Iran, Gold and Oil – The Next Banksters War

Remember the real reason why Moammar Gadhafi is dead. He dared to propose and started creating an alternative currency to the world reserve U.S. Dollar. The lesson learned in Libya is now ready for teaching in Iran. Forget all the noise about going nuclear, the true message is that the banksters rule and nation states serve their ultimate masters. The hype and disinformation that surrounds the push for war is best understood by examining the viewpoint of Iranian MP Kazem Jalali. The Tehran Times quotes him in saying,

“The European Union must be aware that it can never compel the Islamic Republic to succumb to their will and undermine the Iranian nation’s determination to achieve glory and independence, access modern technologies, and safeguard its rights, through the intensification of the pressure.”

“The European Union is seeking to politicize the atmosphere ahead of nuclear talks with Iran and is aware that sanctions on Iran’s oil exports cannot be implemented since the world is not limited to a number of European countries”

Many political commentators warn that an embargo is an act or war. Chris Floyd provides this observation of the recent oil embargo against Iran.

“This week, the warlords of the West took yet another step toward their long-desired war against Iran. (Open war, that is; their covert war has been going on for decades — via subversion, terrorism, and proxies like Saddam Hussein.) On Monday, the European Union obediently followed the dictates of its Washington masters by agreeing to impose an embargo on Iranian oil.

The embargo bans all new oil contracts with Iran, and cuts off all existing deals after July. The embargo is accompanied by a freeze on all European assets of the Iranian central bank. In imposing these draconian measures on a country which is not at war with any nation, which has not invaded or attacked another nation in centuries, and which is developing a nuclear energy program that is not only entirely legal under international law but is also subject to the most stringent international inspection regime ever seen, the EU is “targeting the economic lifeline of the regime,” as one of its diplomats put it, with admirable candor.”

The most important aspect of the Iranian response lies in the way that changes oil settlement for delivery and the futile effect of the US/Anglo/EU imperialist dictates have in the marketplace.

Debkafile reports that India (and probably China) will pay for Iranian oil in gold.

“India and China take about one million barrels per day, or 40 percent of Iran’s total exports of 2.5 million bpd. Both are superpowers in terms of gold assets.

By trading in gold, New Delhi and Beijing enable Tehran to bypass the upcoming freeze on its central bank’s assets and the oil embargo which the European Union’s foreign ministers agreed to impose Monday, Jan. 23. The EU currently buys around 20 percent of Iran’s oil exports.”

A more detailed analysis in Tehran Pushes to Ditch the US Dollar provided ample arguments that an embargo will fail.

“Iran may be isolated from the United States and Western Europe, but Tehran still has some pretty staunch allies. Iran and Venezuela are advancing $4 billion worth of joint projects, including a bank. India has pledged to continue buying Iranian oil because Tehran has been a great business partner for New Delhi, which struggles to make its payments. Greece opposed the EU sanctions because Iran was one of very few suppliers that had been letting the bankrupt Greeks buy oil on credit. South Korea and Japan are pleading for exemptions from the coming embargoes because they rely on Iranian oil. Economic ties between Russia and Iran are getting stronger every year.

Then there’s China. Iran’s energy resources are a matter of national security for China, as Iran already supplies no less than 15% of China’s oil and natural gas. That makes Iran more important to China than Saudi Arabia is to the United States. Don’t expect China to heed the US and EU sanctions much – China will find a way around the sanctions in order to protect two-way trade between the nations, which currently stands at $30 billion and is expected to hit $50 billion in 2015. In fact, China will probably gain from the US and EU sanctions on Iran, as it will be able to buy oil and gas from Iran at depressed prices.”

So why is the EU so determined to apply restrictions is answered in the video, 

 

Now that is part of the reason but for the entire story, one needs to confront the contentions in the You Tube .

Where is gets so confusing for the casual observer is that any discussion that deems to be critical of Israel is a taboo discussion in polite company. Well, when it comes to addressing the impending prospects of a major conflict in the Middle East, the linkage between the deciding influences in American policy that coincide with a greater Israel objective, is silenced in the old-line press and media. Therefore, the key element to explore is the relationship of Zionist interests with the fundamental preservation of the paper currency imperium of Federal Reserve notes as the medium of payment for oil.

Think about this equation in light of ultimate control. Oil is the fuel that runs the engine of all economies. Money is the medium of exchange that pays for the petroleum. War is the universal method used to avoid the breakdown of the money recycling system. In The Petro-Dollar and the EURO, the nature of this formula is probed.

“War is always about achieving a political end. Even holy wars seek to impose a secular control over the vanquished. At the root of every political conflict, lies the MONEY component. On the scale of greed or fear, international discords can slide up or down. Depending on the circumstances or demands, governments rally domestic populations to accept their foreign interventionist goals. Claims of altruistic liberation are fictitious, when the rhetoric is stripped away and the real substance is exposed. Notwithstanding, variances of emphasis; the motive of money underpins the movements of all military confrontations.”

Who can deny that the interest of the Israeli state advances under the Petro-Dollar system for oil payment? The prospect of allowing an oil exporter to do business paid in gold disrupts the balances that maintain an uneasy political rapprochement. Even more threatening to the globalist monopoly is a defiant regime like the Islamic Republic playing by different rules that bypass central banking approval.

It seems that the NeoCon Christian Zionists will never be happy until they institute a techno drone bombing campaign to shut off even more oil resources. With Iraqi and Libyan production in shambles, it is now time to eliminate the Iranian resource. Spiking oil to $200 or more through another foreign intervention just hikes the balance sheets of the oil traders and banking interests. There is no doubt that foreign aid to Israel will rise at even a higher amount.

The bonus is that the gold hordes of Iran would become the spoils of war and conveniently find their way into the storage vaults of the banksters. This is a sweet game as long as there is a continuous supply of gung ho mercenaries to push the button of terror from the skies. Moreover, sending boots on the ground serve an even more profitable hellhole, the War Party can demand a much higher budget, floated with even more debt bought by China with the proceeds from the oil supply that are secured from the export of Canadian shale oil.

Miraculously, this pattern builds an even larger, if not, greater empire. As long as new villains are found to master, the Iran’s of the world will become subjugated under the background music of God Bless America.

What fools our fellow citizens became somewhere in the last century. Remember the John D. Rockefeller quote: “Competition is a sin”, especially if IRAN is the player.

Body bags are made from petroleum base material. In the height of irony, the oil wars are fought to secure the substance to form the burial cloth for disposable soldiers. If America really wants to stand behind the troops, their genuine duty is to prevent and oppose the next Middle East war.

Iran is not an existential threat to the United States. Haaretzreports that former Mossad chief Meir Dagan said in a television interview, “If Israel attacks Iran, it will be dragged into a regional war”. According to Dagan, Iran, Hezbollah and Hamas will respond with massive rocket attacks on Israel. In that scenario, Syria may join in the fray, Dagan said on the television program “Uvda”. Dagan added that such a war would take a heavy toll in terms of loss of life and would paralyze life in Israel.”

An America First foreign policy cannot wage another banksters war.

Iranian Crisis Escalates

Speaking to reporters during a visit to Turkey on January 19, Iran’s foreign minister Ali Akbar Salehi warned his country’s Arab neighbors against aligning themselves too closely with the United States in the ongoing crisis over Tehran’s nuclear program. Saudi Arabia was particularly vocal in its condemnation of Iran’s warning last month that it might close the Strait of Hormuz—through which one-third of the world’s seaborne oil passes daily—if the United States and her allies apply sanctions against Iranian oil exports.

A day earlier Defense Secretary Leon Panetta said American troops in the Persian Gulf region do not require any build-up for a possible military conflict with Iran. “We are not making any special steps at this point in order to deal with the situation,” he said. “Why? Because, frankly, we are fully prepared to deal with that situation now,” Panetta explained.

In the meantime the European Union is on track to agree to an oil embargo against Iran at the EU foreign ministers’ meeting next week.

The latest rhetorical escalation follows President Obama’s decision on December 31 to apply sanctions against any institution dealing with Iran’s central bank, effectively making it impossible for most countries to buy Iranian crude oil.

Chinese Premier Wen Jiabao criticized the U.S. position in comments published on January 19, and on the same day foreign ministry spokesman Liu Weimin said that “sanctions and military threats will not help solve the problem but only aggravate the situation.”

On Wednesday Russian Foreign Minister Sergei Lavrov said the military option mooted by U.S. would ignite a disastrous, widespread Middle East war. “Unilateral sanctions against Iran has nothing in common with the desire to keep the nuclear weapons nonproliferation regime unshaken,” Lavrov said.

Unsurprisingly, the neoconservative advocates of a preventive war against Iran are delighted. They see Tehran’s threat to block the Strait of Hormuz as a “golden opportunity” to force the issue by military means:

A military plan would have to include the elimination of the offending Iranian ships or submarines laying mines, and the destruction of missiles that might menace shipping. Most of Iran’s navy would find itself gracing the bottom of the sea as a result. Meanwhile, major U.S. Marine amphibious landings on Iran’s coast and Army airborne drops deep inside the sparsely populated Hormozgan region would have to create a physical cordon and an occupied buffer zone between Iran and the Strait of Hormuz. It would be a very long time before the West gave this territory back to Iran.

Furthermore, the argument goes, by seizing Hormozgan, the West would have a forward base within Iran from which to conduct attacks on known nuclear sites: “Strike aircraft (and, more worrisome to Iran’s regime, Special Forces troops) would be just 60 to 90 minutes away from Iranian nuclear sites. Iran’s threat to block the Strait of Hormuz has given the West new options.”

The issue that remains moot is not whether Iran is developing a nuclear weapon—let us assume that this is a documented fact, though it is not—but whether an Iranian nuclear weapon would be a threat to the United States. What are the motives of the Iranian decisionmakers? To threaten Europe, thus necessitating an American antimissile shield along Russia’s western borders in Central Europe? To threaten the United States even, regardless of a guaranteed hundred-fold retaliation to any attack? Or to protect Iran from what her leaders perceive to be a threatening environment?

Iran has one neighbor to the west and another to the northeast who were both invaded by the United States over the past 11 years. Neither Afghanistan nor Iraq would have been invaded had they actually possessed weapons of mass destruction. Iran’s eastern neighbor is Pakistan, an unstable and unpredictable nuclear power. In the wider neighborhood there are two other key players with an atomic arsenal, India and Israel, with Turkey not far behind. Under the circumstances, having an independent nuclear deterrent is a perfectly rational option for the government in Tehran to pursue—any Iranian government, Islamist or secular, monarchist or republican, pro- or anti-Western. That option is based on the realities of the security equation and not on the millenarian zeal of Shi’ite fanaticism or on genocidal Jewhatred, as the proponents of war would have us believe. Even if Iran were to garner an arsenal of a dozen devices, which would take a decade at least, the overall strategic balance would remain fundamentally unaltered. Indeed, the political climate in the region may actually improve: Iran would feel safe from an American attack and therefore at least potentially less likely to indulge in destabilizing proxy interventions in the region, notably in Lebanon.

Israel may have reason to feel threatened by Iran’s long-term plans, but it is up to Israel to consider her options and to act accordingly. She may well decide on a robust response, like her bombing of the Osirak nuclear plant in Iraq in 1981, with all the attendant risks and uncertainties. She should not expect the United States to do the job on her behalf, however.

The Saudis would also feel uncomfortable with a nuclear-armed Iran across the Gulf, and that would be a good thing. The more the royal kleptocrats in Riyadh focus on potential threats in the neighborhood, the less likely they are to escalate their global proliferation of Islamic extremism, which they have lavishly financed for decades. In any event, as the example of North Korea shows, the possession of the bomb by a single actor does not necessarily lead to a sudden nuclear rush in the region.

The second objection is technical. Regardless of its formal or substantial justification, can a U.S. war against Iran be kept limited and winnable? The initial intent may be to execute bombing raids against a dozen or perhaps two-dozen specific targets, but would that merely set Iran’s efforts back by two or three years? And what if Iran retaliates by detonating dirty bombs in downtown Tel Aviv and midtown Manhattan? What if the Iranians treat a U.S. attack not as a limited action that, in the War Party’s calculus, would produce a limited response, but as an existential struggle comparable to Khomeini’s all-out reply to Saddam’s attack 30 years ago?

If the Iranians respond forcefully, the advocates of limited air strikes against nuclear installations are certain to demand troops on the ground, regardless of risks and consequences, because our “credibility” would be at stake. In reality, America’s credibility would be terminally undermined by the resulting Iranian quagmire. An all-out “Operation Iranian Freedom” is not a rational option, because even with our unsurpassed military capabilities, the United States would not be able to mount a full-fledged invasion.

The third predictable consequence of a U.S. attack on Iran would be a global economic meltdown of unprecedented severity and magnitude. Not only would Iran’s output of some four million barrels per day be halted, but the maritime traffic through the Straits of Hormuz would come to a standstill for months on end—regardless of outcome. The resulting global energy crisis would make the aftermath of the Yom Kippur War pale in comparison, pushing a barrel to $300 within weeks and making the economic and financial crises of the past three years in Europe and the United States seem like the good old days.

Last but not least, we’d witness internal consolidation of the Iranian regime, a calcified theocracy devoid of ideas and solutions as it faces economic stagnation and political tensions. Domestic squabbles and the infighting of recent months would be forgotten, and any sign of opposition to the regime would be equated with treason. There would be no Iranian Spring for decades to come. On the other hand, without the unifying effect of an external threat the mullahs’ regime may yet prove more vulnerable to implosion than we would otherwise suspect.

Instead of considering a military action against Iran with no clear exit strategy at a prohibitive cost to our core interests, Washington would be well advised to prepare a strategy for dealing with Iran—even as a putative nuclear power. Deterring and containing Iran would be easier than deterring and containing the Soviets 50 years ago. The country’s regime, admittedly unpleasant, is neither suicidal nor tainted by the blood of untold millions, as the two communist nuclear powers had been.

Real concerns about Iran’s nuclear program exist; they are also present in Moscow and Beijing. It is still possible and politically profitable for Washington to pursue bilateral diplomacy based on an offer of U.S. security guarantees to Iran in return for a rigorous supervision regime and a formal pledge that Iran refrain from developing nuclear weapons. A reasonable agreement would also allow Iran to enrich uranium to the extent needed for power generation and accept Iran’s right to the enrichment technology, so long as she agrees to subject her entire nuclear program to international oversight.

By pursuing sanctions similar in intent and likely consequences to FDR’s sanctions against Japan in 1941, the Obama administration may produce similar outcomes. That would be a disaster for all concerned.

Energy Wars 2012

Welcome to an edgy world where a single incident at an energy “chokepoint” could set a region aflame, provoking bloody encounters, boosting oil prices, and putting the global economy at risk.  With energy demand on the rise and sources of supply dwindling, we are, in fact, entering a new epoch — the Geo-Energy Era — in which disputes over vital resources will dominate world affairs.  In 2012 and beyond, energy and conflict will be bound ever more tightly together, lending increasing importance to the key geographical flashpoints in our resource-constrained world.

Take the Strait of Hormuz, already making headlines and shaking energy markets as 2012 begins.  Connecting the Persian Gulf and the Indian Ocean, it lacks imposing geographical features like the Rock of Gibraltar or the Golden Gate Bridge.  In an energy-conscious world, however, it may possess greater strategic significance than any passageway on the planet.  Every day, according to the U.S. Department of Energy, tankers carrying some 17 million barrels of oil — representing 20% of the world’s daily supply — pass through this vital artery.

So last month, when a senior Iranian official threatened to block the strait in response to Washington’s tough new economic sanctions, oil prices instantly soared. While the U.S. military has vowed to keep the strait open, doubts about the safety of future oil shipments and worries about a potentially unending, nerve-jangling crisis involving Washington, Tehran, and Tel Aviv have energy experts predicting high oil prices for months to come, meaning further woes for a slowing global economy.

The Strait of Hormuz is, however, only one of several hot spots where energy, politics, and geography are likely to mix in dangerous ways in 2012 and beyond.  Keep your eye as well on the East and South China Seas, the Caspian Sea basin, and an energy-rich Arctic that is losing its sea ice.  In all of these places, countries are disputing control over the production and transportation of energy, and arguing about national boundaries and/or rights of passage.

In the years to come, the location of energy supplies and of energy supply routes — pipelines, oil ports, and tanker routes — will be pivotal landmarks on the global strategic map.  Key producing areas, like the Persian Gulf, will remain critically important, but so will oil chokepoints like the Strait of Hormuz and the Strait of Malacca (between the Indian Ocean and the South China Sea) and the “sea lines of communication,” or SLOCs (as naval strategists like to call them) connecting producing areas to overseas markets.  More and more, the major powers led by the United States, Russia, and China will restructure their militaries to fight in such locales.

You can already see this in the elaborate Defense Strategic Guidance document, “Sustaining U.S. Global Leadership,” unveiled at the Pentagon on January 5th by President Obama and Secretary of Defense Leon Panetta.  While envisioning a smaller Army and Marine Corps, it calls for increased emphasis on air and naval capabilities, especially those geared to the protection or control of international energy and trade networks.  Though it tepidly reaffirmed historic American ties to Europe and the Middle East, overwhelming emphasis was placed on bolstering U.S. power in “the arc extending from the Western Pacific and East Asia into the Indian Ocean and South Asia.”

In the new Geo-Energy Era, the control of energy and of its transport to market will lie at the heart of recurring global crises.  This year, keep your eyes on three energy hot spots in particular: the Strait of Hormuz, the South China Sea, and the Caspian Sea basin.

The Strait of Hormuz

A narrow stretch of water separating Iran from Oman and the United Arab Emirates (UAE), the strait is the sole maritime link between the oil-rich Persian Gulf region and the rest of the world.  A striking percentage of the oil produced by Iran, Iraq, Kuwait, Qatar, Saudi Arabia, and the UAE is carried by tanker through this passageway on a daily basis, making it (in the words of the Department of Energy) “the world’s most important oil chokepoint.”  Some analysts believe that any sustained blockage in the strait could trigger a 50% increasein the price of oil and trigger a full-scale global recession or depression.

American leaders have long viewed the Strait as a strategic fixture in their global plans that must be defended at any cost.  It was an outlook first voiced by President Jimmy Carter in January 1980, on the heels of the Soviet invasion and occupation of Afghanistan which had, he told Congress, “brought Soviet military forces to within 300 miles of the Indian Ocean and close to the Strait of Hormuz, a waterway through which most of the world’s oil must flow.”  The American response, he insisted, must be unequivocal: any attempt by a hostile power to block the waterway would henceforth be viewed as “an assault on the vital interests of the United States of America,” and “repelled by any means necessary, including military force.”

Much has changed in the Gulf region since Carter issued his famous decree, known since as the Carter Doctrine, and established the U.S. Central Command (CENTCOM) to guard the Strait — but not Washington’s determination to ensure the unhindered flow of oil there.  Indeed, President Obama has made it clear that, even if CENTCOM ground forces were to leave Afghanistan, as they have Iraq, there would be no reduction in the command’s air and naval presence in the greater Gulf area.

It is conceivable that the Iranians will put Washington’s capabilities to the test.  On December 27th, Iran’s first vice president Mohammad-Reza Rahimi said, “If [the Americans] impose sanctions on Iran’s oil exports, then even one drop of oil cannot flow from the Strait of Hormuz.”  Similar statements have since been made by other senior officials (and contradicted as well by yet others).  In addition, the Iranians recently conducted elaborate naval exercises in the Arabian Sea near the eastern mouth of the strait, and more such maneuvers are said to be forthcoming.  At the same time, the commanding general of Iran’s army suggested that the USS John C. Stennis, an American aircraft carrier just leaving the Gulf, should not return.  “The Islamic Republic of Iran,” he added ominously, “will not repeat its warning.”

Might the Iranians actually block the strait?  Many analysts believe that the statements by Rahimi and his colleagues are bluster and bluffmeant to rattle Western leaders, send oil prices higher, and win future concessions if negotiations ever recommence over their country’s nuclear program.  Economic conditions in Iran are, however, becoming more desperate, and it is always possible that the country’s hard-pressed hardline leaders may feel the urge to take some dramatic action, even if it invites a powerful U.S. counterstrike.  Whatever the case, the Strait of Hormuz will remain a focus of international attention in 2012, with global oil prices closely following the rise and fall of tensions there.

The South China Sea

The South China Sea is a semi-enclosed portion of the western Pacific bounded by China to the north, Vietnam to the west, the Philippines to the east, and the island of Borneo (shared by Brunei, Indonesia, and Malaysia) to the south.  The sea also incorporates two largely uninhabited island chains, the Paracels and the Spratlys.  Long an important fishing ground, it has also been a major avenue for commercial shipping between East Asia and Europe, the Middle East, and Africa.  More recently, it acquired significance as a potential source of oil and natural gas, large reserves of which are now believed to lie in subsea areas surrounding the Paracels and Spratlys.

With the discovery of oil and gas deposits, the South China Sea has been transformed into a cockpit of international friction.  At least some islands in this energy-rich area are claimed by every one of the surrounding countries, including China — which claims them all, and has demonstrated a willingness to use military force to assert dominance in the region.  Not surprisingly, this has put it in conflict with the other claimants, including several with close military ties to the United States.  As a result, what started out as a regional matter, involving China and various members of the Association of Southeast Asian Nations (ASEAN), has become a prospective tussle between the world’s two leading powers.

To press their claims, Brunei, Malaysia, Vietnam, and the Philippines have all sought to work collectively through ASEAN, believing a multilateral approach will give them greater negotiating clout than one-on-one dealings with China. For their part, the Chinese have insisted that all disputes must be resolved bilaterally, a situation in which they can more easily bring their economic and military power to bear.  Previously preoccupied with Iraq and Afghanistan, the United States has now entered the fray, offering full-throated support to the ASEAN countries in their efforts to negotiate en masse with Beijing.

Chinese Foreign Minister Yang Jiechi promptly warned the United States not to interfere.  Any such move “will only make matters worse and the resolution more difficult,” he declared.  The result was an instant war of words between Beijing and Washington.  During a visit to the Chinese capital in July 2011, Chairman of the Joint Chiefs of Staff Admiral Mike Mullen delivered a barely concealed threat when it came to possible future military action.  “The worry, among others that I have,” he commented, “is that the ongoing incidents could spark a miscalculation, and an outbreak that no one anticipated.”  To drive the point home, the United States has conducted a series of conspicuous military exercises in the South China Sea, including some joint maneuvers with ships from Vietnam and the Philippines.  Not to be outdone, China responded with naval maneuvers of its own.  It’s a perfect formula for future “incidents” at sea.

The South China Sea has long been on the radar screens of those who follow Asian affairs, but it only attracted global attention when, in November, President Obama traveled to Australia and announced, with remarkable bluntness, a new U.S. strategy aimed at confronting Chinese power in Asia and the Pacific.  “As we plan and budget for the future,” he  members of the Australian Parliament in Canberra, “we will allocate the resources necessary to maintain our strong military presence in this region.”  A key feature of this effort would be to ensure “maritime security” in the South China Sea.

While in Australia, President Obama also announced the establishment of a new U.S. base at Darwin on that country’s northern coast, as well as expanded military ties with Indonesia and the Philippines.  In January, the president similarly placed special emphasis on projecting U.S. power in the region when he went to the Pentagon to discuss changes in the American military posture in the world.

Beijing will undoubtedly take its own set of steps, no less belligerent, to protect its growing interests in the South China Sea.  Where this will lead remains, of course, unknown.  After the Strait of Hormuz, however, the South China Sea may be the global energy chokepoint where small mistakes or provocations could lead to bigger confrontations in 2012 and beyond.

The Caspian Sea Basin

The Caspian Sea is an inland body of water bordered by Russia, Iran, and three former republics of the USSR: Azerbaijan, Kazakhstan, and Turkmenistan.  In the immediate area as well are the former Soviet lands of Armenia, Georgia, Kyrgyzstan, and Tajikistan.  All of these old SSRs are, to one degree or another, attempting to assert their autonomy from Moscow and establish independent ties with the United States, the European Union, Iran, Turkey, and, increasingly, China.  All are wracked by internal schisms and/or involved in border disputes with their neighbors.  The region would be a hotbed of potential conflict even if the Caspian basin did not harbor some of the world’s largest undeveloped reserves of oil and natural gas, which could easily bring it to a boil.

This is not the first time that the Caspian has been viewed as a major source of oil, and so potential conflict.  In the late nineteenth century, the region around the city of Baku — then part of the Russian empire, now in Azerbaijan — was a prolific source of petroleum and so a major strategic prize.  Future Soviet dictator Joseph Stalin first gained notoriety there as a leader of militant oil workers, and Hitler sought to capture it during his ill-fated 1941 invasion of the USSR.  After World War II, however, the region lost its importance as an oil producer when Baku’s onshore fields dried up.  Now, fresh discoveries are being made in offshore areas of the Caspian itself and in previously undeveloped areas of Kazakhstan and Turkmenistan.

According to energy giant BP, the Caspian area harbors as much as 48 billion barrels of oil (mostly buried in Azerbaijan and Kazakhstan) and 449 trillion cubic feet of natural gas (with the largest supply in Turkmenistan).  This puts the region ahead of North and South America in total gas reserves and Asia in oil reserves.  But producing all this energy and delivering it to foreign markets will be a monumental task.  The region’s energy infrastructure is woefully inadequate and the Caspian itself provides no maritime outlet to other seas, so all that oil and gas must travel by pipeline or rail.

Russia, long the dominant power in the region, is pursuing control over the transportation routes by which Caspian oil and gas will reach markets.  It is upgrading Soviet-era pipelines that link the former SSRs to Russia or building new ones and, to achieve a near monopoly over the marketing of all this energy, bringing traditional diplomacy, strong-arm tactics, and outright bribery to bear on regional leaders (many of whom once served in the Soviet bureaucracy) to ship their energy via Russia.  As recounted in my book , Washington sought to thwart these efforts by sponsoring the construction of alternative pipelines that avoid Russian territory, crossing Azerbaijan, Georgia, and Turkey to the Mediterranean (notably the BTC, or Baku-Tbilisi-Ceyhan pipeline), while Beijing is building its own pipelines linking the Caspian area to western China.

All of these pipelines cross through areas of ethnic unrest and pass near various contested regions like rebellious Chechnya and breakaway South Ossetia.  As a result, both China and the U.S. have wedded their pipeline operations to military assistance for countries along the routes.  Fearful of an American presence, military or otherwise, in the former territories of the Soviet Union, Russia has responded with military moves of its own, including its brief August 2008 war with Georgia, which took place along the BTC route.

Given the magnitude of the Caspian’s oil and gas reserves, many energy firms are planning new production operations in the region, along with the pipelines needed to bring the oil and gas to market.  The European Union, for example, hopes to build a new natural gas pipelinecalled Nabucco from Azerbaijan through Turkey to Austria.  Russia has proposed a competing conduit called South Stream.  All of these efforts involve the geopolitical interests of major powers, ensuring that the Caspian region will remain a potential source of international crisis and conflict.

In the new Geo-Energy Era, the Strait of Hormuz, the South China Sea, and the Caspian Basin hardly stand alone as potential energy flashpoints. The East China Sea, where China and Japan are contending for a contested undersea natural gas field, is another, as are the waters surrounding the Falkland Islands, where both Britain and Argentina hold claims to undersea oil reserves, as will be the globally warming Arctic whose resources are claimed by many countries.  One thing is certain: wherever the sparks may fly, there’s oil in the water and danger at hand in 2012.

Source: Michael T. Klare | TomDispatch.com

US vs China: Rivals or Partners

The New Great Game is a strife among many powers, regional and global, as well as, big and small. Russia, China and the US are the key players. The Central Asia is a large and resourceful area as compared to barren, mountainous Afghanistan.

1. Introduction.  The terminology of Great Game was initially coined by Rudyard Kipling. He brought world’s attention towards the rivalry for a region between two superpowers, the Soviet Union and the United Kingdom. The region for which they were competing holds its importance even today. Much has altered since that traditional rivalry and competition has thwarted. The Soviet empire dismembered and the United Kingdom had to abandon its colossal empire following WWII. While both Czars and British feared each other and desired to keep Afghan territory under their influence, the nature of current context is far more complicated.

The New Great Game is a strife among many powers, regional and global, as well as, big and small. Russia, China and the US are the key players. The Central Asia is a large and resourceful area as compared to barren, mountainous Afghanistan. The economic disposition of conflict makes it remarkable. The region comprises the Central Asian Muslim dominant states, bordering the Caspian basin. What makes the Caspian basin and adjoining territories so attractive is the presence of oil. The oil in general has become a source of political tussle among the states.

The West has huge dependency on Middle East. Desperate to wean its dependence on the powerful OPEC Cartel, the United States is pitted in this struggle against Russia, China and Iran, all competing to dominate the Caspian region, its resources and pipeline routes. Complicating the playing field are transnational energy corporations with their own agendas and the brash new Wild West style entrepreneurs who have taken control after the collapse of Soviet Union.

Dossym Satpayev, a political analyst, believes that within next ten years China will dominate the Central Asia’s political, economic and military spheres, mainly through the Shanghai Cooperation Organisation (SCO). Its main rival will be less affluent Russia, whose historic dominance has left it with the habit of trying to boss former Soviet republics. The Chinese leaders have managed to advance far beyond the largely ceremonial co-operation of “friendship treaties”, without resorting to Russian tactics. According to Mr. Satpayev, “China does not only buy loyalty with documents, but with money given at a low percentage”.

Then there comes intense US involvement in the region, which according to some analysts have disturbed the traditional balance of the region. Its global war on terror (GWOT) has come under intense criticism due to fake accusations of WMD in Iraq.  Afghanistan on hunt for Al Qaeda is a drab drag.

2. US vs. China. When it is asserted that America and China are rivals and partners simultaneously, it is here argued that this phrase has a paradoxical impact. An emerging power has to establish cordial relations with an established one. They are rivals at various fronts, however they do avoid any direct clash and act as partners on various matters and forums e.g. the United Nations Security Council (UNSC). The Central Asia presents an altogether distinct and multifaceted battleground. China can neither out rightly oppose a hegemonic presence, nor can it ascertain friendly gestures and proclaim policy statements favoring a “sole superpower’s” huge presence in its backyard. This article will focus on United States (US) and China’s individual interests in the region as well as the competition to outdo each other.

China’s surging demand for reserves is now a fact of life. “Welcome to the oil business of the 21^st century”, says a senior executive at a major US oil producer, “this is the new world”. But the history of oil industry teaches that money is sometimes the only part of the plot. Power and geopolitical influence are oil’s handmaidens. Daniel Yergin; Chairman of Cambridge Energy Research Associates, says that as Chinese companies “try to get in on new deals, occasionally commercial rivalry will get caught up in larger foreign policy issues”.

3. The New Great Game. The New Great Game seems more like a haunted version of the previous game. It’s much more multifaceted and complex. China’s involvement is due to region’s reserves, nevertheless at the same time there also lies a big concern for kinship ties of its restless Xinjiang. If China’s geographical position is analyzed, China shares borders with turbulent Tajikistan, Kyrgyz and the Kazakhstan states. During the cold war, the Central Asia, being part of Former Soviet Union (FSU), was solely used by the Soviets. However the Chinese stance under went no apparent change during the initial years of the region’s independence in 1990’s. The Chinese apprehensions revolved around the theme that these states were part of Russian sphere of influence. Later subsequent events revealed an altering scenario and the Chinese were compelled to carve out their policy goals regarding the region. Hence China was now ready to establish bilateral ties with the nascent states. Analyzing no apparent danger could emanate from the Central Asian republics (CARs), which could threaten China, the latter embarked on an economic policy, investment and trade, every single feature being an ingredient of its soft power image.

4. China. China could offer major trade opportunities as well as modest amounts of capital and technology to the economically weak Central Asian republics. By doing this, Chinese leaders could justifiably assure themselves that they were strengthening republic’s economies and responding to what Central Asian leaders consider their most basic need. The Chinese clearly agree that economic development offers the region the only possibility of limiting future ethnic and religious conflict.[i] Hence economic prosperity can be used as a tool to fuel not only its rapidly growing economy but also can bring subsequent potential stability to the region. China has its own versions of a “new silk route” These Chinese policies may be cause of concern for its old communist boss, the Russian federation. As these policies may diminish latter’s notable grab over the volatile states. Despite harboring deep suspicions for each other’s motives, China and the Russia, have adopted accommodation, and rapprochement policy visibly culminating in Shanghai cooperation organization. One can infer that China’s slow and consistent ascendancy in world politics will help it in exhibiting tremendous influence over its bordering countries.

Having viewed China’s success, the Central Asian leaders always had economic interests in mind. Official invitations were issued and Central Asia’s presidents and foreign ministers went to the Chinese capital eager to satisfy their curiosity about the nature of economic miracle that the Chinese were experiencing.[ii] The Chinese engagements with the Central Asian states characterize border agreements with Kyrgyz and Kazakh republics. In 1998 there was considerable progress in delineating both the Kazakh and Kyrgyz borders with China. A joint statement by President Akayev and President Zhiang Zemin made during Akayev April 1998 trip to Beijing kicked off a period of intensive negotiation. In June 1998 Kazakhstan and China also signed an agreement dividing 944 square kilometers of disputed border territories with nearly 6O percent of the land remaining in Kazakh hands. The critics of the agreement however see that China got the most valuable bits.[iii] Some of the significant economic maneuvers by Chinese also included in 1997, the Chinese national Petroleum Company (CNPC) won a tender and a 60 pc stake – in the Zhana Zhol and kenkiyak fields in Aktobe, Kazakhstan. The Chinese were committed to build a $9.6 billion pipeline, but then scaled down the project by late 2001, to less than $200 million. The Chinese government is also interested in the development of transit links that would allow the Central Asian states to better use the Chinese highway, railroad system and ports to shift transit trade away from Russia, an interest they share with the Central Asian states.[iv] Nazarbayev paid a visit to Beijing in May 2004, he and Chinese president Hu Jin Tao signed an agreement for joint exploration and development of oil and gas resources in the Caspian sea.

China’s role in Central Asian energy sector has steadily increased. This is so because Middle East has been a precarious region due to its unsettled disputes and warring and aggressive policies of the turbulent parties involved. Also the resources which symbolize the famed region are undergoing depletion. Hence the New Great Game is a diversion from the volatile Middle East and China intends to secure alternative oil and gas supplies.

Besides the economic interests, the long enduring separatist movement in the Xinjiang, the Chinese Muslim dominated province, has been a key factor driving Chinese policies. A lasting peace for her internal security is pivotal. The Xinjiang is inhabited by Muslims, many of Turk origin, who have well-established ties with their kins in CARs. The ties between the populations of Xinjiang and the Central Asian states are strong and there has traditionally not been a clear border between the people in Central Asia and Xingjian, aside from the theoretical border given on maps.[v] The Muslims in Xinjiang desire for an independent state “East-Turkestan”. Although none of the governments in Central Asian republics support such a standpoint of Xinjiang people.  There has been constant effort by people, and their aspirations have often culminated into military activity. For this reason China mounted military effort in the province. The neighboring Afghanistan has been a fomenting force behind as the following paragraph better illustrates.

During the year 2000 the Chinese armed forces in Xinjiang claim to have confiscated 4100 kg of dynamite, 2723 kg of other explosives, 604 illegal small arms and 31,000rounds of ammunition in comparison to much lower confiscations in 1990’s.[vi]

5. Pakistan and Afghanistan. The South Asian region comprising Afghanistan and Pakistan’s tribal belt (referred to as Federally Administered Tribal Areas or FATA) had been in war since the late 1970s. The drug trafficking, the weaponry, the recruitment bases, the training centers and other contrabands characterized the region. The atmosphere was productive and a beneficent facilitator to wage a guerrilla war. Then there was a direct spillover effect of the war on the Central Asian region, especially those adjoining directly to chaotic Afghanistan.

6. Following 9/11. The long American presence in the war weary Afghanistan has been distasteful for Russia and China (regional powers) as it is diminishing their role in the region. However the American presence has stipulated inducement to both Russians and Chinese, in their response to Chechens and Uighurs respectively, hence legitimizing their forceful actions. Entering into the tenth year of the bloody struggle in Afghanistan, the North Atlantic Treaty organization (NATO) forces and Taliban scramble for control continues and it gives the impression in 2011 that a stalemate is evolving. The domino effect of the situation is sensed all around the region especially in China’s Muslim dominated province and the Central Asian Muslim republics.

The Chinese expansion in Central Asia slowed down somewhat after Sep 11, 2001. Yet after 2002 the economic interaction, between Central Asia and China has increased immensely. America has a great deal to offer and that most of the states in the region would prefer to cooperate with America rather than Russia or China. Many states, in contrast, are also aware of the fact that Americans will probably leave, while neighbors will stay.  This makes China a crucial actor in the region and a long-term counter-balance against Russia.[vii].

7. China and Africa. China has been the world’s largest and rapidly growing economy with its growth rate stable and sustainable for the past few decades. China is also investing heavily in Africa. This Chinese policy comes under criticism from major powers due to poor human rights record of certain African regimes. The Chinese have bought oil fields in neighbors e.g. the Chinese national petroleum company (CNPC), bought in Kazakhstan oil fields for USD 5 billion. Also China has finalized several construction agreements with Kazakhstan to build pipelines to an estimated cost of USD 9 billion. The China petroleum corporation (Sinopec) agreed on March 12, 2003 to pay British gas USD 615 million for a stake in an oil and gas field in Kazakhstan which came four days after China’s third largest oil company (CNOOC) bought 8.33% of the British gas north Caspian Sea project for the same sum. To this a pledge from China Petroleum Corporation to invest USD 4 billion in Kazakhstan’s oil industry should be added.[viii]

8. China and Iran. China is also developing close commercial relations with Iran, an oil rich state of the region and a close neighbor of the Central Asian republics, to gain from its precious reserves. China’s cooperation with the stern Iranian regime has been aching factor in the US policy circles. A Sino Iranian network of oil pipelines, which has already been initiated, would be a substitute to the current Russian and American networks and give the Central Asian states an alternative route for oil trade which would decrease their dependence on Russia. The Chinese engagements with the Central Asian regimes vary from political to military and trade to investment.

9. CARS. The Central Asian regimes are structurally, militarily, and financially disadvantaged. The regimes are autocratic, dictatorial and their political systems not framed according to true liberal democratic norms. The resource-rich and strategically important region of Central Asia has some of the world’s worst dictatorships.

• The Uzbekistan is widely regarded as having one of the most brutal dictatorships on the planet with corruption, religious and political persecution and state-sanctioned torture including boiling alive of prisoners.
• The Turkmenistan is seen as a little better.
• The regimes in Tajikistan and Kazakhstan are less cruel but remain in the complete control of powerful dictator presidencies. Secondly their militaries are neither trained nor equipped appropriately as following lines better illustrate. The three of the Central Asian states (Kyrgyzstan, Turkmenistan, and Tajikistan) have no military forces worth the name. All five states have sufficiently good relations with Russia. The only potential threat to Russia from Central Asia comes from the possibility of a mass radical Islamist uprising in the Ferghana Valley, especially in the event of a NATO failure in Afghanistan that may perhaps result in the Taliban’s return to power there. In that case, Khramchikhin argues for joining forces with Kazakhstan to keep the radicals in the south while leaving the governments of the other Central Asian to survive as best they can on their own.

10. Economic disposition of region. The economic position of Central Asian states presents a status quo situation owing to scramble being played out in its south.

The Central Asia is continuously recognized as

• An important stakeholder in the Caspian energy game
• A conduit to Chinese energy security,
• A playground of Russian power politics,
• A transit area for criminal activity and religious fervor that is played out to its extreme in Afghanistan.

Central Asia is part of several struggles that intermittently see external actors competing for their attention. This competition is often exemplified in bilateral or multilateral economic as well as military agreements which are negotiated with the Central Asian states. However these external actors also dictate the terms of engagement. Access to resources and infrastructure has become prioritized as soft power tools of Russia, China and US through which they increase their regional influence.

On the other hand regional elites are also powerful. They know that they can leverage competing interests to their (often personal) advantage. As a result rule of law, corporate governance and transparency in commercial operations are often considered to be nonessential in the national interest.

Also these regimes strive to extract maximum aid and armaments from Russia, China and US.. In nutshell Beijing with its interests primarily secured from Muslim Central Asia, Muslim Middle East and Iranian Muslim regimes cannot alienate them by turning hard on to Uighur in Xinjiang. The Uighurs are Sunni Muslims. Many analysts believe that America and China are probably the only two key players in the region since Russia is embroiled in its domestic problems

11. The Source of Attraction/ the wealth distribution. The natural resource that has attracted the attention of American, Japanese and other foreign investors to Central Asia is energy – oil and natural gas. It is worth mentioning here that cross country differences vis-à-vis the ultimate distribution of immense wealth is striking. Kyrgyzstan and Tajikistan are the unlucky neighbors of energy rich Kazakhstan, Turkmenistan, and Uzbekistan. Kazakhstan’s principal underground wealth is oil. By contrast Turkmenistan, rich in oil deposits, is also proud possessor of the word’s third largest reserves of natural gas. Uzbekistan’s known oil and gas reserves are modest in comparison. Even with greater exploration Uzbekistan, at best, can expect to become a modest net energy exporter. The gold is another resource, Central Asia has plenty of.  If oil, gas and gold are what make foreign investors salivate over this region then Central Asia, which most experts write about, excludes Tajikistan and perhaps even Kyrgyzstan.

12. Independent Evaluation and Assessment. Ariel Cohen, in a detailed study of old politics in the Caspian region, has opined that after the Soviet disintegration, the Russian military and security services intended to restore Moscow’s control over the region and its pipeline routes. In his view the US should not allow Russia to play a dominant role in Caspian, otherwise Moscow will have almost monopolistic control over these vital energy resources, thus increasing western dependence upon Russia.

Another analyst Federico Pena also observed the Russian role in the Caspian. He opined that US seems anxious for collaboration in the Caspian region through partnership with Russian companies, asserting that Caspian was strategically important for the US and that the US companies were playing a leading role in the region. This is evident from the multiple pipeline strategy that the US has been promoting in Caspian, which in effect, has reduced the role of Russia’s northern route in exporting oil from this region.

America wants to secure supply not only for itself, but also want western firms to equally invest in Central Asian projects. This would reduce Europe’s acute oil and gas dependence on Moscow. Washington champions two pipelines that would circumvent both Russia and Iran. One would run from Turkmenistan through Afghanistan to the Indian Ocean. The construction has already begun for a $3.8 billion pipeline from Azerbaijan’s capital, Baku, via neighboring Georgia to Turkey’s Mediterranean port of Ceyhan (BTC) project. The BP, its main operator, has invested billions in oil rich Azerbaijan and can count on support from the Bush administration, which stationed about 500 elite troops in war torn Georgia.

Ariel Cohen, in his article titled “The New Great Game: Oil Politics in the Caucasus and Central Asia,” has mentioned certain steps and diplomatic maneuvers to be undertaken by US to ensure unrestricted supply.

• Firstly US should strengthen its ties with Caucasus and Central Asian states, assuring that these states get fair share of revenue in exploration projects and transit fees.
• Secondly US should not adopt policy of ruling out Moscow’s gas companies from exploring rights.
• Thirdly the conflicts arising in the region must be resolved with determination.  Also instead of derogating these Muslim republics US must assist to create free market economies, give them access to European market, and support governments that respect democracy and political pluralism. Various international projects especially the US sponsored (BTC) project, decreases the potential dangers associated with former pathways i.e. the Bosporus straits which are also the busiest in world shipping.
•  The strategic goal of the West should be the creation of a level playing field, allowing Russian and western corporations to participate in the development of Eurasian energy resources on an equal footing. If cooperation from Russia is not forth coming, the US should oppose attempts by the Russian security establishment to impose a single direction for the pipelines i.e. north via Russian territory. If Russian preponderance and geopolitical diktat continues it would give Moscow an unacceptable level of control over the flow of oil to western markets and could make the west vulnerable to Russia’s political whims.
• Nevertheless the US cooperation in region comes with doubts as various International Non Governmental Organizations (INGOS), NGOs and think tanks that effect US policy makers look down upon these regimes due to their poor human rights record, shameful practices of treating prisoners, poverty and a heavy handed approach of regimes towards their indigenous people. The region, in actual fact, is in dire need of economic development, as many sinister and evil deeds are a result of poverty. The primary source of instability throughout the region is neither religious extremism nor ethnic conflict but lack of economic opportunity.

13. US and China as Rivals. The key rival challenging US supremacy in the region is China. In 2009 for the first time China’s net trade with Central Asia exceeded that of Russia and the trend is likely to persist in future, says Alexander Cooley, a political scientist at Columbia University. He says China is stealing a march on the two cold war era superpowers. In December, a consortium, led by the China national petroleum company won the rights to develop Turkmenistan’s south Yolotan field, one of the world’s most prized gas fields. China is also active in uranium and oil projects in Kazakhstan (the region’s largest economy) and has been building modern roads that will transport Chinese goods to impoverished Kyrgyzstan and Tajikistan and beyond.

China has renewed its traditional vassal relations with the region and the Chinese relations with the people in region have traditionally been the relationship of peace, war, trade, deception and marriages, all the ingredients for a good story. It is only in the last 100 years during the Russian and Soviet occupation that China has been excluded from the region. China has traditionally viewed Central Asia as its personal trading area and a region heavily influenced by Chinese cultures. The trade between China and Central Asia has always been crucial and favored by both sides, as it is today. The only change today is that the traders have replaced jade, tea, silk and rhubarb with oil, weapons and infrastructure. Oil and gas have emerged as the most important financial reasons for China to engage with the Central Asian states to the degree that it has done.

The Chinese leaders have been anti US hegemonic displays and its unilateralist stance. Whether it is China’s alliance with Iran or a platform of SCO, the main policy imperative is to restrain US growing influence in region. The Iranian Shiite regime has not been a threat to the Sunni dominated Central Asian states.  Washington may be reluctant to admit it, but in the new Great Game in Eurasia, the Tehran-Beijing axis spells out the future: Multi polarity.

14. Conclusion. One may consider this conception of “new great game” to be bogus or sham, as remonstrated by some thinkers, yet one cannot reckon the very notion of a renounced Realist thought “National self interest”. This is the chief driver behind this game directly or indirectly as the case may be. The illustrious “new great game is a perilous quest. It may be hazardous because the path pursued by some states is treacherous, producing adverse consequences for the people, henceforth oblivious.

A glance at a map and a little knowledge of the region suggests that real reasons for Western military involvement may be largely hidden. Afghanistan is adjacent to Middle East. And though Afghanistan may have little petroleum itself, it borders both Iran and Turkmenistan; the countries with the second and third largest natural gas reserves in the world (Russia being first). Turkmenistan is the country nobody talks about. Its huge reserves of natural gas can only get to market through pipelines. Until 1991, it was part of the Soviet Union and its gas flowed only north through Soviet pipelines. Now Russians are planning a new pipeline, north. Chinese are building a new pipeline, east. The U.S. is pushing for “multiple oil and gas export routes.” High-level Russian, Chinese and American delegations visit Turkmenistan frequently to discuss energy. The U.S. even has a special envoy for Eurasian energy diplomacy. Rivalry for pipeline routes and energy resources reflects competition for power and control in the region. Pipelines are important today in the same way that railway building was important in the 19th century.

Ever since the economic reforms, in China, by Deng Xiao ping in late 1970’s the demand for oil has increased. The dependence on the Middle East had reached 50 percent of crude imports in 1996, and the decision was made to diversify away from the Middle East rather than assume that the Gulf region will become peaceful. The Chinese energy security would be better assured by access to Russian and Central Asian sources as well as to new sources of crude oil imports from Angola and Vietnam.

China is operating equally along side Russia in devouring energy deals. This provides an equal clientele to the Muslim Central Asian republics. This Chinese policy is far more attractive than facing Russian monopoly as previously. China offers a useful counterweight to Russia. A network of pipelines between Central Asia and China is gradually taking shape, and Russia appears to be realizing that China is not just a useful partner for keeping west out of Central Asia – it is also a competitor. However, as European energy growth slows, Russia too needs alternative markets for its oil and gas, and China has managed to secure preferential treatment there as well.

Many analysts who write on Central Asian energy wealth, often focus their concentration on plight of Afghanistan solely, which has made CARs vulnerable, due to the insecurity prevailing in Afghanistan more like a domino effect. At the critical juncture of their independence the Central Asians were fearful as they lost Soviet backing, their security provider. These weak and fragile states were the onlooker of Taliban civil strife in the decade of 1990’s dreading the spillover effect and that seems the same today. In 2011, the consequential effect of US war in Afghanistan is haunting the Central Asian regimes. The drug trafficking, smuggling, narcotics, human trafficking and arms trade etc is delaying their economic well being and becoming cause of derailment and frustration for many opportunists.

Source: Opinion Maker

EU Bonds Rollover Debt with a Chinese Bailout

The financial press is inundated with the most ominous reports of an EU meltdown. The downturn in economic activity and little growth all comes down to the unsustainability in servicing the debt obligations. Sovereign countries bailouts only pile on even more debt. European banks are tied to a Euro dominated currency, while the political union is anything but unified. Any serious student of European history inescapably concludes that the perennial ambition to orchestrate a single patchwork of diverse cultures and interests into a pan European brotherhood is always doomed. A consensus fraternity based upon socialistic economics feeds the inevitable default. However, never fear the banksters will not suffer, as the globalists prepare to use their next crisis, to consolidate their grip of world dominance.

Greece is the Sarajevo in the start of the next currency world war. A containable matter ready to snowball into a full-scale mobilization of competing factions, poses the unwinding of world markets. Never underestimate the inventiveness of financial ministers to paper over an impending default with more debt. Bloomberg reports, “The following is an English translation of a statement made by Government spokesman and Minister of State Elias Mosialos after a conference call between Greek Prime Minister George Papandreou, German Chancellor Angela Merkel and French President Nicolas Sarkozy today, received by e-mail from Mosialos’s Athens office.”

“In response to the rumors of the recent days it was emphasized by all that Greece is an integral part of the eurozone.

“Greece is determined to meet all its commitments to its partners, ensuring in this way the full implementation of the support program.

“The decisions taken by the Cabinet in recent days and the additional measures announced lead to meeting fiscal targets for 2011 and 2012 and the creation of primary surpluses. This will fortify the Greek economy, relieve the public debt burden and reinforce the country’s growth prospects.”

The distinctive difference and shortfall of the Euro from the U.S. Dollar (actually Federal Reserve note) is that the former is competing money, to the later world’s reserve currency status. No restraint is in effect that prevents mandatory acceptance of the U.S. Dollar as settlement payment, since creating unlimited credits is the prerogative of the reserve currency. As long as regimes fear their own demise from either bombing drones or the ending of new credit, the shell game continues.

Therefore, when U.S. Treasury Secretary Timothy Geithner backs an American infusion of even more debt created Dollars to rescue the EU banking system, you know the race to the bottom has begun. Market Watch reports, “The European Central Bank, the Bank of England, Bank of Japan, and the Swiss National Bank announced they will each conduct additional dollar tenders in an effort to provide liquidity through the end of the year. The central banks said the auctions are coordinated with each other and the U.S. Federal Reserve.”This effort will not alter the fundamental plight that faces Europe. As the crunch intensifies, Greece will be sacked. If the British Museum refuses to return the Parthenon, or Elgin Marbles, what would make anyone think that the byzantine Brussels bureaucracy would share any of the renowned fairness and compassion of the goddess Athena? Annihilating Greek democracy is all in a day’s work for the European Commission.

So what is the proposed EU solution? European Commission presidentJose Manuel Barroso announces,

“He will “soon” present proposals for eurozone states to issue joint bonds, a way to even out interest rates among the single currency area’s 17 nations. Such “eurobonds” are currently opposed by Germany and could require a new round of painful EU treaty negotiations.”

Reuters lays out the conflict. “Germany, which is the euro zone’s most powerful economy and enjoys the lowest sovereign borrowing costs, would stand to lose most if such bonds were introduced as it would effectively end up having to underwrite weaker, more risky member states. As a result, German Chancellor Angela Merkel is adamantly opposed.”It needs to be recognized that the German economy is the only thread that keeps the EU alive. The political reality is that what Germany could not conquer militarily, she accomplished by way of her industry and positive trade balances.

Examine two separate bond proposals.

1) Bruegel, a Brussels-based think-tank whose research frequently informs EU policy, last year put forward a proposal for separate ‘red’ and ‘blue’ bonds. Under the plan, euro zone bonds — blue bonds — would be issued jointly and collectively up to the value of 60 percent of each euro zone member state’s gross domestic product (GDP). Borrowing beyond that level would require an individual state to issue red bonds without the collective guarantee of the euro zone, with the market likely to charge a higher yield to reflect the additional risk.

The disparity in financing costs between blue and red bonds — potentially, a jump of more than 50 percent by some estimates — would be a big incentive for euro zone countries to bring their debts rapidly down to below 60 percent of GDP, the limit originally targeted by the EU.

2) Separately, Berlin-based economist Hans-Joachim Dubel has proposed creating European sovereign bonds — dubbed ‘purple’ bonds — that are part-insured by the EU’s rescue fund, the European Financial Stability Facility (EFSF).

Each bond would be split into senior and junior tranches, with the senior section, around 60 percent of the total, insured by the EFSF and its successor, the European Stability Mechanism (ESM).

The ESM would become a monoline bond insurer that in the event of a default would pay investors quickly and in full on 60 percent of their assets, while the junior debt could be restructured. Such junior debt could trade separately after a default.

The dual structure of the bond would mean sovereigns are charged a higher interest rate than for blue bonds, reflecting the implicit 40 percent first loss carried by the uninsured junior tranche. So the mechanism would still provide an incentive to avoid excessive debt issuance when times are good.

It is not hard to envision why Angela Merkel is reluctant to turn over the fruits of a German work ethic and advanced engineering to subsidize a continent of fainéant ingrates.

So where will the money come from to rollover existing government debt or finance the additional sums required to keep the socialist experiment intact? The globalists have an answer, their own ingenious Reich, called China. The Chinese communists are the ultimate banksters’ tool. Their model for economic control is the product of the same clan of London and New York financiers who set the stage for European conflicts designed to move the planet into a vortex of their intention.

The Globe and Mail offers up this account.

“Chinese Premier Wen Jiabao has outlined conditions that Europe must meet before China will increase support for debt-laden Europe in a sign of Beijing’s reluctance to be cast as a savior for the global economy.His top condition was the long-standing demand that Europe recognize China as a full “market economy,” a technical definition that would benefit Chinese companies involved in trade disputes.”

The McClatchy-Tribune Information Service also reports.

“As the global economy slowly recovers, we still face a host of uncertainties and destabilizing factors,” Wen Jiabao said at the opening of the World Economic Forum’s meeting in the north-eastern port of Dalian.

“Under these circumstances, the Chinese economy is closely linked with the global economy,” he told 1,500 delegates from 90 nations at the meeting that has come to be known as the “Summer Davos.”

The way to view the Chinese money machine needs to acknowledge that the globalists want to use the same coolie labor structure for the entire world. Europe is slated to adopt the type of a New World Order that strips all sovereignty from individual countries. China has an undemocratic culture and a rigidly proscribed regiment for political dissenters. The bondage of European debt financed by a PRC slave system is straight out the funding of the Nazi regime playbook.

When Wen Jiabao patronizes the EU, he is instructing the masses to accept the dictates of the EU Commission. The purpose of keeping the phony bond obligations roll over scheme is to use the extortion payments for additional real assets acquisitions and control by the very bankers that designed the collapsing and fake international trading framework.

EU beggars acquiesce to tyrants. Their long record of internal conflict seldom focuses on the underlying masters of the financial fraud. China is the new capital of the banksters’ Babylon. Its location is an armed camp and protectorate of the Mattiods. Their assets are the direct result of the global free trade deception.

The best hope for Europe is that Germany, not Greece, leave the EU. As long as Eastern Europeans and Middle East immigrants clamor to tap into the wealth of “Teutonic Fatherland”, the notion of a United States of Europe will suffer from the same invasion and fate as America. “He, who learns but does not think, is lost! He who thinks but does not learn is in great danger.” – Confucius

Why Palestine is Important

Palestine is important not because it is as beautiful as Tuscany, nor because the Palestinians are suffering, and not even because it is occupied by a Jewish state. What we need to understand is that the Jews have been handed Palestine not because they were so smart or so strong or so devoted, but by Imperial design.

Palestine is important because it is believed to be a linchpin of Empire, one of the key points necessary to control the world. Such was the conviction of the 19^th century British Empire-builders of the Rhodes variety, and this conviction has been recently and continuously reformulated into the terms of modern geopolitics. Once an arcane theory developed by HJ Mackinder, it has grown up to become a driving force behind globalism. We shall not go into its rational interpretation of mythological imagery; we must simply accept that this is the way the world’s powerful elite think.

Mackinder planned the subjugation of the whole planet to the Empire. He noted that the Arab world (apassage-land, in his terms) is central for this enterprise, and declared that “the hill citadel of Jerusalem has a strategic position with reference to world-realities not differing essentially from its ideal position in the perspective of the Middle Ages, or its strategic position between ancient Babylon and Egypt.” He believed that the “ideal position” of Jerusalem as the centre of the world of the medieval Crusader maps is no religious quirk, but an inspired understanding of the inherent quality of the place. In his exact words, “In a monkish map, contemporary with the Crusades, which still hangs in Hereford Cathedral, Jerusalem is marked as at the geometrical centre, the navel, of the world, and on the floor of the Church of the Holy Sepulchre at Jerusalem they will show you to this day the precise spot which is the centre… The medieval ecclesiasts were not far wrong”.

 A strategist-mystic, Mackinder was a great supporter of Balfour declaration: “The Jewish national seat in Palestine will be one of the most important outcomes of the war. That is a subject on which we can now afford to speak the truth … a national home at the physical and historical centre of the world”.

In his fresh-from-the-presses book, The Great Games (rush out and buy it while stocks last, dear reader!), our friend and fellow Counterpuncher Eric Walberg says it best: “Mackinder’s inspiration was not Zionist but rather imperial, and by putting Jews in a Palestinian homeland he was assembling the pieces in today’s imperial order”.

Clearly, his imperialism, and his geography have had religious antecedents. Geopolitics is a secularised sacred geography, and its drive towards “the hill citadel of Jerusalem” and “Shambala” is not a coincidence. But then, every ideology is a crypto-religious doctrine; or in words of Carl Schmitt, «all of the most pregnant concepts of modern doctrine are secularized theological concepts».

People argue that geopolitics has more than a touch of mumbo-jumbo, but this doctrine is being applied by the elites. One can rationalise the fateful Imperial attachment to Afghanistan by a vague possibility to build there a pipeline; it is easier to see in the US drive to Afghanistan a new version of the search of Shambala.   Mackinder rationalised his feelings, he referred to Jerusalem’s army being able to defend the Suez, but the old maps influenced him – and other Empire-builders – more than he was ready to admit.

For this reason it is difficult to imagine that the Empire will ever voluntarily release Palestine; it is far too important ideologically, religiously, geopolitically, and strategically in the eyes of the Imperial elites. But why has the Empire chosen the Jews to be the shock troops in Palestine? Indiana University’s Professor of Geography, Mohameden Ould-Mey provides some explanation in a scholarly paper, a paper that was never successfully published. The paper had been duly reviewed and accepted by Political Geography’schief editor David Slater, but two years later a new chief editor came along who knew better on which side lies the butter, and he quickly spiked the paper. He used his position to instead commission some celebratory articles about Israel’s Independence Day.

In the never-published paper, Professor Ould-Mey revealed that the Zionist movement was not created by Jews in the 19^th century: they were busy looking closer to home. These starry-eyed Jews once dreamt of forming a homeland inside Ukraine or Poland, to build there an independent state “just like Serbia”. It was the British who had a different idea, namely, to turn the Jews into English colonists in the Middle East. They needed manpower to man the Hill Citadel, and “they wanted the Jews to fill in the blank for the non-existing native Protestants in the Holy Land”.  The idea was tried earlier and failed: Napoleon toyed with the idea of planting Jews in Palestine as France’s foot soldiers, but there were no takers among Jews. The Brits achieved what the French could not.

Enter William Henry Hechler (1845- 1931), “the British agent who actually fathered Zionism in Eastern Europe and Russia”. Hechler is the man who turned Leo Pinsker into a Zionist; Pinsker later became author of the first and most influential pre-Zionist pamphlet, Auto-Emancipation. “This is when and how the British began to inject their Zionism into an otherwise local and normal emancipation movement of Eastern European Jewry in their own ancestral homeland” in Eastern Europe, writes Ould-Mey.

After winning over Pinsker and establishing the first Jewish movement for settlement in Palestine (Hibath Zion), Hechler went to Vienna to entice Theodor Herzl. At that time, Hechler was already “described as an agent working for German and English interests and particularly as a ‘secret agent’ working for the Intelligence Service”.

“Hechler actively participated in the First Zionist Congress in Basle, Switzerland in August 1897…Hechler-Herzl relations (like the Hechler-Pinsker ones before them and the Balfour- Weizmann ones after them) would seem to resemble the tutor-tutored relations rather than prophet-prince relations as suggested by Zionist historiography. Beyond tutoring Herzl on what Zionism is all about, Hechler introduced both Herzl and Zionism to the German Emperor, the Russian Czar, the Ottoman Sultan, the Pope (Pie X)” and other luminaries.

“Herzl was essentially a British envoy to the Germans, the Russians, the Ottomans, and the Jews. It was said that Herzl was fitted to lead Zionism precisely because he knew neither the Jews nor Palestine or Turkey…”

Ould-Mey concludes: “The British wanted Palestine for imperial and religious motives and used the Zionist Jews as willing surrogates and proxies who down the road became more active agents.”

This makes sense, for it solves the mystery: why was the Jewish Zionist movement such a Johnny-come-lately? Jewish Zionism was still in its infancy when Russians, French and Germans had been buying up lands and building houses all over the Holy Land for 40 years. Ould-Mey’s theory answers all the pertinent questions nicely. It was an English coup de grace.

This discovery is very exciting, but a trifle short of sensational: the British Intelligence Service is known to have rocked the cradle of The Muslim Brotherhood, the CIA fostered the Taliban, Shabak fathered Hamas. There is no doubt that all these bodies became wildly independent, unleashed themselves from their masters and ended up causing them a lot of trouble. Ould-Mey’s discovery that the Zionist movement was established by the British Secret service does not necessarily imply that it remained under their control – or anybody’s external control.

Since then, Jews have become doubly integrated into the fabric of the Empire: as the holders of the geopolitical “hill citadel of Jerusalem”, and as the bearers of neo-liberal post-modern ideology, the ideology of the “islanders” in Mackinder’s terminology — which is surprisingly close to “the traditional Jewish ideology” in the view of Milton Friedman as expounded by Gilad Atzmon. The first group is located mainly in Israel; the second group is mainly in the US.

The Zionist conception that the Jews are natural placeholders of the “hill citadel of Jerusalem” is now under review. The Middle East has sprung forth new forces with which the Empire is already actively collaborating. Foremost are the aggressive Saudi Wahhabis whom Thierry-Meyssan has identified as theSudairi. Qatar’s Al-Jazeera is a powerful weapon that is in their hands. They  with Israel but they are not Zionist stooges. They are quite a nasty lot and are friends of the Empire by their own right.

Obama’s May speech has made this clear. Israel is no longer the only outpost in the wilderness of the Middle East, no longer a bastion of the West in the East. Obama’s proposal was similar to that made by Jimmy Carter to China and Taiwan in 1979, when the United States transferred diplomatic recognition from Taipei to Beijing while carrying on commercial, cultural, and other unofficial contacts with Taiwan. Over 30 years have passed since then, and Taiwan has not suffered from being downgraded. Likewise, Obama offered Israel a similar deal: shrink a bit, and you will live a long and happy life. Contraction should be not only territorial, but strategic and ideological as well. You are welcome to stay a favorite son of the US in the Middle East, but as a son among other sons, not as a pampered baby among slaves. In short, be a Taiwan – don’t try to be a China.

As we know, Israel quickly neutralized this proposal by mobilising pro-Jewish American politicians. This has effectively humiliated Obama – and energized the new pro-Imperial Arab forces to action. Their new confidence was expressed in Prince Turki’s opinion piece and has been widely commented upon. This is one reason why Israel has been acting hysterically recently, as is evident from the attacks on the Flotilla, the detention of the fly-in tourists, and the massacre of the unarmed Palestinians upon the anniversary days of the Nakba and Naksa.

Israelis have a feeling that their position is being re-evaluated, and they are freshening up their connections with the Jews abroad and flexing the power of their lobbies, playing up anti-semitism hysteria. The most recent orchestrated surges of pro-Jewish sentiments have surfaced in the harsh treatment of film director Lars von Trier and designer John Galliano, but are by no means over.

Now an important debate of the last decade can be addressed. Noam Chomsky explained America’s obsession with Israel by hard-nosed Imperial interests, while John Mearsheimer and Stephen Walt inter alia have explained it by activity of the Israel Lobby. Now we can try to square this circular argument.

Indeed, the imperial plans for conquest of the world as they were laid upon in the end of 19^th century included creation of the “hill citadel of Zion” manned by “ranging” (Mackinder’s term) Jews. New data proves that these plans were not inspired by Jews, but given to Jews by imperial planners. These plans passed from generation to generation, and presumably they are now accepted by the imperial elites as given.

During the Cold War this idea figured less prominently, but “since the end of the Cold War, as regional strategic concerns have replaced those of the global bipolar confrontation of the twin superpowers, the relevance of Mackinder’s study [and of his concepts] is once again apparent”, in words of Leut.-Gen Ervin Rokke.

 So apparently, Chomsky was right? Not so fast. We can reword the old argument in new terms: M&W argument can be read as “the old ideas of Mackinder are so much of old bunkum, and in reality the citadel became rather a hindrance than a useful defence, like Belfort”.  This coincides with the Arab pro-Imperialist view of the Saudis. Perhaps it is a convincing opinion, but the Lobby is still instrumental in blocking it.

The last and final answer to the “Jews and Empire” question was proposed by the modern Russian author, Viktor Pelevin:

- Everything is in the hands of Allah, – said the girl.

- I beg your pardon, – a young man turned to her rather unexpectedly, – How can it be? What about Buddha’s mind? Hands of Allah exist only in the mind of Buddha, you would not deny that, would you?

The girl smiled politely.

- Surely I wouldn’t. The hands of Allah exist only in Buddha’s mind. But the whole point is that the mind of Buddha is in the hands of Allah.

Crisis By Consensus

This is the first in a series of four articles…

Greece is in crisis because it has too much debt. The US is in crisis because it needs to issue more debt. The debt-hobbled economies of Europe are known as the PIGS: Portugal, Ireland, Greece and Spain. Their fiscal health may determine the future of the euro.

Like the euro, the dollar suffers from a fiscal cold poised to become financial pneumonia. The US could soon have $16.7 trillion in government bonds secured by our full faith and (ahem) credit.

The deficit for 2011 alone is $1.3 trillion. In 1980, the entire US debt totaled $900 billion. An additional $2.4 trillion in debt is sought to fund the government through 2012.

With fiscal resources tight, budget cuts are under way at the federal, state and local level. New York City plans to lay off five percent of its teachers. California plans to close dozens of its popular state parks. Arizona sold its public buildings and now leases them back.

Public sector pensions are on the chopping block. Look for cuts in Social Security benefits as annual interest payments on US bonds reach $627 billion by 2017 — enough to fund the Pentagon in 2007. America’s securitized debt is exceeded only by its unsecuritized obligations. Those debts total tens of trillions more.

Two months ago, Standard & Poor’s lowered its outlook for US bonds from stable to negative. Moody’s signaled its intent to announce a possible default on US bonds, even if temporary. Fitch also forecasts a possible downgrade.

How did the US reach this perilous juncture?

Post-World War II, America was home to 50 percent of the world’s productive power. That strength infused US bonds with global credibility and guaranteed the dollar would be favored worldwide as the reserve currency. Those strengths also ensured we could borrow at will.

Finance has long been the “operating system” shaping geopolitical affairs from the shadows — invisible, intangible yet ever present. That stable presence suggests today’s destabilizing dynamics were foreseeable.

As the US reduces its commitments to Africa, China is reinvesting in commodities, building infrastructure and making African allies. While we Americans continue to put our faith in financial assets, Beijing is reinvesting our purchasing power in physical assets — roads, railways, ports — and commodities, including metals, minerals, factories and even farmland. The interest we pay to China on US bonds helps modernize its navy and air force, positioning Beijing to project force worldwide.

Did today’s financial dynamics “just happen”? Or was this systemic disabling of America done by design? Americans want to know: How did we get it so terribly wrong?

When waging long-term warfare, shared mindsets are the key battlefield. Victories flow to those skilled at creating generally accepted truths — even if false. Where do consensus beliefs reside if not in a shared mindset? That intangible realm is where modern-day wars are won or lost. At present, the US is losing to those skilled at sustaining false beliefs. Iraq had no WMD yet we were induced to invade by a consensus belief that persuaded us otherwise. Nor did Iraq have yellowcake uranium from Niger. Nor did Al-Qaeda operatives meet in Prague with Iraqi officials. Nor was Saddam Hussein’s secular regime collaborating with religious fundamentalists in Afghanistan.

How do lies become widely held beliefs? How was Secretary of State Colin Powell induced to believe that Iraq had mobile biological weapons laboratories? Who has the means, motivation, opportunity and, importantly, the stable nation state intelligence to deceive us with such success?

This latest inducement to war on false pretenses was tactical, not strategic. Strategic duplicity induced the world’s strongest economy to freely embrace the very financial forces that now threaten the capacity of Americans to defend their freedom. Did we freely choose to squander and now endanger our “full faith and credit”? Or were we induced? Was post-World War II America the target of a trans-generational fraud?

Debt is a well-traveled route to wealth. With borrowed funds, you can buy a house. Securitize that debt and more credit becomes available for more homebuyers. Securitization can also fuel a debt-induced housing boom. The resulting wealth accrues to those positioned to capture that inflated value. And to those who pocket fees for repackaging debt as tradable securities.

Who captured the bulk of the wealth that we were induced to believe would be found down that debt-fueled path? Answer: The same financial sophisticates who pocketed the bulk of the private sector wealth financed with today’s public sector debt. Skeptics question whether the US freely chose this path. Americans rightly want to know how their nation became a global purveyor of junk debt. The US faces a consensus-enabled crisis. Was this outcome a consequence of dysfunctional domestic politics? Or was this the handiwork of those skilled at pitting parties against one another while selling debt to both?

The U.S. Economy Remains Mired In A Long-Term Slump

“We have involved ourselves in a colossal muddle, having blundered in the control of a delicate machine, the working of which we do not understand.” John Maynard Keynes

Black Tuesday. On October 29, 1929, the stock market crashed triggering the worst economic collapse in history, the Great Depression. Thousands of banks and businesses failed, shanty towns sprung up across the country, and 15 million Americans (25% of the workforce) lost their jobs. President Herbert Hoover, who believed the turmoil would be over in a matter of weeks, opposed providing aid to the needy and unemployed. He supported the same policies as his GOP heirs in Congress today who seek to deepen the present crisis by cutting unemployment benefits, slashing fiscal stimulus and balancing the budget on the backs of workers. The Hoover Doctrine was summed up by Treasury Secretary Andrew Mellon who famously said, “Liquidate labor, liquidate stocks, liquidate real estate…purge the rottenness out of the system.” Mellon’s views prevailed and by July 8, 1932, the Dow Jones Industrial Average had fallen to 41 points (an 89 percent drop from its peak in 1929) while the economy sunk into a decade-long slump.

Before the crash, stock prices had been propped up by massive amounts of margin debt that melted away in a deflationary inferno when the panic selloff began in late October. The calamity took down 4,000 banks and left the broader economy in ruins. John Kenneth Galbraith summed it up like this in his masterpiece “The Great Crash: 1929″:

“Had the economy been fundamentally sound in 1929 the effect of the great stock market crash might have been small. …. But business in 1929 was not sound; on the contrary it was exceedingly fragile. It was vunerable to the kind of blow it received from Wall Street. Those who have emphasized this vulnerability are obviously on strong ground. Yet when a greenhouse succumbs to a hailstorm something more than a purely passive role is normally attributed to the storm. One must accord similar significance to the typhoon which blew out of lower Manhattan in October 1929.” (Extracts from “The Great Crash: 1929″, John Kenneth Galbraith, First Published 1955, Page 204.)

The years leading up to the 2008 Financial Crisis saw similar trends as those before the Great Depression. It was also a period of extreme inequality and excessive risk taking. Credit-binging had inflated bubbles in housing and stocks clearing the way for a painful downturn and years of retrenching. The economy was also weak before the crisis, but the weakness was largely masked by the frenzy of credit spending that kept activity high. On August 9, 2007, the mask was stripped away when French-owned bank BNP Paribas suspended withdrawals at three of its funds because the value of the toxic mortgage-backed assets it held could not be determined. News of the incident spread quickly through the markets where trillions of dollars of mortgage-backed securities (MBS) were held by all the major banks and financial institutions. That set off a cascade of downgrades which ate away at bank capital and led to the collapse of Lehman Brothers.

When Lehman failed, all Hell broke lose; markets plunged, interbank lending slowed to a crawl, and forced liquidations wiped out trillions in capital. The unwinding continued for a full 6 months despite Congress’s $700 billion TARP bailout and the Fed’s blanket guarantees on all manner of dodgy financial assets. Finally, in mid-March 2009, the stock market hit rock-bottom and slowly began to recover. In contrast, the real economy remains stuck in a long-term Depression characterized by flagging output, falling housing prices, and high unemployment.

The basic problem facing the economy, is lack of demand. Stagnant wages, high unemployment and gross inequality have made a strong recovery impossible. Working people simply don’t have the purchasing power to generate positive growth. If it wasn’t for monetary and fiscal stimulus, the economy would be in recession right now. Even so, personal consumption has not slipped as much as one would expect. What has dropped off is investment, and, as author Robert Skidelsky notes, “In a growing economy, the gap between consumption and production must be filled by investment if full employment is to be maintained.”

So, why aren’t businesses investing?

Because working people are underwater on their mortgages, maxed out on their credit cards, and overdue on their bills. There’s no reason to build more capacity when consumers are struggling just to stay afloat. But that creates a big problem for the economy, because new investment is crucial to keeping things running smoothly. Here’s how John Bellamy Foster and Fred Magdoff explain it in their book “The Great Financial Crisis”:

“For a capitalist economy to work well the surplus (or savings) that it generates must be invested in new productive capacity. Yet, investment in modern capitalism…is at best a risky undertaking since investment decisions that determine the level of output in the present are based on expectations of profits on this investment…in the future…..Any lessening of investment tends to generate a vicious circle, pulling down employment, income, and spending generating growing financial problems, and negatively affecting the business climate generally—resulting in an economic slowdown.” (“The Great Financial Crisis”, John Bellamy Foster and Fred Magdoff, Monthly Review Press)

The recycling of surplus capital has hit a road-bump, so the economy has started to sputter. This situation should persist until household deleveraging ends and consumers regain their footing.

The Fed has tried to offset the lack of investment by inflating an equities bubble, but, so far, the results have been disappointing. The so called “wealth effect” has not boosted investment or trickled down to the broader economy. Demand remains weak and there are no signs of another credit expansion. Unless there’s a surge in borrowing, (which seems unlikely) the financialization process will slow and the economy will languish in a long-term slump. That appears to be what’s happening.

Last week, in his second press conference, Fed chairman Ben Bernanke claimed victory in his war against deflation. He said, “I think the point I would make about where we are today versus last August, is that then deflation was a non-trivial risk. I don’t think people necessarily appreciate deflation can be very pernicious.”

Is Bernanke right; is deflation no longer a threat?

Not likely. While the consumer price Index (CPI) has been on the rise, the fight against deflation is far from over. Consumers and households are still deleveraging, housing prices are falling and unemployment is stuck at 9 percent with 16.5 percent underemployed. Private sector debt is still at historic levels and will have to come down further. If that process is not eased by increasing the government’s budget deficits, then economy will shrink even more and lapse back into recession.

We’re at a point of extreme vulnerability. Bernanke’s bond purchasing program (QE2) may have temporarily lifted stocks and commodities out of the doldrums, but there are no guarantees that the trend will continue.

The question is whether consumers can maintain sufficient demand to power the economy by themselves or if deflationary pressures will reemerge as soon as the gigantic injections of monetary and fiscal stimulus run out?

Also, there are troubles are brewing around the world that could push the economy back into crisis. For example, many analysts now believe that China is headed for a hard landing. Here’s an excerpt from fund manager Gary Shilling’s 4-part series on China on Bloomberg News:

“China is much more vulnerable to an international slowdown than is generally understood…China’s reliance on exports and a controlled currency for growth, for instance, will no longer work if U.S. consumers are engaged in a chronic saving spree, as I believe they will be. Chinese export growth, which averaged 21 percent per year in the last decade, is bound to suffer….

Inflation Looming…China’s state-controlled economic boom may soon lead to crippling inflation. In February 2010, the director of the National Bureau of Statistics said that “asset-price increases pose a challenge for macroeconomic policy.”

The housing boom has pushed up prices to the point that apartments in Beijing are affordable to only the top 20 percent of earners — they’re selling at about 22 times average income (average U.S. house prices peaked at six times average income). A square meter of property in China costs an estimated 164 times per-capita income, compared with 33 times in high-priced Japan…

The government is fearful of rising prices, and has moved to prevent speculation. Buyers must now put down 60 percent of the purchase price on second homes, and 30 percent on first homes. The government is pressing banks to contain mortgages, and some have raisedinterest rates.” (“Shilling: China Heading for a Hard Landing”, Bloomberg)

So, why is China finding it so difficult to fight inflation?

Mainly, because a shadow banking system has sprouted up and is providing massive amounts of credit outside the traditional “regulated” banking system. That’s adding to the money supply and driving up prices. Here’s the story from guest author Waiching Li at Credit Writedowns:

“According to a study issued by the People’s Bank of China in 2010, non-banking sector lending has expanded to 63.3 trillion Yuan, ($10 trillion), 44.4% of total lending activities of China’s economy.

Shadow banking, a concept coined by the US Federal Reserve, refers to non-banking financial institutions with some banking functions, but they are not or less regulated like a bank. In the U.S., the lack of regulation for the securitization of traditional financial products, including home loans, was one of the major causes of the financial crisis.

Shadow banking in China mainly exists in the form of “Bank and Trust Cooperation”, the underground financing networks; but small loan companies and pawn shops also play a role in these shadow financing activities.

While mortgage securitization is not an issue in China, the “Bank and Trust Cooperation” is a vehicle to provide ‘hidden’ loans to enterprises outside the scope of the bank’s reserve limit. Similar to the credit securitization problems in the US, the banks play the role as an intermediary. ….

Data released on March 31th, by China Trustee Association, shows that the scale of Bank and Trust Cooperation as has already reached to 15.3 trillion yuan ($2.35 trillion). The risks of such financial arrangements are asymmetrically transferred to buyers. Since no credit ratings are available for these debts, the buyers have to blindly follow the bank’s referrals, hoping the banks, which make money from commissions and fees no matter what happens with the loan, have done due diligence and are honest.” (“The Shadow Banking Problem in China”, Credit Writedowns)

Unregulated “shadow” banking inevitably ends in disaster because loan-quality gradually deteriorates and that leads to panic selling. This is essentially what happened at BNP Paribas when they suspended withdrawals at their 3 funds; they became suspicious of the underlying collateral (subprime mortgages) and that sparked a bank run in the repo market. China will face the same problem if the government doesn’t reign in its shadow banks and control the flow of credit.

There are also troubles in the eurozone which could send the global economy sliding back into recession. George Soros warned last week, “We are on the verge of an economic collapse which starts, let’s say, in Greece, but it could easily spread…..The financial system remains extremely vulnerable.”

Greece will eventually have to restructure its debt as its debt-to-GDP ratio continues to widen each year it stays on its present payment schedule. Greek Prime Minister George Papandreou is willingly gutting public assets and laying off 20% of the public workforce to appease foreign bondholders who refuse to accept haircuts on their investments. Here’s economist Mark Weisbrot summing up the goings-on in Greece:

“Imagine that in the worst year of our recent recession, the United States government decided to reduce its federal budget deficit by more than $800 billion dollars – cutting spending and raising taxes to meet this goal. Imagine that, as a result of these measures, the economy worsened and unemployment soared to more than 16 percent, and then the president pledged another $400 billion in spending cuts and tax increases this year. What do you think would be the public reaction?

It would probably be similar to what we are seeing in Greece today, including mass demonstrations and riots, because that is what the Greek government has done…..Because of the massive opposition to further economic self-destruction – the latest polls show that 80 percent of Greeks are opposed to making any more concessions to the European authorities….

The IMF’s latest review of its agreement with Greece suggests that the Euro, for the Greek economy, is still 20-34 percent overvalued. This makes a recovery through “internal devaluation” – i.e., keeping unemployment so high and therefore lowering wages to make the economy more internationally competitive – an even more remote possibility than it would otherwise be. But the big problem is that the country’s fiscal policy is going in the wrong direction, and of course they cannot use monetary policy because that is controlled by the ECB.” (“Greek Protesters Are Better Economists Than the European Authorities”, CEPR)

While the Papandreou government has clinched enough votes in parliament to pass another phase of the EU’s austerity plan, this merely puts off the day of reckoning. Greece will not escape default. Eventually, the bondholders will be forced to take a hit on their investments and that will push the EU banking system (particularly English, French and German banks) into crisis. The meltdown may not be as big as Lehman, but it will certainly be enough to push the eurozone back into recession.

Lastly, GOP deficit hawks are threatening to trim government spending even though the economy is still too wobbly to stand on its own. If they succeed, the economy will contract and unemployment will rise. Here’s an excerpt from an article by economist Mark Thoma who explains the pitfalls of belt-tightening:

“…. widespread weakness in recent economic data makes a double dip much more likely. In May, just 54,000 jobs were added, auto sales declined significantly, retail sales were sluggish even excluding autos, and growth in manufacturing slowed sharply. Meanwhile, house prices continue to decline to new post-bubble lows, home sales have slowed, claims for unemployment insurance have risen, and consumer sentiment has weakened. Both stimulus spending and QE2 are coming to an end, state and local budgets are still a problem, and corporate bond issuance “fell to its slowest pace of the year.”…

…When the recession started, I was certain we wouldn’t repeat the mistakes of the past. One mistake in particular looms large right now, the deficit reduction and interest rate increases that sent the economy into a tailspin in 1937-38. Many people do not realize that there were two recessions within the Great Depression. The first, which came in 1929, is well known. This recession lasted until 1933, and then the economy began slowly recovering, much like today. As the recovery continued, people began to worry about the budget deficit and the possibility of inflation – again much like today. In response, fiscal authorities began reducing the deficit and monetary authorities raised interest rates, and the result was a second recession in 1937-38. This mistake prolonged the economy’s troubles considerably, and in part was why this became the “Great” Depression.” (“How the Fed Could Set Off a New Recession”, Mark Thoma, The Fiscal Times)

Regardless of the recent uptick in stock prices, the economy remains mired in a long-term slump. Demand is weak, because wages haven’t kept pace with productivity and because consumers no longer have easy access to credit. When consumers don’t spend, businesses don’t invest. It’s that simple. Big business is currently sitting on nearly $2 trillion for which there are no profitable outlets for investment. Unless investment picks up, the economy will continue to operate below capacity and unemployment will remain high.

Neither the Obama administration nor Congress believe that the government can play a constructive role in easing the business cycle or reducing unemployment. Policymakers still ascribe to a laissez faire orthodoxy which makes a protracted slowdown unavoidable. The only thing keeping the economy from a double dip recession is government spending. When austerity-minded congressmen slash the deficits, the last thread keeping the economy in positive territory will be cut and deflationary pressures will reemerge.

See also: US states slash spending, cut jobs: The majority of US states begin their new fiscal year July 1, with budgets that impose crippling reductions in public services, particularly health care and education, and destroy hundreds of thousands of jobs.

Dalai Lama: “I am a Marxist”

There is no better way to proclaim your lack of spiritual and philosophical depth than by, two decades after the fall of communism, disclosing that you’re Marxist.  Yet this is precisely what Buddhist spiritual leader the Dalai Lama did during a speech before 150 Chinese students at the University of Minnesota this month.  Journalist Tsering Namgyal reports on the story at Religion Dispatches, writing, “‘as far as socio-political beliefs are concerned, I consider myself a Marxist.’  ‘But not a Leninist,’ he [the Lama] clarified.”

Well, that’s a relief.  Those Leninists can really kill ya’.  Marxists will just murder you.

This isn’t the first time the Lama indicated that his soul is as red as the robes he wears.  During a lecture in NYC on May 19, the Tibetan leader credited “capitalism” with bringing new freedoms to China but then , “Still I am a Marxist”; he then explained that Marxism has “moral ethics, whereas capitalism is only how to make profits.”  That’s some deep thinking right there.

Now, I have the word “capitalism” in quotation marks because it was originated by a communist, and we shouldn’t allow enemies of the good to define the vocabulary of the debate.  I prefer to call the mostly free market in question a “natural economy,” as it is what naturally occurs when people are afforded economic freedom; they will buy, produce, sell and compete.  In contrast, communism (in the real world, not in the stateless utopia of textbook fantasies) requires a large, intrusive, freedom-squelching government to micromanage people’s endeavors and quash the yearnings of man’s spirit.  And because the Natural Economy does allow people the most freedom practical (we still must have courts to enforce contracts, for instance), it is infinitely morally superior to Marxism.

Having said this, the Natural Economy doesn’t have “moral ethics”; it just is.  It is, again, what naturally occurs when man is permitted to spread his wings.  And it will be as moral as the average people who operate within it.

In contrast, Marxism will be as immoral as the worst people who operate within it.  This is because, while the Natural Economy is governed by those hundreds of millions of consumer votes called the market, communism is ruled by the unscrupulous few who can claw their way to the top in an inevitably corrupt political system.

But while Marxism is morally inferior, it cannot be said to have “moral ethics” any more than the Natural Economy does – not in the true sense of the term.  This is because it is atheistic.  And a belief in morality – “morality” properly understood, that is – correlates to a belief in God.

Why?  Because what we call “morality” can originate with only one of two possible sources: Man or something outside of him.  If it’s something outside of and infinitely superior to him (i.e., God) – if “Absolute Truth” exists, in other words – then we can say that morality has an existence unto itself and is, therefore, real.  But what if, as wanting Greek philosopher Protagoras said, “Man is the measure of all things”?  Then morality doesn’t really exist; the word is then just a confusing redundancy, a water-muddying term that we apply to what is nothing but man’s consensus tastes.  After all, we wouldn’t say that chocolate ice cream was “bad” or “wrong” and vanilla “good” or “right” simply because we found out that the greater mass of humanity preferred the latter, would we?  Yet is it any more logical to proclaim murder bad or wrong if the only basis for doing so is that the vast majority of the world prefers that we not kill in a way labeled unjust?  If, as with ice cream, our attitude toward murder is just a matter of man’s collective preference, then it lies in the same realm: taste.  This is, by the way, what people of faith mean when they equate atheism with amorality.  Secularists such as Christopher Hitchens take umbrage at this, but they misunderstand the concepts involved; no one is saying that an atheist cannot act morally – only that atheism cannot, logically, involve “morality.”

As for Marxism’s atheism and anti-religious passions, the Lama explains them away.  Writes Namgyal:

The Tibetan leader answered that the [sic] Marx was not against religion or religious philosophy per se but against religious institutions that were allied, during Marx’s time, with the European ruling class.  He also provided an interesting anecdote about his experience with Mao.  He said that Mao had felt that the Dalai Lama’s mind was very logical, implying that Buddhist education and training help sharpens [sic] the mind.  He said he met with Mao several times, and that once, during a meeting in Beijing, the Chinese leader called him in and announced: “Your mind is scientific!” — an assessment that was followed by the famous line, “religion is poison.”

Well, I guess that with the Lama, flattery will get you everywhere.

I’ve never heard the above interpretation of Marx before, and I very much doubt that he was a man of even private faith and non-institutionalized religion.  Regardless, one of the most important points about Marx is never made: He was most likely what we would today call mentally ill.  Note that he was notorious for not washing, and this is not uncommon for people who manifest crippling depression and other psychological/spiritual problems.  And would it be surprising if Marx had been thus afflicted?  “There is a fine line between genius and insanity,” they say, and Marx was a classic case of a brilliant mind that was twisted enough to conjure up a truly batty theory.

As for the Lama’s mind, it doesn’t seem as if he has to worry much about a slight misstep landing him in insanity’s realm.  A few years ago he was asked if he took exception to a highly sexualized image on a magazine cover, and he dodged the question politician-like, saying (I’m paraphrasing), “This world isn’t real, anyway.”

Really?

Then why is he concerned about what the Chinese are doing in Tibet?  What does it matter if the Chicomms oppress its people and quash its culture?  Hey, if the Lama and some fellow Buddhist monks are hauled off to a Chinese concentration camp, they can just mediate on how it’s all an illusion.

The real illusion is the Lama’s image.  A man of authentic faith seeks Truth and doesn’t deny reality, either the moral variety or the physical (“Am I a man who dreamt he was a worm or a worm dreaming he is a man?!”).  The reality here, though, is that the Dalai Lama is, like Gandhi (about whom I recently wrote), just another overrated Eastern spiritual leader whom elites glom onto because he is quite liberal and not Western.  He should stick to with Bill Murray on the bag.

Can The United States Feed A Starving World?

Today, in 2011, the World Health Organization, projects that 18 million human beings will starve to death. (Source:www.worldhealthorganization.org )  That’s eight million adults and 10 million children under the age of twelve.

In 2011, the United States virtually feeds Egypt with 82 million people and projected to exceed over 100 million by mid century.  Africa as a whole expects to grow from 850 million to 1.4 billion by mid century.

China, at 1.3 billion, adds eight million net gain annually while India adds another 11 million annually on their way to become the most populated country at 1.6 billion in 40 years.

As those countries continue adding enormous populations, they destroy cropland. At some point, they will not be able to feed their overwhelming populations.  Can the United States feed a starving world without starving its own citizens?  Answer: not a chance!

Lester Brown, author of Plan B, Mobilizing to Save Civilization, and director at www.earth-policy.org, gives his appreciation for what humanity faces in the next 40 years.

“In 1994, I wrote an article in World Watch magazine entitled “Who Will Feed China?” that was later expanded into a book of the same title,” said Brown. “When the article was published in late August, the press conference generated only moderate coverage. But when it was reprinted that weekend on the front of the Washington Post’s Outlook section with the title “How China Could Starve the World,” it unleashed a political firestorm in Beijing.

“The response began with a press conference at the Ministry of Agriculture on Monday morning, where Deputy Minister Wan Baorui denounced the study. Advancing technology, he said, would enable the Chinese people to feed themselves. This was followed by a government-orchestrated stream of articles that challenged my findings.

“The strong reaction surprised me. In retrospect, although I had followed closely the Great Famine of 1959-61, during which some 30 million people starved to death, I had not fully appreciated the psychological scars it left. The leaders in Beijing are survivors of that famine. As a result of that traumatic experience, no leader could acknowledge that China might one day have to import much of its food. China, they said, had always fed itself, and it always would.

“As party leaders assessed the situation, they decided to launch an all-out effort to maintain grain self-sufficiency. The government quickly adopted several key production-boosting measures, including a 40 percent rise in the grain support price paid to farmers, an increase in agricultural credit, and heavy investment in developing higher-yielding strains of wheat, rice, and corn, their leading crops.

“They offset cropland losses in the fast-industrializing coastal provinces by plowing grasslands in the northwestern provinces, a measure that contributed to the emergence of the country’s massive dust bowl. In addition to overplowing, they expanded irrigation by overpumping aquifers.

“Lastly, the Party made a conscious decision to abandon self-sufficiency in soybeans and concentrate their agricultural resources on remaining self-sufficient in grain. The effect of neglecting the soybean in the country where it originated was dramatic. In 1995 China produced and consumed nearly 14 million tons of soybeans. In 2010 it was still producing only 14 million tons-but it consumed nearly 70 million tons, most of it to supplement grain in livestock and poultry rations.  China now imports four-fifths of its soybeans. (See data.)

“China’s decision to import vast quantities of soybeans led to a restructuring of agriculture in the western hemisphere, the only region that could respond to such a massive demand. The United States now has more land in soybeans than in wheat. Brazil has more land in soybeans than in all grains combined. Argentina, with twice as much land in soybeans as in grain, is fast becoming a soybean monoculture. For the hemisphere as a whole, there is now more land in soybeans than in either wheat or corn.”

The United States, Brazil, and Argentina-the big three soybean producers-now account for more than 80 percent of the world harvest andnearly 90 percent of soybean exports. Nearly 60 percent of world soybean exports go to China.

“Despite China’s herculean efforts to expand grain output, several trends are now converging that make it harder to do so. Some, like soil erosion, are longstanding,” said Brown. “The pumping capacity to deplete aquifers has emerged only in recent decades. The extraordinary growth in China’s automobile fleet and the associated paving of land have come only in the last several years.

“Overplowing and overgrazing are creating a huge dust bowl in northern and western China. The numerous dust storms originating in the region each year in late winter and early spring are now regularly recorded on satellite images. For instance, on March 20, 2010, a suffocating dust storm enveloped Beijing, prompting the city’s weather bureau to warn that air quality was hazardous, urging people to stay inside or to cover their faces when outdoors. Visibility was low, forcing motorists to drive with lights on in daytime.

“Beijing was not the only area affected. This particular dust storm engulfed scores of cities in five provinces, directly affecting over 250 million people. And it was not an isolated incident. In early spring, residents of eastern China hunker down as the dust storm season begins. Along with the difficulty in breathing and the dust that stings the eyes, people face a constant struggle to keep dust out of homes and to clear doorways and sidewalks of dust and sand. But the farmers and herders in the vast northwest, whose livelihoods are blowing away, are paying a far higher price.

“Wang Tao, one of the world’s leading desert scholars, reports that from 1950 to 1975 an average of 600 square miles of land in China’s north and west turned to desert each year. By the turn of the century, nearly 1,400 square miles of land was going to desert annually. The trend is clear.

“China is now at war. It is not invading armies that are claiming its territory, but expanding deserts. Old deserts are advancing and new ones are forming like guerrilla forces striking unexpectedly, forcing Beijing to fight on several fronts. And in this war with the deserts, China is losing.

“A U.S. Embassy report entitled “Desert Mergers and Acquisitions” describes satellite images showing two deserts in north-central China expanding and merging to form a single, larger desert overlapping Inner Mongolia and Gansu Provinces. To the west in Xinjiang Province, two even larger deserts-the Taklimakan and Kumtag-are also heading for a merger. Highways running through the shrinking region between them are regularly inundated by sand dunes.

“An estimated 24,000 villages in northwestern China have been totally or partially abandoned since 1950 as sand dunes encroach on cropland, forcing farmers to leave. Unlike the U.S. Dust Bowl of the 1930s, when many farmers in the Great Plains migrated to California, China’s “Okies” do not have a West Coast to migrate to. They are moving to already heavily populated eastern cities.

“Overpumping, like overplowing, is also taking a toll. As the demand for food in China has soared, millions of Chinese farmers have drilled irrigation wells to expand their harvests. As a result, water tables are falling and wells are starting to go dry under the North China Plain, which produces half of China’s wheat and a third of its corn. The overpumping of aquifers for irrigation temporarily inflates food production, creating a food production bubble that eventually bursts when the aquifer is depleted. Earth Policy Institute estimates that some 130 million Chinese are being fed with grain produced by overpumping-by definition, a short term phenomenon.

“In a 2010 interview with Washington Post reporter Steve Mufson, Chinese groundwater expert He Qingcheng noted that underground water now meets three fourths of Beijing’s water needs. The city, he said, is drilling 1,000 feet down to reach water-five times deeper than 20 years ago. He notes that as the deep aquifer under the North China Plain is depleted, the region is losing its last water reserve-its only safety cushion. His concerns are mirrored in the unusually strong language of a World Bank report on China’s water situation that foresees “catastrophic consequences for future generations” unless water use and supply can quickly be brought back into balance.

“At the same time, China is losing cropland to residential and industrial construction, and to paving land for cars as their numbers multiply at a staggering rate. In 2009, vehicle sales totaled 14 million, surpassing those in the United States for the first time. In 2010, sales jumped to 18 million, and in 2011 they are projected to reach 20 million, the highest ever for any country. Adding 20 million cars to the fleet means paving one million acres for roads, highways, and parking lots. Cars are now competing with farmers for cropland in China.

“Rural China is also facing a tightening labor supply. As industrial wages rise, it becomes more difficult to find young people to work at low-return jobs in rural areas. Marginal cropland and smaller plots, no longer economical, are abandoned. As the rural labor supply shrinks, so does the potential for labor-intensive double-cropping (such as planting winter wheat and then corn as a summer crop in the north or producing two rice crops per year in the south), a practice that has dramatically expanded China’s grain production.

“As all these trends converge, China’s food supply is tightening. In November 2010, the food price index was up a politically dangerous 12 percent over a year earlier. Now after 15 years of near self-sufficiency in grain, it seems likely that China soon will turn to the world market for massive grain imports, as it already has done for 80 percent of its soybeans.”

“How much grain will China import?” said Brown. “How will it compare with their soybean imports? No one knows for sure, but if China were to import only 20 percent of its grain, it would need 80 million tons, an amount only slightly less than the 90 million tons of grain the United States exports to all countries each year. This would put heavy additional pressure on scarce exportable supplies of wheat and corn.

For China, the handwriting is on the wall. It will almost certainly have to turn to the outside world for grain to avoid politically destabilizing food price rises. To import massive quantities of grain, China will necessarily draw heavily on the United States, far and away the world’s largest grain exporter. To be dependent on imported grain, much of it from the United States, will be China’s worst nightmare come true.

“For U.S. consumers, China’s worst nightmare could become ours. If China enters the U.S. grain market big time, as now seems inevitable, American consumers will find themselves competing with 1.4 billion Chinese consumers with fast-rising incomes for the U.S. grain harvest, driving up food prices.

“This would raise prices not only of the products made directly from grain, such as bread, pasta, and breakfast cereals, but also of meat, milk, and eggs, which require much larger quantities of grain to produce. If China were to import even one fifth of its grain, there would likely be pressure from U.S. consumers to restrict or to ban exports to China, as the United States did in the 1970s, when it banned soybean exports to Japan.

“But in dealing with China, the United States now faces a very different situation. When the U.S. Treasury Department auctions off securities every month to finance the U.S. fiscal deficit, China has been a major buyer. It holds over $900 billion worth of U.S. Treasury securities. China is our banker. In another time, another age, the United States could restrict access to U.S. grain as it did in the 1970s, but with China today this may not be possible.

“For Americans, who live in a country that has been the world’s breadbasket for more than half a century, a country that has never known food shortages or runaway food prices, the world is about to change. Like it or not, we are going to be sharing our grain harvest with the Chinese, no matter how much it raises our food prices.”

Lester Brown is President of the Earth Policy Institute and author of the
newly published book World on the Edge.

Additional data and information sources at www.earth-policy.org

Genetically Modified Cows Produce ‘Human’ Breast Milk

By Richard Gray | Telegraph.co.uk…

Scientists have created genetically modified cattle that produce “human” milk in a bid to make cows’ milk more nutritious.

The scientists have successfully introduced human genes into 300 dairy cows to produce milk with the same properties as human breast milk.

Human milk contains high quantities of key nutrients that can help to boost the immune system of babies and reduce the risk of infections.

The scientists behind the research believe milk from herds of genetically modified cows could provide an alternative to human breast milk and formula milk for babies, which is often criticised as being an inferior substitute.

They hope genetically modified dairy products from herds of similar cows could be sold in supermarkets. The research has the backing of a major biotechnology company.

The work is likely to inflame opposition to GM foods. Critics of the technology and animal welfare groups reacted angrily to the research, questioning the safety of milk from genetically modified animals and its effect on the cattle’s health.

But Professor Ning Li, the scientist who led the research and director of the State Key Laboratories for AgroBiotechnology at the China Agricultural University insisted that the GM milk would be as safe to drink as milk from ordinary dairy cows.

He said: “The milk tastes stronger than normal milk.

“We aim to commercialize some research in this area in coming three years. For the “human-like milk”, 10 years or maybe more time will be required to finally pour this enhanced milk into the consumer’s cup.”

China is now leading the way in research on genetically modified food and the rules on the technology are more relaxed than those in place in Europe.

The researchers used cloning technology to introduce human genes into the DNA of Holstein dairy cows before the genetically modified embryos were implanted into surrogate cows.

Writing in the scientific peer-reviewed journal Public Library of Science One, the researchers said they were able to create cows that produced milk containing a human protein called lysozyme.

Lysozyme is an antimicrobial protein naturally found in large quantities in human breast milk. It helps to protect infants from bacterial infections during their early days of life.

They created cows that produce another protein from human milk called lactoferrin, which helps to boost the numbers of immune cells in babies. A third human milk protein called alpha-lactalbumin was also produced by the cows.

The scientists also revealed at an exhibition at the China Agricultural University that they have boosted milk fat content by around 20 per cent and have also changed the levels of milk solids, making it closer to the composition of human milk as well as having the same immune-boosting properties.

Professor Li and his colleagues, who have been working with the Beijing GenProtein Biotechnology Company, said their work has shown it was possible to “humanise” cows milk.

In all, the scientists said they have produced a herd of around 300 cows that are able to produce human-like milk.

The transgenic animals are physically identical to ordinary cows.

Writing in the journal, Professor Li said: “Our study describes transgenic cattle whose milk offers the similar nutritional benefits as human milk.
“The modified bovine milk is a possible substitute for human milk. It fulfilled the conception of humanising the bovine milk.”

Speaking to The Sunday Telegraph, he added the “human-like milk” would provide “much higher nutritional content”. He said they had managed to produce three generations of GM cows but for commercial production there would need to be large numbers of cows produced.
He said: “Human milk contains the ‘just right’ proportions of protein, carbohydrates, fats, minerals, and vitamins for an infant’s optimal growth and development.

“As our daily food, the cow’s milk provided us the basic source of nutrition. But the digestion and absorption problems made it not the perfect food for human being.”

The researchers also insist having antimicrobial proteins in the cows milk can also be good for the animals by helping to reduce infections of their udders.

Genetically modified food has become a highly controversial subject and currently they can only be sold in the UK and Europe if they have passed extensive safety testing.

The consumer response to GM food has also been highly negative, resulting in many supermarkets seeking to source products that are GM free.

Campaigners claim GM technology poses a threat to the environment as genes from modified plants can get into wild plant populations and weeds, while they also believe there are doubts about the safety of such foods.

Scientists insist genetically modified foods are unlikely to pose a threat to food safety and in the United States consumers have been eating genetically modified foods for more decades.

However, during two experiments by the Chinese researchers, which resulted in 42 transgenic calves being born, just 26 of the animals survived after ten died shortly after birth, most with gastrointestinal disease, and a further six died within six months of birth.

Researchers accept that the cloning technology used in genetic modification can affect the development and survival of cloned animals, although the reason why is not well understood.

A spokesman for the Royal Society for the Protection of Animals said the organisation was “extremely concerned” about how the GM cows had been produced.

She said: “Offspring of cloned animals often suffer health and welfare problems, so this would be a grave concern.

“Why do we need this milk – what is it giving us that we haven’t already got.”

Helen Wallace, director of biotechnology monitoring group GeneWatch UK, said: “We have major concerns about this research to genetically modify cows with human genes.

“There are major welfare issues with genetically modified animals as you get high numbers of still births.

“There is a question about whether milk from these cows is going to be safe from humans and it is really hard to tell that unless you do large clinical trials like you would a drug, so there will be uncertainty about whether it could be harmful to some people.

“Ethically there are issues about mass producing animals in this way.”

Professor Keith Campbell, a biologist at the University of Nottingham works with transgenic animals, said: “Genetically modified animals and plants are not going to be harmful unless you deliberately put in a gene that is going to be poisonous. Why would anyone do that in a food?

“Genetically modified food, if done correctly, can provide huge benefit for consumers in terms of producing better products.”

Aggressive Power and Immoral Authority

Another sad chapter from a desperate imperial empire lays naked for the entire world to see. The pretense that an international community of nations has arbitrary authority to remove any government that conflicts with the master plan of total global enslavement exposes the utter failure of legitimacy. By what moral mandate do belligerent nations have to insight regime change, when the facts clearly demonstrate that conflicting tribal factions are engaged in a civil conflict?

The psychosis exhibited by the War Party and their allies for domination of world energy resources is at the core of a hostile and malevolent foreign policy. The drive to eliminate Muammar Gaddafi and colonize Libya’s oil into friendly corporatist hands is a game that is again, repeated under the guise of humanitarian intervention.When will western nations learn the lessons of two world wars and the carnage that follows from employing military intercession, when direct intrusion is not justified? Jingoistic fervor always emboldens a crumbling financial system that urgently needs another excuse to boost prices to ridiculous levels in order to service debts already in default.

The manipulated mass media unleashes their propaganda machine and dutifully demonizes another foe of the global command and control cabal. Rabid NeoCons push their pro Zionist script as Progressive stooges fall in line behind their messiah and Manchurian Candidate Wall Street puppet.

Ignoring the U.S. Constitution’s Congressional war power function, once again places another nail in the coffin of the lost Republic. There is no valid national interest in attacking Libya. There is no sane reason to deploy and direct military force in another theater of conflict. Naked aggression is an act of war. The despicable arrogance of Lincoln, the interventionist tradition of Wilson and the imperialism of both Roosevelt’s is a wicked policy. The office of the Presidency is not a “dime’s worth of difference” from any tinhorn dictator, like Gaddafi.

The Arab League backing of a no-fly zone over Libya is additional proof of their myopic approach towards regional self-interest. Did anyone ask these tribal sheiks who is going to be next after Mubarak and now Gaddafi? If they are unable to see the pattern used to ensure a greater Israel, their coalition is nothing more than a shylock, House of Ishmael, version of deceit as they lose at an existential game of dominos.

America First essentially requires a foreign policy that benefits us, the legitimate citizens, who deserve true national defense. Unending foreign adventurism results in perpetual and permanent animosity towards our country. Duel loyalists forfeit any claim over the American people.

Military service troops need to choose their fundamental loyalty. They should stand down, resign or live up to their oaths to defend our nation against the domestic traitors that sell out to the global elite, that are hell bent on consolidating their New World Order.

BATR is consistent and vocal in opposition to every administration that betrays the tenants of the Declaration of Independence. Congress needs to impeach Barack Hussein Obama II. The House of Representative wimps and Senate toadies must put an end to the dictatorship of any President who refuses to dismantle the evil empire. The axis of the corporate/state, manipulated by the Federal Reserve banksters is the real enemy.Populists and loyal citizens of all ideologies need to engage in meaningful civil disobedience. If self-determination is such a valid principle that the armies of the world community can attack any nation with impunity, when will a reincarnated Lafayette come to the rescue of a new and genuine American rebellion? United Nation goons are more likely to patrol our cities before the average sheepledecides to take back their government from the criminal syndicate that scheme and plan the next insurrection.

Where is the righteous outrage? Stop the madness and listen to the sage council of the father of our country, George Washington. His farewell address speaks to all ages and people.

“Against the insidious wiles of foreign influence (I conjure you to believe me, fellow-citizens) the jealousy of a free people ought to be constantly awake, since history and experience prove that foreign influence is one of the most baneful foes of republican government. But that jealousy to be useful must be impartial; else it becomes the instrument of the very influence to be avoided, instead of a defense against it. Excessive partiality for one foreign nation and excessive dislike of another cause those whom they actuate to see danger only on one side, and serve to veil and even second the arts of influence on the other. Real patriots who may resist the intrigues of the favorite are liable to become suspected and odious, while its tools and dupes usurp the applause and confidence of the people, to surrender their interests.

The great rule of conduct for us in regard to foreign nations is in extending our commercial relations, to have with them as little political connection as possible”.

For those who desire a world government that allows vassal rulers to sit on phony democratic thrones, as long as they obey the dictates of the supra elites, the American Revolution was fought to defeat your tyranny. The time is now and the need is indisputable. The call goes out. Minutemen patriots wanted, Tories need not apply.

The Tea Party movement is a start, but it needs to escalate to the next level. Globalists, often residing in New York City, Washington DC and London are the cause of most wars. The Communistgulag was their invention and Beijing totalitarianism their stepchild. The attack on Libya is just the latest campaign to stamp out any resistance to their agenda for total captivity. Revolutions are usually bloody, but seldom do the elites shed a drop of their self-proclaimed blueblood in their “Splendid Little Wars“. Only when the true enemies of humanity are recognized and removed from power and influence will the warfare stop on a global level.

Libya another Kosovo – NATO and Coalition Bombs for peace

By Diana Johnstone | counterpunch.org…

Video from: 

Libya: Is This Kosovo All Over Again?

From: counterpunch.org

Another NATO Intervention?

Less than a dozen years after NATO bombed Yugoslavia into pieces, detaching the province of Kosovo from Serbia, there are signs that the military alliance is gearing up for another victorious little “humanitarian war”, this time against Libya. The differences are, of course, enormous. But let’s look at some of the disturbing similarities.

A demonized leader.

As “the new Hitler”, the man you love to hate and need to destroy, Slobodan Milosevic was a neophyte in 1999 compared to Muammar Qaddafi today. The media had less than a decade to turn Milosevic into a monster, whereas with Qaddafi, they’ve been at it for several decades. And Qaddafi is more exotic, speaking less English and coming before the public in outfits that could have been created by John Galliano (another recently outed monster). This exotic aspect arouses the ancestral mockery and contempt for lesser cultures with which the West was won, Africa was colonized and the Summer Palace in Beijing was ravaged by Western soldiers fighting to make the world safe for opium addiction.

The “we must do something” chorus.

As with Kosovo, the crisis in Libya is perceived by the hawks as an opportunity to assert power. The unspeakable John Yoo, the legal advisor who coached the Bush II administration in the advantages of torturing prisoners, has used the Wall Street Journal to advise the Obama administration to ignore the U.N Charter and leap into the Libyan fray. “By putting aside the U.N.’s antiquated rules, the United States can save lives, improve global welfare, and serve its own national interests at the same time,” Yoo proclaimed. And another leading theorist of humanitarian imperialism, Geoffrey Robertson, has told The Independent that, despite appearances, violating international law is lawful.

The specter of “crimes against humanity” and “genocide” is evoked to justify war.

As with Kosovo, an internal conflict between a government and armed rebels is being cast as a “humanitarian crisis” in which one side only, the government, is assumed to be “criminal”. This a priori criminalization is expressed by calling on an international judicial body to examine crimes which are assumed to have been committed, or to be about to be committed. In his Op Ed piece, Geoffrey Robertson made it crystal clear how the International Criminal Court is being used to set the stage for eventual military intervention. The ICC can be used by the West to get around the risk of a Security Council veto for military action, he explained.

“In the case of Libya , the council has at least set an important precedent by unanimously endorsing a reference to the International Criminal Court. […] So what happens if the unarrested Libyan indictees aggravate their crimes – eg by stringing up or shooting in cold blood their opponents, potential witnesses, civilians, journalists or prisoners of war?” [Note that so far there are no “indictees” and no proof of “crimes” that they supposedly may “aggravate” in various imaginary ways.) But Robertson is eager to find a way for NATO “to pick up the gauntlet” if the Security Council decides to do nothing.]

“The defects in the Security Council require the acknowledgement of a limited right, without its mandate, for an alliance like NATO to use force to stop the commission of crimes against humanity. That right arises once the council has identified a situation as a threat to world peace (and it has so identified Libya, by referring it unanimously to the ICC prosecutor).”

Thus referring a country to the ICC prosecutor can be a pretext for waging war against that country! By the way, the ICC jurisdiction is supposed to apply to States that have ratified the treaty establishing it, which, as I understand, is not the case of Libya – or of the United States. A big difference, however, is that the United States has been able to persuade, bully or bribe countless signatory States to accept agreements that they will never under any circumstances try to refer any American offenders to the ICC. That is a privilege denied Qaddafi.

Robertson, a member of the UN justice council, concludes that: “The duty to stop the mass murder of innocents, as best we can if they request our help, has crystallized to make the use of force by Nato not merely ‘legitimate’ but lawful.”

Leftist idiocy.

Twelve years ago, most of the European left supported “the Kosovo war” that set NATO on the endless path it now pursues in Afghanistan. Having learned nothing, many seem ready for a repeat performance. A coalition of parties calling itself the European Left has issued a statement “strongly condemning the repression perpetrated by the criminal regime of Colonel Qaddafi” and urging the European Union “to condemn the use of force and to act promptly to protect the people that are peacefully demonstrating and struggling for their freedom.” Inasmuch as the opposition to Qaddafi is not merely “peacefully demonstrating”, but in part has taken up arms, this comes down to condemning the use of force by some and not by others – but it is unlikely that the politicians who drafted this statement even realize what they are saying.

The narrow vision of the left is illustrated by the statement in a Trotskyist paper that: “Of all the crimes of Qaddafi, the one that is without doubt the most grave and least known is his complicity with the EU migration policy…” For the far left, Qaddafi’s biggest sin is cooperating with the West, just as the West is to be condemned for cooperating with Qaddafi. This is a left that ends up, out of sheer confusion, as cheerleader for war.

Refugees.

The mass of refugees fleeing Kosovo as NATO began its bombing campaign was used to justify that bombing, without independent investigation into the varied causes of that temporary exodus – a main cause probably being the bombing itself. Today, from the way media report on the large number of refugees leaving Libya since the troubles began, the public could get the impression that they are fleeing persecution by Qaddafi. As is frequently the case, media focuses on the superficial image without seeking explanations. A bit of reflection may fill the information gap. It is hardly likely that Qaddafi is chasing away the foreign workers that his regime brought to Libya to carry out important infrastructure projects. Rather it is fairly clear that some of the “democratic” rebels have attacked the foreign workers out of pure xenophobia. Qaddafi’s openness to Africans in particular is resented by a certain number of Arabs. But not too much should be said about this, since they are now our “good guys”. This is a bit the way Albanian attacks on Roma in Kosovo were overlooked or excused by NATO occupiers on the grounds that “the Roma had collaborated with the Serbs”.

Osama bin Laden.

Another resemblance between former Yugoslavia and Libya is that the United States (and its NATO allies) once again end up on the same side as their old friend from Afghan Mujahidin days, Osama bin Laden. Osama bin Laden was a discreet ally of the Islamist party of Alija Izetbegovic during the Bosnia civil war, a fact that has been studiously overlooked by the NATO powers. Of course, Western media have largely dismissed Qaddafi’s current claim that he is fighting against bin Laden as the ravings of a madman. However, the combat between Qaddafi and bin Laden is very real and predates the September 11, 2001 attacks on the Twin Towers and the Pentagon. Indeed, Qaddafi was the first to try to alert Interpol to bin Laden, but got no cooperation from the United States. In November 2007, the French news agency AFP reported that the leaders of the “Fighting Islamic Group” in Libya announced they were joining Al Qaeda. Like the Mujahidin who fought in Bosnia, that Libyan Islamist Group was formed in 1995 by veterans of the U.S.-sponsored fight against the Soviets in Afghanistan in the 1980s. Their declared aim was to overthrow Qaddafi in order to establish a radical Islamist state. The base of radical Islam has always been in the Eastern part of Libya where the current revolt broke out. Since that revolt does not at all resemble the peaceful mass demonstrations that overthrew dictators in Tunisia and Egypt, but has a visible component of armed militants, it can reasonably be assumed that the Islamists are taking part in the rebellion.

Refusal of negotiations.

In 1999, the United States was eager to use the Kosovo crisis to give NATO’s new “out of area” mission its baptism of fire. The charade of peace talks at Rambouillet was scuttled by US Secretary of State Madeleine Albright, who sidelined more moderate Kosovo Albanian leaders in favor of Hashim Thaci, the young leader of the “Kosovo Liberation Army”, a network notoriously linked to criminal activities. The Albanian rebels in Kosovo were a mixed bag, but as frequently happens, the US reached in and drew the worst out of that bag.

In Libya, the situation could be even worse.

My own impression, partly as a result of visiting Tripoli four years ago, is that the current rebellion is a much more mixed bag, with serious potential internal contradictions. Unlike Egypt, Libya is not a populous historic state with thousands of years of history, a strong sense of national identity and a long political culture. Half a century ago, it was one of the poorest countries in the world, and still has not fully emerged from its clan structure. Qaddafi, in his own eccentric way, has been a modernizing factor, using oil revenues to raise the standard of living to one of the highest on the African continent. The opposition to him comes, paradoxically, both from reactionary traditional Islamists on the one hand, who consider him a heretic for his relatively progressive views, and Westernized beneficiaries of modernization on the other hand, who are embarrassed by the Qaddafi image and want still more modernization. And there are other tensions that may lead to civil war and even a breakup of the country along geographic lines.

So far, the dogs of war are sniffing around for more bloodshed than has actually occurred. Indeed, the US escalated the Kosovo conflict in order to “have to intervene”, and the same risks happening now with regard to Libya, where Western ignorance of what they would be doing is even greater.

The Chavez proposal for neutral mediation to avert catastrophe is the way of wisdom. But in NATOland, the very notion of solving problems by peaceful mediation rather than by force seems to have evaporated.

Diana Johnstone is the author of Fools Crusade: Yugoslavia, NATO and Western Delusions.She can be reached at

Interview with George Katsiaficas

U.S. Human Rights Policy is Self-serving and Duplicitous: George Katsiaficas…

George Katsiaficas is a renowned university professor, sociologist, author and activist. He is a visiting American Professor of Humanities and Sociology at Chonnam National University, Gwangju, South Korea where he teaches and does research on the 1980s and 1990s East Asian uprisings.

Katsiaficas has a Ph.D. of sociology from the University of California, San Diego. Since 1990, he has taught sociology at the Wentworth Institute of Technology’s Department of Humanities and Social Sciences. During the period between 2006 and 2008, he was an Associate in Research at the Harvard University and Korea Institute.

He specializes in social movements, Asian politics, the U.S. foreign policy, comparative and historical studies and has written numerous books in these fields.

In 2003, he won the American Political Science Association’s Special Award for Outstanding Service and in 2008, received the Fulbright Senior Scholar Research Fellowship.

Among his major books are “The Battle of Seattle” by the New York’s Soft Skull Press, “Liberation, Imagination and the Black Panther Party” by New York’s Routledge Press and “South Korean Democracy: Legacy of the Gwangju Uprising” by London’s Routledge Press.

What follows is the complete text of interview with Dr. George Katsiaficas on the recent uprising in the Arab world, its impacts on the international developments and its implications for the United States and its European allies.

Kourosh Ziabari: After Tunisia and Egypt in which the revolutionary forces and people on the ground succeeded in ousting the U.S.-backed puppets, several other Arab nations joined them and staged massive street demonstrations to call for civil liberties, improved living conditions, freedom and democratic governments. Now the whole Arab world is in a state of turmoil and unrest and the U.S.-backed dictators are facing the bitter reality that their autocracies are about to fail and collapse. What factors led to the extension of anti-government protests to the whole Arab world? Can we interpret this collective uprising a result of the explosion of strong pan-Arabist sentiments?

George Katsiaficas: No one could have predicted that the suicide of a vegetable vendor in rural Tunisia would unleash long pent-up frustrations on such a scale. If we take a long historical view, the Arab world went into a steep decline after Europeans discovered how to round Africa and established direct trade with the East. While oil has provided a huge stimulus for recovery in the 20th century, its effects have been drastically mitigated by elite corruption. The Arab people are finally awakening from a long slumber. The masses of ordinary Arabs today know in their hearts that they are more intelligent than their rulers. They know that they could all live better lives if they could get rid of the corrupt and often stupid elites trampling on their freedoms and hogging the money that rightfully belongs to everybody.

The phenomenon of uprisings spreading from place to another and drawing in ever more sectors of the population is one that I first uncovered when I studied the global movement of 1968. Unlike armed insurrections of the early part of the 20th century, the New Left involved a rapid proliferation of popular unarmed revolts—historically a new phenomenon. As I pulled together my empirical studies, I was stunned by the spontaneous spread of revolutionary aspirations in a chain reaction of uprisings and the massive occupation of public space—the sudden entry into history of millions of ordinary people who acted in a unified fashion, intuitively believing that they could change the direction of their society. Although they were not united by any centralized organization or even loosely tied together by any coordinating body, everyone was inspired by the heroic struggle of Vietnam. All over the world—from Paris to Prague, Chicago to Mexico City, and Dhaka to Beijing—people’s revolutionary aspirations and actions were not only synchronized, but they were also remarkably similar to each other in their international solidarity and desire for self-government.

After analyzing the proliferation of the global movement, especially the strikes of May 1968 in France and May 1970 in the US, I coined the term the “eros effect” to explain the rapid emergence of global solidarity and love. From my case studies, I came to understand how in moments of the eros effect, universal interests become generalized at the same time as the dominant values of society are negated (such as national chauvinism, hierarchy, and individualism). At that time, for example, opinion polls consistently showed that Ho Chi-minh was more popular than Richard Nixon on American college campuses. See The Imagination of the New Left: A Global Analysis of 1968 (Boston: South End Press, 1987.)

At first glance, the current revolt appears to be confined to the Arab world, but in fact, it has already had a much wider effect: Gabon, Iran, and China have all felt the tremors from the rising in Egypt. Even workers in Wisconsin, who are fighting cutbacks in their standard of living, expressed admiration for, and inspiration from, the Egyptian uprising. Certainly pan-Arab sentiments are a driving force, yet they are not essential. People feel in their bones that change is possible—and not only in the Arab world.

KZ: Many Iranians believe that the uprisings of Tunisia and Egypt have been inspired by Iran‘s Islamic Revolution of 1979. They compare the overthrowing of U.S.-backed Mubarak and Ben Ali to the dissolution of Mohammad Reza Shah’s government which was unconditionally supported by the United States and its European allies. Do you find such a relationship between these revolutions which took place during an interval of 32 years?

GK: Revolutions and popular uprisings have unexpected results—and not necessarily immediate ones. Even generations later, people’s memories and psyches assimilate lessons from previous eaves of struggles. The courage of Iranians in 1979, their withstanding of ferocious repression by the Shah and his forces, was evident for people all over the world, and inspired Haitians and Filipinos to overthrow their dictators. In 1987, I wrote that, “In the epoch after 1968, popular movements have internalized the New Left tactic of the occupation of public space as means of social transformation, and this tactic’s international diffusion led to the downfall of the Shah, Duvalier, and Marcos…the significance of the eros effect and the importance of synchronized world-historical movements will only increase.”

KZ: In your recent article, you’ve compared the new Middle East revolutions to the Korea’s 1987 June Uprising when after 19 consecutive days of massive street demonstrations, people could finally bring down the 26-year autonomy of military forces and hold direct presidential elections. In what ways are these movements similar to each other?

GK: In both cases, people basically fought with bare hands against mighty police forces and defeated them. Thousands of ordinary citizens claimed the right to remain together in public and refused to go home when ordered to do so. Small informal leadership circles emerged in the course of popular struggles, drawn initially from extant activist circles but also porous enough to admit many newcomers from a variety of constituencies. Most significantly, both revolts were quickly ended by the peaceful retirement of the incumbent president and vague promises made by the military—which in both cases remained in power as the uprising subsided. It took South Koreans another five years of struggle before the first civilian was elected president, and it took until 1996 to put the previous dictators in prison. While one agreed to the order to return some US$300 million that he had stolen from the public, Chun Doo-hwan famously testified he had less than $100 to his name—thereby losing his honor but keeping a fortune of perhaps $700 million. Both sums pale in comparison to the estimated fortune amassed by Mubarek. It remains to be seen how much of the Mubarek family holdings will be recovered—or, more importantly, whether or not Egypt will move toward substantive democracy. The longer people adopt a “wait and see” attitude, the less chance there is of change. Millennia of pharonic rule and dictatorships are not easily undone.

KZ: The Libyan dictator Muammar Gaddafi is said to have deposited $90 billion in Italian and other European banks. Since 1990s, the European states moved towards normalizing their ties with the dictator and supported him both politically and financially. Now, these Western states with which the Libyan dictator was once a close friend are calling for a unified international action against him. The old friend has now become a bitter enemy. Isn’t this an exercise of double standards by the Western governments?

GK: This double standard is nothing new. The US has a long history of riding on the backs of dictators in Third World countries and then tossing them away like a used car once they have outlived their usefulness. Longtime Philippines president Ferdinand Marcos was ousted with US approval in 1986; the CIA maintained real time connection to the rebels and provided them with invaluable intelligence information. Much earlier, in 1961, Rafael Trujillo, who had ruled the Dominican Republic with an iron fist for decades, was assassinated. Many people suspect the CIA provided the assassins with the weapons they used. In 1963, Ngo Dinh Diem, who had faithfully served US interests in South Vietnam from 1956 to 1963, was overthrown in a military coup about which the US had advance knowledge, and US refusal to assist him led to his assassination. Many people believe long-time US ally Park Chung-hee, ruler of South Korea from 1961 to 1979, was killed with advance US approval.

KZ: The media have reported that the mercenaries of Colonel Gaddafi have so far killed more than 6,000 protesters in Tripoli and other cities of Libya. What’s your prediction for the political future of Libya? Gaddafi has vowed to remain in power and “die as a martyr”; however, the protesters, despite the large-scale crackdown by the government haven’t retracted from their stance and are still calling for the ouster of the old dictator. What will be the outcome of these tumultuous clashes in Libya? Will the revolution finally end in the overthrowing of Muammar Gaddafi?

KZ: That is a life and death question for thousands of Libyans. It is too early for us to tell whether or not the armed revolt will prevail. With the US and NATO already overextended in Iraq and Afghanistan, the Joints Chiefs are resisting the call by conservatives here to implement a no-fly zone and come to the assistance of the rebels. We should not forget that Gaddafi has played ball with the US in recent years, and he is certainly calling in every favor he is owed. In 1980, the US encouraged Korean General Chun Doo-hwan to suppress the democratic popular uprising in Gwangju. There can be no doubt that it may well stand by and watch as Gaddafi crushes those opposed to his rule.

KZ: Prof. Rashid Khalidi believes that the recent uprisings in the Arab countries have transformed and changed the mainstream media’s portrayal of the Muslim world. The people that were once introduced as fanatic terrorists and extremists are now being called freemen who sacrifice their lives for the sake of achieving freedom and liberty. Do you agree with this viewpoint? Has the communal uprising of the Arab world changed the public’s viewpoint regarding the Arabs and Muslims?

GK: In my view, US public opinion has not really shifted much. The self-organization of armed resistance to Gaddafi astounds American journalists. American young people note with amusement that soccer and dating web sites were used by young Libyans to organize their uprising, but my students complain that they feel burdened by the region’s peoples looking to the US for help.

I suspect the change in Arabs’ own self-understanding is far more significant. For too long, the role of public opinion and the importance of ordinary people has been disregarded in the region, especially by insurgencies, which instead of seeking to stimulate popular movements and raise consciousness, instead pinned their hopes on elites or organized armed commando actions. The first and most influential shift occurred with the first Palestinian intifada in the late 1980s. The people’s uprising was ruthlessly crushed—remember Yitzhak Rabin’s orders to break bones of unarmed children—but the spirit of popular resistance was kindled throughout the region.

KZ: We already know that the authoritarian regimes of Saudi Arabia, Egypt, Tunisia, Jordan, Yemen, Bahrain and Libya are among the major human rights violators in the world; however, the United States and its European cronies who frequently boast of their concerns about the preservation of human rights and freedom have been long indifferent to the persecution of political activists, incarceration of journalists and bloggers and other abuses of human rights in these countries. On the other hand, the superpowers have always employed the excuse of human rights for pressuring the independent and non-aligned nations such as Iran. What do you think about this dualistic approach?

KZ: From the very beginning, US human rights policy has been self-serving and duplicitous. In the name of democracy and enlightenment, the US exterminated millions of Native Americans. The US government broke nearly every treaty it ever signed with native peoples, a sad history known as the “Trail of Broken Treaties.” It would be laughable if it were not so tragic that a country based upon enslavement and murder of millions of Africans and genocide against Native Americans, a country that killed at least three million Koreans and more than two million Indochinese, a country that today is massacring thousands more in Iraq, Afghanistan and Pakistan, could seek to instruct anyone on “human rights.” Yet it is precisely a self-righteous belief in American freedom and superiority that motivates continuing genocide.

President Jimmy Carter, with whom the modern version of human rights policy is thought to originate, collaborated with Indonesian generals in the bloody invasion of East Timor. Carter approved the suppression of the Gwangju Uprising at the cost of hundreds of lives. Years later, when evidence of his actions could be assembled, a Peoples Tribunal found Carter and 7 other high US officials guilty of “crimes against humanity for violation of the civil rights of the people of Gwangju.” Five months afterwards, Carter was awarded a Nobel Peace Prize. The hypocrisy continues unabated. Obama enlarges the war in Afghanistan and attacks Pakistan, and he, too, is awarded a Nobel Peace Prize. Should we be surprised that an award named after the inventor of dynamite provides international legitimation of Western imperialism and aggression?

KZ: As my final question, what’s your prediction for the future of Arab countries which have been engulfed by the waves of popular upsurge in the recent weeks? Will the autocratic regimes of the Persian Gulf region finally yield to the demands of the protesting revolutionaries?

Unfortunately, my prognosis is that the region will continue to be burdened by corrupt elites, but also that existing rulers will have to permit larger circles of economic innovators to emerge and grant people a wider range of civil liberties. With a population of 90 million, Egypt barely managed to manufacture what Costa Rica (population 900,000) could produce. Historically speaking, uprisings have opened the doors to subsequent economic development, as we readily see today in East Asia.

I suspect that substantive democracy in the Arab world (nor practically anywhere else for that matter) is not in the cards—at least for now. Elections may well be permitted but, as in the US, candidates will reflect the dominant parties, not any meaningful alternative. Military spending will continue to be lavish and result in enormous waste of resources. Militarized nation-states armed with weapons of mass destruction, although widely understood as historical anachronisms, will continue to reign supreme. Ordinary people’s dreams of a world at peace reveals a wisdom that far surpasses their rulers’ capacity to think, yet the resultant contradiction requires a globally synchronized effort to result in real change.

In my view, the synchronicity of revolts and occupation of public space that began in 1968 is continually widening its circles. Besides the overthrow of communism in Eastern Europe and the Soviet Union, we saw a wave of uprisings after Gwangju that spread in six years from 1986 to 1992 through the Philippines, Burma, Tibet, China, Taiwan, Bangladesh, Nepal, and Thailand. This most recent emergence of the eros effect in the Arab world indicates that popular movements are building to an even more intense climax, to a global uprising that might finally bring an end to the scandalous control of humanity’s collective wealth by a handful of billionaires.

China’s Attack On The Dollar

“THE DOLLAR AS RESERVE CURRENCY IS A PRODUCT OF THE PAST,” said China’s President Hu Jintao in a recent Wall Street Journal interview. 

China has been warning America that its support for the dollar was not unconditional. But the warnings fell on deaf ears and Washington embraced a borrow-and-spend policy that would have destroyed any other currency.

Then last year, when it became clear that America could not borrow enough money to pay its bills—Ben Shalom Bernanke revved up the Fed’s printing presses and pumped out an easy $900 billion—75 percent of America’s borrowing needs—to cover the debt.

Bernanke called his scheme, QE II, (Quantitative Easing II), which sounds more like a laxative than an economic policy.

While America’s economy (and the dollar) is headed for the trash heap, China’s goal is toreplace the dollar with the Yuan as the new global currency.

Thus, countries will be forced to maintain reserves of the Yuan and dump the dollar.

CHINA WOULD THEN use its own currency to conduct transactions, gaining more favorable terms—(which America now enjoys but not for long)—in the Asian superpower’s insatiable  for new energy sources.

As reports Der Spiegel, Hu and the Politburo attended secret lectures in which Chinese professors explained the history of the rise and fall of major powers. During these sessions, the Chinese leaders were taught that no modern country has ever become a superpower without a reserve currency.

The United States superseded the British Empire at the end of World War II, when the dollar replaced the British pound as the dominant currency in the global financial system.

This explains why Beijing has pursued the internationalization of the Yuan since the outbreak of the global financial crisis in 2008, which the Chinese believe has irrevocably harmed their American rival.

AND NOW, with Goldman Sachs, CitiGroup, and NM Rothschild & Sons, centering their global operations in Shanghai, the Chinese leaders envision transforming their export city into the world’s financial capital, replacing Wall Street. View Entire Story Here, Here, Here& Here.

Of course, the same Wall Street Bankers will be exploiting China’s newly-found wealth.

For after all, the big boys, Lloyd Blankfein of Goldman Sachs and Robert Rubin & Sanford Weill of CitiGroup, sent America’s manufacturing to China in the first place.

With US manufacturing gone, the white collar jobs have vanished with it. All of our IT specialists, R&D scientists, computer programmers, and engineers, are seeing their jobs taken by those with names like “Wang” and “Singh.”

But those with names like Rubin, Weill, and Blankfein, that’s a story for the Forbes 400…

http://www.realzionistnews.com/?p=613

The War – Did We Sacrifice a Million Lives and a $Trillion Cash Just to Hand Our Jobs to China? Part Three

While the Tea Partiers and the liberals squabble over important domestic issues, America’s corporate and military titans, at the expense of America’s workers and taxpayers and with the blessing of Congress and the President, are creating China’s economic miracle. The military, at a cost of over $1 trillion, has paved the way for China to acquire and the U.S. to lose access to vast mineral and petroleum resources. The oil industry, with U.S. government assistance, is building a safe haven in East Asia from the imminent crash of oil everywhere else. And foreign investment, largely American, is giving China on average nearly one million new jobs a month while American unemployment soars.

This is a four-part series. Part One discusses why and how the oil industry could create a safe haven from its own collapse, and why it might choose China for the project. Part Two discusses how East Asia became “the right market” for the world’s remaining oil reserves, endangering everyone else. Part Three discusses how the US military has turned Afghanistan and Iraq into China’s good buddies. Part Four takes a broader view of what has happened and what if anything can be done about it. Enjoy.

Part Three of Four. Our Hand-Picked Governments in Afghanistan and Iraq Snub Us and Befriend China

Next stop, Afghanistan

After ousting the Taliban under the guise (or the reality – take your pick) of doing something about 9/11, the US put in place Hamid Karzai, a former Unocal (you remember, the company that convinced Congress that the “right markets” were in East Asia, not the West) adviser. While the specific project pushed by Unocal’s Maresca has not gone forward, the continuing significance of Maresca’s testimony is demonstrated by the signing in December, 2010 by Karzai of a multinational agreement (not including the US) to build a natural gas pipeline, to serve points East. Maresca’s vision of the “right markets” has remained alive and well.

Shortly, with the Taliban out of the way, China arrived on the scene to get involved in a variety of resource exploitation projects, and was greeted by the Karzai administration and the Afghan public with open arms. With the Taliban gone from Kabul, Afghan-Chinese business is booming on many levels. In the decade since 9/11, trade has increased tenfold, consumer markets in Kabul, like those in the US, are packed with Chinese products, often one fifth the price of similar goods manufactured in the US or Germany or Iran, and there is a continuous stream of about 30,000 traders shuttling back and forth between the two countries.¹

At least equally important, and better known, is that China has won numerous industrial and resource-development contracts from the Karzai government in Afghanistan. China Railway Construction Group/China Railway Shisiju Group has won major railway-construction contracts. Chinese companies now dominate the Afghan cable and fiber optics markets. Chinese contractors have also received contracts for hospital, school, road and housing developments..

The crown jewel of it all is a 30-year contract to exploit what is said by some to be the largest and by others to be the second-largest undeveloped copper deposit in the world, Aynak, approximately 40 miles southeast of Kabul.. The deposit is said by one reporter to be valued at $30 billion and by another to be valued at “up to” $88 billion, yet China’s bid of $3.5 billion winning it the deal over several other bidders including Phelps-Dodge of the United States, reportedly surprised analysts who were not expecting a bid over $2 billion. Some have questioned the integrity of the bidding process, which also reportedly had no economic or environmental review, and question the over-involvement in favor of the Chinese proposal by Karzai’s mining minister, discussed in a Nature article in October, 2007, but the Karzai government denies any wrong-doing.²

None of this would have been possible without the United States’ military intervention, apparently immensely expensive to the people of the United States in dollars, lives, and loss of good will. Mathew Nasuti of Kabul Press writes:

“China is not merely winning the propaganda war. It is keeping a low public profile in Afghanistan, which keeps Muslim militant efforts focused on the very visible American military presence. While the United States Government spends an estimated $1 billion a day in Afghanistan and, more importantly, places its men and women in uniform in the line of fire, the country that benefits the most from that effort appears to be China. If the Americans and their NATO allies were not fighting and dying in Afghanistan, Chinese military forces would likely have to be deployed. The Beijing government seems happy to have the West take over its military responsibilities. As the Taliban and al-Qaeda focus on battling the very visible Western forces, China officials work behind the scenes preparing to benefit in the long-term from the primarily American effort.”³

Ironically, one of the reasons for continued presence of the United States in Afghanistan is that the Aynak mining operation faces continued threats from Taliban insurgents, and the U.S. Army’s Tenth Mountain Division patrols the area for China.⁴

Even the Afghan-American Chamber of Commerce, folks one would expect to find allies among American Republicans and Tea-Partiers, is whistling into the wind about what’s going on: “We’re giving tens of billions of dollars in assistance to Afghanistan, and we’re getting no credit. We need a policy on developing mines and minerals and oil and gas in Afghanistan. Otherwise, it will be dominated by the Chinese.”⁵

None of these stunning advances for China could have occurred without military intervention by the United States. Can they be reconciled with the Government’s asserted goal of routing out Al Qaeda in Afghanistan? No, because there are in fact under 100 Al Qaeda in Afghanistan. For this we would deploy over 100 THOUSAND US troops, spend half a trillion dollars and still find ourselves regularly outmaneuvered? Can they be reconciled with the leftperceived goal of US imperialism in the sense of capture and control of the resources of a nation with the use of military force? No, because the only imperialist interests appearing to be furthered are those of the Chinese, and if conventional imperialism is involved, we are fighting FOR those we should be fighting against. No especially because US imperialist interests cannot be reconciled with providing military security for China’s mining operations.

Has George Monbiot’s prediction that our handpicking the Taliban’s successor would “crush” China’s ambitions in Afghanistan come true? Hardly.On the other hand, if the US military has been hijacked by the oil industry and China to aid in consolidating resources in Maresca’s “right markets,” then not only do the facts fit, but far from bumbling, the operation has been a tremendous success at costs that, while very high to the US taxpayer, have been negligible to the “clients.”

All of this is surely at least CONSISTENT with implementation of the conjectured plan for giving oil a Chinese safe haven in which to invest its trillions as the oil-based economies of the rest of the world, including the US, collapse. It is not a pretty picture to see the US using its military might with either the effect or the intent of depriving Americans of resources and sending them to China, while China, insisting it has nothing to do with the war, reaps the benefits. That uis unquestionably the effect, but we should take a look at what’s been happening in Iraq before jumping to conclusions about intent.

On to Iraq, the One-time Home of Saddam Hussein.

Iraq is in fact more of the same. The United States Government has never shown that Al Qaeda had a safe haven in Iraq or even that the US was making an attempt to rout out Al Qaeda. The same is true of the Taliban in Iraq. And the back-up claim of the US, that attempts to manufacture weapons of mass destruction in Iraq had to be halted, was never shown to have any factual support. This writer will not reiterate the evidence on this subject. So that left a “US-imperialists-are seeking-control-of-the-oil” explanation as the only apparently viable one.

Viable, that is, until the US “regime change” occurred and Saddam Hussein’s chosen successor began to parcel out contracts on its vast oil reserves, estimated at 110 billion barrels (vast at least in this day of declining oil). We shall look in vain for any signs of gratitude to the U.S. from the newly-installed “grateful pro-western government.”⁶

Falah Aljibury, an Iraqi energy analyst who has advised several Iraqi oil ministers as well as other OPEC nations, says that the Asian nations have been at an advantage as a result of their non-participation in the military operations that secured benefits for them.⁷ And so it certainly appears.

In an early round of sales, four small contracts were entered into, but notably, all with Asian contractors: China, Vietnam, India and Indonesia.⁸

In August, 2008, without a bidding process, Iraq entered into a 20-year contract with China to develop the small Ahdab field, near the Iranian border, expected to yield 125,000 bpd. Iraq’s spokesperson, discussing the deal with the Washington Post, emphasized that Western oil compaies had thus far only been given technical services contracts, that the contract given to China was much more lucrative, and that Iraqi officials hoped the deal with China would “refute all the rumors that say the American companies are the only ones benefitting from the American occupation.” ⁹

In 2009, again without a bidding process, Iraq gave China and its partner BP the largest contract that can or will ever be made anywhere again for oil a 20-year contract to develop its crown jewel, the Rumaila field, said to be second only in the world to Saudi Arabia’s now-declining Ghawar field.¹⁰ Longterm contracts, unique in Iraq for the Middle East, are permitted under the Iraqi regime change’s law, the terms of which were reviewed by the Bush Administration prior to its submission to the Iraqi parliament.¹¹ Those terms include the contractor sharing title to the petroleum with Iraq, but that particular provision has yet to be approved by Iraq’s parliament. With estimated reserves of 17 billion barrels and production at 2.85 mbpd, Rumaila makes the giant Alaskan Prudhoe Bay field, the largest in North America (total production to reach 13 billion barrels at a maximum production rate of 2 mbpd,¹²) look modest.

Again without a bidding process, in May, 2010, Iraq signed a contract with China and the Turkish Petroleum Corporation (TPAO) to develop the Maysan oilfield complex, which contains 2.5 billion barrels. The complex is expected to yield 450,000bpd (remember that only a decade ago, that alone would have been 10% of China’s demand), and the stakes are divided 64% China, 11% Turkey, and 25% retained by Iraq. ¹³.

The American companies by appearances got their main chance in Iraq with an open auction on numerous large fields in December, 2009. The American companies were, however, according to the press, “noticeably absent.”¹⁴ Despite a very flashy televised show of transparency in the bidding process,¹⁵ the die had already been cast – the American companies had apparently already decided either that they did not want to develop Iraq’s huge oil reserves, or that they could not win on the terms Iraq was offering. The fields auctioned off¹⁶ included

Rajnoon – another “Prudhoe Bay” field, its total reserves 13 billion barrels and projected output 1.8 mbpd- successful bidder Malaysia.

Halfaya (4.1 billion barrels of reserves, projected output of 535,000 barrels per day (bpd)) – successful bidder China (50%), along with partners Total from France (25%) and Petronas from Malaysia (25%).

Gharaf (reserves of around 860 million barrels, projected output of 230,000 bpd) – successful bidder a partnership (Malaysia 60%, Japan 40% )

West Qurna Phase 2(about 12 billion barrels of reserves; projected production of 1.8 mbpd) – successful bidder Russia.

US company Exxon-Mobil, partnering with Royal Dutch Shell, had been awarded one month earlier a significant 20-year development contract for West Qurna Phase 1 (estimated reserves of 8.5 billion barrels, with an output target of 2.1 mbpd),¹⁷ but that is the only major contract awarded to a U.S. company, and there are not expected to be additional major auctions for decades. As discussed in Part Two, Exxon is actively investing in China, so the oil it obtains from Iraq may ultimately go to China rather than to the U.S.

Here in summary are the fields parceled out by Iraq in 2009 alone:

Asia  Rumaaila     2.85mbpd         primary holder China

Maysan     0.45                   primary holder China

Rajnoon     1.80                  primary holder Malaysia

Halfaya     0.535                 primary holder China

Gharaf      0.230                 primary holder Malaysia

Total Asia 5.865

Russia W. Qurna Ph 2 1.80

Exxon/U.S. W. Qurna Ph 1 2.10

France Halfaya (25%) 0.134

Malaysia is a small player in the world of oil relative to the above contracts, producing approximately 693,000bpd and consuming 536,000 bpd, with reserves of about 4 billion barrels,¹⁸ so Malaysia is likely standing in for someone else in Iraq.

Oh, yes. Part of what the US is doing in Iraq is the same as in Afghanistan: serving as security forces for the primarily-Asian and particularly Chinese oil contractors, which is apparently a major reason the Commander-in-Chief doesn’t seem to be in much hurry to fulfill his commitment to bring the troops home.¹⁹

NOTES

1. Tini Tran, AP News Service, “As U.S. fights, China spends to gain Afghan foothold ,” US Independence Day, July 4, 2010,http://www.msnbc.msn.com/id/38076136/ns/world_news-south_and_central_asia/

2. Mathew Masuti, “US Losing Afghanistan to China,” Kabul Press July 19,2010, http://www.kabulpress.org/my/spip.php?article19517; Radio Free Europe / Radio Liberty, November 24, 2007, “Afghanistan: China’s Winning Bid For Copper Rights Includes Power Plant, Railroad,”http://www.afghan-web.com/economy/china_copper.htm land ; Tini Tran, AP News Service, “As U.S. fights, China spends to gain Afghan foothold ,” US Independence Day, July 4, 2010, http://www.msnbc.msn.com/id/38076136/ns/world_news-south_and_central_asia/

3. Mathew Masuti, “US Losing Afghanistan to China,” Kabul Press July 19,2010, http://www.kabulpress.org/my/spip.php?article19517.

4. As reported in the Asia Times, citing the Economist magazine. Syed Fazl-e-Haider “Afghan cash starts going to China, “http://www.atimes.com/atimes/South_Asia/KK11Df04.html.

5. As reported in the Asia Times, citing an NBC News interview of Donald Ritter, president of the Afghan-American Chamber of Commerce. Syed Fazl-e-Haider “Afghan cash starts going to China, ” http://www.atimes.com/atimes/South_Asia/KK11Df04.html.

6. Cf. observations of George Monbiot in October 2001, quoted above.

7. , CNNMoney.com staff writer, April 5 2007: “And Iraq’s big oil contracts go to … Companies from China, India and other Asian nations are seen getting the first contracts. But don’t write off Big Oil just yet.” http://money.cnn.com/2007/04/05/news/international/iraq_oil/index.htm

8. , CNNMoney.com staff writer, “And Iraq’s big oil contracts go to … Companies from China, India and other Asian nations are seen getting the first contracts. But don’t write off Big Oil just yet.’ April 5 2007. http://money.cnn.com/2007/04/05/news/international/iraq_oil/index.htm

9. Amit R. Paley, Washington Post Foreign Service, Friday, August 29, 2008, “Iraq and China Sign $3 Billion Oil Contract: Deal Is First of Its Kind Since Invasion,” http://www.washingtonpost.com/wpdyn/content/article/2008/08/28/AR2008082802200.html

10. Friday, 24 September 2010, Jay Ruskin, “NEWS: ‘Surge of interest’ in Iraq oil contracts as BP prepares to develop Rumaila field.”http://www.ufppc.org/us-a-world-news-mainmenu-35/9930-news-surge-ofinterest-in-iraq-oil-contracts-as-bp-prepares-to-develop-rumaila- field.html.Note that the Prudhoe Bay field has had 13 billion barrels of “recoverable” oil but 25 billion barrels total. Press reports for Rumaila have not made the distinction, so there is some possibility that its “recoverable” oil is no more than Prudhoe Bay’s.

11. , CNNMoney.com staff writer, April 5 2007: “And Iraq’s big oil contracts go to … Companies from China, India and other Asian nations are seen getting the first contracts. But don’t write off Big Oil just yet.” http://money.cnn.com/2007/04/05/news/international/iraq_oil/index.htm

12. Wikipedia, Prudhoe Bay Oil Field, http://en.wikipedia.org/wiki/Prudhoe_Bay_Oil_Field

13. “Iraq signs oilfield deals with CNOOC, TPAO,” Maktoob News, 5/17/2010 http://en.news.maktoob.com/20090000470398/Iraq_signs_oilfield_deals_with_C NOOC_TPAO/Article.htm

14. Jane Arraf, Global Post, December 12, 2009, “Iraq’s giant oil fields go on auction block. Royal Dutch Shell and Malaysia’s state-owned oil company win the biggest prize, the super-giant Majnoon Field,” http://www.globalpost.com/dispatch/iraq/091211/oil-auction

15. The auction “was conducted like a high-stakes game show. To ensure transparency, oil company representatives brought their bids to the stage in sealed envelopes. The figures were then put up on giant screens with the winner announced to polite applause.” Jane Arraf, Global Post, December 12, 2009, “Iraq’s giant oil fields go on auction block. Royal Dutch Shell and Malaysia’s state-owned oil company win the biggest prize, the super-giant Majnoon Field,” http://www.globalpost.com/dispatch/iraq/091211/oil-auction

16. Pepe Escobar, “Iraq’s oil auction hits the jackpot,” Asia Times On Line, December 16, 2009, http://www.atimes.com/atimes/Middle_East/KL16Ak02.html

17. Alarabiya.net, Thursday, 05 November 2009, “W.Qurna a prized oilfield with 8.7 bln bbls of reserves. Exxon-led group clinches Iraq’s W.Qurna contract.” (The article alternatively refers to the field as having 8.5 and 8.7 billion barrels.) http://www.alarabiya.net/articles/2009/11/05/90303.html

18. EIA, “Malaysia Oil,” http://www.eia.doe.gov/cabs/Malaysia/Oil.html

19. See, e.g., Ben Lando, “Major oil export development highlights security questions, July 13, 2010, http://www.iraqoilreport.com/security/energy-sector/major-oil-export-developmen t-highlights-security-questions-4814/

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