percent…

Darkening prospects for the global economy could also complicate matters for the U.S. central bank.

Inflation is running below the Fed’s 2 percent target, despite a strengthening labor market and overall economy.” (Consumer Price Index drops 0.4% in December, in line with estimates, CNBC)

Think about that for a minute: Consumer prices just logged their biggest drop since the freaking slump of 2008 and, yet, the Fed is still babbling about raising rates.

Talk about lunacy. Not only has the Fed not reached its inflation target of 2%, but it’s abandoned the project altogether. Why? Why has the Fed suddenly stopped trying to boost inflation when the yields on benchmark 10-year US Treasuries have just plunged to record lows (1.70%) and are blinking red? In other words, the bond market is signaling slow growth and zero inflation for as far as the eye can see, but the Fed wants to raise rates and slash growth even more?? It doesn’t make any sense, unless of course, Yellen has something else up her sleeve. Which she does.

Now get a load of this shocker on retail sales in last week’s news. This is from Bloomberg:

“The optimism surrounding the outlook for U.S. consumers was taken down a notch as retail sales slumped in December by the most in almost a year, prompting some economists to lower spending and growth forecasts.
The 0.9 percent decline in purchases …. extended beyond any single group as receipts fell in nine of 13 major retail categories.

Treasury yields and stocks fell as a deepening commodities rout and the drop in sales spurred concern global growth is slowing…

…average hourly earnings falling 0.2 percent in December from the month before in the first drop since late 2012. That limits the amount of spending consumers can undertake without dipping into savings or racking up debt.” (U.S. Retail Sales Down Sharply, Likely Cuts to Growth Forecasts Ahead, Bloomberg)

Remember when everyone thought that low oil prices were going to save the economy? It hasn’t worked out that way though, has it? Nor will it. Falling oil prices usually indicate recession, crisis or deflation. Take your pick. They’re usually not a sign of green shoots, escape velocity, or sunny uplands.

And did you catch that part about falling wages? How do you expand a consumer-dependent economy, when workers are seeing their wages shrivel every month? In case, you haven’t seen the abysmal stagnation of wages in graph-form, here’s a chart from American Progress:

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Negative real wage growth means the amount of slack in the market is still considerable.

So while stock prices have doubled or tripled in the last 6 years, wages have basically been flatlining. That’s a pretty crummy distribution system, don’t you think. Unless you’re in the 1 percent of course, then everything is just hunky dory.

But at least Yellen can find some comfort in the fact that unemployment continues to improve. In fact, just two weeks ago unemployment dropped to an impressive 5.4%, the lowest since 2007. So if we forget about the fact that wages are stagnating, that management has nabbed all the productivity-gains for the last 40 years, and that another 451,000 workers dropped off the radar altogether in December, then everything looks pretty rosy. But, of course, it’s all just a bunch of baloney. Take a look at this from Zero Hedge:

“Another month, another attempt by the BLS to mask the collapse in the US labor force with a seasonally-adjusted surge in waiter, bartender and other low-paying jobs. Case in point… the labor participation rate just slid once more, dropping to 62.7%, or the lowest print since December 1977. This happened because the number of Americans not in the labor forced soared by 451,000 in December, far outpacing the 111,000 jobs added according to the Household Survey, and is the primary reason why the number of uenmployed Americans dropped by 383,000.

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(Labor Participation Rate Drops To Fresh 38 Year Low; Record 92.9 Million Americans Not In Labor Force, Zero Hedge)

So, yeah, unemployment looks great until you pick through the data and see it’s all a big fraud. Unemployment is only falling because more and more people are throwing in the towel and giving up entirely.

Finally, there’s the rapidly-expanding mess in the oil patch where the news on layoffs and cut backs gets worse by the day. This is from Wolf Richter at Naked Capitalism:

“Layoffs are cascading through the oil and gas sector. On Tuesday, the Dallas Fed projected that in Texas alone, 140,000 jobs could be eliminated. Halliburton said that it was axing an undisclosed number of people in Houston. Suncor Energy, Canada’s largest oil producer, will dump 1,000 workers in its tar-sands projects. Helmerich & Payne is idling rigs and cutting jobs. Smaller companies are slashing projects and jobs at an even faster pace. And now Slumberger, the world’s biggest oilfield-services company, will cut 9,000 jobs.” (Money dries up for oil and gas, layoffs spread, write-offs start, Wolf Richter, Naked Capitalism)

And then there’s this tidbit from Pam Martens at Wall Street on Parade:

“In a December 15 article by Patrick Jenkins in the Financial Times, readers learned that data from Barclays indicated that “energy bonds now make up nearly 16 per cent of the $1.3 trillion junk bond market — more than three times their proportion 10 years ago,” and “Nearly 45 per cent of this year’s non-investment grade syndicated loans have been in oil and gas.” Raising further alarms, AllianceBernstein has released research suggesting that the deals were not fully subscribed by investors with the potential that “as much as half of the outstanding financing from the past couple of years may be stuck on banks’ books.” (The perfect storm for Wall Street banks, Russ and Pam Martens, Wall Street on Parade)

How do you like that? So nearly half the toxic energy-related gunk that was bundled up into dodgy junk bonds (and is likely to default in the near future) is sitting on bank balance sheets. Does that sound like a potential trigger for another financial crisis or what?

And, no, I am not trying to ignore the fact that third quarter GDP came in at a whopping 5 percent which vastly exceeded all the analysts estimates. But let’s put that into perspective. According to economist Dean Baker, the growth spurt was mainly “an anomaly” …”driven by extraordinary jump in military spending and a big fall in the size of the trade deficit that is unlikely to be repeated.” Here’s more from Baker:

“As usual, just about everything we’ve heard about the economy is wrong. To start, the 5.0 percent growth number must be understood against a darker backdrop: The economy actually shrank at a 2.1 percent annual rate in the first quarter. If we take the first three quarters of the year together, the average growth rate was a more modest 2.5 percent.” (Don’t Believe What You Hear About the US Economy, Dean Baker, CEPR)

So, the economy is growing at a crummy 2.5 percent, but Yellen wants to raise rates. Why? Does she want to shave that number to 2 percent or 1.5 percent? Is that it? She wants to go backwards?

Of course not. The real reason the Fed wants to raise rates, is to attract foreign capital to US markets in order to keep stocks soaring, keep borrowing costs low, and reinforce the dollar’s role as the world’s reserve currency. That’s what’s really going on. The petrodollars are drying up, so US markets need a new source of funding. Direct foreign investment, that’s the ticket, Ducky. All the Fed needs to do is boost rates by, let’s say, 0.5 percent and “Cha-ching”, here comes the capital. Works like a charm every time, just ask former Treasury Secretary Robert Rubin whose strong dollar policy sent stock prices into orbit while widening the nation’s current account deficit by many orders of magnitude. (We never said the plan didn’t have its downside.)

The Fed’s sinister plan to raise interest rates (sometime by mid-2015) will push the dollar’s exchange rate higher thus triggering capital flight in the emerging markets which are already struggling with plunging commodities prices and an excruciating slowdown. The investment flows from the EMs to US financial assets and Treasuries will offset the loss of petrodollar revenue while expanding Wall Street’s ginormous stock market bubble. As for the emerging markets, well, they’re going to take it in the shorts bigtime as one would expect. Here’s a clip from an article by Ambrose-Evans Pritchard that lays it out in black and white:

“The US Federal Reserve has pulled the trigger. Emerging markets must now brace for their ordeal by fire. They have collectively borrowed $5.7 trillion in US dollars, a currency they cannot print and do not control. This hard-currency debt has tripled in a decade, split between $3.1 trillion in bank loans and $2.6 trillion in bonds. It is comparable in scale and ratio-terms to any of the biggest cross-border lending sprees of the past two centuries…

Officials from the Bank for International Settlements say privately that developing countries may be just as vulnerable to a dollar shock as they were in the Fed tightening cycle of the late 1990s, which culminated in Russia’s default and the East Asia Crisis. The difference this time is that emerging markets have grown to be half the world economy. Their aggregate debt levels have reached a record 175pc of GDP, up 30 percentage points since 2009…”

This time the threat does not come from insolvent states. They have learned the lesson of the late 1990s. Few have dollar debts. But their companies and banks most certainly do, some 70pc of GDP in Russia, for example. This amounts to much the same thing in macro-economic terms. ” (Fed calls time on $5.7 trillion of emerging market dollar debt, Ambrose-Evans Pritchard, Telegraph)

The Fed has been through this drill so many times before they could do it in their sleep. (” U.S. interest-rate hikes in 1980s and 1990s played a role in financial crises across Latin America and East Asia.” Foreign Policy Magazine) They’ve learned how to profit off every crisis, particularly the one’s that they themselves create, which is just about all of them. In this case, most of the loans to foreign businesses and banks were denominated in dollars. So, now that the dollar is soaring, (“The dollar’s value has risen about 15 percent relative to the euro and the yen just since the summer.” NPR) the debts are going to balloon accordingly (in real terms) which is going to push a lot of businesses off a cliff forcing sovereigns to step in and provide emergency bailouts.

Did someone say “looming financial crisis”?

Indeed. Bernanke’s “easy money” has inflated bubbles across the planet. Now these bubbles are about to burst due to the strong dollar and anticipated higher rates. At the same time, the policy-switch will send hundreds of billions of foreign capital flooding into US markets pushing stocks and bonds through the roof while generating mega-profits for JPM, G-Sax and the rest of the Wall Street gang. All according to plan.

Naturally, the stronger dollar will weigh heavily on employment and exports as foreign imports become cheaper and more attractive to US consumers. That will reduce hiring at home. Also the current account deficit will widen significantly, meaning that the US will again be consuming much more than it produces. (This took place under Rubin, too.) But here’s what’s interesting about that: According to the Bureau of Economic Analysis: “Our current account deficit has narrowed sharply since the crisis…The U.S. current account deficit now stands at 2.5 percent of GDP, down from more than 6 percent in the fourth quarter of 2005.” (BEA)

Great. In other words, Obama’s obsessive fiscal belt-tightening lowered the deficits enough so that Wall Street can “party on” for the foreseeable future, ignoring the gigantic bubbles they’re inflating or the emerging market economies that are about to be decimated in this latest dollar swindle.

If that doesn’t make you mad, I don’t know what will.


Mike Whitney is a regular columnist for Veracity Voice

Mike Whitney lives in Washington state. He can be reached at: fergiewhitney@msn.com

Murdering Journalists … Them and Us

January 20, 2015 by · Leave a Comment 

NATO bombs radio station B92 Belgrade

After Paris, condemnation of religious fanaticism is at its height. I’d guess that even many progressives fantasize about wringing the necks of jihadists, bashing into their heads some thoughts about the intellect, about satire, humor, freedom of speech. We’re talking here, after all, about young men raised in France, not Saudi Arabia.

Where has all this Islamic fundamentalism come from in this modern age? Most of it comes – trained, armed, financed, indoctrinated – from Afghanistan, Iraq, Libya, and Syria. During various periods from the 1970s to the present, these four countries had been the most secular, modern, educated, welfare states in the Middle East region. And what had happened to these secular, modern, educated, welfare states?

In the 1980s, the United States overthrew the Afghan government that was progressive, with full rights for women, believe it or not , leading to the creation of the Taliban and their taking power.

In the 2000s, the United States overthrew the Iraqi government, destroying not only the secular state, but the civilized state as well, leaving a failed state.

In 2011, the United States and its NATO military machine overthrew the secular Libyan government of Muammar Gaddafi, leaving behind a lawless state and unleashing many hundreds of jihadists and tons of weaponry across the Middle East.

And for the past few years the United States has been engaged in overthrowing the secular Syrian government of Bashar al-Assad. This, along with the US occupation of Iraq having triggered widespread Sunni-Shia warfare, led to the creation of The Islamic State with all its beheadings and other charming practices.

However, despite it all, the world was made safe for capitalism, imperialism, anti-communism, oil, Israel, and jihadists. God is Great!

Starting with the Cold War, and with the above interventions building upon that, we have 70 years of American foreign policy, without which – as Russian/American writer Andre Vltchek has observed – “almost all Muslim countries, including Iran, Egypt and Indonesia, would now most likely be socialist, under a group of very moderate and mostly secular leaders”. Even the ultra-oppressive Saudi Arabia – without Washington’s protection – would probably be a very different place.

On January 11, Paris was the site of a March of National Unity in honor of the magazine Charlie Hebdo, whose journalists had been assassinated by terrorists. The march was rather touching, but it was also an orgy of Western hypocrisy, with the French TV broadcasters and the assembled crowd extolling without end the NATO world’s reverence for journalists and freedom of speech; an ocean of signs declaring Je suis CharlieNous Sommes Tous Charlie; and flaunting giant pencils, as if pencils – not bombs, invasions, overthrows, torture, and drone attacks – have been the West’s weapons of choice in the Middle East during the past century.

No reference was made to the fact that the American military, in the course of its wars in recent decades in the Middle East and elsewhere, had been responsible for the deliberate deaths of dozens of journalists. In Iraq, among other incidents, see Wikileaks’ 2007 video of the cold-blooded murder of two Reuters journalists; the 2003 US air-to-surface missile attack on the offices of Al Jazeera in Baghdad that left three journalists dead and four wounded; and the American firing on Baghdad’s Hotel Palestine the same year that killed two foreign cameramen.

Moreover, on October 8, 2001, the second day of the US bombing of Afghanistan, the transmitters for the Taliban government’s Radio Shari were bombed and shortly after this the US bombed some 20 regional radio sites. US Defense Secretary Donald Rumsfeld defended the targeting of these facilities, saying: “Naturally, they cannot be considered to be free media outlets. They are mouthpieces of the Taliban and those harboring terrorists.”

And in Yugoslavia, in 1999, during the infamous 78-day bombing of a country which posed no threat at all to the United States or any other country, state-owned Radio Television Serbia (RTS) was targeted because it was broadcasting things which the United States and NATO did not like (like how much horror the bombing was causing). The bombs took the lives of many of the station’s staff, and both legs of one of the survivors, which had to be amputated to free him from the wreckage.

I present here some views on Charlie Hebdo sent to me by a friend in Paris who has long had a close familiarity with the publication and its staff:

“On international politics Charlie Hebdo was neoconservative. It supported every single NATO intervention from Yugoslavia to the present. They were anti-Muslim, anti-Hamas (or any Palestinian organization), anti-Russian, anti-Cuban (with the exception of one cartoonist), anti-Hugo Chávez, anti-Iran, anti-Syria, pro-Pussy Riot, pro-Kiev … Do I need to continue?

“Strangely enough, the magazine was considered to be ‘leftist’. It’s difficult for me to criticize them now because they weren’t ‘bad people’, just a bunch of funny cartoonists, yes, but intellectual freewheelers without any particular agenda and who actually didn’t give a fuck about any form of ‘correctness’ – political, religious, or whatever; just having fun and trying to sell a ‘subversive’ magazine (with the notable exception of the former editor, Philippe Val, who is, I think, a true-blooded neocon).”

Dumb and Dumber

Remember Arseniy Yatsenuk? The Ukrainian whom US State Department officials adopted as one of their own in early 2014 and guided into the position of Prime Minister so he could lead the Ukrainian Forces of Good against Russia in the new Cold War?

In an interview on German television on January 7, 2015 Yatsenuk allowed the following words to cross his lips: “We all remember well the Soviet invasion of Ukraine and Germany. We will not allow that, and nobody has the right to rewrite the results of World War Two”.

The Ukrainian Forces of Good, it should be kept in mind, also include several neo-Nazis in high government positions and many more partaking in the fight against Ukrainian pro-Russians in the south-east of the country. Last June, Yatsenuk referred to these pro-Russians as “sub-humans” , directly equivalent to the Nazi term “untermenschen”.

So the next time you shake your head at some stupid remark made by a member of the US government, try to find some consolation in the thought that high American officials are not necessarily the dumbest, except of course in their choice of who is worthy of being one of the empire’s partners.

The type of rally held in Paris this month to condemn an act of terror by jihadists could as well have been held for the victims of Odessa in Ukraine last May. The same neo-Nazi types referred to above took time off from parading around with their swastika-like symbols and calling for the death of Russians, Communists and Jews, and burned down a trade-union building in Odessa, killing scores of people and sending hundreds to hospital; many of the victims were beaten or shot when they tried to flee the flames and smoke; ambulances were blocked from reaching the wounded … Try and find a single American mainstream media entity that has made even a slightly serious attempt to capture the horror. You would have to go to the Russian station in Washington, DC, RT.com, search “Odessa fire” for many stories, images and videos. Also see the Wikipedia entry on the 2 May 2014 Odessa clashes.

If the American people were forced to watch, listen, and read all the stories of neo-Nazi behavior in Ukraine the past few years, I think they – yes, even the American people and their less-than-intellectual Congressional representatives – would start to wonder why their government was so closely allied with such people. The United States may even go to war with Russia on the side of such people.

L’Occident n’est pas Charlie pour Odessa. Il n’y a pas de défilé à Paris pour Odessa.

Some thoughts about this thing called ideology

Norman Finkelstein, the fiery American critic of Israel, was interviewed recently by Paul Jay on The Real News Network. Finkelstein related how he had been a Maoist in his youth and had been devastated by the exposure and downfall of the Gang of Four in 1976 in China. “It came out there was just an awful lot of corruption. The people who we thought were absolutely selfless were very self-absorbed. And it was clear. The overthrow of the Gang of Four had huge popular support.”

Many other Maoists were torn apart by the event. “Everything was overthrown overnight, the whole Maoist system, which we thought [were] new socialist men, they all believed in putting self second, fighting self. And then overnight the whole thing was reversed.”

“You know, many people think it was McCarthy that destroyed the Communist Party,” Finkelstein continued. “That’s absolutely not true. You know, when you were a communist back then, you had the inner strength to withstand McCarthyism, because it was the cause. What destroyed the Communist Party was Khrushchev’s speech,” a reference to Soviet premier Nikita Khrushchev’s 1956 exposure of the crimes of Joseph Stalin and his dictatorial rule.

Although I was old enough, and interested enough, to be influenced by the Chinese and Russian revolutions, I was not. I remained an admirer of capitalism and a good loyal anti-communist. It was the war in Vietnam that was my Gang of Four and my Nikita Khrushchev. Day after day during 1964 and early 1965 I followed the news carefully, catching up on the day’s statistics of American firepower, bombing sorties, and body counts. I was filled with patriotic pride at our massive power to shape history. Words like those of Winston Churchill, upon America’s entry into the Second World War, came easily to mind again – “England would live; Britain would live; the Commonwealth of Nations would live.” Then, one day – a day like any other day – it suddenly and inexplicably hit me. In those villages with the strange names there were people under those falling bombs, people running in total desperation from that god-awful machine-gun strafing.

This pattern took hold. The news reports would stir in me a self-righteous satisfaction that we were teaching those damn commies that they couldn’t get away with whatever it was they were trying to get away with. The very next moment I would be struck by a wave of repulsion at the horror of it all. Eventually, the repulsion won out over the patriotic pride, never to go back to where I had been; but dooming me to experience the despair of American foreign policy again and again, decade after decade.

The human brain is an amazing organ. It keeps working 24 hours a day, 7 days a week, and 52 weeks a year, from before you leave the womb, right up until the day you find nationalism. And that day can come very early. Here’s a recent headline from the Washington Post: “In the United States the brainwashing starts in kindergarten.”

Oh, my mistake. It actually said “In N. Korea the brainwashing starts in kindergarten.”

Let Cuba Live! The Devil’s List of what the United States has done to Cuba

On May 31, 1999, a lawsuit for $181 billion in wrongful death, personal injury, and economic damages was filed in a Havana court against the government of the United States. It was subsequently filed with the United Nations. Since that time its fate is somewhat of a mystery.

The lawsuit covered the 40 years since the country’s 1959 revolution and described, in considerable detail taken from personal testimony of victims, US acts of aggression against Cuba; specifying, often by name, date, and particular circumstances, each person known to have been killed or seriously wounded. In all, 3,478 people were killed and an additional 2,099 seriously injured. (These figures do not include the many indirect victims of Washington’s economic pressures and blockade, which caused difficulties in obtaining medicine and food, in addition to creating other hardships.)

The case was, in legal terms, very narrowly drawn. It was for the wrongful death of individuals, on behalf of their survivors, and for personal injuries to those who survived serious wounds, on their own behalf. No unsuccessful American attacks were deemed relevant, and consequently there was no testimony regarding the many hundreds of unsuccessful assassination attempts against Cuban President Fidel Castro and other high officials, or even of bombings in which no one was killed or injured. Damages to crops, livestock, or the Cuban economy in general were also excluded, so there was no testimony about the introduction into the island of swine fever or tobacco mold.

However, those aspects of Washington’s chemical and biological warfare waged against Cuba that involved human victims were described in detail, most significantly the creation of an epidemic of hemorrhagic dengue fever in 1981, during which some 340,000 people were infected and 116,000 hospitalized; this in a country which had never before experienced a single case of the disease. In the end, 158 people, including 101 children, died. That only 158 people died, out of some 116,000 who were hospitalized, was an eloquent testimony to the remarkable Cuban public health sector.

The complaint describes the campaign of air and naval attacks against Cuba that commenced in October 1959, when US president Dwight Eisenhower approved a program that included bombings of sugar mills, the burning of sugar fields, machine-gun attacks on Havana, even on passenger trains.

Another section of the complaint described the armed terrorist groups, los banditos, who ravaged the island for five years, from 1960 to 1965, when the last group was located and defeated. These bands terrorized small farmers, torturing and killing those considered (often erroneously) active supporters of the Revolution; men, women, and children. Several young volunteer literacy-campaign teachers were among the victims of the bandits.

There was also of course the notorious Bay of Pigs invasion, in April 1961. Although the entire incident lasted less than 72 hours, 176 Cubans were killed and 300 more wounded, 50 of them permanently disabled.

The complaint also described the unending campaign of major acts of sabotage and terrorism that included the bombing of ships and planes as well as stores and offices. The most horrific example of sabotage was of course the 1976 bombing of a Cubana airliner off Barbados in which all 73 people on board were killed. There were as well as the murder of Cuban diplomats and officials around the world, including one such murder on the streets of New York City in 1980. This campaign continued to the 1990s, with the murders of Cuban policemen, soldiers, and sailors in 1992 and 1994, and the 1997 hotel bombing campaign, which took the life of a foreigner; the bombing campaign was aimed at discouraging tourism and led to the sending of Cuban intelligence officers to the US in an attempt to put an end to the bombings; from their ranks rose the Cuban Five.

To the above can be added the many acts of financial extortion, violence and sabotage carried out by the United States and its agents in the 16 years since the lawsuit was filed. In sum total, the deep-seated injury and trauma inflicted upon on the Cuban people can be regarded as the island’s own 9-11.

Notes

  1. US Department of the Army, Afghanistan, A Country Study (1986), pp.121, 128, 130, 223, 232
  2. Counterpunch, January 10, 2015
  3. Index on Censorship, the UK’s leading organization promoting freedom of expression, October 18, 2001
  4. The Independent (London), April 24, 1999
  5. Ukrainian Prime Minister Arseniy Yatsenyuk talking to Pinar Atalay”, Tagesschau (Germany), January 7, 2015 (in Ukrainian with German voice-over)
  6. CNN, June 15, 2014
  7. See William Blum, West-Bloc Dissident: A Cold War Memoir, chapter 3
  8. Washington Post, January 17, 2015, page A6
  9. William Blum, Killing Hope: US Military and CIA Interventions Since World War II, chapter 30, for a capsule summary of Washington’s chemical and biological warfare against Havana.
  10. For further information, see William Schaap, Covert Action Quarterly magazine (Washington, DC), Fall/Winter 1999, pp.26-29


William Blum is the author of:

  • Killing Hope: US Military and CIA Interventions Since World War 2
  • Rogue State: A Guide to the World’s Only Superpower
  • West-Bloc Dissident: A Cold War Memoir
  • Freeing the World to Death: Essays on the American Empire


Portions of the books can be read, and signed copies purchased, at www.killinghope.org

Email to bblum6@aol.com

Website: WilliamBlum.org

William Blum is a regular columnist for Veracity Voice

Condemn Islamic Terror and Shield Zionist Atrocities

January 20, 2015 by · Leave a Comment 

Surviving in a world of offensive double standards comes easy for people who lost their moral compass. Most culturally deficient pawns have such limited intellectual capacities and ethical fortitude to apply the same critical standards to zealots, who practice and defend barbarism no matter where it is committed. The narration that masquerades as objective news reporting out of the mass media, acts as a gatekeeper to provide political cover for Zionist protection. If the eternal struggle between Muslims and Jews was the supreme existential conflict, why would Christians take sides, when the purported feud between cousins, drips blood no matter whose hand holds the sword?

Oh how dare equivocate between both pseudo religious cultures, when both are engulfed in political warfare as their primary tenant. If moral principle was the essence of either society, this obscene charade of state sponsored terrorism would be exposed for what it really represents. Now before the do-gooder Christians bask in their own moral superiority, your own secular humanism surrender does not bode well for your final judgment.

The point is that unholy religious and politically inspired violence against a perceived enemy to achieve an atmosphere of panic is simply wrong. When government special operations, globalist intelligence interests and elite NWO sociopaths plan, fund, recruit, direct and cover-up false flag attacks, designed to complete a global despotism; all citizens of exploited countries lose their rights and become duped into thinking insecurity stems from radical psychopaths. The collective mental health of most societies is in a crisis of terminal proportions.

Ponder the linkage of France’s lower house of parliament votes 339 to 151 in favor of symbolic motion to recognize statehood of Palestine and Netanyahu’s Chilling Threat To France Prior To The Charlie Hebdo Tragedy. Surely, a coincidence in what is widely seen as consistent with a pattern of a sponsored Mossad scenario, the Charlie Hebdo murders in Paris has the world primed for even more draconian measures that in fact, extinguishes genuine security.

Benjamin Netanyahu’s latest ruse to advance the victimhood claim is transparent.

The real reason Bibi wants French Jews to move to Israel reports “By calling on France’s Jews to move to Israel, Netanyahu is promoting a worldview in which there is no national conflict, no occupation and no Palestinian people. There are only Jews and radical Muslims.”

“The leader of a country that is constantly in a state of war, and that every few years actually goes to war, is imploring France’s Jews to leave their country in the wake of two terrorist attacks (one of which was not directed at a Jewish target), and move to Israel. Even if we ignore the downright chutzpah of his demand vis-a-vis the French government (try imagining a leader of a Western state calling on Israelis to immigrate to his country because of the security situation in Israel), no one doubts that French Jewish immigrants will be in much greater danger living in Israel. Perhaps our foreign minister would do well to update Netanyahu on the travel warnings issued fairly often for our country?”

The insecurity hysteria that infects Western countries from the Zionist bias media about a terrorist under every bed refuses to speak the truth. Honest reporting would require coverage of the following. The same old story, Israeli atrocities against Palestinians, but where in the controlled propaganda and fantasy viewpoint of corporatist political correctness, will such factual Zionist atrocities be reported and condemned?

Once upon a time fair play was a well established standard in international affairs. Even if it was often ignored in practice, the objective was seen as a condition that established moral authority. The reality is that governance of Israel maintains a hostility that sabotages any attempts for coexistence. EXAMPLES OF HATE SPEECH BY ISRAEL AGAINST PALESTINE illustrates the savage attitude that earns world enmity for the Zionist apartheid state. Watch the chilling documentary video, Israeli Genocide in Gaza which supports righteous outrage.

The boycott Israel movement may not have taken off to a level that its proponents hoped. Yet, such non violent opposition goes unnoticed with all the hype about terrorism. The Boycott Israel Campaign provides a list of companies and answered frequently asked questions about their efforts. If this cause gained traction, the screams would be deafening from media sentinels.

In order to maintain the storyline of extreme Islamophobia terrorism, it is necessary to eliminate any debate that analyzes the established policies that foster “Greater Israel” dominance in the Middle East. Just examine the Saudi Israeli alliance forged in blood.

“The attack on Gaza comes by Saudi Royal Appointment. This royal warrant is nothing less than an open secret in Israel, and both former and serving defense officials are relaxed when they talk about it.  Former Israeli defense minister Shaul Mofaz surprised the presenter on Channel 10 by saying Israel had to specify a role for Saudi Arabia and the United Arab Emirates in the demilitarization of Hamas. Asked what he meant by that, he added that Saudi and Emirati funds should be used to rebuild Gaza after Hamas had been defanged.”

Reports: Saudis Looking for Alliance With Israel presents a chilling prospect for the beleaguered Palestinians.

“Given the successes of the radical Sunni Islamic State (formerly ISIS), the lingering threat of the Muslim Brotherhood (which birthed Hamas), and the rising Shiite power in Iran, Riyadh is seen as more keen than ever to complete that process so it can formerly align with Israel, and thereby gain the advantage of its military and economic might.

The only problem is that the Saudis want to solve that “minor conflict” by asking Israel to take severe security risks by surrendering strategic positions to a Palestinian populace that has sadly proved its unwillingness to eradicate the violent anti-Israel elements within.”

Well, there you have it. Those radical Palestinian elements are dedicated terrorists, while the Saudi’s benefactor funds their barbaric wahhabi client fanatics, who miraculously never have a map to locate Israel.

If you are not allowed to discuss who really is behind the ISIS band of cutthroats, fall back on a proven tactic of diversion. $1B trial opens against PLO over Israel terror attacks in a U.S. courtroom. “The victims allege that the Palestinian groups violated the US Anti-Terrorism Act by giving money and weapons — and employment — to terrorists in the attacks that occurred between 2001 and 2004.”

Do not hold your breath waiting for a similar suit against Saudi financiers must less about U.S. covert agencies supplying arms and coordination to their new best friend, ISIS hit squads.

In this obscene world of select memory, a terrorist is your friend if they are killing an enemy of Israel, especially if a high profile attack can garnish mass public opinion support to keep the phony “War of Terror” rolling along.

When it comes to actual non state sponsored terrorism, the number of definite instances can be disputed. The GTD Global Terrorism Database lists information on over 125,000 terrorist attacks. A search of Jewish Terrorists provides results of well over 100 instances. The JDL, Jewish Defense League is a leading “Perpetrator” with a long list of crimes within the United States. The savage legacy of Rabbi Meir Kahane has a long record of terrorism to use as inspiration.

Past Zionist-Jewish Terrorism – Some Historical Facts provides both Israeli Defense Force missions and the tactics used during the formatting years of the Zionist State. Such examples seldom get a whisper of notice much less coverage in the Newspeak media. The Jewish ownership and financial control of the establishment media allows for a self prophecy of inevitability if one believes the distortions, omissions and outright lies.

Imbalance in culpability that condemns terrorist with the same intensity and blame, no matter who is responsible for the violence, will never allow for a peaceful resolution to the mutual hate that propels the globe towards oblivion.

Pat Buchanan makes a profound point in the essay, To Die for Charlie Hebdo?

“As for the “glorification of terrorist acts,” Israel’s Menachem Begin, the ANC’s Nelson Mandela, and the PLO’s Yasser Arafat were all credibly charged with acts of terrorism in their liberation struggles.

And all three won the Nobel Prize for Peace.”

His observation is not that terrorists are rewarded by the World Community, but that the hypocrisy of the establishment fabrication that makes heroes out of thugs with blood stained hands goes with the political objectives to demonize your enemy,   while crowning the butchers.

Islamic bombers who eagerly evaporate themselves as long as they can kill others, is a sickness that no authentic religion could justify.  Governments that employ aerial bombing to obliterate entire neighborhoods, and have an official policy, that kills children; practices true terrorism.

If the Christian West is ever to regain its moral foundation, their governments must no long encourage continued terrorism because of their insane foreign policies. Abandoning the teaching of Jesus Christ, a Jew, and Son of God has allowed the apocalyptic demons to run wild. Looking for a rapprochement between Muslim and Jew will never be realized until the final carnage and tribulation is stopped with His Second Coming at the end of this satanic age.


Sartre is the publisher, editor, and writer for Breaking All The Rules. He can be reached at: BATR

Sartre is a regular columnist for Veracity Voice

Kudos To All Of My Fellow Patriots

January 11, 2015 by · 2 Comments 

Counting the sellouts, sycophants, sissies and socialists (by whatever name they call themselves, including Republican) is certainly easier than counting the plucky, perspicacious, passionate patriots, that is for sure. For every one of the latter, there are thousands of the former. In fact, since God would have spared Sodom and Gomorrah had he found a faithful ten (out of a population of around ten thousand), it may be that America is teetering around that same percentage. We might be looking at a similar one in a thousand preserving percentage in this country today.

On Capitol Hill, there are fewer than fifty House members and senators (out of 535) that could be categorized as faithful patriots. In certain State houses and senate chambers, the percentage would be considerably higher. In many states, however, the percentage would be much lower.

When it comes to America’s pulpits, the percentage of faithful patriots is almost certainly no more than five percent. That was the percentage of faithful pastors in Nazi Germany who boldly stood against Hitler’s Police State. And I’m confident the percentage of pastors in America today who are courageously standing against the modern-day Police State is about the same.

There are almost NO mainstream journalists in print or television who haven’t sold their souls to a paycheck. The same is true for the talking heads on the talk radio shows. Likewise, the vast majority of our judges seem completely ignorant of constitutional government and the Bill of Rights–or have complete contempt for the same. As for educators in the halls of higher learning, forget it!

From a futuristic perspective, the horizon of America can be put into three basic camps: 1) Jesus is going to come like the Seventh Cavalry and bail all of the good Christians to Heaven, and then destroy everything; but who cares? Only the “bad” people will be here, 2) There is no hope; it’s all over; it’s only going to get worse until the fiery end comes, and all one can hope for is to prepare his family and close friends to “survive,” 3) All of the trends point to a continuing demise of liberty, and, in all probability, the future will be very problematic for EVERYONE (Christians and unbelievers alike), but our Creator–who is the author of liberty–still has a providential plan for freedom in this land and is (and will continue) separating and calling out a courageous remnant for that purpose. Put me in the last camp.

With all due respect, I think the folks who align themselves in the first two camps are trying to escape reality and evade responsibility. One is as bad as the other. The one who sits back and does nothing because he believes God would never allow Christians in America to go through “tribulation,” and the person who believes tribulation is coming but the only option is to hide in a hole (figuratively speaking) are both abrogating their responsibility to be the “salt” of the earth and the protectors and defenders of liberty.

However, between the two, I feel more umbrage against my Christian brethren in the first group. They are supposed to have the Spirit of God in them. They are supposed to be students of the Scriptures. More than anyone, they should be the ones to take seriously their charge to “Occupy” till Christ comes.

Try selling the line that “Jesus won’t let us go through tribulation” to the Christians in Sudan. For the last twenty years, more than two million Christians have been persecuted, imprisoned, beheaded, disemboweled, dismembered, tortured, sold into slavery, hung on crosses, etc., in that war-torn land. I guess God doesn’t love those poor suffering souls as much as He loves us soft, self-righteous, comfort-crazy, entertainment-mad, feel-good Christians in America. What rubbish!

Try selling that line to the beleaguered Christians in Iraq, Syria, Saudi Arabia, Iran, North Korea, Burma, China, India, even Israel, etc. These believers have been in tribulation for generations. Only in America could a theological position on eschatology result in a complete slave-mentality.

I can understand people who don’t believe in God losing hope and resorting to withdrawing from society. But, for the life of me, I cannot understand my Christian brethren using the doctrine of the Rapture as an excuse to remove themselves from the freedom fight. Personally, I think the doctrine of the Rapture is often nothing but a covering to mask the cowardice or indifference that grips their hearts.

Therefore, I regard patriots as possibly being from virtually any religion, church denomination, political affiliation, ethnicity, race, educational background, or social strata. I know Catholics who are patriots, Mormons who are patriots. I know Jews who are patriots. I even know Muslims who are patriots. Yes, you read it right, Muslims. There are patriots who are black, white, Hispanic, Asian, Indian, etc. There are self-proclaimed liberals who have more understanding of liberty than many professing conservatives. There are patriots counted among the Democrat Party, the Republican Party, the Constitution Party, the Libertarian Party, The Reform Party, the Green Party, etc.

As Thomas Jefferson and John Adams stood side by side for the Declaration of Independence, as George Washington and Alexander Hamilton and Patrick Henry and Benjamin Franklin, did the same, so I will stand with any defender of liberty, regardless of race, religion, denomination–and even with those who have no faith.

Of course, my approach to liberty is God-centered. And my hope in the future is, likewise, God-centered. I do not believe that God is finished with liberty in America. And I am convinced that God is calling out a freedom-remnant even as we speak. I see this almost every week here in the redoubt of the Montana Flathead Valley. I am very much a realist; but I am very much NOT a pessimist. I guess I am a futurist: I believe there is a future for liberty-minded people in this country. The one in a thousand is still among us; I am convinced of that.

On Capitol Hill there are a faithful few: Justin Amash of Michigan, Mike Lee of Utah, Steve Stockman of Texas, and Thomas Massie of Kentucky, for example. (I’m withholding judgment on Rand Paul, although among the current list of presidential hopefuls, I like him best so far. I think his foreign policy is far superior to that of Ted Cruz. But Ted’s stand on illegal immigration eclipses Rand’s so far. So, I’m reserving judgment. Jeb Bush is disaster!)

In many State legislatures, there are dynamic patriots fighting ferociously for our liberties. I’m talking about people such as Montana’s Jerry O’Neil, Washington State’s Matt Shea, and Nevada’s Michele Fiore.

Behind the pulpit, there are only a precious few numbered among the patriots. Those five pastors whom the Liberty Church Project just recently helped to withdraw from (or bypass altogether) the devilish 501c3 tax exempt organization status stand out. Warren Luke Campbell and his dad, Warren Campbell, in Coeur d’Alene, Idaho, Tony McGhee in Wilmington, North Carolina, Eric Philpot and Nathan Kealer of Dallas,Texas, and Roy Magnuson and his son, Josiah, in Greenville, South Carolina.

Of course, Dr. Greg Dixon, Sr. has been in the freedom fight longer than most of us have been alive. And Dr. David Manning has been an indefatigable opponent of the New World Order as I have ever seen. He just might be the most politically incorrect and bravest pastor in America. And thank God for patriot-preachers such as David Schnittger, Paul Blair, Barry Byrd, Stevie Craft, Hal Curtis, Wiley Drake, Jay Grimstead, and Steve Wagner.

I appreciate the founder and editor of NewsWithViews.com. His website has grown to include a plethora of writers, not all of whom do I agree with, of course. But I know Paul Walter: in his core, he is a patriot. Tom DeWeese has been fighting Agenda 21 longer and more effectively than anyone I know. Christine Tobin over at “Fair And Equal” has done yeoman’s work for years to try and restore free and equal elections to America’s political process. Judge Andrew Napolitano has been a refreshing voice for individual liberty and constitutional government for years, as well. Dr. Tom Kendall stands extremely tall in the world of medicine, as does Dr. Curtis Caine, and the Flathead Valley’s very own Dr. Annie Bukacek.

In the field of law, I am very proud of the stand for freedom taken by my son, Tim. And attorneys Bill Olson and Herb Titus stand as pillars of their profession. And I also greatly admire other patriot-lawyers such as John Whitehead, Larry Klayman, Gene Garrison, Gary Kreep, Ed Vieira, and my dear friend, Danny Kepner.

And though not a majority, there are hundreds of patriot-sheriffs across the country who are relentless in their defense of the liberties of the people of their counties. I’m talking about sheriffs such as Shane Harrington, Joe Arpaio, Bruce Newman, John Hanlin, Gil Gilbertson, Denny Peyman, Larry Smith, and Richard Mack.

And patriots such as Scott Bradley, Sam Bushman, Larry Breazeale, Randy Brogdon, Joel Skousen, Alex Jones, LCDR Guy Cunningham, Aubyn Curtis, Coach Dave Daubenmire, author Thomas DiLorenzo, LCDR David Gillie, filmmaker James Jaeger, Brigadier General Charles Jones, Rick Jore, Roger Koopman, Gary Marbut, and Stewart Rhodes have been fighting the good fight for years. And, of course, Richard Viguerie has been our champion forever.

The numbers of patriots that we have lost over the past few years is too numerous to list. The hole in the freedom fight that they left is massive. God, please raise up freedom-loving Elishas to wear their mantles.

If my estimation is correct, and we still have that preserving-percentage of one in a thousand yet in this country, it means we have ­­­­­­325,000 patriots in America who have not bowed the knee to the New World Order and in whose hearts the love of liberty still beats strong. Ladies and gentlemen, this is an UNCONQUERABLE host.

To all of my fellow patriots: Kudos! Don’t quit! Stay strong! The battle is not over! Freedom still has a future in America!


Chuck Baldwin is a regular columnist for Veracity Voice

You can reach him at: chuck@chuckbaldwinlive.com
Please visit Chuck’s web site at: http://www.chuckbaldwinlive.com

Oil Price Blowback

January 10, 2015 by · Leave a Comment 

Is Putin Creating A New World Order?

“If undercharging for energy products occurs deliberately, it also effects those who introduce these limitations. Problems will arise and grow, worsening the situation not only for Russia but also for our partners.”Russian President Vladimir Putin

It’s hard to know which country is going to suffer the most from falling oil prices. Up to now, of course, Russia, Iran and Venezuela have taken the biggest hit, but that will probably change as time goes on. What the Obama administration should be worried about is the second-order effects that will eventually show up in terms of higher unemployment, market volatility, and wobbly bank balance sheets. That’s where the real damage is going to crop up because that’s where red ink and bad loans can metastasize into a full-blown financial crisis. Check out this blurb from Nick Cunningham at Oilprice.com and you’ll see what I mean:

“According to an assessment from the Federal Reserve Bank of Dallas, an estimated 250,000 jobs across eight U.S. states could be lost in 2015 if oil prices don’t rise. More than 50 percent of those job losses would occur in Texas, which leads the nation in oil production.

There are some early signs that a slowdown in drilling could spread to the manufacturing sector in Texas… One executive at a metal manufacturing company said in the survey, “the drop in crude oil prices is going to make things ugly… quickly.” Another company that manufactures machinery told the Dallas Fed, “Low oil prices will drive reductions in U.S. drilling rigs, which will in turn reduce the market for our products.”

The sentiment was similar for a chemical manufacturer, who said “lower oil prices will adversely impact margins. Energy volatility will cause our customers to keep inventories tight.”

States like Texas, North Dakota, Oklahoma, and Louisiana have seen their economies boom over the last few years as oil production surged. But the sector is now deflating, leaving gashes in employment rolls and state budgets.” (Low Prices Lead To Layoffs In The Oil Patch, Nick Cunningham, Oilprice.com)

Of course industries lay-off workers all the time and it doesn’t always lead to a financial crisis. But unemployment is just one part of the picture, lower personal consumption is another. Take a look:

“Falling oil prices are a bigger drag on economic growth than the incremental “savings” received by the consumer…..Another way to show this graphically is to look at the annual changes in Personal Consumption Expenditures (PCE) in aggregate as compared to the subsection of PCE spent on energy and related products. This is shown in the chart below.

Lower Energy Prices To Lower PCE (Personal Consumption Expenditures):

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(The Gasoline Price Myth, Lance Roberts, oilprice.com)

See? So despite what you might have read in the MSM, lower gas prices do not translate into greater personal consumption or more robust growth. Quiet the contrary, they tend to intensify deflationary pressures and reduce activity which is a damper on growth.

Then there’s the knock-on effects that crashing prices and layoffs have on other industries like mining, manufacturing and chemical production. Here’s more from Oil Price:

“Oil and gas production makeup a hefty chunk of the “mining and manufacturing” component of the employment rolls. Since 2000, when the oil price boom gained traction, Texas has comprised more than 40% of all jobs in the country according to first quarter data from the Dallas Federal Reserve…

The majority of the jobs “created” since the financial crisis have been lower wage paying jobs in retail, healthcare and other service sectors of the economy. Conversely, the jobs created within the energy space are some of the highest wage paying opportunities available in engineering, technology, accounting, legal, etc. In fact, each job created in energy related areas has had a “ripple effect” of creating 2.8 jobs elsewhere in the economy from piping to coatings, trucking and transportation, restaurants and retail….

The obvious ramification of the plunge in oil prices is that eventually the loss of revenue will lead to cuts in production, declines in capital expenditure plans (which comprise almost 1/4th of all capex expenditures in the S&P 500), freezes and/or reductions in employment, and declines in revenue and profitability…

Simply put, lower oil and gasoline prices may have a bigger detraction on the economy than the “savings” provided to consumers.” (The Gasoline Price Myth, Lance Roberts, oilprice.com)

None of this sounds very reassuring, does it? And yet, all we hear from the media is how the economy is going to reach “escape velocity” on the back of cheap oil. Nonsense. This is just more “green shoots” baloney wrapped in public relations hype. The fact is, the economy needs the good-paying jobs more than it needs low-priced energy. But now that prices are tumbling, those jobs are going to disappear which is going to be a drag on growth. Now check out these headlines I picked up on Google News that help to show what’s going on off the radar:

“Texas is in danger of a recession”, CNN Money.
“Texas Could Be Headed for an Oil-Fueled Recession, JP Morgan Economist Says”, Wall Street Journal “Good Times From Texas to North Dakota May Turn Bad on Oil-Price Drop”, Bloomberg
“Low Oil Prices in the New Year Are Screwing Petrostates”, Vice News
“Top US Oil States Are Taking A Hit From Plunging Crude Prices”, Business Insider

Get the picture? If oil prices continue to fall, unemployment is going to spike, activity is going to slow, and the economy is going tank. And the damage won’t be limited to the US either. Get a load of this from the UK Telegraph:

“A third of Britain’s listed oil and gas companies are in danger of running out of working capital and even going bankrupt amid a slump in the value of crude, according to new research.

Financial risk management group Company Watch believes that 70pc of the UK’s publicly listed oil exploration and production companies are now unprofitable, racking up significant losses in the region of £1.8bn.

Such is the extent of the financial pressure now bearing down on highly leveraged drillers in the UK that Company Watch estimates that a third of the 126 quoted oil and gas companies on AIM and the London Stock Exchange are generating no revenues.

The findings are the latest warning to hit the oil and gas industry since a slump in the price of crude accelerated in November when the Organisation of Petroleum Exporting Countries (Opec) decided to keep its output levels unchanged. The decision has caused carnage in oil markets with a barrel of Brent crude falling 45pc since June to around $60 per barrel.” (Third of listed UK oil and gas drillers face bankruptcy, Telegraph)

“Carnage in oil markets,” you say?

Indeed. Many of the oil-drilling newcomers set up shop to take advantage of the low rates and easy money available in the bond market. Now that prices have crashed, investors are avoiding energy-related junk bonds like the plague which is making it impossible for the smaller companies to roll over their debt or attract fresh capital. When these companies start to default en masse, as they certainly will if prices don’t rebound, the blowback will be felt on bank balance sheets across the country creating the possibility of another financial meltdown. (Now we ARE talking about a financial crisis.)

The basic problem is that the banks have bundled a lot of their dodgy debt into financially-engineered products like Collateralized Loan Obligations (CLOs) and Collateralized Debt Obligations (CDOs) that will inevitably fail when borrowers are no longer able to service the loans. The rot can be concealed for a while, but eventually, if prices don’t recover, a significant number of these companies are going to go under which will push the perennially-undercapitalized banking system to the brink once again. That’s why Washington’s plan to push down oil prices (to hurt the Russian economy) might have made sense on a short-term basis (to shock Putin into submission) but as a long-term strategy, it’s nuts. And what’s even crazier, is that Obama has decided to double-down on the same wacky plan even though Putin hasn’t given an inch. Check this out from Reuters on Monday:

“The Obama administration has opened a new front in the global battle for oil market share, effectively clearing the way for the shipment of as much as a million barrels per day of ultra-light U.S. crude to the rest of the world…

The Department of Commerce on Tuesday ended a year-long silence on a contentious, four-decade ban on oil exports, saying it had begun approving a backlog of requests to sell processed light oil abroad.

The action comes at a critical juncture for the global oil market. World prices have halved to less than $60 a barrel since the summer as top exporter Saudi Arabia, once a staunch defender of $100 oil, refused to cut production in the face of surging U.S. shale output and tempered global demand…

With global oil markets in flux, it is far from clear how much U.S. condensate will find a market overseas.”
(Analysis – U.S. opening of oil export tap widens battle for global market, Reuters)

Does that make sense to you, dear reader? Why would Obama suddenly opt to change the rules of the game when he knows it will increase supply and push prices down even further? Why would he do that? Certainly, he doesn’t want to inflict more pain on domestic producers, does he?

Let’s let Obama answer the question for himself. Here’s a clip from an NPR interview with the president just last week. About halfway through the interview, NPR’s Steve Inskeep asks Obama: “Are you just lucky that the price of oil went down and therefore their currency collapsed or …is it something that you did?

Barack Obama: If you’ll recall, their (Russia) economy was already contracting and capital was fleeing even before oil collapsed. And part of our rationale in this process was that the only thing keeping that economy afloat was the price of oil. And if, in fact, we were steady in applying sanction pressure, which we have been, that over time it would make the economy of Russia sufficiently vulnerable that if and when there were disruptions with respect to the price of oil — which, inevitably, there are going to be sometime, if not this year then next year or the year after — that they’d have enormous difficulty managing it.” (Transcript: President Obama’s Full NPR Interview)

Am I mistaken or did Obama just admit that he wanted “disruptions” in the “price of oil” because he figured Putin would have “enormous difficulty managing it”?

Isn’t that the same as saying that it was all part of Washington’s plan; that plunging prices were just the icing on the cake for their asymmetrical attack on the Russian economy? It sure sounds like it. And that would also explain why Obama decided to allow domestic producers to dump more oil on the market even though it’s going to send prices lower. Apparently, none of that matters as long as the policy hurts Russia.

So maybe the US-Saudi oil collusion theory isn’t so far fetched after all. Maybe Salon’s Patrick L. Smith was right when he said:

“Less than a week after the Minsk Protocol was signed, Kerry made a little-noted trip to Jeddah to see King Abdullah at his summer residence. When it was reported at all, this was put across as part of Kerry’s campaign to secure Arab support in the fight against the Islamic State.

Stop right there. That is not all there was to the visit, my trustworthy sources tell me. The other half of the visit had to do with Washington’s unabated desire to ruin the Russian economy. To do this, Kerry told the Saudis 1) to raise production and 2) to cut its crude price. Keep in mind these pertinent numbers: The Saudis produce a barrel of oil for less than $30 as break-even in the national budget; the Russians need $105.

Shortly after Kerry’s visit, the Saudis began increasing production, sure enough — by more than 100,000 barrels daily during the rest of September, more apparently to come…

Think about this. Winter is coming, there are serious production outages now in Iraq, Nigeria, Venezuela and Libya, other OPEC members are screaming for relief, and the Saudis make back-to-back moves certain to push falling prices still lower? You do the math, with Kerry’s unreported itinerary in mind, and to help you along I offer this from an extremely well-positioned source in the commodities markets: “There are very big hands pushing oil into global supply now,” this source wrote in an e-mail note the other day.” (“What Really Happened in Beijing: Putin, Obama, Xi And The Back Story The Media Won’t Tell You”, Patrick L. Smith, Salon)

Vladimir Putin: Public Enemy Number 1

Let’s cut to the chase: All these oil shenanigans are really aimed at just one man: Vladimir Putin. There are a number of reasons why Washington wants to get rid of Putin, the first of which is that the Russian president has become an obstacle to US plans to pivot to Asia. That’s the main issue. As long as Putin is calling the shots, there’s going to be growing resistance to NATO’s push eastward and Washington’s military expansion across Central Asia which could undermine US plans to encircle China and remain the world’s only superpower. Here’s an excerpt from Zbigniew Brzezinski’s The Grand Chessboard which helps to explain the importance Eurasia is in terms of Washington’s global ambitions:

“..how America ‘manages’ Eurasia is critical. A power that dominates Eurasia would control two of the world’s three most advanced and economically productive regions. A mere glance at the map also suggests that control over Eurasia would almost automatically entail Africa’s subordination, rendering the Western Hemisphere and Oceania (Australia) geopolitically peripheral to the world’s central continent. About 75 per cent of the world’s people live in Eurasia, and most of the world’s physical wealth is there as well, both in its enterprises and underneath its soil. Eurasia accounts for about three-fourths of the world’s known energy resources.” (p.31) (Zbigniew Brzezinski, The Grand Chessboard: American Primacy And It’s Geostrategic Imperatives, Key Quotes From Zbigniew Brzezinksi’s Seminal Book)

Get it? Prevailing in Asia is the administration’s top priority, which is why the US is rapidly moving its military assets into place. Check this out from the World Socialist Web Site:

“Under Obama’s “pivot to Asia,” the Pacific Command will account for more than 60 percent of all US military forces, up from 50 percent under the Bush administration. This includes new US basing arrangements in the Philippines, Singapore and Australia, as well as renewed close military ties to New Zealand, and ongoing US military exercises in Thailand, Malaysia, Indonesia and Taiwan….(as well as) large troop deployments in Japan and South Korea, including nuclear-armed units.” (The global scale of US militarism, Patrick Martin, World Socialist Web Site)

The “Big Shift” is already underway, which is why obstacles have to be removed and Putin’s got to go.

Second, Putin has made himself a general nuisance vis a vis US strategic objectives in Syria, Iran and Ukraine. In Syria, Putin has thrown his support behind Assad who the US wants to topple in order to redraw the map of the Middle East and build gas pipelines from Qatar to Turkey to access the lucrative EU market.

Third, Putin has strengthened a number of coalitions and alliances –the BRICS bank, the Eurasian Economic Union, and the Shanghai Cooperation Organization–all of which pose a challenge to US dominance in the region as well as a viable alternative to neoliberal financial institutions like the IMF and World Bank. Going back to Brzezinski’s “chessboard” once again, we see that the US should not feel threatened by any one nation, but should be constantly on-the-lookout for “regional coalitions” which could derail its plans to rule the world. Here’s Brzezinski again:

“…the three grand imperatives of imperial geostrategy are to prevent collusion and maintain security dependence among the vassals, to keep tributaries pliant and protected, and to keep the barbarians from coming together.” (p.40)

“Henceforth, the United States may have to determine how to cope with regional coalitions that seek to push America out of Eurasia, thereby threatening America’s status as a global power.” (p.55) (Zbigniew Brzezinski, The Grand Chessboard: American Primacy And It’s Geostrategic Imperatives, Key Quotes From Zbigniew Brzezinksi’s Seminal Book)

As a founding member and primary backer of these organizations, (and initiator of giant energy deals with China, India and Turkey) Putin has become Washington’s biggest headache and a logical target for regime change.

Finally, Putin is doing whatever he can to circumvent dollar-denominated business and financial transactions. The move away from the buck is a direct attack on the US’s greatest source of power, the ability to control the de facto international currency and to require that other nation’s stockpile dollars for their energy purchases which are then recycled into US financial assets, stocks bonds and US Treasuries. This petrodollar-recycling scam allows the US to run gigantic current account deficits without raising interest rates or reducing government spending. Putin’s anti-dollar policies could diminish the greenback’s role as reserve currency and put an end to a system that institutionalizes looting.

This is why Putin is Public Enemy Number 1. It’s because he’s blocking the US pivot to Asia, strengthening anti-Washington coalitions, sabotaging US foreign policy objectives in the Middle East, creating institutions that rival the IMF and World Bank, transacting massive energy deals with critical US allies, increasing membership in an integrated, single-market Eurasian Economic Union, and attacking the structural foundation upon which the entire US empire rests, the dollar.

Naturally, Washington’s powerbrokers are worried about these developments, just as they are worried about the new world order which is gradually taking shape under Putin’s guidance. But, so far, they haven’t been able to do anything about it. The administration’s regime change schemers and fantasists have shown time-and-again that they’re no match for Bad Vlad who has beaten them at every turn.

Bravo, Putin.


Mike Whitney is a regular columnist for Veracity Voice

Mike Whitney lives in Washington state. He can be reached at: fergiewhitney@msn.com

As Aleppo Goes, So Goes Syria?

January 3, 2015 by · Leave a Comment 

Were a visitor to arrive at the embattled city of Aleppo these frigid and bleak days from the western government controlled side of the 7000 year old city, even if blindfolded and wearing tight earplugs the sightless and deaf traveler would likely sense something very different from what he experiences in Damascus and other cities in Syria.

Somehow, a visitor just feels it in the ambient atmosphere. Something–expectations, pressure, anticipation, dread, anguish, excitement is rapidly building and seemingly is about to impact profoundly events in this war that has killed nearly a quarter million people, wounded more than one million and forced more than 3 million to flee Syria while displacing half of the remaining population that once numbered 23 million. With no end even faintly in sight.

Aleppo has been and remains, along with Damascus, the strategic area which is critical to both sides of the chaotically stalemated conflict. The victor in Aleppo will achieve momentum which some military experts claim will lead them to control much of Syria and certainly nearly all of the major population centers. Aleppo is crucial for both sides as pressure builds daily and as many Aleppines are expressing a sense that some powerful dynamic in about to occur leading toward a resolution of the four year civil war or perhaps leading to even more abject horror.

None of us knows of course but this observer wondered the other day if this is what his host, the commander of government forces in the old city souk in Aleppo had in mind when he looked up toward the nearby ancient Citidel where his troops are finally stationed after two years of fighting opposition forces. But what did he mean when he cryptically said, “In three days my friend you will see something happen here that will have major consequences, enshallah (god willing) for the good of the Syrian people and my country.”

Well, in the following three days nothing particularly major seemed to happen in the neighborhood where this observer has been staying the western section of Aleppo. The usual thuds of mortars and artillery and aircraft screaming across the sky followed by bomb blasts and passersby often squinting skyward and shrugging at visitors as they hurry on their way.

On the third day in Idlib, rebels and Nusra Front militants did seize at least three government checkpoints near two military bases, Wadi Deif and Hamidiyeh which straddle an important supply route in Idlib Province to the southwest. This achievement suggests al Nusra achieves occasional dominance over the Syrian army. Yet almost immediately government combat aircraft bombed the Bab town area of Aleppo, an area controlled by Da’ish (IS) which are increasingly collaborating with Nusra in some areas. Rebels hav also been active recently to the southwest adding more pressure on government forces that are currently scattered over a large area vaguely surrounding Allepo and fighting to capture it from rebels still building up their forces in the east, north and northwest of the city.

Or did the commander mean the reportedly rapid in-gathering of Hezbollah and Iranian fighters who many believe are preparing a Qalamoun type offensive from the west aimed at cutting supplies lines to rebels forces? Its hard to know, but when we last visited his compound on the fifth day, for sure it had changed, presumably in anticipation of something significant about to be unleashed. The hallways of his three level HQ were now neatly stacked to the ceilings with rockets and ammunition of various kinds. One of his aides joked that he hoped Da’ish or Nusra was not digging another tunnel in the area. With a grimace, his commander explained that his men have only a little outdated Soviet era tunnel detection equipment that does not work well so they rely on literally keeping their ears to the ground to detect deadly tunneling sounds. Rebel tunneling that led to the nearby 150 year old Carlton Citadel Hotel being completely demolished on 8 May 2014. The blast from a tunnel underneath killed between 14 and 50 people depending of which source one credits. Da’ish claims it was being used as an army barracks. As this observer stumbled alongside army guys whispering into their radios as we climbed through the Carlton Hotel rubble in pitch blackness toward the Citadel, he was advised that some bodies under the rubble had still not been recovered seven months later and he sensed fear in his guides about tunnels being dug below. A well-grounded nervousness because on 12/30/14 a powerful blast from explosives planted in a tunnel near the HQ this observer visited reportedly, by a new rebel coalition in Aleppo called Jabha Shamiyeh, killed or wounded more than 30 soldiers.

Both sides and their allies are getting exhausted with reported increased desertions from both sides and intensifying complaints from the population. Syria’s allies are growing weary of a conflict that could last decades without clear benefits to any side. Russia is tired with major economic problems looming. The recent collapse in oil prices and Western sanctions have battered the Russian economy which has fallen into decline for the first time in five years, according to official figures. This forced drastic interventions from the Russian Central Bank and appears to be creating the biggest crisis in Vladimir Putin’s leadership of the country. Russia’s economy ministry said GDP had fallen by 0.5pc in the year to November, the latest sign that the country is heading for recession.

With respect to Iran, despite repeated assurances from its leaders that the US led sanctions have been defeated, it still faces severe economic problems as well as the growing loss of al Quds commanders in Syria and Iraq leading to increasing criticism of the regimes involvement in both countries and even Lebanon from the Iranian people.

Iran’s worst nightmare in Iraq and Syria and perhaps soon in Lebanon is Da’ish (IS) and Nusra black flags fluttering on the horizon Both have left little doubt that they view Shia as a cult of apostates who tried to hijack Islam in the 7th Century and need to be eradicated or at a minimum converted and watched closely. On 12/19/14 a suicide bomber, presumably from Da’ish (IS) or Nusra attacked Shiite pilgrims on their way to a shrine at Samarra in the Taji area north of Baghdad again, this time killing at least 17 people and wounding more than 35. This as they have recently launched a campaign to liberate Syria and Iraq from what they claim now nearly total Iranian occupation. Da’ish has launched a social media campaign among Sunni tribes to eliminate once and for all Shia and return Islam to the Caliphate of and by Mohammad the Prophet. One Da’ish adviser discussed with this observer how Iran’s regime has become vulnerable and ripe for removal by the people of Iran due to the same forces plaguing Hezbollah. That is trying to justify to their supporters why they are in Iraq and Syria killing Sunni and Shia alike instead of getting serious about dialogue and salvaging these countries. Time is claimed to be on the side of Da’ish by its spokesmen given the perceived depth of corruption and illegitimacy of rulers in the region and increasingly restive populations.

One student I met at the restaurant in Aleppo explained as only an inspired student seems to be able and willing to do these days: “Change is coming. Deep change. The corrupt incompetents and religious fanatics on all both sides will be swept away. What you are seeing these days in our region are only mild soft tremors presaging the next phase. Frankly, I put religions at the top of my personal Terrorism List.”

Hezbollah is under increasing pressure, even within the Shia community, to leave Syria and Iraq partly because their supporters have tired of seeing posters of their dead sons plastered around the Bekaa, South Beirut, and South Lebanon. Hezbollah leaders have never really convinced many people of its necessity to fight in Syria and Iraq to keep the “terrorist and takfiris” out of Lebanon. According to virtually every poll taken, a majority of Lebanese believe the opposite- believing that IS and Al Nusra are coming here because Hezbollah went there and created a magnate for jihadists to fight them and target their strongholds. Meanwhile some right-wing Israeli politicians, if not the Northern Command, reportedly claim Hezbollah is over stretched and they fantasize about ‘ turf furloughing’ in Lebanon’ and carpet bombing Hezbollah much more severely than during its most recent genocidal ‘lawn-mowing’ in Gaza.

Against this backdrop, maybe the subject most frequently discussed these days with foreign visitors to Aleppo is the urgent need for a ceasefire leading to a negotiated settlement. So the time may be ripe for a ceasefire in Aleppo. One idea is to establish a ‘stand down models’ or ‘freeze zones” to be put into place across Syria in order to stop the seemingly interminable slaughter. UN envoys UN Envoy Staffan De Mistura’s proposal for a ‘freeze’ and the fast approaching Jan. 26-29 Moscow talks could be what the army commander had in mind. Part of De Mistura’s goal is to secure a ceasefire that would allow humanitarian aid to reach those in dire need. He has warned the fall of Aleppo would likely create an additional 400,000 refugees.

The ‘freeze’ proposal was within three days of the commanders prediction and if adopted by the parties could spread to other areas and conceivable lead to a ceasefire and then to peace talks as being promoted by Russia and being studied by the Assad government. The Foreign Ministry told the media this week that “Syria is ready to participate in preliminary consultations in Moscow in order to meet the aspirations of Syrians to find a way out of crisis.”

One example of ‘freezing the conflict in Aleppo” movement, as a step toward a broader settlement along the lines proposed by is the 12/29/14 action by Syrian army allowing more than 30 besieged families and some armed men who surrendered, “safe passage” out of from Douma and Zibdin in Eastern Ghouta adjoining Damascus. There are also rumors that male evacuees might be recruited into a pro-regime militia. The evacuation was the second since December 9, when 76 families were allowed out of Douma.

According to Freeze proponents, this plan to freeze the fighting in Aleppo is the only hopeful one available. De Mistura has said he sees no hope for another plan and it is the only plan capable of freezing the fighting, securing people’s needs and returning the displaced people who are burdening neighboring areas and states. It will also allow for the eventual process of reconstruction he and many others insist. Regime supporters argue that Syrian President Assad is showing readiness to ensure the success of the international plan in Aleppo, and that he convinced Russian President Vladimir Putin of the plan while convincing his Iranian allies as well.

The White House, despite reservations, appears more flexible this week, linking their approval with that of some of their regional allies, meaning Saudi Arabia, Jordan and the Persian Gulf countries. Two rounds of Geneva talks early in 2014 failed to halt the conflict and some claimed actually inflamed it.

A Syrian gentleman who speaks regularly to security officials and leaders from Mr. Assad’s minority Alawite sect, an important component of his base, said recently that a growing numbers across the political spectrum now are insisting on a political settlement despite others still insisting on a fight to the death. One angry gentleman, exhibiting a ‘no turning back’ mentality and who lost his home, family and all hope for recovery, emphasized to this observer, that, “What happens to us during this period is not important. What matters is how history will judge us 1000 years from now.”

And so the Syrian civil war goes on. As Red Cross Dr David Nott who returned to Aleppo recently to help treat victims presented a gloomy assessment while describing the nearly complete breakdown of medical treatment in the city. He explained that more than 80% of patients requiring urgent treatment now die as a result of their injuries or lack of basic care, medicine and equipment. A plunge in vaccination rates from 90 percent before the war to 52 percent this year and contaminated water is allowing typhoid and hepatitis to spread and over half of public hospitals are closed resulting in treatments for diseases and injuries being erratic. More than 6,500 cases of typhoid and 4,200 cases of measles, the deadliest disease for Syrian children, being reported in 2014 across Syria.

One can only wish Envoy De Mistura and like-minded proponents of the immediate establishment of a “freeze zone” in Aleppo, to be replicated across Syria as strongly favored by army commanders with whom this observer recently discussed the subject, the very best of luck in the New Year.

Freezing hostilities in Aleppo could possibly achieve the same for Syria. It’s worth a try.


Dr. Franklin Lamb is Director, Americans Concerned for Middle East Peace, Beirut-Washington DC, Board Member of The Sabra Shatila Foundation, and a volunteer with the Palestine Civil Rights Campaign, Lebanon. He is the author of The Price We Pay: A Quarter-Century of Israel’s Use of American Weapons Against Civilians in Lebanon and is doing research in Lebanon for his next book. He can be reached at fplamb@gmail.com

Dr. Franklin Lamb is a regular columnist for Veracity Voice

Irreversible Decline?

January 1, 2015 by · Leave a Comment 

Did the U.S. and the Saudis Conspire to Push Down Oil Prices?

“Saudi oil policy… has been subject to a great deal of wild and inaccurate conjecture in recent weeks. We do not seek to politicize oil… For us it’s a question of supply and demand, it’s purely business.” – Ali al Naimi, Saudi Oil Minister

“There is no conspiracy, there is no targeting of anyone. This is a market and it goes up and down.” – Suhail Bin Mohammed al-Mazroui, United Arab Emirates’ petroleum minister

“We all see the lowering of oil prices. There’s lots of talk about what’s causing it. Could it be an agreement between the U.S. and Saudi Arabia to punish Iran and affect the economies of Russia and Venezuela? It could.” – Russian President Vladimir Putin

Are falling oil prices part of a US-Saudi plan to inflict economic damage on Russia, Iran and Venezuela?

Venezuelan President Nicolas Maduro seems to think so. In a recent interview that appeared in Reuters, Maduro said he thought the United States and Saudi Arabia wanted to drive down oil prices “to harm Russia.”

Bolivian President Evo Morales agrees with Maduro and told journalists at RT that: “The reduction in oil prices was provoked by the US as an attack on the economies of Venezuela and Russia. In the face of such economic and political attacks, the nations must be united.”

Iranian President Hassan Rouhani said the same thing,with a slightly different twist: “The main reason for (the oil price plunge) is a political conspiracy by certain countries against the interests of the region and the Islamic world … Iran and people of the region will not forget such … treachery against the interests of the Muslim world.”

US-Saudi “treachery”? Is that what’s really driving down oil prices?

Not according to Saudi Arabia’s Petroleum Minister Ali al-Naimi. Al-Naimi has repeatedly denied claims that the kingdom is involved in a conspiracy. He says the tumbling prices are the result of “A lack of cooperation by non-OPEC production nations, along with the spread of misinformation and speculator’s greed.” In other words, everyone else is to blame except the country that has historically kept prices high by controlling output. That’s a bit of a stretch, don’t you think? Especially since–according to the Financial Times — OPEC’s de facto leader has abandoned the cartel’s “traditional strategy” and announced that it won’t cut production even if prices drop to $20 per barrel.

Why? Why would the Saudis suddenly abandon a strategy that allowed them to rake in twice as much dough as they are today? Don’t they like money anymore?

And why would al-Naimi be so eager to crash prices, send Middle East stock markets into freefall, increase the kingdom’s budget deficits to a record-high 5 percent of GDP, and create widespread financial instability? Is grabbing “market share” really that important or is there something else going on here below the surface?

The Guardian’s Larry Elliot thinks the US and Saudi Arabia are engaged a conspiracy to push down oil prices. He points to a September meeting between John Kerry and Saudi King Abdullah where a deal was made to boost production in order to hurt Iran and Russia. Here’s a clip from the article titled “Stakes are high as US plays the oil card against Iran and Russia”:

“…with the help of its Saudi ally, Washington is trying to drive down the oil price by flooding an already weak market with crude. As the Russians and the Iranians are heavily dependent on oil exports, the assumption is that they will become easier to deal with…

John Kerry, the US secretary of state, allegedly struck a deal with King Abdullah in September under which the Saudis would sell crude at below the prevailing market price. That would help explain why the price has been falling at a time when, given the turmoil in Iraq and Syria caused by Islamic State, it would normally have been rising.

The Saudis did something similar in the mid-1980s. Then, the geopolitical motivation for a move that sent the oil price to below $10 a barrel was to destabilize Saddam Hussein’s regime. This time, according to Middle East specialists, the Saudis want to put pressure on Iran and to force Moscow to weaken its support for the Assad regime in Syria… (Stakes are high as US plays the oil card against Iran and Russia, Guardian)

That’s the gist of Elliot’s theory, but is he right?

Vladimir Putin isn’t so sure. Unlike Morales, Maduro and Rouhani, the Russian president has been reluctant to blame falling prices on US-Saudi collusion. In an article in Itar-Tass, Putin opined:

“There’s a lot of talk around” in what concerns the causes for the slide of oil prices, he said at a major annual news conference. “Some people say there is conspiracy between Saudi Arabia and the US in order to punish Iran or to depress the Russian economy or to exert impact on Venezuela.”

“It might be really so or might be different, or there might be the struggle of traditional producers of crude oil and shale oil,” Putin said. “Given the current situation on the market the production of shale oil and gas has practically reached the level of zero operating costs.” (Putin says oil market price conspiracy between Saudi Arabia and US not ruled out, Itar-Tass)

As always, Putin takes the most moderate position, that is, that Washington and the Saudis may be in cahoots, but that droopy prices might simply be a sign of over-supply and weakening demand. In other words, there could be a plot, but then again, maybe not. Putin is a man who avoids passing judgment without sufficient evidence.

The same can’t be said of the Washington Post. In a recent article, WP journalist Chris Mooney dismisses anyone who thinks oil prices are the result of US-Saudi collaboration as “kooky conspiracy theorists”. According to Mooney:

“The reasons for the sudden (price) swing are not particularly glamorous: They involve factors like supply and demand, oil companies having invested heavily in exploration several years ago to produce a glut of oil that has now hit the market — and then, perhaps, the “lack of cohesion” among the diverse members of OPEC.” (Why there are so many kooky conspiracy theories about oil, Washington Post)

Oddly enough, Mooney disproves his own theory a few paragraphs later in the same piece when he says:

“Oil producers really do coordinate. And then, there’s OPEC, which is widely referred to in the press as a “cartel,” and which states up front that its mission is to “coordinate and unify the petroleum policies” of its 12 member countries…. Again, there’s that veneer of plausibility to the idea of some grand oil related strategy.” (WP)

Let me get this straight: One the one hand Mooney agrees that OPEC is a cartel that “coordinates and unify the petroleum policies”, then on the other, he says that market fundamentals are at work. Can you see the disconnect? Cartels obstruct normal supply-demand dynamics by fixing prices, which Mooney seems to breezily ignore.

Also, he scoffs at the idea of “some grand oil related strategy” as if these cartel nations were philanthropic organizations operating in the service of humanity. Right. Someone needs to clue Mooney in on the fact that OPEC is not the Peace Corps. They are monopolizing amalgam of cutthroat extortionists whose only interest is maximizing profits while increasing their own political power. Surely, we can all agree on that fact.

What’s really wrong with Mooney’s article, is that he misses the point entirely. The debate is NOT between so-called “conspiracy theorists” and those who think market forces alone explain the falling prices. It’s between the people who think that the Saudis decision to flood the market is driven by politics rather than a desire to grab “market share.” That’s where people disagree. No denies that there’s manipulation; they merely disagree about the motive. This glaring fact seems to escape Mooney who is on a mission to discredit conspiracy theorists at all cost. Here’s more:

(There’s) “a long tradition of conspiracy theorists who have surmised that the world’s great oil powers — whether countries or mega-corporations — are secretly pulling strings to shape world events.”…

“A lot of conspiracy theories take as their premise that there’s a small group of people who are plotting to control something, to control the government, the banking system, or the main energy source, and they are doing this to the disadvantage of everybody else,” says University of California-Davis historian Kathy Olmsted, author of “Real Enemies: Conspiracy Theories and American Democracy, World War I to 9/11″. (Washington Post)

Got that? Now find me one person who doesn’t think the world is run by a small group of rich, powerful people who operate in their own best interests? Here’s more from the same article:

(Oil) “It’s the perfect lever for shifting world events. If you were a mad secret society with world-dominating aspirations and lots of power, how would you tweak the world to create cascading outcomes that could topple governments and enrich some at the expense of others? It’s hard to see a better lever than the price of oil, given its integral role in the world economy.” (WP)

“A mad secret society”? Has Mooney noticed that — in the last decade and a half — the US has only invaded nations that have huge natural resources (mainly oil and natural gas) or the geography for critical pipeline routes? There’s nothing particularly secret about it, is there?

The United States is not a “mad secret society with world-dominating aspirations”. It’s a empire with blatantly obvious “world-dominating aspirations” run by political puppets who do the work of wealthy elites and corporations. Any sentient being who’s bright enough to browse the daily headlines can figure that one out.

Mooney’s grand finale:

“So in sum, with a surprising and dramatic event like this year’s oil price decline, it would be shocking if it did not generate conspiracy theories. Humans believe them all too easily. And they’re a lot more colorful than a more technical (and accurate) story about supply and demand.” (WP)

Ah, yes. Now I see. Those darn “humans”. They’re so weak-minded they’ll believe anything you tell them, which is why they need someone as smart as Mooney tell them how the world really works.

Have you ever read such nonsense in your life? On top of that, he gets the whole story wrong. This isn’t about market fundamentals. It’s about manipulation. Are the Saudis manipulating supply to grab market share or for political reasons? THAT’S THE QUESTION. The fact that they ARE manipulating supply is not challenged by anyone including the uber-conservative Financial Times that deliberately pointed out that the Saudis had abandoned their traditional role of cutting supply to support prices. That’s what a “swing state” does; it manipulates supply keep prices higher than they would be if market forces were allowed to operate unimpeded.

So what is the motive driving the policy; that’s what we want to know?

Certainly there’s a strong case to be made for market share. No one denies that. If the Saudis keep prices at rock bottom for a prolonged period of time, then a high percentage of the producers (that can’t survive at prices below $70 per barrel) will default leaving OPEC with greater market share and more control over pricing.

So market share is certainly a factor. But is it the only factor?

Is it so far fetched to think that the United States–which in the last year has imposed harsh economic sanctions on Russia, made every effort to sabotage the South Stream pipeline, and toppled the government in Kiev so it could control the flow of Russian gas to countries in the EU–would coerce the Saudis into flooding the market with oil in order to decimate the Russian economy, savage the ruble, and create favorable conditions for regime change in Moscow? Is that so hard to believe?

Apparently New York Times columnist Thomas Freidman doesn’t think so. Here’s how he summed it up in a piece last month: “Is it just my imagination or is there a global oil war underway pitting the United States and Saudi Arabia on one side against Russia and Iran on the other?”

It sounds like Freidman has joined the conspiracy throng, doesn’t it? And he’s not alone either. This is from Alex Lantier at the World Socialist Web Site:

“While there are a host of global economic factors underlying the fall in oil prices, it is unquestionable that a major role in the commodity’s staggering plunge is Washington’s collaboration with OPEC and the Saudi monarchs in Riyadh to boost production and increase the glut on world oil markets.

As Obama traveled to Saudi Arabia after the outbreak of the Ukraine crisis last March, the Guardian wrote, “Angered by the Soviet invasion of Afghanistan in 1979, the Saudis turned on the oil taps, driving down the global price of crude until it reached $20 a barrel (in today’s prices) in the mid-1980s… [Today] the Saudis might be up for such a move—which would also boost global growth—in order to punish Putin over his support for the Assad regime in Syria. Has Washington floated this idea with Riyadh? It would be a surprise if it hasn’t.” (Alex Lantier,Imperialism and the ruble crisis, World Socialist Web Site)

And here’s an intriguing clip from an article at Reuters that suggests the Obama administration is behind the present Saudi policy:

“U.S. Secretary of State John Kerry sidestepped the issue (of a US-Saudi plot) after a trip to Saudi Arabia in September. Asked if past discussions with Riyadh had touched on Russia’s need for oil above $100 to balance its budget, he smiled and said: “They (Saudis) are very, very well aware of their ability to have an impact on global oil prices.” (Saudi oil policy uncertainty unleashes the conspiracy theorists, Reuters)

Wink, wink.

Of course, they’re in bed together. Saudi Arabia is a US client. It’s not autonomous or sovereign in any meaningful way. It’s a US protectorate, a satellite, a colony. They do what they’re told. Period. True, the relationship is complex, but let’s not be ridiculous. The Saudis are not calling the shots. The idea is absurd. Do you really think that Washington would let Riyadh fiddle prices in a way that destroyed critical US domestic energy industries, ravaged the junk bond market, and generated widespread financial instability without uttering a peep of protest on the matter?

Dream on! If the US was unhappy with the Saudis, we’d all know about it in short-order because it would be raining Daisy Cutters from the Persian Gulf to the Red Sea, which is the way that Washington normally expresses its displeasure on such matters. The fact that Obama has not even alluded to the shocking plunge in prices just proves that the policy coincides with Washington’s broader geopolitical strategy.

And let’s not forget that the Saudis have used oil as a political weapon before, many times before. Indeed, wreaking havoc is nothing new for our good buddies the Saudis. Check this out from Oil Price website:

“In 1973, Egyptian President Anwar Sadat convinced Saudi King Faisal to cut production and raise prices, then to go as far as embargoing oil exports, all with the goal of punishing the United States for supporting Israel against the Arab states. It worked. The “oil price shock” quadrupled prices.

It happened again in 1986, when Saudi Arabia-led OPEC allowed prices to drop precipitously, and then in 1990, when the Saudis sent prices plummeting as a way of taking out Russia, which was seen as a threat to their oil supremacy. In 1998, they succeeded. When the oil price was halved from $25 to $12, Russia defaulted on its debt.

The Saudis and other OPEC members have, of course, used the oil price for the obverse effect, that is, suppressing production to keep prices artificially high and member states swimming in “petrodollars”. In 2008, oil peaked at $147 a barrel.” (Did The Saudis And The US Collude In Dropping Oil Prices?, Oil Price)

1973, 1986, 1990, 1998 and 2008.

So, according to the author, the Saudis have manipulated oil prices at least five times in the past to achieve their foreign policy objectives. But, if that’s the case, then why does the media ridicule people who think the Saudis might be engaged in a similar strategy today?

Could it be that the media is trying to shape public opinion on the issue and, by doing so, actually contribute to the plunge in oil prices?

Bingo. Alert readers have probably noticed that the oil story has been splashed across the headlines for weeks even though the basic facts have not changed in the least. It’s all a rehash of the same tedious story reprinted over and over again. But, why? Why does the public need to have the same “Saudis refuse to cut production” story driven into their consciousness day after day like they’re part of some great collective brainwashing experiment? Could it be that every time the message is repeated, oil sells off, and prices go down? Is that it?

Precisely. For example, last week a refinery was attacked in Libya which pushed oil prices up almost immediately. Just hours later, however, another “Saudis refuse to cut production” story conveniently popped up in all the major US media which pushed prices in the direction the USG wants them to go, er, I mean, back down again.

This is how the media helps to reinforce government policy, by crafting a message that helps to push down prices and, thus, hurt “evil” Putin. (This is called “jawboning”) Keep in mind, that OPEC doesn’t meet again until June, 2015, so there’s nothing new to report on production levels. But that doesn’t mean we’re not going to get regular updates on the “Saudis refuse to cut production” story. Oh, no. The media is going to keep beating that drum until Putin cries “Uncle” and submits to US directives. Either that, or the bond market is going to blow up and take the whole damn global financial system along with it. One way or another, something’s got to give.

Bottom line: Falling oil prices and the plunging ruble are not some kind of free market accident brought on by oversupply and weak demand. That’s baloney. They’re part of a broader geopolitical strategy to strangle the Russian economy, topple Putin, and establish US hegemony across the Asian landmass. It’s all part of Washington’s plan to maintain its top-spot as the world’s only superpower even though its economy is in irreversible decline.


Mike Whitney is a regular columnist for Veracity Voice

Mike Whitney lives in Washington state. He can be reached at: fergiewhitney@msn.com

Ruble Takedown Exposes Cracks In Putin’s Defense

December 20, 2014 by · Leave a Comment 

Putin’s Next Move Is Crucial…

The plunge of the Russian currency this week is the drastic outcome of policies implemented by the major imperialist powers to force Russia to submit to American and European imperialism’s neo-colonial restructuring of Eurasia. Punishing the Putin regime’s interference with their plans for regime change in countries such as Ukraine and Syria, the NATO powers are financially strangling Russia.” Alex Lantier, Imperialism and the ruble crisis, WSWS

“The struggle for world domination has assumed titanic proportions. The phases of this struggle are played out upon the bones of the weak and backward nations.” Leon Trotsky, 1929

Russian President Vladimir Putin suffered a stunning defeat on Tuesday when a US-backed plan to push down oil prices sent the ruble into freefall. Russia’s currency plunged 10 percent on Monday followed by an 11 percent drop on Tuesday reducing the ruble’s value by more than half in less than a year. The jarring slide was assisted by western sympathizers at Russia’s Central Bank who, earlier in the day, boosted interest rates from 10.5 percent to 17 percent to slow the decline. But the higher rates only intensified the outflow of capital which put the ruble into a tailspin forcing international banks to remove pricing and liquidity from the currency leading to the suspension of trade. According to Russia Today:

“Russian Federation Council Chair Valentina Matviyenko has ordered a vote on a parliamentary investigation into the recent activities of the Central Bank and its alleged role in the worst-ever plunge of the ruble rate…

“I suggest to start a parliamentary investigation into activities of the Central Bank that has allowed violations of the citizens’ Constitutional rights, including the right for property,” the RIA Novosti quoted Tarlo as saying on Wednesday.

The senator added that according to the law, protecting financial stability in the country is the main task of the Central Bank and its senior management. However, the bank’s actions, in particular the recent raising of the key interest rate to 17 percent, have so far yielded the opposite results.” (Upper House plans probe into Central Bank role in ruble crash, RT)

The prospect that there may be collaborators and fifth columnists at Russia’s Central Bank should surprise no one. The RCB is an independent organization that serves the interests of global capital and regional oligarchs the same as central banks everywhere. This is a group that believes that humanity’s greatest achievement is the free flow of privately-owned capital to markets around the world where it can extract maximum value off the sweat of working people. Why would Russia be any different in that regard?

It isn’t. The actions of the Central Bank have cost the Russian people dearly, and yet, even now the main concern of RCB elites is their own survival and the preservation of the banking system. An article that appeared at Zero Hedge on Wednesday illustrates this point. After ruble trading was suspended, the RCB released a document with “7 new measures” all of which were aimed at protecting the banking system via moratoria on securities losses, breaks on interest rates, additional liquidity provisioning, easier credit and accounting standards, and this gem at the end:

“In order to maintain the stability of the banking sector in the face of increased interest rate and credit risks of a slowdown of the Russian economy the Bank of Russia and the Government of the Russian Federation prepare measures to recapitalize credit institutions in 2015.” (Russian Central Bank Releases 7 Measures It Will Take To Stabilize The Financial Sector, Zero Hedge)

Sound familiar? It should. You see, the Russian Central Bank works a lot like the Fed. At the first sign of trouble they build a nice, big rowboat for themselves and their dodgy bank buddies and leave everyone else to drown. That’s what these bullet points are all about. Save the banks, and to hell the people who suffer from their exploitative policies.

Here’s more from RT:

“Earlier this week a group of State Duma MPs from the Communist Party sent an official address to Putin asking him to sack (Central Bank head, Elvira) Nabiullina, and all senior managers of the Central Bank as their current policies are causing the rapid devaluation of ruble and impoverishment of the majority of the Russian population.

In their letter, the Communists also recalled Putin’s address to the Federal Assembly in which he said that control over inflation must not be in the way of the steady economic growth.

“They listen to your orders and then do the opposite,” the lawmakers complained.” (RT)

In other words, the RCB enforces its own “austerity” policy in Russia just as central bankers do everywhere. There’s nothing conspiratorial about this. CBs are owned and controlled by the big money guys which is why their policies invariably serve the interests of the rich. They might not call it “trickle down” or “structural adjustment” (as they do in the US), but it amounts to the same thing, the inexorable shifting of wealth from working class people to the parasitic plutocrats who control the system and its political agents. Same old, same old.

Even so, the media has pinned the blame for Tuesday’s ruble fiasco on Putin who, of course, has nothing to do with monetary policy. That said, the ruble rout helps to draw attention to the fact that Moscow is clearly losing its war with the US and needs to radically adjust its approach if it hopes to succeed. First of all, Putin might be a great chess player, but he’s got a lot to learn about finance. He also needs a crash-course in asymmetrical warfare if he wants to defend the country from more of Washington’s stealth attacks.

In the last 10 months, the United States has executed a near-perfect takedown of the Russian economy. Following a sloppy State Department-backed coup in Kiev, Washington has consolidated its power in the Capital, removed dissident elements in the government, deployed the CIA to oversee operations, launched a number of attacks on rebel forces in the east, transferred ownership of Ukraine’s vital pipeline system to US puppets and foreign corporations, created a tollbooth separating Moscow from the lucrative EU market, foiled a Russian plan to build an alternate pipeline to southern Europe (South Stream), built up its military assets in the Balkans and Black Sea and, finally–the cherry on the cake–initiated a daring sneak attack on Russia’s currency by employing its Saudi-proxy to flood the market with oil, push prices off a cliff, and trigger a run on the ruble which slashed its value by more than half forcing retail currency platforms to stop trading the battered ruble until prices stabilized.

Like we said, Putin might be a great chess player, but in his battle with the US, he’s getting his clock cleaned. So far, he’s been no match for the maniacal focus and relentless savagery of the Washington powerbrokers. Yes, he’s formed critical alliances across Asia and the world. He’s also created competing institutions (like the BRICS bank) that could break the imperial grip on global finance. And, he’s also expounded a vision of a new world in which “one center of power” does not dictate the rules to everyone else. That’s all great, but he’s losing the war, and that’s what counts. Washington doesn’t care about peoples’ dreams or aspirations. What they care about is ruling the world with an iron fist, which is precisely what they intend to do for the next century or so unless someone stops them. Putin’s actions, however admirable, have not yet changed that basic dynamic. In fact, this latest debacle (authored by the RCB) is a severe setback for the country and could impact Russia’s ability to defend itself against US-NATO aggression.

So what does Putin need to do to reverse the current trend?

The first order of business should be a fundamental change in approach followed by a quick switch from defense to offense. There should be no doubt by now, that Washington is going for the jugular. The attack on the ruble provides clear evidence that the US will not be satisfied until Russia has been decimated and reduced to “a permanent state of colonial dependency.” (Chomsky) The United States has launched a full-blown economic war on Russia and yet the Kremlin is still acting like Washington’s punching bag. You can’t win a war like that. You have to take the initiative; take chances, be bold, think outside the box. That’s what Washington is doing. The rout of the ruble is perhaps the most astonishingly-successful asymmetrical attack in recent memory. It involved tremendous risks and costs on the part of the perpetrators. For example, the lower oil prices have ravaged important domestic industries, created widespread financial instability, and sent markets across the planet into a nosedive. Even so, Washington persevered with its audacious strategy, undeterred by the vast collateral damage, never losing sight of its ultimate objective; to deprive Moscow of crucial oil revenues, to crash the ruble, and to open up Central Asia for imperial expansion and US military bases. (The pivot to Asia)

This is how the US plays the game, by keeping its “eyes on the prize” at all times, and by rolling roughshod over anyone or anything that gets in its way. That is why the US is the world’s only superpower, because the voracious oligarchs who run the country will stop at nothing to get what they want.

Does Putin have the grit to match that kind of venomous determination? Has he even adjusted to the fact that WW3 will be unlike any conflict in the past, that jihadi-proxies and Neo Nazi-proxies will be employed as shock troops for the empire clearing the way for US special forces and foot soldiers who will hold ground and establish the new order? Does he even realize that Barbarossa 2 is already underway, but that the Panzer divisions and 2 million German regulars have been replaced with high-powered computers, covert ops, color-coded revolutions, currency crises, capital flight, cyber attacks and relentless propaganda. That’s 4th Generation (4-G) warfare in a nutshell. And, guess what? The US attack on the ruble has shown that it is the undisputed master of this new kind of warfare. More important, Washington has just prevailed in a battle that could prove to be a critical turning point if Putin doesn’t get his act together and retaliate.

Retaliate?!?

You mean nukes?

Heck no. But, by the same token, you can’t expect to win a confrontation with the US by rerouting gas pipelines to Turkey or by forming stronger coalitions with other BRICS countries or by ditching the dollar. Because none of that stuff makes a damn bit of difference when your currency is in the toilet and the US is making every effort to grind your face into the pavement.

Capisce?

There’s an expression is football that goes something like this: The best defense is a good offense. You can’t win by sitting on the sidelines and hoping your team doesn’t lose. You must engage your adversary at every opportunity never giving ground without a fight. And when an opening appears where you can take the advantage, you must act promptly and decisively never looking back and never checking your motives. That’s how you win.

Washington only thinks in terms winning. It expects to win, and will do whatever is necessary to win. In fact, the whole system has been re-geared for one, sole purpose; to beat the holy hell out of anyone who gets out of line. That’s what we do, and we’ve gotten pretty good at it. So, if you want to compete at that level, you’ve got to have “game”. You’re going to have to step up and prove that you can run with the big kids.

And that’s what makes Putin’s next move so important, crucial really. Because whatever he does will send a message to Washington that he’s either up to the challenge or he’s not. Which is why he needs to come out swinging and do something completely unexpected. The element of surprise, that’s the ticket. And we’re not talking about military action either. That just plays to Uncle Sam’s strong hand. Putin doesn’t need another Vietnam. He needs a coherent gameplan. He needs a winning strategy. He needs to takes risks, put it all on the line and roll the freaking dice. You can’t lock horns with the US and play it safe. That’s a losing strategy. This is smash-mouth, steelcage smackdown, a scorched-earth event where winner takes all. You have to be ready to rumble.

Putin needs to think asymmetrically. What would Obama do if he was in Putin’s shoes?

You know what he’d do: He’d send military support to Assad. He’d arm rebel factions in Saudi Arabia, Somalia, Nigeria and elsewhere. He’d strengthen ties with Venezuela, Bolivia, Ecuador providing them with military, intelligence and logistical support. He’d deploy his NGOs and Think Tank cronies to foment revolution wherever leaders refused to follow Moscow’s directives. He would work tirelessly to build the economic, political, media, and military institutions he needed to impose his own self-serving version of snatch-and-grab capitalism on every nation on every continent in the world. That’s what Obama would do, because that’s what his puppetmasters would demand of him.

But Putin must be more discreet, because his resources are more limited. But he still has options, like the markets, for example. Let’s say Putin announces that creditors in the EU (particularly banks) won’t be paid until the ruble recovers. How does that sound?

Putin: “We’re really sorry about the inconvenience, but we won’t be able to make those onerous principle payments for a while. Please accept our humble apologies.” End of statement.

Moments later: Global stocks plunge 350 points on the prospect of a Russian default and its impact on the woefully-undercapitalized EU banking system.

Get the picture? That’s what you call an asymmetrical attack. The idea was even hinted at in a piece on Bloomberg News. Here’s an excerpt from the article:

“Sergei Markov, a pro-Putin academic, wrote in a column on Vzglyad.ru. “Since the reasons for the ruble’s fall are political, the response should be political, too. For example, a law that would ban Russian companies from repaying debts to Western counterparties if the ruble has dropped more than 50 percent in the last year. That will immediately lower the pressure on the ruble, many countries have done this, Malaysia is one example. It’s in great economic shape now.” (Is Russia ready to impose capital controls? Chicago Tribune)

Here’s more background from RT:

“Major banks across Europe, as well as the UK, US, and Japan, are at major risk should the Russian economy default, according to a new study by Capital Economics. The ING Group in the Netherlands, Raiffeisen Bank in Austria, Societe General in France, UniCredit in Italy, and Commerzbank in Germany, have all faced significant losses in the wake of the ruble crisis…

Overall Societe General, known as Rosbank in the Russian market, has the most exposure at US$31 billion, or €25 billion, according to Citigroup Inc. analysts. This is equivalent to 62 percent of the Paris-based bank’s tangible equity, Bloomberg News reported.

Following the drop, Raiffeisen, which has €15 billion at risk in Russia, saw its stocks plummeted more than 10 percent. Raiffeisen also has significant exposure in Ukraine, which is facing a similar currency sell-off as Russia.” (Russia crisis leaves banks around the world exposed by the billions, RT)

So Putin defaults which nudges the EU banking system down the stairwell. So what? What does that prove?

It proves that Russia has the tools to defend itself. It proves that Putin can disrupt the status quo and spread the pain a bit more equitably. “Spreading the pain” is a tool the US uses quite frequently in its dealings with other countries. Maybe Putin should take a bite of that same apple, eh?

Another option would be to implement capital controls to avoid ruble-dollar conversion and further capital flight. The beauty of capital controls is that they take power away from the big money guys who run the world and hand it back to elected officials. Leaders like Putin are then in a position to say, “Hey, we’re going to take a little break from the dollar system for while until we get caught up. I hope you’ll understand our situation.”

Capital controls are an extremely effective of avoiding capital flight and minimizing the impact of a currency crisis. Here’s a short summary of how these measures helped Malaysia muddle through in 1998:

“When the Asian financial crisis hit, Malaysia’s position looked a lot like Russia’s today: It had big foreign reserves and a low short-term debt level, but relatively high general indebtedness if households and corporations were factored in. At first, to bolster the ringgit, Deputy Prime Minister Anwar Ibrahim pushed through a market-based policy with a flexible exchange rate, rising interest rates and cuts in government spending. It didn’t work: Consumption and investment went down, and pessimism prevailed, exerting downward pressure on the exchange rate.

So, in June 1998, Prime Minister Mahathir Mohammad… appointed a different economic point man, Daim Zainuddin. In September, on Daim’s urging, Malaysia introduced capital controls. It banned offshore operations in ringgit and forbade foreign investors to repatriate profits for a year. Analysts at the time were sharply critical of the measures, and Malaysia’s reputation in the global financial markets inevitably suffered.

According to Kaplan and Rodrik, however, the capital controls were ultimately effective. The government was able to lower interest rates, the economy recovered, the controls were relaxed ahead of time, and by May 1999 Malaysia was back on the international capital markets with a $1 billion bond issue.” (Is Russia ready to impose capital controls, Chicago Tribune)

Sure they were effective, but they piss off the slacker class of oligarchs who think the whole system should be centered on their “inalienable right” to move capital from one spot to another so they can rake-off hefty profits at everyone else’s expense. Capital controls push those creeps to the back of the line so the state can do what it needs to do to preserve the failing economy from the attack of speculators. Here’s a clip from a speech Joseph Stiglitz gave in 2014 at the Atlanta Fed’s 2014 Financial Markets Conference. He said:

“When countries do not impose capital controls and allow exchange rates to vary freely, this can give rise to high levels of exchange rate volatility. The consequence can be high levels of economic volatility, imposing great costs on workers and firms throughout the economy. Even if they can lay off some of the risk, there is a cost to doing so. The very existence of this volatility affects the structure of the economy and overall economic performance.”

That sums it up pretty well. Without capital controls, the deep-pocket Wall Street banks and speculators can simply vacuum the money out of an economy leaving the country broken and penniless. This nihilistic decimation of emerging markets via capital flight is what the kleptocracy breezily refers to as “free markets”, the unwavering plundering of civilization to fatten the coffers of the swinish few at the top of the foodchain. That’s got to stop.

Putin needs to put his foot down now; stop the outflow of cash, stop the conversion of rubles to dollars, force investors to recycle their money into the domestic economy, indict the central bank governors and trundle them off to the hoosegow, and reassert the power of the people over the markets. If he doesn’t, then the speculators will continue to peck away until Russia’s reserves are drained-dry and the country is pushed back into another long-term slump. Who wants that?

And don’t think that Putin’s only problem is Washington either, because it isn’t. He’s got an even bigger headache in his own country with the morons who still buy the hogwash that “the market knows best.” These are the fantasists, the corporate toadies, and the fifth columnists, some of whom hold very high office. Here’s a clip I picked up at the Vineyard of the Saker under the heading “Medvedev declares: more of the same”:

(Russian Prime Minister) “Medvedev has just called a government meeting with most of the directors of top Russian corporations and the director of the Russian Central Bank. He immediately announced that he will not introduce any harsh regulatory measures and that he will let the market forces correct the situation. As for the former Minister of Finance, the one so much beloved in the West, Alexei Kudrin, he expressed his full support for the latest increase in interest rates.”

This is lunacy. The US has just turned Russia’s currency into worthless fishwrap, and bonehead Medvedev wants to play nice and return to “business as usual”??

No thanks. Maybe Medvedev wants to be a slave to the market, but I’ll bet Putin is smarter than that.

Putin’s not going to roll over and play dead for these vipers. He’s got to much on the ball for that. He’s going to beat them at their own game, fair and square. He’s going to implement capital controls, restructure the economy away from the west, and aggressively look for ways to deter Washington from spreading its heinous resource war to Central Asia and beyond.

He’s not going to give an inch. You’ll see.


Mike Whitney is a regular columnist for Veracity Voice

Mike Whitney lives in Washington state. He can be reached at: fergiewhitney@msn.com

American Exceptionalism and American Torture

December 20, 2014 by · 1 Comment 

In 1964, the Brazilian military, in a US-designed coup, overthrew a liberal (not more to the left than that) government and proceeded to rule with an iron fist for the next 21 years. In 1979 the military regime passed an amnesty law blocking the prosecution of its members for torture and other crimes. The amnesty still holds.

That’s how they handle such matters in what used to be called The Third World. In the First World, however, they have no need for such legal niceties. In the United States, military torturers and their political godfathers are granted amnesty automatically, simply for being American, solely for belonging to the “Good Guys Club”.

So now, with the release of the Senate Intelligence Committee report on CIA torture, we have further depressing revelations about US foreign policy. But do Americans and the world need yet another reminder that the United States is a leading practitioner of torture? Yes. The message can not be broadcast too often because the indoctrination of the American people and Americophiles all around the world is so deeply embedded that it takes repeated shocks to the system to dislodge it. No one does brainwashing like the good ol’ Yankee inventors of advertising and public relations. And there is always a new generation just coming of age with stars (and stripes) in their eyes.

The public also has to be reminded yet again that – contrary to what most of the media and Mr. Obama would have us all believe – the president has never actually banned torture per se, despite saying recently that he had “unequivocally banned torture” after taking office.

Shortly after Obama’s first inauguration, both he and Leon Panetta, the new Director of the CIA, explicitly stated that “rendition” was not being ended. As the Los Angeles Times reported at the time: “Under executive orders issued by Obama recently, the CIA still has authority to carry out what are known as renditions, secret abductions and transfers of prisoners to countries that cooperate with the United States.”

The English translation of “cooperate” is “torture”. Rendition is simply outsourcing torture. There was no other reason to take prisoners to Lithuania, Poland, Romania, Egypt, Jordan, Kenya, Somalia, Kosovo, or the Indian Ocean island of Diego Garcia, amongst other torture centers employed by the United States. Kosovo and Diego Garcia – both of which house large and very secretive American military bases – if not some of the other locations, may well still be open for torture business, as is the Guantánamo Base in Cuba.

Moreover, the key Executive Order referred to, number 13491, issued January 22, 2009, “Ensuring Lawful Interrogations”, leaves a major loophole. It states repeatedly that humane treatment, including the absence of torture, is applicable only to prisoners detained in an “armed conflict”. Thus, torture by Americans outside an environment of “armed conflict” is not explicitly prohibited. But what about torture within an environment of “counter-terrorism”?

The Executive Order required the CIA to use only the interrogation methods outlined in a revised Army Field Manual. However, using the Army Field Manual as a guide to prisoner treatment and interrogation still allows solitary confinement, perceptual or sensory deprivation, sensory overload, sleep deprivation, the induction of fear and hopelessness, mind-altering drugs, environmental manipulation such as temperature and noise, and stress positions, amongst other charming examples of American Exceptionalism.

After Panetta was questioned by a Senate panel, the New York Times wrote that he had “left open the possibility that the agency could seek permission to use interrogation methods more aggressive than the limited menu that President Obama authorized under new rules … Mr. Panetta also said the agency would continue the Bush administration practice of ‘rendition’ … But he said the agency would refuse to deliver a suspect into the hands of a country known for torture or other actions ‘that violate our human values’.”

The last sentence is of course childishly absurd. The countries chosen to receive rendition prisoners were chosen precisely and solely because they were willing and able to torture them.

Four months after Obama and Panetta took office, the New York Times could report that renditions had reached new heights.

The present news reports indicate that Washington’s obsession with torture stems from 9/11, to prevent a repetition. The president speaks of “the fearful excesses of the post-9/11 era”. There’s something to that idea, but not a great deal. Torture in America is actually as old as the country. What government has been intimately involved with that horror more than the United States? Teaching it, supplying the manuals, supplying the equipment, creation of international torture centers, kidnaping people to these places, solitary confinement, forced feeding, Guantánamo, Abu Ghraib, Bagram, Chile, Brazil, Argentina, Chicago … Lord forgive us!

In 2011, Brazil instituted a National Truth Commission to officially investigate the crimes of the military government, which came to an end in 1985. But Mr. Obama has in fact rejected calls for a truth commission concerning CIA torture. On June 17 of this year, however, when Vice President Joseph Biden was in Brazil, he gave the Truth Commission 43 State Department cables and reports concerning the Brazilian military regime, including one entitled “Widespread Arrests and Psychophysical Interrogation of Suspected Subversives.”

Thus it is that once again the United States of America will not be subjected to any accountability for having broken US laws, international laws, and the fundamental laws of human decency. Obama can expect the same kindness from his successor as he has extended to George W.

“One of the strengths that makes America exceptional is our willingness to openly confront our past, face our imperfections, make changes and do better.” – Barack Obama, written statement issued moments after the Senate report was made public.

And if that pile of hypocrisy is not big enough or smelly enough, try adding to it Bidens’ remark re his visit to Brazil: “I hope that in taking steps to come to grips with our past we can find a way to focus on the immense promise of the future.”

If the torturers of the Bush and Obama administrations are not held accountable in the United States they must be pursued internationally under the principles of universal jurisdiction.

In 1984, an historic step was taken by the United Nations with the drafting of the “Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment” (came into force in 1987, ratified by the United States in 1994). Article 2, section 2 of the Convention states: “No exceptional circumstances whatsoever, whether a state of war or a threat of war, internal political instability or any other public emergency, may be invoked as a justification of torture.”

Such marvelously clear, unequivocal, and principled language, to set a single standard for a world that makes it increasingly difficult for one to feel proud of humanity. We cannot slide back. If today it’s deemed acceptable to torture the person who supposedly has the vital “ticking-bomb” information needed to save lives, tomorrow it will be acceptable to torture him to learn the identities of his alleged co-conspirators. Would we allow slavery to resume for just a short while to serve some “national emergency” or some other “higher purpose”?

If you open the window of torture, even just a crack, the cold air of the Dark Ages will fill the whole room.

Cuba … at long, long last … maybe …

Hopefully, it’s what it appears to be. Cuba will now be treated by the United States as a country worthy of at least as much respect as Washington offers to its highly oppressive, murdering, torturing allies in Saudi Arabia, Egypt, Honduras, Israel, Pakistan, Afghanistan, and elsewhere.

It’s a tough decision to normalize relations with a country whose police force murders its own innocent civilians on almost a daily basis, and even more abroad, but Cuba needs to do it. Maybe the Cubans can civilize the Americans a bit.

Let’s hope that America’s terrible economic embargo against the island will go the way of the dinosaurs, and Cuba will be able to demonstrate more than ever what a rational, democratic, socialist society can create. But they must not open the economy for the Yankee blood-suckers to play with as they have all over the world.

And I’ll be able to go to Cuba not as a thief in the night covering my tracks and risking a huge fine.

But with the Republicans taking over Congress next month, all of this may be just a pipe dream.

Barack Obama could have done this six years ago when he took office; or five years ago when American Alan Gross was first arrested and imprisoned in Cuba. It would have been even easier back then, with Obama’s popularity at its height and Congress not as captured by the Know-Nothings as now.

So, Cuba outlasted all the punishment, all the lies, all the insults, all the deprivations, all the murderous sabotage, all the assassination attempts against Fidel, all the policies to isolate the country. But for many years now, it’s the United States that has been isolated in the Western Hemisphere.

Reason Number 13,336 why capitalism will be the death of us.

Antibiotic-resistant bacteria – the “superbugs” – if left unchecked, could result in 10 million deaths a year by 2050. New drugs to fight the superbugs are desperately needed. But a panel advising President Obama warned in September that “there isn’t a sufficiently robust pipeline of new drugs to replace the ones rendered ineffective by antibiotic resistance.”

The problem, it appears, is that “Antibiotics generally provide low returns on investment, so they are not a highly attractive area for research and development.”

Aha! “Low returns on investment”! What could be simpler to understand? Is it not a concept worth killing and dying for? Just as millions of Americans died in the 20th century so corporations could optimize profits by not protecting the public from tobacco, lead, and asbestos.

Corporations are programmed to optimize profits without regard for the society in which they operate, in much the same way that cancer cells are programmed to proliferate without regard for the health of their host.

Happy New Year. Here’s what you have to look forward to in 2015.

  • January 25: 467 people reported missing from a university in Mexico. US State Department blames Russia.
  • February 1: Military junta overthrows President Nicolás Maduro in Venezuela. Washington decries the loss of democracy.
  • February 2: US recognizes the new Venezuelan military junta, offers it 50 jet fighters and tanks.
  • February 3: Revolution breaks out in Venezuela endangering the military junta; 40,000 American marines land in Caracas to quell the uprising.
  • February 16: White police officer in Chicago fatally shoots a 6-year old black boy holding a toy gun.
  • March 6: Congress passes a new law which states that to become president of the United States a person must have the surname Bush or Clinton.
  • April 30: The Department of Homeland Security announces plan to record the DNA at birth of every child born in the United States.
  • May 19: The Supreme Court rules that police may search anyone if they have reasonable grounds for believing that the person has pockets.
  • May 27: The Transportation Security Administration declares that all airline passengers must strip completely nude at check-in and remain thus until arriving at their destination.
  • June 6: White police officer in Oklahoma City tasers a 7-month-old black child, claiming the child was holding a gun; the gun turns out to be a rattle.
  • July 19: Two subway trains collide in Manhattan. The United States demands that Moscow explain why there was a Russian citizen in each of the trains.
  • September 5: The Democratic Party changes its name to the Republican Lite Party, and announces the opening of a joint bank account with the Republican Party so that corporate lobbyists need make out only one check.
  • September 12: White police officer in Alabama shoots black newborn, confusing the umbilical cord for a noose.
  • November 16: President Obama announces that Iran, Syria, Lebanon, Palestine, North Korea, Sudan, Nicaragua, Venezuela, Bolivia and Cuba all possess weapons of mass destruction; have close ties to the Islamic State, al Qaeda, and the Taliban; are aiding pro-Russian rebels in Ukraine; were involved in 9-11; played a role in the assassination of John F. Kennedy and the attack on Pearl Harbor; are an imminent threat to the United States and all that is decent and holy; and are all “really bad guys”, who even (choke, gasp) use torture!
  • November 21: The United States invades Iran, Syria, Lebanon, Palestine, North Korea, Sudan, Nicaragua, Venezuela, Bolivia and Cuba.
  • December 10: Barack Obama is awarded his second Nobel Peace Prize
  • December 11: To celebrate his new peace prize, Obama sends out drones to assassinate wrong-thinking individuals in Somalia, Afghanistan and Yemen.
  • December 13: Members of Ukraine’s neo-Nazi parties, which hold several high positions in the US-supported government, goose-step through the center of Kiev in full German Storm Trooper uniforms, carrying giant swastika flags, shouting “Heil Hitler”, and singing the Horst Wessel song. Not a word of this appears in any American mainstream media.
  • December 15: US Secretary of State warns Russia to stop meddling in Ukraine, accusing Moscow of wanting to re-create the Soviet Union.
  • December 16: White police officer shoots a black 98-year-old man sitting in a wheel chair, claiming the man pointed a rifle at him. The rifle turns out to be a cane.
  • December 28: The Washington Redskins football team finish their season in last place. The White House blames Vladimir Putin.

Notes

  1. Associated Press, December 11, 2014
  2. New York Times, December 11, 2014
  3. Los Angeles Times, February 1, 2009
  4. New York Times, February 6, 2009
  5. New York Times, May 24, 2009
  6. Washington Post, December 11, 2014
  7. National Security Archive’s Brazil Documentation Project
  8. Washington Post, December 10, 2014
  9. See note 7
  10. Washington Post, December 13, 2014


William Blum is the author of:

  • Killing Hope: US Military and CIA Interventions Since World War 2
  • Rogue State: A Guide to the World’s Only Superpower
  • West-Bloc Dissident: A Cold War Memoir
  • Freeing the World to Death: Essays on the American Empire


Portions of the books can be read, and signed copies purchased, at www.killinghope.org

Email to bblum6@aol.com

Website: WilliamBlum.org

William Blum is a regular columnist for Veracity Voice

The Oil Coup

December 20, 2014 by · Leave a Comment 

US-Saudi Subterfuge Send Stocks and Credit Reeling…

U.S. powerbrokers have put the country at risk of another financial crisis to intensify their economic war on Moscow and to move ahead with their plan to “pivot to Asia”.

Here’s what’s happening: Washington has persuaded the Saudis to flood the market with oil to push down prices, decimate Russia’s economy, and reduce Moscow’s resistance to further NATO encirclement and the spreading of US military bases across Central Asia. The US-Saudi scheme has slashed oil prices by nearly a half since they hit their peak in June. The sharp decline in prices has burst the bubble in high-yield debt which has increased the turbulence in the credit markets while pushing global equities into a tailspin. Even so, the roiled markets and spreading contagion have not deterred Washington from pursuing its reckless plan, a plan which uses Riyadh’s stooge-regime to prosecute Washington’s global resource war. Here’s a brief summary from an article by F. William Engdahl titled “The Secret Stupid Saudi-US Deal on Syria”:

“The details are emerging of a new secret and quite stupid Saudi-US deal on Syria and the so-called IS. It involves oil and gas control of the entire region and the weakening of Russia and Iran by Saudi Arabian flooding the world market with cheap oil. Details were concluded in the September meeting by US Secretary of State John Kerry and the Saudi King…

..the kingdom of Saudi Arabia, has been flooding the market with deep discounted oil, triggering a price war within OPEC… The Saudis are targeting sales to Asia for the discounts and in particular, its major Asian customer, China where it is reportedly offering its crude for a mere $50 to $60 a barrel rather than the earlier price of around $100. That Saudi financial discounting operation in turn is by all appearance being coordinated with a US Treasury financial warfare operation, via its Office of Terrorism and Financial Intelligence, in cooperation with a handful of inside players on Wall Street who control oil derivatives trading. The result is a market panic that is gaining momentum daily. China is quite happy to buy the cheap oil, but her close allies, Russia and Iran, are being hit severely…

According to Rashid Abanmy, President of the Riyadh-based Saudi Arabia Oil Policies and Strategic Expectations Center, the dramatic price collapse is being deliberately caused by the Saudis, OPEC’s largest producer. The public reason claimed is to gain new markets in a global market of weakening oil demand. The real reason, according to Abanmy, is to put pressure on Iran on her nuclear program, and on Russia to end her support for Bashar al-Assad in Syria….More than 50% of Russian state revenue comes from its export sales of oil and gas. The US-Saudi oil price manipulation is aimed at destabilizing several strong opponents of US globalist policies. Targets include Iran and Syria, both allies of Russia in opposing a US sole Superpower. The principal target, however, is Putin’s Russia, the single greatest threat today to that Superpower hegemony. (The Secret Stupid Saudi-US Deal on Syria, F. William Engdahl, BFP)

The US must achieve its objectives in Central Asia or forfeit its top-spot as the world’s only superpower. This is why US policymakers have embarked on such a risky venture. There’s simply no other way to sustain the status quo which allows the US to impose its own coercive dollar system on the world, a system in which the US exchanges paper currency produced-at-will by the Central Bank for valuable raw materials, manufactured products and hard labor. Washington is prepared to defend this extortionist petrodollar recycling system to the end, even if it means nuclear war.

How Flooding the Market Adds to Instability

The destructive and destabilizing knock-on effects of this lunatic plan are visible everywhere. Plummeting oil prices are making it harder for energy companies to get the funding they need to roll over their debt or maintain current operations. Companies borrow based on the size of their reserves, but when prices tumble by nearly 50 percent–as they have in the last six months– the value of those reserves falls sharply which cuts off access to the market leaving CEO’s with the dismal prospect of either selling assets at firesale prices or facing default. If the problem could be contained within the sector, there’d be no reason for concern. But what worries Wall Street is that a surge in energy company failures could ripple through the financial system and wallop the banks. Despite six years of zero rates and monetary easing, the nation’s biggest banks are still perilously undercapitalized, which means that a wave of unexpected bankruptcies could be all it takes to collapse the weaker institutions and tip the system back into crisis. Here’s an excerpt from a post at Automatic Earth titled “Will Oil Kill the Zombies?”:

“If prices fall any further, it would seem that most of the entire shale edifice must of necessity crumble to the ground. And that will cause an absolute earthquake in the financial world, because someone supplied the loans the whole thing leans on. An enormous amount of investors have been chasing high yield, including many institutional investors, and they’re about to get burned something bad….. if oil keeps going the way it has lately, the Fed may instead have to think about bailing out the big Wall Street banks once again.” (Will Oil Kill the Zombies?, Raúl Ilargi Meijer, Automatic Earth)

The problem with falling oil prices is not just mounting deflation or droopy profits; it’s the fact that every part of the industry–exploration, development and production — is propped atop a mountain of red ink (junk bonds). When that debt can no longer be serviced or increased, then the primary lenders (counterparties and financial institutions) sustain heavy losses which domino through the entire system. Take a look at this from Marketwatch:

“There’s ‘no question’ that for energy companies with a riskier debt profile the high-yield debt market “is essentially shut down at this stage,” and there are signs that further pain could hit the sector, ” senior fixed-income strategist at U.S. Bank Wealth Management, Dan Heckman told Marketwatch. “We are getting to the point that it is becoming very concerning.” (Marketwatch)

When energy companies lose access to the market and are unable to borrow at low rates, it’s only a matter of time before they trundle off to extinction.

On Friday, the International Energy Agency (IEA) renewed pressure on prices by lowering its estimate for global demand for oil in 2015. The announcement immediately sent stocks into a nosedive. The Dow Jones Industrial Average (DJIA) lost 315 points by the end of the day, while, according to Bloomberg, more than “$1 trillion was erased from the value of global equities in the week”.

The world is awash in cheap petroleum which is wreaking havoc on domestic shale producers that need prices of roughly $70 per barrel to break-even. With West Texas Intermediate (WTI) presently headed south of 60 bucks–and no bottom in sight–these smaller producers are sure to get clobbered. Pension funds, private equity, banks, and other investors who gambled on these dodgy energy-related junk bonds are going to get their heads handed to them in the months ahead.

The troubles in the oil patch are mainly attributable to the Fed’s easy money policies. By dropping rates to zero and flooding the markets with liquidity, the Fed made it possible for every Tom, Dick and Harry to borrow in the bond market regardless of the quality of the debt. No one figured that the bottom would drop out leaving an entire sector high and dry. Everyone thought the all-powerful Fed could print its way out of any mess. After last week’s bloodbath, however, they’re not nearly as confident. Here’s how Bloomberg sums it up:

“The danger of stimulus-induced bubbles is starting to play out in the market for energy-company debt….Since early 2010, energy producers have raised $550 billion of new bonds and loans as the Federal Reserve held borrowing costs near zero, according to Deutsche Bank AG. With oil prices plunging, investors are questioning the ability of some issuers to meet their debt obligations…

The Fed’s decision to keep benchmark interest rates at record lows for six years has encouraged investors to funnel cash into speculative-grade securities to generate returns, raising concern that risks were being overlooked. A report from Moody’s Investors Service this week found that investor protections in corporate debt are at an all-time low, while average yields on junk bonds were recently lower than what investment-grade companies were paying before the credit crisis.” (Fed Bubble Bursts in $550 Billion of Energy Debt: Credit Markets, Bloomberg)

The Fed’s role in this debacle couldn’t be clearer. Investors piled into these dodgy debt-instruments because they thought Bernanke had their back and would intervene at the first sign of trouble. Now that the bubble has burst and the losses are piling up, the Fed is nowhere to be seen.

In the last week, falling oil prices have started to impact the credit markets where investors are ditching debt on anything that looks at all shaky. The signs of contagion are already apparent and likely to get worse. Investors fear that if they don’t hit the “sell” button now, they won’t be able to find a buyer later. In other words, liquidity is drying up fast which is accelerating the rate of decline. Naturally, this has affected US Treasuries which are still seen as “risk free”. As investors increasingly load up on USTs, long-term yields have been pounded into the ground like a tentpeg. As of Friday, the benchmark 10-year Treasury checked in at a miniscule 2.08 percent, the kind of reading one would expect in the middle of a Depression.

The Saudi-led insurgency has reversed the direction of the market, put global stocks into a nosedive and triggered a panic in the credit markets. And while the financial system edges closer to a full-blown crisis every day, policymakers in Washington have remained resolutely silent on the issue, never uttering as much as a peep of protest for a Saudi policy that can only be described as a deliberate act of financial terrorism.

Why is that? Why have Obama and Co. kept their mouths shut while oil prices have plunged, domestic industries have been demolished, and stocks have gone off a cliff? Could it be that they’re actually in cahoots with the Saudis and that it’s all a big game designed to annihilate enemies of the glorious New World Order?

It certainly looks that way.


Mike Whitney is a regular columnist for Veracity Voice

Mike Whitney lives in Washington state. He can be reached at: fergiewhitney@msn.com

Will Falling Oil Prices Crash The Markets?

December 14, 2014 by · Leave a Comment 

Shale Leads The Way…

Crude oil prices dipped lower on Wednesday pushing down yields on US Treasuries and sending stocks down sharply. The 30-year UST slipped to a Depression era 2.83 percent while all three major US indices plunged into the red. The Dow Jones Industrial Average (DJIA) led the retreat losing a hefty 268 points before the session ended. The proximate cause of Wednesday’s bloodbath was news that OPEC had reduced its estimate of how much oil it would need to produce in 2015 to meet weakening global demand. According to USA Today:

“OPEC lowered its projection for 2015 production to 28.9 million barrels a day, or about 300,000 fewer than previously forecast, and a 12-year low…. That’s about 1.15 million barrels a day less than the cartel pumped last month, when OPEC left unchanged its 30 million barrel daily production quota…

The steep decline in crude price raises fears that small exploration and production companies could go out of business if the prices fall too low. And that, in turn, could cause turmoil among those who are lending to them: Junk-bond purchasers and smaller banks.” (USA Today)

Lower oil prices do not necessarily boost consumption or strengthen growth. Quite the contrary. Weaker demand is a sign that deflationary pressures are building and stagnation is becoming more entrenched. Also, the 42 percent price-drop in benchmark U.S. crude since its peak in June, is pushing highly-leveraged energy companies closer to the brink. If these companies cannot roll over their debts, (due to the lower prices) then many will default which will negatively impact the broader market. Here’s a brief summary from analyst Wolf Richter:

“The price of oil has plunged …and junk bonds in the US energy sector are getting hammered, after a phenomenal boom that peaked this year. Energy companies sold $50 billion in junk bonds through October, 14% of all junk bonds issued! But junk-rated energy companies trying to raise new money to service old debt or to fund costly fracking or off-shore drilling operations are suddenly hitting resistance.

And the erstwhile booming leveraged loans, the ugly sisters of junk bonds, are causing the Fed to have conniptions. Even Fed Chair Yellen singled them out because they involve banks and represent risks to the financial system. Regulators are investigating them and are trying to curtail them through “macroprudential” means, such as cracking down on banks, rather than through monetary means, such as raising rates. And what the Fed has been worrying about is already happening in the energy sector: leveraged loans are getting mauled. And it’s just the beginning…

“If oil can stabilize, the scope for contagion is limited,” Edward Marrinan, macro credit strategist at RBS Securities, told Bloomberg. “But if we see a further fall in prices, there will have to be a reaction in the broader market as problems will spill out and more segments of the high-yield space will feel the pain.”…Unless a miracle happens that will goose the price of oil pronto, there will be defaults, and they will reverberate beyond the oil patch.” (Oil and Gas Bloodbath Spreads to Junk Bonds, Leveraged Loans. Defaults Next, Wolf Ricter, Wolf Street)

The Fed’s low rates and QE pushed down yields on corporate debt as investors gorged on junk thinking the Fed “had their back”. That made it easier for fly-by-night energy companies to borrow tons of money at historic low rates even though their business model might have been pretty shaky. Now that oil is cratering, investors are getting skittish which has pushed up rates making it harder for companies to refinance their debtload. That means a number of these companies going to go bust, which will create losses for the investors and pension funds that bought their debt in the form of financially-engineered products. The question is, is there enough of this financially-engineered gunk piled up on bank balance sheets to start the dominoes tumbling through the system like they did in 2008?

That question was partially answered on Wednesday following OPEC’s dismal forecast which roiled stocks and send yields on risk-free US Treasuries into a nosedive. Investors ditched their stocks in a mad dash for the exits thinking that the worst is yet to come. USTs provide a haven for nervous investors looking for a safe place to hunker down while the storm passes.

Economist Jack Rasmus has an excellent piece at Counterpunch which explains why investors are so jittery. Here’s a clip from his article titled “The Economic Consequences of Global Oil Deflation”:

“Oil deflation may lead to widespread bankruptcies and defaults for various non-financial companies, which will in turn precipitate financial instability events in banks tied to those companies. The collapse of financial assets associated with oil could also have a further ‘chain effect’ on other forms of financial assets, thus spreading the financial instability to other credit markets.” (The Economic Consequences of Global Oil Deflation, Jack Rasmus, CounterPunch)

Falling oil prices typically drag other commodities prices down with them. This, in turn, hurts emerging markets that depend heavily on the sale of raw materials. Already these fragile economies are showing signs of stress from rising inflation and capital flight. In a country like Japan, however, one might think the effect would be positive since the lower yen has made imported oil more expensive. But that’s not the case. Falling oil prices increase deflationary pressures forcing the Bank of Japan to implement more extreme measures to reverse the trend and try to stimulate growth. What new and destabilizing policy will Japan’s Central Bank employ in its effort to dig its way out of recession? And the same question can be asked of Europe too, which has already endured three bouts of recession in the last five years. Here’s Rasmus again on oil deflation and global financial instability:

“Oil is not only a physical commodity bought, sold and traded on global markets; it has also become an important financial asset since the USA and the world began liberalized trading of oil commodity futures…

Just as declines in oil spills over to declines of other physical commodities…price deflation can also ‘spill over’ to other financial assets, causing their decline as well, in a ‘chain like’ effect.

That chain like effect is not dissimilar to what happened with the housing crash in 2006-08. At that time the deep contraction in the global housing sector ( a physical asset) not only ‘spilled over’ to other sectors of the real economy, but to mortgage bonds…and derivatives based upon those bonds, also crashed. The effect was to ‘spill over’ to other forms of financial assets that set off a chain reaction of financial asset deflation.

The same ‘financial asset chain effect’ could arise if oil prices continued to decline below USD$60 a barrel. That would represent a nearly 50 percent deflation in oil prices that could potentially set in motion a more generalized global financial instability event, possibly associated with a collapse of the corporate junk bond market in the USA that has fueled much of USA shale production.” (CounterPunch)

This is precisely the scenario we think will unfold in the months ahead. What Rasmus is talking about is “contagion”, the lethal spill-over from one asset class to another due to deteriorating conditions in the financial markets and too much leverage. When debts can no longer be serviced, defaults follow sucking liquidity from the system which leads to a sudden (and excruciating) repricing event. Rasmus believes that a sharp cutback in Shale gas and oil production could ignite a crash in junk bonds that will pave the way for more bank closures. Here’s what he says:

“The shake out in Shale that is coming will not occur smoothly. It will mean widespread business defaults in the sector. And since much of the drilling has been financed with risky high yield corporate ‘junk’ bonds, the shale shake out could translate into a financial crash of the US corporate junk bond market, which is now very over-extended, leading to regional bank busts in turn.” (CP)

The financial markets are a big bubble just waiting to burst. If Shale doesn’t do the trick, then something else will. It’s just a matter of time.

Rasmus also believes that the current oil-glut is politically motivated. Washington’s powerbrokers persuaded the Saudis to flood the market with petroleum to push down prices and crush oil-dependent Moscow. The US wants a weak and divided Russia that will comply with US plans to increase its military bases in Central Asia and allow NATO to be deployed to its western borders. Here’s Rasmus again:

“Saudi Arabia and its neocon friends in the USA are targeting both Iran and Russia with their new policy of driving down the price of oil. The impact of oil deflation is already severely affecting the Russian and Iranian economies. In other words, this policy of promoting global oil price deflation finds favor with significant political interests in the USA, who want to generate a deeper disruption of Russian and Iranian economies for reasons of global political objectives. It will not be the first time that oil is used as a global political weapon, nor the last.” (CP)

Washington’s strategy is seriously risky. There’s a good chance the plan could backfire and send stocks into freefall wiping out trillions in a flash. Then all the Fed’s work would amount to nothing.

Karma’s a bitch.


Mike Whitney is a regular columnist for Veracity Voice

Mike Whitney lives in Washington state. He can be reached at: fergiewhitney@msn.com

Defending Dollar Imperialism

December 6, 2014 by · Leave a Comment 

Ukraine War Driven by Gas-Dollar Link…

“The Fed’s ‘need’ to take on an even more active role as foreigners further slow the purchases of our paper is to put the pedal to the metal on the currency debasement race now being run in the developed world — a race which is speeding us all toward the end of the present currency regime.” Stephanie Pomboy, MacroMavens

“No matter what our Western counterparts tell us, we can see what’s going on. NATO is blatantly building up its forces in Eastern Europe, including the Black Sea and the Baltic Sea areas. Its operational and combat training activities are gaining in scale.” Russian President Vladimir Putin

If there was a way the United States could achieve its long-term strategic objectives and, at the same time, avoid a war with Russia, it would do so. Unfortunately, that is not an option, which is why there’s going to be a clash between the two nuclear-armed adversaries sometime in the near future.

Let me explain: The Obama administration is trying to rebalance US policy in a way that shifts the focus of attention from the Middle East to Asia, which is expected to be the fastest growing region in the coming century. This policy-change is called the “pivot” to Asia. In order to benefit from Asia’s surge of growth, the US plans to beef up its presence on the continent, expand its military bases, strengthen bilateral alliances and trade agreements, and assume the role of regional security kingpin. The not-so-secret purpose of the policy is China “containment”, that is, Washington wants to preserve its position as the world’s only superpower by controlling China’s explosive growth. (The US wants a weak, divided China that will do what it’s told.)

In order to achieve its goals in Asia, the US needs to push NATO further eastward, tighten its encirclement of Russia, and control the flow of oil and gas from east to west. These are the necessary preconditions for establishing US hegemonic rule over the continent. And this is why the Obama administration is so invested in Kiev’s blundering junta-government; it’s because Washington needs Poroshenko’s neo Nazi shock troops to draw Russia into a conflagration in Ukraine that will drain its resources, discredit Putin in the eyes of his EU trading partners, and create the pretext for deploying NATO to Russia’s western border.

The idea that Obama’s proxy army in Ukraine is defending the country’s sovereignty is pure bunkum. What’s going on below the surface is the US is trying to stave off irreversible economic decline and an ever-shrinking share of global GDP through military force. What we’re seeing in Ukraine today, is a 21st century version of the Great Game implemented by political fantasists and Koolaid drinkers who think they can turn the clock back to the post WW2 heyday of the US Empire when the world was America’s oyster. Thankfully, that period is over.

Keep in mind, the glorious US military has spent the last 13 years fighting sheep herders in flip-flops in Afghanistan in a conflict that, at best, could be characterized as a stalemate. And now the White House wants to take on Russia?

Can you appreciate the insanity of the policy?

This is why Secretary of Defense Chuck Hagel was sacked last week, because he wasn’t sufficiently eager to pursue this madcap policy of escalating the wars in Afghanistan, Iraq, Syria and Ukraine. Everyone knows it’s true, the administration hasn’t even tried to deny it. They’d rather stick with foam-at-the-mouth buffoons, like Susan Rice and Samantha Powers, then a decorated veteran who has more credibility and intelligence in his little finger than Obama’s whole National Security team put together.

So now Obama is completely surrounded by rabid warmongering imbeciles, all of whom ascribe to the same fairytale that the US is going to dust-off Russia, remove Assad, redraw the map of the Middle East, control the flow of gas and oil from the ME to markets in the EU, and establish myriad beachheads across Asia where they can keep a tight grip on China’s growth.

Tell me, dear reader, doesn’t that strike you as a bit improbable?

But, of course, the Obama claque think it’s all within their grasp, because, well, because that’s what they’ve been told to think, and because that’s what the US has to do if it wants to maintain its exalted position as the world’s lone superpower when its economic significance in the world is steadily declining. You see, here’s the thing: The exceptional nation is becoming more unexceptional all the time, and that’s what has the political class worried, because they see the handwriting on the wall, and the writing says, “Enjoy it while it lasts, buddy, cuz you ain’t gonna be numero uno much longer.”

And the US has allies in this wacky crusade too, notably Israel and Saudi Arabia. The Saudis have been particularly helpful lately by flooding the market with oil to push down prices and crush the Russian economy. (On Friday, Benchmark crude oil prices plummeted to a four-year low, with Brent crude sinking to $69.11 a barrel.) The Obama administration is using the classic one-two punch of economic sanctions and plunging oil revenues to bully Moscow into withdrawing from Crimea so Washington can move its nuclear arsenal to within spitting distance of Moscow. Here’s a bit of background from the Guardian:

“Think about how the Obama administration sees the state of the world. It wants Tehran to come to heel over its nuclear programme. It wants Vladimir Putin to back off in eastern Ukraine. But after recent experiences in Iraq and Afghanistan, the White House has no desire to put American boots on the ground. Instead, with the help of its Saudi ally, Washington is trying to drive down the oil price by flooding an already weak market with crude. As the Russians and the Iranians are heavily dependent on oil exports, the assumption is that they will become easier to deal with.

John Kerry, the US secretary of state, allegedly struck a deal with King Abdullah in September under which the Saudis would sell crude at below the prevailing market price. That would help explain why the price has been falling at a time when, given the turmoil in Iraq and Syria caused by Islamic State, it would normally have been rising.” (Stakes are high as US plays the oil card against Iran and Russia, Larry Eliot, Guardian)

And here’s more from Salon’s Patrick L. Smith at Salon:

“Less than a week after the Minsk Protocol was signed, Kerry made a little-noted trip to Jeddah to see King Abdullah at his summer residence. When it was reported at all, this was put across as part of Kerry’s campaign to secure Arab support in the fight against the Islamic State.

Stop right there. That is not all there was to the visit, my trustworthy sources tell me. The other half of the visit had to do with Washington’s unabated desire to ruin the Russian economy. To do this, Kerry told the Saudis 1) to raise production and 2) to cut its crude price. Keep in mind these pertinent numbers: The Saudis produce a barrel of oil for less than $30 as break-even in the national budget; the Russians need $105.

Shortly after Kerry’s visit, the Saudis began increasing production, sure enough — by more than 100,000 barrels daily during the rest of September, more apparently to come…

Think about this. Winter is coming, there are serious production outages now in Iraq, Nigeria, Venezuela and Libya, other OPEC members are screaming for relief, and the Saudis make back-to-back moves certain to push falling prices still lower? You do the math, with Kerry’s unreported itinerary in mind, and to help you along I offer this from an extremely well-positioned source in the commodities markets: “There are very big hands pushing oil into global supply now,” this source wrote in an e-mail note the other day.” (What Really Happened in Beijing: Putin, Obama, Xi And The Back Story The Media Won’t Tell You, Patrick L. Smith, Salon)

The Obama team managed to persuade our good buddies the Saudis to flood the market with oil, drive down prices, and put the Russian economy into a nosedive. At the same time, the US has intensified its economic sanctions, done everything in its power to sabotage Gazprom’s South Stream pipeline (that would bypass Ukraine and deliver natural gas to Europe via a southern route), and cajole the Ukrainian parliament into auctioning off 49 percent of the leasing rights and underground storage facilities to privately-owned foreign corporations.

How do you like that? So the US has launched a full-blown economic war against Russia that’s been completely omitted in the western media. Are you surprised?

Washington is determined to block further Russo-EU economic integration in order to collapse the Russian economy and put foreign capital in control of regional energy distribution. It’s all about the pivot. The big money guys figure the US has to pivot to Asia to be a player in the next century. All of these unprovoked attacks on Moscow are based on that one lunatic strategy.

But aren’t people in the EU going to be angry when they can’t get the energy they need (at the prices they want) to run their businesses and heat their homes?

Washington doesn’t think so. Washington thinks its allies in the Middle East can meet the EU’s energy needs without any difficulty. Check out this clip from an article by analyst F. William Engdahl:

“…details are emerging of a new secret and quite stupid Saudi-US deal on Syria and the so-called IS. It involves oil and gas control of the entire region and the weakening of Russia and Iran by Saudi Arabian flooding the world market with cheap oil. ….

On September 11, US Secretary of State Kerry met Saudi King Abdullah at his palace on the Red Sea. The King invited former head of Saudi intelligence, Prince Bandar to attend. There a deal was hammered out which saw Saudi support for the Syrian airstrikes against ISIS on condition Washington backed the Saudis in toppling Assad, a firm ally of Russia and de facto of Iran and an obstacle to Saudi and UAE plans to control the emerging EU natural gas market and destroy Russia’s lucrative EU trade. A report in the Wall Street Journal noted there had been “months of behind-the-scenes work by the US and Arab leaders, who agreed on the need to cooperate against Islamic State, but not how or when.

The process gave the Saudis leverage to extract a fresh US commitment to beef up training for rebels fighting Mr. Assad, whose demise the Saudis still see as a top priority.”
(The Secret Stupid Saudi-US Deal on Syria, F. William Engdahl, BFP)

So the wars in Ukraine and Syria are not really separate conflicts at all. They’re both part of the same global resource war the US has been prosecuting for the last decade and a half. The US plans to cut off the flow of Russian gas and replace it with gas from Qatar which will flow through Syria and onto the EU market after Assad is toppled.

Here’s what’s going on: Syria’s troubles began shortly after it announced that it was going to be part of an “Islamic pipeline” that would transfer natural gas from the South Pars gas field off the coast of Iran across Iraq and Syria, eventually connecting to Greece and the lucrative EU market. According to author Dmitri Minin:

“A gas pipeline from Iran would be highly profitable for Syria. Europe would gain from it as well, but clearly someone in the West didn’t like it. The West’s gas-supplying allies in the Persian Gulf weren’t happy with it either, nor was would-be no. 1 gas transporter Turkey, as it would then be out of the game.” (The Geopolitics of Gas and the Syrian Crisis: Syrian “Opposition” Armed to Thwart Construction of Iran-Iraq-Syria Gas Pipeline, Dmitri Minin, Global Research)

Two months after Assad signed the deal with Iraq and Iran, the rebellion broke out in Syria. That’s quite a coincidence, don’t you think? Funny how frequently those kinds of things happen when foreign leaders don’t march to Washington’s tune.

Here’s more from Minin:

“Qatar is doing all it can to thwart the construction of the pipeline, including arming the opposition fighters in Syria, many of whom come from Saudi Arabia, Pakistan and Libya…

The Arabic newspaper Al-Akhbar cites information according to which there is a plan approved by the U.S. government to create a new pipeline for transporting gas from Qatar to Europe involving Turkey and Israel…

This new pipeline is to begin in Qatar, cross Saudi territory and then the territory of Jordan, thus bypassing Shiite Iraq, and reach Syria. Near Homs the pipeline is to branch in three directions: to Latakia, Tripoli in northern Lebanon, and Turkey. Homs, where there are also hydrocarbon reserves, is the project’s main crossroads, and it is not surprising… that the fiercest fighting is taking place. Here the fate of Syria is being decided. The parts of Syrian territory where detachments of rebels are operating with the support of the U.S., Qatar and Turkey, that is, the north, Homs and the environs of Damascus, coincide with the route that the pipeline is to follow to Turkey and Tripoli, Lebanon. A comparison of a map of armed hostilities and a map of the Qatar pipeline route indicates a link between armed activities and the desire to control these Syrian territories. Qatar’s allies are trying to accomplish three goals: to break Russia’s gas monopoly in Europe; to free Turkey from its dependence on Iranian gas; and to give Israel the chance to export its gas to Europe by land at less cost.”

How do you like that; another coincidence: “The fiercest fighting (in Syria) is taking place” where there’s massive “hydrocarbon reserves” and along the planned pipeline route.

So the conflict in Syria isn’t really about terrorism at all. It’s about natural gas, competing pipelines and access to markets in the EU. It’s about money and power. The whole ISIS-thing is a big hoax to conceal what’s really going on, which is a global war for resources, more blood for oil.

But how does the US benefit from all of this, after all, won’t the gas revenues go to Qatar and the transit countries rather than the US?

Yep, they sure will. But the gas will also be denominated in dollars which will shore up demand for USDs thus perpetuating the petrodollar recycling system which creates a vast market for US debt and which helps to keep US stocks and bonds in the nosebleed section. And that’s what this is all about, preserving dollar supremacy by forcing nations to hold excessive amounts of USDs to use in their energy transactions and to service their dollar-denominated debts.

As long as Washington can control the world’s energy supplies and force the world to trade in dollars, it can spend well in excess of what it produces and not be held to account. It’s like having a credit card you never have to pay off.

That’s a racket Uncle Sam is prepared to defend with everything he’s got, even nukes.


Mike Whitney is a regular columnist for Veracity Voice

Mike Whitney lives in Washington state. He can be reached at: fergiewhitney@msn.com

Anti-Putin Propaganda Not Working

November 27, 2014 by · Leave a Comment 

Anyone who follows the news regularly, knows that the media has done everything in its power to smear Vladimir Putin and to demonize him as a tyrant and a thug. Fortunately, most people aren’t buying it.
Yes, I’ve seen the polls that say that Putin and Russia are viewed “less favorably” than they were prior to the crisis in Ukraine. In fact, here’s a clip from a recent PEW survey which seems to prove that I’m wrong:

“Across the 44 countries surveyed, a median percentage of 43% have unfavorable opinions of Russia, compared with 34% who are positive.

Negative ratings of Russia have increased significantly since 2013 in 20 of the 36 countries surveyed…

Americans and Europeans in particular have soured on Russia over the past 12 months. More than six-in-ten in Poland, Germany, Italy, Spain, France, the U.S. and the UK have an unfavorable image of Russia. And in all but one of these countries negative reviews are up by double digits since last year, including by 29 percentage points in the U.S., 27 points in Poland, 24 points in the UK and 23 points in Spain.” (Russia’s Global Image Negative amid Crisis in Ukraine: Americans’ and Europeans’ Views Sour Dramatically, PEW Research)

These results strongly suggest that the public blames Moscow for the fighting in Ukraine and (presumably)agrees with the prevailing storyline that Putin is a vicious aggressor who seized Crimea in order to rebuild the Soviet Empire. The problem with the PEW survey is that the results are based random samples of nationwide face-to-face or telephone interviews.

Why is that a problem?

It’s a problem because the man-on-the-street hasn’t the foggiest idea of what’s going on in Ukraine. All he knows is what he’s heard on TV. So, naturally, when he’s asked to offer his opinion on the matter, he’s going to regurgitate some variation of the official version, which is that Putin is responsible.

But try asking someone who’s actually been following events in Ukraine that same question, and you’re going to get an entirely different answer. Among the people who follow the daily developments in Ukraine, roughly two out of three support the Russian position. This isn’t something you’re going to find in the survey data, but if you take the time to comb the comments lines in the international media, you’ll see what I’m saying is true.

I hadn’t figured this out until last week’s G-20 Summit in Brisbane when Canada’s PM Stephen Harper brusquely greeted Putin saying, “I guess I’ll shake your hand, but I only have one thing to say to you: you need to get out of Ukraine.”

The incident immediately became headline news around the world as journalists for all the major media heaped praise on Harper for courageously “shirt-fronting” the dastardly Putin. What was left out in the media’s account of the exchange, was Putin’s crisp retort, which was, “Unfortunately it is impossible, (for us to leave Ukraine) because we are not there.”

Touché. As you might expect, Putin’s response did not fit with the media’s narrative, so it was scrubbed from the coverage altogether.

The Harper incident was a particularly big deal in Canada where all the newspapers ran gushing articles lauding the prime minister for his righteousness and fortitude. Oddly enough, however, only a small percentage of the people who commented on the dust-up, saw Harper as the hero. Here’s a few samples of what ordinary people had to say. This is from BobsOpinion:

“Harper embarrasses Canadians again on the international stage. It will take years for Canadians to re-build our international relationships and to re-build our reputation.”

This comment is from redondex:

“Harper made a childish and baseless remark to Putin and walked off with a grin of a proud five year old spoilt kid. All Harper achieved was to ridicule himself in front of the rest of the world. That is our leaders usual behavior.”

This is from Makman1:

“I was under the impression that a proper democracy would first use negotiating as a way to understand the divergent groups involved in the Ukrainian revolution and then apply a political solution, if possible. The present Ukrainian government immediately used force. PERIOD! The Harper government, instead of using its “influence” to attempt to defuse a complex situation blindly followed the actions of the USA. If Harper really cared at all he would ask his foreign minister to get directly involved with Russian and Ukrainian counterparts and help reach a compromise…. Hopefully, Harper is not supporting Ukrainian right wing fascists?”

This is from Jörð:

“It’s not wise for Harper to follow America’s lead on every foreign policy. The USA government has a terrible track record when it comes to getting things right in foreign lands. Also Putin was correct when he responded to Harper’s comment by saying “It’s impossible, we are not there.” Technically Russia is not “In” the Ukraine.”

This is Time4Change:

“This is another example of Harper BLUSTERING backed with NO SUBSTANCE! Why are there NO SANCTIONS on the Russian Energy Giants Rosneft and Rostec? Could it be the hundreds of billions of $s the Russians have invested in the tar sands have caused Harper to be the SOFTEST on ACTIONS while shouting the loudest.”

And this is from Mt Athabaska:

” …one day Harper will reach puberty on global affairs.”

It’s worth noting that these comments were lifted from article that was published by the Canadian Broadcasting Corporation. I was shocked at how harshly Harper was criticized by his own countrymen. I was also surprised that the author’s obvious anti-Putin bias had virtually no impact on the opinions of the people who commented on the incident. In fact, it appeared to make many of them mad.

I should also mention that I omitted all of the comments that lambasted Harper for hiding in a broom closet “while a gun battle ensued in a nearby hallway of the Parliament building in Ottawa” in early October. (See here: Needless to say, Harper’s comical performance at the G-20 hasn’t convinced anyone that he’s the courageous leader he imagines himself to be.)

The media is increasingly worried that it’s losing its ability to persuade people to support policies that only serve the interests of elites. The media has rolled out all the heavy artillery in its campaign to demonize Putin, but the strategy hasn’t worked. In fact, it’s backfired quite badly leading some publications to cancel their comments section altogether.

And the response from readers has been huge too, mainly because the standoff between two nuclear-armed adversaries has galvanized the publics’ attention. For example, in the CBC article I cited above, more than 2,500 comments have been posted already, while many of the other articles on Ukraine or Putin have exceeded 6,000 comments. This just shows how closely people are following events and how passionate they feel about the policy.

And, as we said earlier, this isn’t just a Canadian phenom either. For example, here are a few of the comments I picked up from an article in the conservative UK Telegraph in an article titled Global economy to suffer as Putin quits G20 early.

Zeug Gezeugt:

“The US supports the neo-Nazi ethnic cleansing campaign in east Ukraine, Russia supports the Russian speaking Ukrainian majority in the east against it. Pretty simple really, and the US enforced sanctions can only harm EU Russian relations, a win-win all round for the neoconservative hawks.”

Pamela Cohen:

“So, the media tells us in the Title that Putin is to blame when the Global economy suffers, because he left the G20 early. What stupidity. And what a statement in bringing warships as their targeted President attends yet another meeting. Good for Putin. Blame the US-backed coup and looting and 4000 deaths on Putin, and blame the Ukrainian plane that shot down a passenger flight on him, too. Then shun him at a world meeting, as if he doesn’t have the right and responsibility to defend his country’s borders, Naval base, pipeline and brothers in the Ukraine as they are shelled and killed by US manipulation.

Instead of shock and awe and intruding where they didn’t belong like the US in all the Mid-Eastern countries according to long-ago made plans, Putin sends humanitarian aid and the people vote in Donetsk and Luhansk.

Putin-not all Americans are stupid sheep. My apologies for the onslaught of ignorance and imperialism. You are standing up to bullies of the worst kind. The world needs peaceful solutions to restore the harm of NWO fanaticism and corrupt bankers. Hold the line.”

MP Jones: “The US never ended the cold war and the ‘useful idiots’ in this context are us in Europe and the UK.”

Richard N:

“Most British people are deeply unconvinced by the flood of US and EU propaganda over Ukraine, trying to cast Russia as the villain – when the civil war there was caused directly by the US and their EU side kicks backing a coup to overthrow the elected government of a sovereign country, Ukraine.”

timepass:

“With due respect to the author, you say that his (Putin’s) popularity will rise at home as a consequence of this. Please read the message boards North American and European, you will find his popularity seems to have increased everywhere.

Guess the Brains behind 5 eyes and snooping will now have to move into the new reality of the power of the internet to provide information which they would not like others to get. Just a question of time before they make their next move – Censorship!”

Busufi:

“If, the ‘Seven Dwarfs’ (US, UK, EU, Japan, Australia, Canada, and South Africa) like bullies, weren’t so obsessed with beating Russia or China into a corner, rather than bringing Russia or China into their corner; the world would be a better place. Co-operation works better than devastation.”

John Derbyshire :

“Why all this Anti Russian propaganda. The fools who run the West keep creating bogeymen Bin Laden, ISIS, oddly both had connections to Western Powers. So as we face an economic down in the world economy we need another bogeyman, and up pops Putin in the Capitalist controlled media!

People seem to have short memories of pre Putin era, when Yeltsin backed by the West led the country to economic meltdown. Maybe he has scant regard for democratic institutions, but do Western governments support the views of the people!

All of this came about when the United States pushed Nato’s borders eastward and involved themselves in the Ukraine, particularly Mr Kerry. Russia felt itself threatened not by demands of democracy a device used by the worlds superpower, but the growing influence of the United States in the region. The fact that the USA exploited ethnic tensions only shows what was their intention in the region.”

petergardener:

“If the objective is to make Mr Putin appear isolated on the world stage in order to make him less popular at home, it isn’t working and also shows a profound misunderstanding of the Russian mind-set. ‘

Our Western political leaders also have a profound misunderstanding of strategy. Just about everything they do in relation to Russia is wrong and gains the West nothing. But they do like willy waving. Just a pity they do so much damage while they are at it.”

RedBaron9495: “With the public, the effect is rebounding and probably starting to gain Putin more support and worldwide sympathy. This British news forum is good example of that. They made the mistake of going into overkill…..and the public are wising up to the propaganda. They seen this all before prior to Iraq 2003 invasion…and again with Gaddafi.”

Circle of DNA :

“Well, the lives of average folks in Russia has been drastically improved since Putin took the reins of power. He defends Russian interests, fights the empire of chaos, and is massively supported by his people. He is also well educated and a first class statesmen. What is there not to like about him?”

Alltaxationistheft: “The Russian people appreciate how lucky they’ve been for Vladimir Putin to be around at the right time to resist the Neocon supremacist Wolfowitz doctrine…

Since the 1990s , the war mongering maniacs in the West have been planning to asset strip, and plunder Russia via ”liberal democracy”, claiming its natural resources while funding serial inter-ethnic tribal wars via US allies Qatar and Saudi Arabia…

In the 1990s, Russian people were driven into starvation ,prostitution and suicide under pro American ”Liberal” US corporate puppet Yeltsin… but Putin kicked the CIA EU Mossad lunatics out and has been re-building a Russia into a world power ever since.”

anonymous:

“The classless western free (loading) world that produces very little except paper currency, lies and bullshit. I am surprised Mr. Putin came and surrounded himself with such low life scum.
When all the western oligarchs hate someone as much as they hate President Putin, you know he has to be doing something right.”

There’s no need to be selective. Curious readers should go to any editorial platform that covers the crisis in Ukraine and judge for themselves if what I’m saying is true or not. The comments above are in no way extraordinary. What they do show, however, is that the media is losing the propaganda war in pretty stunning fashion, and that’s a huge victory for ordinary people. It’s very difficult for elites to prosecute their criminal wars or implement their rip-off economic policies when people can clearly see what they’re up to.

Now check out this article in the German paper Zeit Online where the author bemoans the media’s loss of influence. The article is titled “How Putin Divides”:

“Why do so many German citizens judge the crisis in Crimea in a completely different way than politicians and the media?

In my 30 years of experience with debates, I have never seen anything like what is now happening in Germany in the dispute over Russia and Crimea….

Unless surveys are misleading, two-thirds of German citizens, voters and readers stand opposed to four-fifths of the political class – in other words, to the government, to the overwhelming majority of members of parliament and to most newspapers and broadcasters. But what does “stand” mean? Many are downright up in arms. And from what one can gauge from letters to the editor, the share of critics seems significantly higher now than what was triggered by Sarrazin’s inflammatory book back then.” (Zeit Online)

Did you catch that part about the “two-thirds of German citizens.. stand opposed to four-fifths of the political class…and to most newspapers and broadcasters”?

That’s a triumph in itself, isn’t it? And what is the issue they disagree about?

They disagree “about the conflict between an aggressive autocrat (Bad Vlad) and Western democracies.”(the Washington-led troublemakers)

Here’s more from the same article:

“…the legitimacy of international law is being questioned in an offensive manner, while the legitimacy of Putin’s nationalist-imperialist ideology is being seriously considered….. It doesn’t do any good to accuse the majority of sheepishness or base economic selfishness, even if that seems to be the driving motive of some business leaders… The issue goes deeper, much deeper.” (How Putin Divides, Von Bernd Ulrich, Zeit Online)

“The legitimacy of international law is being questioned”?!?

Have you ever read such crybaby gibberish in your life?

Why is “the legitimacy of international law is being questioned”? Because people don’t accept blindly what they read the papers and hear on the news anymore? Because corporate editors no longer control how people think about issues? Because people are using their critical thinking skills to see through the lies and bullshit that idiots like the author ladle out in heaping doses every day? Is that why?

It seems to me that that’s a positive development, that people should question whatever they read in the papers and look for other sources of information before they form an opinion.

The bottom line is that no one believes the goofy propaganda the western media is trying to ram down the everyone’s throat anymore.

As kyle555 at Zero Hedge says: “India, China, Brazil and a host of other countries, representing more than half the world’s population, aren’t buying the western imperialist narrative on Ukraine. Nor are major segments of the domestic populations of the countries that are warmongering against Russia.”

Nor do they believe that US wars are a force for good in the world. Here’s strannick at Zero Hedge:

“Russia has seen firsthand the American dream for other nations, as American backed Oligarchs pillaged Russia while it’s people starved and were impoverished. Putin loves his country, and won’t sit on his thumbs while America attempts to encircle it through proxies while rationalizing its actions through corrupt MSMedia propaganda.”

Nor are they buying the “Putin is Hitler” crappola.

This is from smacker:

“People see in Putin a proud national leader who has the guts to stand up to our own criminals and who has over 80% support from his own population. That is enough to admire the guy, whatever else he might be.”

This is from Gaius frakkin':

“A lot of the hatred from the political puppets in the West is due to Putin’s popularity. They’re jealous sociopaths who yearn to be respected and admired as much as him. The fact that Putin’s popularity is never mentioned is the key tell.”

And this from Joe Tierney:

“Vladdy-Poot is hammering home the point that the euros need to stop being America’s bitches, think for themselves, consider the terrible “costs” accruing to them for “wearing the blue dress” for America.

…America’s “global chaos ploy” is failing. Its cynical, “throw everyone under the bus” strategy just to cut across the rise of Russia-China is exposed for what it is – America cares nothing about the euros or anyone else. All it cares about is its own global dominance in perpetuity, no matter the “costs” to the rest of the world, including its friends and allies.

Putin has balls the size of the moon, and you can damn well bet that right now Russia and Putin are secretly being cheered on a grand scale around the globe.”

There’s a reason why, according to Gallup, Trust in Media (is at an) All-Time Low. It’s because the corporate media is the most perfidious, double-dealing, hypocritical institution in the country today. That’s why the anti-Putin propaganda has fallen on deaf ears. It’s because most people know you can’t believe anything you read in the news.


Mike Whitney is a regular columnist for Veracity Voice

Mike Whitney lives in Washington state. He can be reached at: fergiewhitney@msn.com

A New Push For Peace In Syria?

November 16, 2014 by · Leave a Comment 

Why are there no serious peace talks to end the war in Syria? After robbing over 130,000 people of their lives, and evicting over 9 million refugees from their homes, the Syrian war has infected nearly every region of the Middle East. Yet among the U.S. and its regional allies there are no public discussions about a viable peace plan, only war talk.

It’s hard to talk peace when the United States is still maneuvering for war, having recently given $500 million to arm and train Syrian rebels, while also brokering a deal with Saudi Arabia to open a new Syrian rebel training camp, in addition to the one already functioning in Jordan. Instead of using Obama’s vast Middle East influence for peace he has used it to push war.

The brilliant failure of the U.S.-led Geneva peace talks on Syria was done without the seriousness demanded by the wholesale destruction of a nation. Obama used the talks to pursue “U.S. interests,” having purposely excluded Iran from the talks while trying to leverage disproportionate power for Obama’s “Free Syrian Army” rebels, who enjoy minuscule power on the ground as they used peace talks to make unrealistic demands.

Obama played a passive role in the peace talks, allowing them to flounder instead of publicly putting forth serious proposals that reflected the situation on the ground. There have been no talks since January and Geneva III is yet unscheduled, as Obama seems committed only to giving the rebels more bargaining power via more war, the logic being that if the rebels are armed and trained appropriately, they’ll eventually be able to win back enough land to force the Assad government to bargain on equal terms.

The giant void in the market for peace has opened up opportunities for Russia and Egypt, who reportedly are attempting to insert themselves as leaders in Middle East diplomacy, in part to expand their influence, in part to protect themselves from the conflagration of Islamic extremism the conflict is producing.

Mint Press reports on the still-developing story:

“Moscow and Cairo are preparing for a conference between the Syrian regime and the opposition in the hope of bringing them together in a transitional government that ‘fights terrorism’…the agenda of the conference to be held between the two sides includes establishing a transitional Syrian government with extensive powers while maintaining Syrian President Bashar al-Assad’s authority over the army and security institutions.”

If such a proposal comes to fruition its merits must be seriously debated on the world stage, where Obama would very likely do his best to sabotage the peace. This is because Obama’s rebels on the ground in Syria — loosely organized under the “Free Syrian Army” banner — are powerless, and a Russia-led peace process would reveal this fact and apply it to a peace treaty, leaving little influence for the Obama administration in the new government. This is a peace deal Obama would rather kill.

Obama’s rebels are weak while the Syrian Government has made substantial military gains. Most notably a recent peace deal was won in Syria’s largest city Aleppo, modeled after the peace deal in Homs that allowed rebels to leave unarmed while giving de-facto control of the city to the government.

Interestingly, veteran Middle East journalist Robert Fisk recently questioned not only the relevance of Obama’s Free Syrian Army, but it’s very existence. Fisk explains:

“The Free Syrian Army I think drinks a lot of coffee in Istanbul. I have never come across it – except in the first months of the fighting, I’ve never come across even prisoners from the Free Syrian Army…You know, the FSA, in the eyes of the Syrians, doesn’t really exist. They’ve got al-Qaeda, Nusrah, various other Islamist groups, and now of course ISIS…But I don’t think they care very much about the Free Syrian Army. One officer told me that some have been accepted back into the Syrian Army, so they could go home. Others had been allowed to go home and they were not permitted to serve in the Syrian Army anymore. I think that the Free Syrian Army is a complete myth and I don’t believe it really exists and nor do the Syrians…”

Fisk’s analysis of the FSA punctuates the perspective of many who have long questioned whether the FSA had been totally absorbed by the Islamic extremist militias. At most the FSA exists in tiny irrelevant pockets, though Fisk thinks the FSA might be an Obama administration fantasy used to justify the ongoing Syrian war.

Aside from Obama’s weakness on the ground, there are broader geo-political reasons Obama would reject a Russia/Egypt-led peace. For one, the Obama Administration only recently made a long term investment in war, by giving the $500 billion to the Syrian rebels and training thousands more in Saudi Arabia, actions that effectively dismissed any meaningful reconciliation with Iran.

Obama chose instead to reinforce the close alliances with pariah states Saudi Arabia and Israel, and both are demanding that Syria be destroyed. By re-committing himself to Saudi Arabia, Turkey, and Israel, Obama has essentially abandoned peace with Syria and Iran, since Obama’s allies want Syria and Iran destroyed.

If Obama followed the lead of Russia and Egypt in the peace process, his allies would abandon him, since they’ve invested huge sums of money, arms, and their political livelihoods on making sure their governments and domestic companies profit off of the demise of the Syrian government.

This is the basis for the complete geo-political stalemate in the Middle East. Of course the giant U.S. corporations that benefit from Middle East dominance are applying maximum pressure to continue war. The stalemate has become so obvious and destructive in Syria that Russia and Egypt haveinserted themselves as power brokers, which would act to bolster their political-economic leverage while pushing the U.S. out.

Regional power scrambling aside, if a rational peace deal were put forth —whether it’s brokered by Russia, Egypt, or whomever — the world must demand that peace be pursued, lest the Syrian catastrophe continue.

Obama and his regional allies have proven totally incapable of producing any realistic peace proposal — they’ve been too consumed with war. Obama has yet another chance to recognize the results of this failed proxy war and accept a peace that is a 100,000 lives overdue, or it can forge ahead to expand the killing. Stopping the war is as easy as acknowledging the reality, and to forge a treaty that reflects it.


Shamus Cooke is a regular columnist for Veracity Voice

He can be reached at shamuscook@yahoo.com

Will Seif al Islam Lead the Expulsion of the ISIS Affiliate, Al Fajr Libya?

November 1, 2014 by · 1 Comment 

Time will tell…

With the Abu Baker al-Siddiq Brigade, Zintan, Libya…

A second interview by this observer with Seif al Islam Gadhafi, formerly the heir apparent to his father Moammar, was sought and finally arranged as a follow up to an earlier one focusing of my interest in the Imam Musa Sadr case. That case involves a great crime against a great man and conciliator and his historic cause, and exposes those who betrayed him in Lebanon and two other countries while swearing their personal devotion and shedding crocodile tears over the past 36 years. That research is nearing completion and publication awaits DNA results from body samples more credible than the ones offered by the Bosnia laboratory two years ago and immediately demonstrated to be fraudulent. The story of why that particular lab was chosen and by who goes to the essence of the current stonewalling campaign with respect to informing the public about what exactly happened to Imam Sadr and his partners on 8/3l/1978 in Tripoli, Libya. It also identifies who instructed Gadhafi to kill them over the strong objections from the PLO’s Yassir Arafat who spoke with Gadhafi and tried to save the trio of Lebanese Shia.

But our discussion soon turned to other subject as Seif’s jailers may have taken seriously my joke that if they extended the original 20 minutes I was granted to two hours, I would deliver to them 10 US Visas and they could fill in any names the might choose. Truth told, of course I could not even get myself a passport renewal as former US Ambassador Jeffrey Feltman reportedly sneered at a US Embassy Christmas party a few years back, “Lamb will serve ten years hard time in the Feds for hobnobbing with terrorists (Hezbollah in those days…who knows today?) when we get him back home.” I admit that Jeff and I both have a problem with Hezbollah. His is because Hezbollah just may liberate Palestine and mine is that Hezbollah needs to do more in Lebanon and use 90 minutes of Parliament’s time, where it has the power, to grant Palestinian refugees in Lebanon the right to work and to own a home.

Meanwhile, Da’ish (IS) is metastasizing fast in Libya through its main affiliate al Fajr Libya (Libya Dawn) and plans to add Tripoli, to its Islamic Caliphate along with Baghdad, Damascus, Amman and Beirut during the coming months and if necessary, years. This, according to Seif al Islam and representatives of the Zintan brigades based southwest of Tripoli as well as two representatives of other tribes and militia moving toward supporting the still vital Gadhafi regime remnants.

Libya may be the lowest hanging ripe fruit within easy reach of Da’ish (IS) and its growing number of affiliates, according to US Ambassador Deborah Jones during a recent visit to the US Embassy in Malta, to discuss her own problems in Libya which include the 8/31/14 take-over by al Fajr Libya (FL) of the US embassy compound barely a month after it was evacuated and moved to Tunisia for the second time since February of 2011. Secretary of State John Kerry reassured the media in Washington recently that “the embassy was not really closed, but had moved out of Libya”. One Religion Professor at Tripoli University joked last week that “Kerry is correct, the US embassy is here but it’s in a state of occultation. We can’t see it but it’s around and watches us.” A Libyan photographer who was at the embassy compound when Al Fajr Libya (FL) arrived reported that the Da’ish (IS) affiliate had moved into buildings inside the embassy complex claiming that they would ‘protect it’ as they carted off boxes of documents for ‘safe keeping.’ FL is described by a former Dean at Tripoli U. as between al Nusra and Da’ish (IS) with a fragile partnership between the two and presenting to the public “A Good cop-Bad cop tag-team with differences to be worked out once all the infidels are vanquished.

Libya, as with the Arab Maghreb, is on the cusp of a new wave of Islamist groups, and is moving beyond al-Qaeda of Bin Laden, Zawahiri, and Abdelmalek Droukdel, to Baghdadi’s ISIS and its widely perceived logical offshoot ISIM being planted in North Africa and the Sahel. The threat of the Da’ish (Islamic State is already deeply anchored and expanding in the now lawless Libya, according to UN envoy Bernardino León. Several Libyan organizations recently announced their loyalty to IS leader Abu Bakr Al-Baghdadi. This has confirmed a speculation that IS has penetrated Libyan public institutions. The Ansar al-Sharia group, affiliated with ISIS, has declared authority during the last several days over the coastal city of Darna which is located strategically between Benghazi and the Egyptian border – just 289 km (179 miles) and 333 km (206 miles), respectively.

Countless militia are forming, merging, changing names and lying low as perceived interests dictate. Soldiers of the Caliphate in Algeria was retitled, revitalized and repackaged to enhance its appeal on social media as has the Furqan Brigade of the AQIM in Tunisia. Ansar Al-Sharia is another one becoming very active.The Uqba bin Nafi Brigade, has just declared allegiance to ISIS as has the Islamic Caliphate in the Islamic Maghreb. al-Ummah Brigade, which operates out of Libyan coasts and airports, another is Al-Battar is attracting pro-ISIS elements. Majlis Shura Shabab al-Islam (the Islamic Youth Shura Council), or MSSI. According to Libyan sources and journalist Adam al-Sabiri, writing in Al Akbar, Abu Bakr al-Baghdadi asked these elements to deploy to the Libyan front to counter the attacks by the Libyan army led by Khalifa Haftar as part of Operation Dignity seeking to “purge Libya of terrorists.”

Libyan friends, some from three years ago, advise that more people have been killed in the past three years than during the 2011 revolution and they now fear a Somalia-like “failed state” given all the weapons, lawlessness, and growing number of Islamists. The South of Libya has not been spared the lawlessness, as tribal battles continue for control of a lucrative smuggling trade. Friends point out that the country no longer even bothers to celebrate the National Holiday commemorating the 10/23/2011 “total liberation of Libya.” “It’s a cruel joke” my friend Hinde advised as she explains that many Libyans yearn for the stability of the Gadhafi days. “Maybe wanting to turn the clock back is the same in Iraq and Egypt and Syria?” she wondered.

“The rampant regional, ideological and tribal conflicts are worse than the rule of the dictator,” said Salah Mahmud al-Akuri, a doctor in Benghazi. “Some Libyans are looking back to the old regime.”

Amidst all the chaos, Libyan Prime Minister Abdullah Al-Thinni claimed last week that groups loyal to the IS, such as al Fajr Libya, are presently in control of the city of Derna and other Libyan towns and have begun summoning townspeople to public squares to witness declarations of fealty to Da’ish (IS), even beginning their signature public executions. Libya’s “government” claims that its “army” is preparing to expel Fajr Libya (FL) and retake the capital, as more militia rush to join FL. Prime Minister Abdullah al-Thani’s said in a statement this week that he gave orders to the government forces to “advance toward Tripoli to liberate it and to free it from the grip of al Fajr Libya”. The Libyan embassy in Washington told a House Foreign Affairs committee staffer that they expect that residents in Tripoli will launch “a civil disobedience campaign until the arrival of the army.” Walking around the former “Green Square” this observer saw no signs of this rather he observed citizens stocking up on necessities or packing their cars. Later, Thani added, military forces in the strife-torn country “have absolutely united to also recapture Libya’s second city Benghazi from the local IS affiliate, al Fajr Liyba (FL). Leading one to wonder whether the Libyan “army” will fare better than Maliki’s did in Mosul and Anbar.

According to students and staff at Tripoli University, (known as Fatah University during the Gadhafi decades) a few of whom this observer first met in the summer of 2011, and who lived the political events in their country since while some of their friends and relatives, as in Iraq, Syria and Lebanon, are preparing to leave and start a new life somewhere. Hasan, a Gadhafi supporter I was with nearly daily three years ago in Tripoli still curses what, “NATO did this to our country. The Gadhafi regime was changing as you know Franklin, but the reformers were prevented from making the changes that Seif al Islam and his associates got their father to agree to. Remember when Saif said “My father wants to live in a tent where he is most happy and write a history of the Jamahiriya (land of the masses). He will offer advice but have just a ceremonial role out of politics? You remember that? We believed Seif didn’t we?. Anyhow, khalas!, Libya is finished! NATO gave it to Da’ish just as they gave Afghanistan, Iraq and Syria to Iran.”

Libya is now moving beyond al-Qaeda of Bin Laden, Zawahiri, and Abdelmalek Droukdel, to Baghdadi’s ISIS and its widely perceived logical offshoot Islamic State in the Islamic Maghreb (ISIM-Damis) now expanding in North Africa and the Sahel. Former rebels who fought against Gadhafi have formed powerful militias and seized control of large parts of Libya in the past three years. Back in mid-august of 2011, the late American journalist Marie Colvin and I stood on the balcony of the Corinthia Hotel opposites the still empty Marriott where some kid was practicing sniping from the roof, at my expense, as I pointed out to Marie a body floating just off the beach of the Mediterranean across the road. We walked over and examined it and decided while it was dressed in religious garb the man may have been an army deserter; there were increasing numbers in those days, because of his military style boots. We alerted some militia guys driving along the corniche who said they would report the body and before long an ambulance did arrive. Two of the militia waded out waist deep and pulled in the bloated body to shore, unlaced his tan leather boots while holding their noses from the stench. They then threw the new boots in the back of their pick-up and drove off with no more than a smiling ‘shukran habibis’ (thanks dears). Later that day Marie and I counted a column of 143 pickups with AK-47 jubilant fist waving rebels entering along the coastal road toward downtown Tripoli having come from battles in the east around Misrata. In the next few days we discussed how there seemed to be countless ‘free-cigarettes, $200 on the first of each month and your personal Kalasnikov’ militia popping up like mushrooms after a summer rain. Three years ago one of their battle cries was “Death to Gadafi—Yes to Freedom!” Today one hears around Tripoli another slogan from the lips of young men many of whom may be the same, chanting, “Death to the kafirs (disbelievers,” or infidels) Yes to Islam!Abas (that’s all!”

Seif el Islam still resides at his cell in Zintan which, even though jail is jail, has been upgraded from when he was captured in the Sahara making his way toward Niger and his finger was cut off as a warning.

Seif, has proposed talks and is ready to participate in bringing together Libya’s warring parties and aiding the transition to what he claims he was working on before the February 17, 2011 uprising in Benzhazi which quickly spread. Seif’s team would likely include his father’s cousin and confident Ahmed Gaddaf al-Dam, former Deputy Foreign Minister Khaled Kane, long-time Libyan diplomat, the widely respected Omar el Hamdi now is Cairo, and Seif’s sister Aisha, now living with his mother and children in the Gulf.

Seif has no illusions of returning Libya to the past, but argues that elements of the former regime deserved to be heard. “We were in the process of making broad reforms and my father gave me the responsibly to see them through. Unfortunately the revolt happened and both sides made mistakes that are now allowing extreme Islamist group like Da’ish to pick up the pieces and turn Libya into an extreme fundamentalist entity in their regional plans.”

With respect to Seifs trials, whether ins the Tripoli courthouse or at the International Criminal Court in the Hague, the odds of either happening anytime soon, ior at all, are fading as negotiations for an arrangement are reportedly progressing.

A solution is being sought, according to sources at the Justice Ministry in Tripoli because there are many problems with Seifs case which was supposed to begin earlier this year, and the case has been criticized by a number of international actors. Not least for which how Libya and the ICC have handled their cases. For example, Human Rights Watch has accused the Libyan government of failing to provide adequate legal representation and the ICC it has been unable to compel the Libyan government to allow it access — just one of many challenges to the ICC’s legitimacy in recent years. Meanwhile it is likely that Seif’s jailers, who increasing respects and admires him, may have other ideas that would enhance their own standing in Libya. In addition, certain NATO countries are said to be privately discussing with Washington, Paris London and Bonn the idea of finding a role for Seif and certain of his associates and family members in “the new Libya.”

According to Seif, and former regime officials, several NATO countries have sent messages claiming they did not intend for his father to be killed but were searching during the summer of 2011 for a refuge for his father in Africa. Seif does not believe them.

Seif al Islam still has substantial influence among tribes still loyal to Gaddafi as well as former regime officials in the army and government. The delegation Seif could assemble, including Ahmad Gadaff al-Dam, would benefit from the latter’s still strong connections with Arab governments, Morocco, Egypt, Algeria, Saudi Arabia and the UAE as well as some European countries.

More on this and other subjects related to Seif and the growing international recognition over the need for expulsion of Islamists from Libya, and a possible significant role for Seif, are expected to be discussed publicly soon.


Dr. Franklin Lamb is Director, Americans Concerned for Middle East Peace, Beirut-Washington DC, Board Member of The Sabra Shatila Foundation, and a volunteer with the Palestine Civil Rights Campaign, Lebanon. He is the author of The Price We Pay: A Quarter-Century of Israel’s Use of American Weapons Against Civilians in Lebanon and is doing research in Lebanon for his next book. He can be reached at fplamb@gmail.com

Dr. Franklin Lamb is a regular columnist for Veracity Voice

Sick Man of Europe: Turkey’s Infection With The Cancer of ISIS

October 25, 2014 by · Leave a Comment 

American journalist Serena Shim was beheaded — and “not with a sword but a cement truck,” to paraphrase T.S. Elliott.

Right before she lost her head in a brutal “accidental” collision with a cement truck the size of a freight train, Shim had reported that not only was Turkey supplying ISIS foreign fighters and terrorists from such places as Pakistan and Chechnya with weapons and material, but Turkey was also spiriting wounded ISIS terrorists back over the Syrian border into Turkey, hidden in NGO aid trucks, so they could be treated in Turkish hospitals.

Turkish Intelligence is highly suspected of setting up this tragic hit on Shim, hoping to silence her — but its actions have backfired and all it has really accomplished is to make the whole world put Turkey under a microscope, asking questions about Shim’s bloody death and the role that the Turkish intelligence agency played in this beheading.

“Turkey. how could you have sunk so low?” the whole world now asks.

“Hey, it was easy,” Turkey replies. “What else could we do?” What else could Turkey do indeed — when the usual crew of polished and professional American and Israeli neo-con con-men (not to be mistaken for actual honest, hardworking and sorely hoodwinked Americans and Israelis) simply showed up at its doorstep, waved their magic wands over Turkish president Erdogan’s head and promised to get him the old Ottoman Empire back if only he would attack Syria. (Or else.)

And then with his eyes dazzled by dreams of glittering booty, Erdogan fell for the con — hook, line and sinker. Of course he did. And then he opened Pandora’s box and let ISIS in.

According to Middle East expert Judith Bello, the Washington Post published a map “of the flow of 15,000 fighters flowing into Syria from more than 80 nations, hardly the foot soldiers of a civil war. Most of these fighters have entered Syria through Turkey.”

A sorry cancer-like epidemic of death, destruction and deceit has spread over the Middle East in the last few decades. And Turkey, the “Sick Man of Europe,” has been the latest nation to catch it.

Welcome to the cancer ward, President Erdogan.

On Thanksgiving this year, Turkey will obviously have nothing to be thankful for, what with ISIS sitting at its table and expecting its dinner — unless Turkey starts “chemotherapy” immediately. My prescription for Turkey? “Stop messing around with ISIS, stop believing the empty promises of American and Israeli neo-con-men, and start behaving in Turkey’s citizens’ best interests instead.”

Turkey has been trying to join the European Union for years now. But who wants a Turkey in the EU that has already proven itself to be just another Middle Eastern “soiled dove” for American and Israeli con-men? Erdogan has thrown the baby out with the bathwater here.

Just because Iraq, Libya, Egypt, Jordan, Qatar, Yemen, Kuwait and Saudi Arabia have all been diagnosed with the kind of fuzzy thinking that can only be caused by cancer of the part of the brain that governs common sense and self-preservation, this doesn’t mean that Turkey has to waste away too. Beheading a journalist is common in these other neo-con infected countries. But one would expect that a sophisticated and modern country like Turkey, a potential member of the EU even, might be immune. But apparently not.

President Erdogan, what were you THINKING!

PS: Looks like the average American and Israeli isn’t immune from catching the cancer of stupid thinking either. If we aren’t a lot more careful and watchful and vigilant than we are right now, then we too may soon be contracting this Turkish and Middle Eastern disease — and then watch our own journalists get beheaded too.

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